AICPA

Another unintended consequence of Sarbanes Oxley

Tue, 15 Jan 2008 06:59:59 -0500

The Lord & Benoit report noted above makes much of what it calls "The Unintended Paradox." Sarbanes Oxley of course was meant to instill confidence in the financial reports of public companies. It has largely succeeded at the large company level. As for smaller companies, the critical Section 404 requirements, notably the requirement for auditor attestation of internal controls, has been repeatedly delayed. Meanwhile, nonpublic companies are now required by the AICPA to have auditors "evaluate the design of controls relevant to the financial statements and determine whether or not the control has been implemented." 404-like to say the least. So for the moment, the control standards for nonpublic small companies are more rigorous than for public companies. Imagine that.

For more:
- see the report (reg. req.)

Private companies struggling with Sarbox-lite

Tue, 13 Nov 2007 06:59:59 -0500

A year ago, the AICPA passed new rules governing the audits of private companies. The deadline for compliance is December. So you've got a lot of companies in full audit mode, a "mad rush," according to one expert. The AICPA rules are not nearly as onerous as Sarbanes Oxley rules. For example, they do not ask for conclusions about controls; they only ask that they be tested. And the rules are not mandatory. But they are seen as GAAP by many firms, according to cfo.com. The result has been that auditors of privately held companies and non-profits are taking 10 to 25 percent longer to finish their audits. Sound familiar?

For more:
- here's the cfo.com article

Related article:
- The top 10 material weaknesses for small companies

ALSO NOTED: Compliance manager's claims at pharma company not Sarbox-protected; Data breach at TD Ameritrade; and more ...

Tue, 18 Sep 2007 06:59:58 -0400

> Big data breach at TD Ameritrade. Article
> Another mid size company dumps a big four firm (KPMG). Article
> Hot field: Forensic accountants. Article
> Manager's claims at pharma company not Sarbox-protected. Article
> Staffing company: Mortgage cuts lead to accounting. Article
> More on Japan's new Sarbox-like law. Article
> More on whistle blowers' lack of success. Article
> Cognex opts for smaller audit firm. Article
> Syntax Brillian details accounting issues that delayed earnings. Article
> British pharma bent on U.S. listing, not detered by Sarbanes Oxley. Article
> Legal view of compliance risk from outsourcing. Article
> AICPA hires Mat Young for political affaris. Article
> More on Sarbox-like rules for the mortgage industry. Article

IT Watch:
> Business Objects Announces new EPM suite. Article
> Microsoft patch fixes what some deem a Sarbox hole. Article

Scandal Watch:
> Dell to delay earnings pending restatement process. Article
> Ex-Controller settles fraud case. Article
> Former CEO charged with inflating financials at eyewea company. Article

And finally ... How to dress for success. Article

More jargon: What is a SAS Type II Exam?

Mon, 16 Apr 2007 20:01:39 -0400

We've touched on the rise of software-as-a-service and how it might affect compliance initiatives. We noted then that more SaaS solution providers in the GRC arena may feel the need to publicize that they have passed something called SAS 70 Type II examinations, which are performed by auditors. In the last week, a raft of companies have come forward with such announcements, notably Bwise but also AmeriVault and ViaWest. This all makes sense, though more jargon is the last thing we need. Companies are placing more pressure on service providers and their controls environment as a way to satisfy their auditors. Hosted-service providers these days are expected to do what they can to help. Passing the exam should provide some comfort. The Statement on Auditing Standards (SAS) No. 70 is the creation of the American Institute of Certified Public Accountants (AICPA). It basically means that the service providers has had an auditor take a look at their processes and controls and they have been deemed adequate.

For more:
- see this release from Bwise
- read this AmeriVault release
- and this release from ViaWest

Accountants aim to repair Sarbox-related image

Mon, 05 Feb 2007 19:01:39 -0500

For the accounting firms, the Sarbanes-Oxley era has been one in which their professional image has suffered some huge PR blows. They were once seen as impartial, bean-counters making sure that a company's finances were up to par. Then came Enron and all the other scandals--including the Arthur Andersen fiasco--and all of sudden the bean-counters were stereotyped as criminals. The industry is out to change that. The Center for Audit Quality was launched last week by the AICPA and BDO Seidman, Crowe Chizek, Deloitte & Touche, Ernst & Young, Grant Thornton, KPMG, McGladrey & Pullen, and PricewaterhouseCoopers. It's goal is to foster confidence in the audit function. We'll see what steps they take, especially in regards to public perception of Sarbox issues. They'll be promoting a lot of other trade group-like stuff as well.

For more:
- here's an article from CFO.com

Related Articles:
Do accountants need liability protection? Report
Accounting errors persist, tiny companies in hot seat. Report

A better way to evaluate IT controls?

Mon, 24 Jul 2006 20:01:38 -0400

The final SEC rules require companies that base their internal financial control evaluation on a recognized framework, one that is bias-free and allows consistent measurements in a way that accounts for all relevant factors. Companies have several options when it comes to this framework. The one issued by COSO would work fine, for example. The AICPA and CICA have also developed a so-called Trust Services framework. Article

ALSO NOTED: Globalization of Sarbox continues; Pressure mounts in Congress;

Mon, 17 Jul 2006 20:01:38 -0400

> As the AICPA moves to North Carolina, people are pondering its significance in a post-Sarbox world. Article

> We've discussed the global aspects of Sarbanes-Oxley at length. Forbes has a nice article that summarizes the key issues. Interesting point: 17 percent of foreign companies would consider delisting from U.S. exchanges. Article

> Did Sarbox chase Rosneft to London? Article

> Chinese companies listed in the U.S. chafe under Sarbanes-Oxley deadline. Article Same goes for Korean firms. Article

> Pressure for reform mounts in Congress. The Financial Services Forum assembled a senior treasury official and three House members for a debate on Sarbanes-Oxley. Rep. Tom Feeney (R-FL) was an invitee. Article

> Background on the three U.K. bankers extradited to the U.S. Article

> Ex-partners sue KPMG for legal fees related to tax-shelter probe. Article

> Sign of the times? Shares of Resource Connection, a Sarbanes-Oxley consulting firm, tumble. Article

And Finally... Best places to live, 2006. Article

ALSO NOTED: Roughly 80 percent of companies in compliance; IT asset management as a Sarbox issue; Much more...

Mon, 12 Jun 2006 20:00:38 -0400

> Trend: Roughly 80 percent of those polled say they are now in full compliance with Sarbox and other laws, according to one survey. It is unclear, however, if the costs of compliance are set to decline. Article

> IT asset management has been seen as a Sarbox issue for awhile now. Unfortunately, one survey says that 95 percent of companies and inaccurate information about their assets. Article

> More than 50 accountants have been the targets of disciplinary action by the SEC since the start of 2005, but only a handful have paid fines and nearly half are still licensed to practice. Article

> The FASB and AICPA are looking into whether accounting and reporting standards should be tailored to fit privately held companies. Article

> Stock exchange globalizations raises a lot of regulatory and compliance issues. Can trading be equitably regulated across six times zones? Article

> Would Sarbox apply to companies listed in the London Stock Exchange, if a deal with Nasdaq were struck? Not likely. But the uncertainty lingers. Article

And finally... What do female financial executives and managers really want? Article