EUROPE STREAMLINES PROCESS FOR OUTSIDE AUDIT FIRMSBrussels - The European Commission has decided to cut some of the red tape to allow audit firms from other countries, including the U.S., to operate in Europe.
The decision grants a transitional period for the registration requirements for audit firms from non-European Union countries. It also clarifies how the authorities in the EU's member states should deal with so-called "third-country" audit firms under the EU's Statutory Audit Directive, which the member states were supposed to have "transposed" into their national law on June 29 of this year. So far, 12 of the EU's 27 member states have completely implemented the directive, and most of the others have transposed major parts of the directive.
The decision allows 30 third-country audit firms to continue their audit activities regarding third-country companies listed on European markets by granting the audit firms a transitional period for the registration requirements until July 1, 2010. However, the transition will only be granted if the audit firms comply with the minimum information requirements for investors in Europe.
Besides the U.S., the decision also applies to Argentina, Australia, the Bahamas, the Bermudas, Brazil, Canada, the Cayman Islands, Chile, China, Croatia, Guernsey, Jersey, the Isle of Man, Hong Kong, India, Indonesia, Israel, Japan, Kazakhstan, Malaysia, Mauritius, Mexico, Morocco, New Zealand, Pakistan, Russia, Singapore, South Africa, South Korea, Switzerland, Taiwan, Thailand, Turkey, Ukraine and the United Arab Emirates.
AICPA'S AUDIT SAMPLING GUIDE
New York - The American Institute of CPAs has released Audit Sampling, a newly updated audit guide containing the latest requirements and practices for auditors. The institute has updated the guide for the first time since 2001 with new case studies and an in-depth look at non-statistical audit sampling. The appendices include sampling tables, testing considerations and a comparison of the key provisions of the risk assessment standards.
Expanded guidance includes the application of sampling to tests of controls and details, determining the sample size, and evaluating sample results. The guide reflects the Defining Professional Requirements Standard (SAS No. 102), and includes guidance on audit documentation (SAS 103) and communicating internal control-related matters (SAS 112).
The guide costs $69 for AICPA members and $86.25 for non-members. For more information, visit www.cpa2biz.com or call (888) 777-7077.
DCT DISMISSES KPMG
DCT Industrial Trust, a Denver-based real estate investment trust, has dismissed Big Four firm KPMG as its auditor and engaged Ernst & Young as its new independent accountant. In a filing, DCT said that the auditor change was not the result of any disagreement over accounting practices or principles. KPMG's audit reports on DCT's financials for the years ended Dec. 31, 2006 and 2007, did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles.
JUDGE SPLITS CHARGES IN KPMG CASE
New York - The judge presiding over the KPMG tax shelter case has agreed to sever the four tax evasion counts for one of the defendants from the rest of the charges relating to the tax shelter. Raymond Ruble, a former partner with the law firm Brown & Wood, had asked the judge to sever the charges that accused him of evading personal income taxes between 1998 and 2001.
"Although the indictment does not exclude the possibility that Ruble's unreported side-payments were related to the conspiracy, neither does it allege that the unreported income arose from the conspiracy," wrote Judge Lewis Kaplan. "Unguided by an allegation of how the unreported income related to the conspiracy, the court will not hypothesize about how they could be related."
Ruble and three other defendants were expected to face trial in late August. A fifth defendant, Amir Makov, pleaded guilty last September. Judge Kaplan dismissed charges against 13 other defendants last July.
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