Audit & Accounting

In a rough economy, when liability claims against accountants tend to rise, it's especially critical for CPA firms who expand their practices beyond their comfort areas to know exactly what their policy covers and to make any necessary adjustments. It's especially important considering that liability carriers treat issues differently in their policies, according to Gary Sutherland, chief executive of North American Professional Liability Insurance Agency, an independent broker.

Our column in the Feb. 11, 2008, issue addressed the pitfalls of pursuing off-balance-sheet financing. In light of the August 2010 exposure draft from the Financial Accounting Standards Board and the International Accounting Standards Board that proposes capitalizing all leases, we decided to republish it in order to help readers who might be baffled by this massive paradigm shift. In the next issue, we'll reprint a follow-up column in which we responded to criticisms from an individual who basically had no problem with operating lease accounting, to the point that he didn't even consider it as a way for management to deliberately mislead financial statement users.

A majority of members of the Blue Ribbon Panel on Standard Setting for Private Companies voted in favor of establishing a separate standard-setting board for private company accounting at a meeting Friday, but will wait until December to issue its final recommendations.

The International Accounting Standards Board has amended its standards on financial instrument disclosures to beef up the disclosure requirements for financial asset transfer transactions such as securitizations, and discourage questionable balance-sheet “window dressing.”

The Public Company Accounting Oversight Board is taking a new approach to getting its inspectors in the door of auditing firms outside the U.S. that claim they can’t be inspected because of legal restrictions from foreign officials.

Accounting Today’s Growth and Profitability Summit is taking place November 17-18, 2010 at the Wynn Resort in Las Vegas.

The Center for Audit Quality is partnering with three other organizations to develop ways to deter and detect financial reporting fraud.

AICPA president and CEO Barry Melancon is calling for the Financial Accounting Foundation to set up a separate standards board for private company accounting.

IMGCAP(1)]Check out the digital edition of the October 11, 2010 issue of Accounting Today.

The American Institute of CPAs has sent the Financial Accounting Standards Board a letter criticizing FASB’s proposal to account for nearly all financial instruments at fair value.