Tuesday, October 23, 2007

PCAOB Urged to Take a 'Clean Sheet' Approach to Standard Setting Priorities at Oct. 17 SAG Meeting

SAG members were concerned that items on PCAOB's priorities list from prior years remain uncompleted. They also asked if the PCAOB had sufficient resources to complete their projects. Some noted the PCAOB had become a follower rather than a leader, and suggested the PCAOB try to leverage off work being done by the AICPA's Auditing Standards Board (ASB) and the International Auditing and Assurance Standards Board (IAASB) where those groups were ahead of the PCAOB on certain standards.

PCAOB Urged to Take a 'Clean Sheet' Approach to Standard Setting Priorities at Oct. 17 SAG Meeting

Labels: AICPA, ASB, FEI, IAASB, IFRS, pcaob, sarbanes oxley

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Monday, October 22, 2007

PCAOB Told to Plan for Global Standards

Members of the Public Company Accounting Oversight Board's advisory group are split on the question of how hard it would be for the auditing profession to adapt to International Financial Reporting Standards.

In light of a recent Securities and Exchange Commission proposal that U.S. companies should be given the choice between IFRS and U.S. generally accepted accounting principles, some PCAOB advisers worried that such a choice would overly burden accounting professors who are already strapped for resources. They also questioned whether the International Accounting Standards Board's version of IFRS is of high enough quality to meet U.S. regulators' and investors' expectations. The IASB expressed similar worries on Thursday.

The larger accounting firms, however, assured the advisory group that they have been training their staffs on using IFRS. Perhaps surprisingly, a member of the Financial Accounting Standards Board spoke in favor of a move to international standards.

PCAOB Told to Plan for Global Standards

Labels: GAAP, IFRS, pcaob, sec

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PCAOB Issues Staff Guidance On Auditing Internal Control in Smaller Public Companies

The Public Company Accounting Oversight Board today published for public comment staff guidance on auditing internal control over financial reporting in smaller public companies.

The guidance explains how auditors can apply the Board's internal control auditing standard, Auditing Standard No. 5, An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements, to audits of smaller, less complex public companies.

When it adopted Auditing Standard No. 5 in May, the Board committed to provide additional guidance on applying the standard to audits of smaller public companies. Auditing Standard No. 5 provides direction to auditors on scaling the audit based on the company’s size and complexity.

PCAOB Issues Staff Guidance On Auditing Internal Control in Smaller Public Companies

Labels: as5, pcaob, small business

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Wednesday, October 17, 2007

E&Y's Otty adds to brand mystery

Two separate sources told Accountancy Age last week that designs for a global rebrand were in the pipeline, but global figures played down any moves.

Otty (pictured) said this week when revealing his firm's annual results: 'I'm not aware that we're doing any major rebranding,' but refused to completely rule out the possibility.

'If you're talking about rebranding - are we going to change our logo, and all that sort of stuff, it's unlikely, but it's the sort of debate that you would have in an organisation like ours every couple of years,' said Otty.

E&Y's Otty adds to brand mystery

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Tuesday, October 16, 2007

Compliance Biggest CIO Worry, Says Cisco VP

Managing compliance is one of the biggest issues before a CIO, says John McCool, senior VP and GM of Cisco's Internet Systems Business Unit.

"Compliance problems are associated with various areas, like financial compliance as in Sarbanes-Oxley, or vertical-specific compliance like HIPAA for the healthcare industry," notes McCool.

Cisco's Service-Oriented Network Architecture (SONA), an architectural framework that delivers business solutions to unify network-based services, has a strong focus on security, which can be used as a building block for ensuring compliance, says McCool.

"SONA allows you to regularize access to corporate networks, thereby ensuring both security and compliance," he points out.

Compliance Biggest CIO Worry, Says Cisco VP

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Sarbanes-Oxley = a downturn in corporate risk-taking

For all its noble intentions, the five-year-old Sarbanes-Oxley Act prompts many complaints from the corporate community. It has been blamed (wrongly, in most cases) for prompting companies to shun public listings in New York. Executives complained about the cost of compliance, and the potential for liability. Then they turned around and decided it wasn’t so bad after all.

Now, two academic studies commissioned by the American Enterprise Institute conclude that SOX, as it’s fondly known, has reduced the corporate risk-taking that produces economic growth. One study led by Professor Kenneth Lehn at the University of Pittsburgh compared 4000 US companies with close to 1000 similar companies in the UK , concluding that the U.S. players were more risk-averse.

Sarbanes-Oxley = a downturn in corporate risk-taking

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Sunday, October 14, 2007

Tech Panel: Sarbox, Immigration Policies Need Facelifts

A panel of experts who kicked off the TechNet Innovation Summit Thursday argue that the U.S. needs to revamp its immigration policy to maintain its position as a leader in technological innovation. They note that though the country’s colleges and universities attract the world’s best students, current immigration rules make it difficult for those students to stay in the U.S. after they graduate.

According to an ITworld.com piece, panelists agree that the U.S. “has about five years to tune up its engine before emerging countries such as China and India catch up.” UC Berkeley business professor Laura Tyson advocates immigration laws that use point systems in the visa application process as well as those that “reward education.” She points to legislation in Canada, the UK and Australia as examples, the story says.

Tech Panel: Sarbox, Immigration Policies Need Facelifts

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Saturday, October 13, 2007

Compliance Provides Benefits Beyond The Obvious

Recent requirements place a stronger business focus on the acquisition and implementation of security controls. Consumers are expressing growing concern over the security of their personal information, and companies that increase security through compliance activities can sometimes gain a competitive edge. The privacy aspects of compliance call for proper and effective security controls. Privacy clarifies what needs to be protected, and a supporting risk assessment helps determine the appropriate level of security controls. This is particularly critical as the security perimeter now extends to mobile laptops and PDAs. With many data breaches caused by ignorance or a lack of policy, compliance can be used to increase awareness of and attention to data protection requirements and practices.

Compliance Provides Benefits Beyond The Obvious

Labels: compliance, gramm-leach-bliley act, hipaa, sox

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Restatements hit market less under Sarb-Ox -study

Market reaction is less volatile following company announcements they will restate financial results since the Sarbanes-Oxley corporate reform law was enacted, according to a new paper authored by two Public Company Accounting Oversight Board (PCAOB) economists.

That suggests investors believe restatement announcements convey more timely and higher quality information, leaving them with less uncertainty about companies that must restate their financial data, said the report, which was released late Thursday.

The study will be discussed on Oct. 18 when a PCAOB advisory group meets.

Restatements hit market less under Sarb-Ox -study

Labels: market reaction, pcaob

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Friday, October 12, 2007

Waiting for the auditor

Compliance spend may continue to rise year on year but there has been no attendant increase in compliance confidence. The majority of compliance officers are all too well aware of the presence of gaps and holes in IT systems, often created by unauthorised changes, which can rapidly undermine the compliant status.

Indeed, for many organisations, compliance has become little more than a box ticking exercise that attempts to deliver a compliant organisation at one point in time. Yet change to the business and IT infrastructure is both rapid and constant – and an essential component of development and growth.

As a result each audit process is fraught with problems. Compliance officers know without any doubt that a manual check by auditors could well reveal some breach or compliance problem that requires further, highly expensive, investigation. The result is increasing audit costs and a growing risk of major compliance failure – with attendant fines and negative publicity.

Waiting for the auditor

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Wednesday, October 10, 2007

Sarbanes-Oxley flexibility: Too little too late

You know a government regulation is seriously out-of-whack when even the SEC begins to backpedal. That's the case with Sarbanes Oxley, the corporate governance act that's placed an extraordinary financial burden on small-to-medium electronics firms thinking of going public.

The SEC recently issued a new auditing standard for Sarbanes Oxley intended to "reduce unnecessary costs, especially for smaller public companies," according to SEC Chairman Chris Cox. Unfortunately, experts who work closely with electronics startups see the standard as more of a band-aid than a panacea, when it comes to encouraging industrywide innovation.

Sarbanes-Oxley flexibility: Too little too late

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Monday, October 08, 2007

Sarbanes-Oxley: Helping to Nationalize Accounting & Auditing

Sarbanes-Oxley, of course, was just a small step along the yellow brick road that will lead to total rule over private industry, especially in the realm of accounting and audit. Talk is heating up regarding the new Treasury Advisory Committee on the Auditing Profession. A recent Treasury release has Secretary Paulson stating that "this Committee has been chartered to develop recommendations as to what can best be done to sustain a vibrant auditing profession, a profession whose work is critical to investor confidence in our capital markets."

This committee, made up of some very powerful and statist players, will "examine auditing industry concentration, financial soundness, audit quality, employee recruitment and retention, in addition to other topics. Treasury expects the committee to produce findings and recommendations by early summer 2008." The government will also determine whether or not the structure of audit firms is proper, and whether the auditor profession is sustainable. The government is not hiding its omnipotent agenda; the fact that they will "examine" the employee recruiting and retention process should send some fairly transparent clues.

Sarbanes-Oxley: Helping to Nationalize Accounting & Auditing

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Thursday, October 04, 2007

Auditing the Auditors after Sarbanes Oxley

How has the auditing industry evolved since the 2002 Sarbanes-Oxley Act? Treasury Secretary Henry Paulson aims to find out.

A committee formed by Mr. Paulson to address what he has called challenges facing the auditing profession will spend the next year focusing on audit firm concentration, audit quality and communications between auditors and investors.

The 21-member committee, which includes a mix of business, regulatory and academic representatives, is expected to make recommendations by summer 2008. The timing of those recommendations could pose a challenge for Mr. Paulson, however, since they will come just months before the Bush administration leaves offices and as the 2008 elections begin to occupy the attention of Congress. Treasury officials played down those concerns, saying the recommendations aren't intended for the "short term" and can be implemented once Mr. Bush -- and Mr. Paulson -- leaves office.

Auditing the Auditors after Sarbanes Oxley

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