LETTER CAMPAIGN SUPPORTS PRIVATE STANDARDS BOARD

New York - Close to 2,500 letters have been written to the Financial Accounting Foundation supporting the creation of a separate standards board for private company accounting, according to the American Institute of CPAs.

At the Spring Meeting of Council, AICPA president and CEO Barry Melancon encouraged CPAs to write to the FAF to encourage it to set up a separate board. The FAF has set up a trustee working group to study the issue.

"Ninety-nine percent of the letters from the privately held company constituency demanded that the Financial Accounting Foundation create differential standards for privately held companies," Melancon said. "We've studied this problem for far too long."

The AICPA has even provided a kind of toolkit on its Web site to help members write letters to the FAF in support of a private company board.

 

PWC AND CROWE SUED OVER COLONIAL BANK AUDITS

New York - PricewaterhouseCoopers and Crowe Horwath have been sued over their audits of Colonial Bancgroup by the bankrupt bank's trustee.

The bank, formerly headquartered in Montgomery, Ala., failed in 2009 after it disclosed that it had bought over $1 billion in troubled mortgages from mortgage-lending firm Taylor Bean & Whitaker that Taylor Bean did not actually own. The bank's deposits were subsequently sold to BB&T Corp. by the Federal Deposit Insurance Corp.

The complaint against the bank's two former auditing firms charges them with accounting malpractice and professional negligence for not detecting the fraud. The two firms were also sued for breach of contract. The complaint accused the firms of violating generally accepted auditing standards while the fraud lasted from 2002 to 2009.

PwC spokesman Christopher Atkins declined to comment. "It's our policy not to discuss matters in litigation," he said.

Crowe Horwath disputed the claims in the lawsuit.

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