Audit

A majority of CFOs and senior comptrollers do not agree with proposals to allow companies to file financial statements in International Financial Reporting Standards instead of U.S. generally accepted accounting principles, according to a newly released survey by accounting firm Grant Thornton.

Economic crime still prevails in the United States and other parts of the world, as 53 percent of U.S. companies surveyed in a recent global economic crime study reported that they were affected by some form of it in the past two years, with losses totaling $223 million.

SEC Commissioner Paul Atkins told U.S. business leaders in Japan that a recently issued auditing standard should have the effect of cutting audit fees.

A former Arthur Andersen audit partner has settled charges brought against him by the Securities and Exchange Commission alleging that he assisted in a $300 million fraud committed by an audit client in 2000.Without admitting or denying the charges, Fred Gold agreed to a $100,000 fine, a permanent anti-fraud injunction, and an administrative order barring him from appearing or practicing before the commission.The SEC alleged that Gold should have known that the 2000 financial statements of American Tissue -- the audit of which he supervised and approved -- included fraudulently inflated assets and earnings, and also that in 2001 Gold altered work papers to prevent discovery of the fraud in a peer review, and later tried to hide the audit failure by destroying documents and e-mails after another accounting firm discovered American Tissue's overvalued inventory.Earlier, former Andersen audit manager John Parson and senior accountant Brendon McDonald settled SEC charges in the same matter; Parson for $50,000 and permanent suspension from practicing before the commission, and McDonald for a $30,000 penalty and a five-year suspension.

The Treasury Department has selected a Kansas professor to study the effects of financial restatements.The department picked Susan Scholz, a professor at the University of Kansas, to carry out the study, which will look at the impact of public company financial restatements and the reasons behind them. Treasury Secretary Henry Paulson discussed the need for a better understanding of these issues back in May.While Sarbanes-Oxley requirements and tougher auditing standards have forced companies to issue a growing number of restatements, some observers have questioned whether immaterial restatements might unnecessarily harm investor confidence.Scholz will examine the factors triggering public company financial restatements, describe the restatements, analyze their impact, and evaluate their significance.The Treasury Department chose Scholz through the competitive bidding process. She is an associate professor and Harper Faculty Fellow at the University of Kansas School of Business, and received her doctorate in business administration from the University of Southern California.

Software developer Paisley has announced an updated version of its governance, risk and compliance software, Paisley Enterprise GRC.

The Public Company Accounting Oversight Board released a report on the issues it has identified from inspections of U.S. firms that audit 100 or fewer public companies.

Because of the thousands upon thousands of press releases that I have seen, very few impress or take me by surprise. But the one at www.healthsouth.com/who_we_are/press_releases.asp did just that. In the release, HealthSouth Corporation announced that it has received a $440 million tax recovery from the IRS “for overstatements of taxable income attributable to financial fraud perpetrated by members of prior management.” This recovery includes a $296 million tax refund for the tax years 1996 through 1999, and $144 million of associated interest income.

BIOFUEL ENGAGES GRANT THORNTONBioFuel Energy Corp., a Denver-based producer of ethanol, has named Grant Thornton as its new independent accountant.

Regular readers know that we often challenge financial reporting participants to "tell the truth, the whole truth, and nothing but the truth."This ancient oath covers all the bases by binding witnesses to tell what they know to be true, not diminished by leaving something out and not augmented by adding something extraneous. One or even two out of three simply isn't good enough.

Dietary supplement developer Mannatech has fired Grant Thornton as its auditor and appointed BDO Seidman in its place after a dispute over the company's chairman.

PricewaterhouseCoopers has several significant deficiencies with its auditing, according to an inspection report issued by the Public Company Accounting Oversight Board.

1987: A TOUGH ENTRANCEIt was not, perhaps, the best of times for the accounting profession: Scandals, including the implosion that summer of the brazenly fraudulent ZZZZ Best, had tarnished auditors' reputations, malpractice insurance rates were soaring, college students were staying away in droves, and the Federal Trade Commission claimed that the American Institute of CPAs' rules on professional activities violated restraint-of-trade rules.

Concerned that companies are investing much in internal controls but then risking it all by not monitoring those controls, COSO, the Committee of Sponsoring Organizations of the Treadway Commission, has issued a discussion document that may eventually become a full set of guidelines on monitoring.COSO chairman Larry Rittenberg said he has been pondering this project ever since the Sarbanes-Oxley Act of 2002's Section 404 went into effect.

Radon Stancil and Rick Parkes own Diversified Estate Services, a financial planning firm, based in Cary, NC. They have been in practice for more than 30 years. They also co-founded the N.C. Educational Institute that was formed to teach continued education to other professionals as well as the public. In short, they are pretty knowledgeable fellows. They have come up with 10 smart financial ideas to help ensure that an individual’s retirement nest egg lasts a lifetime. And, here they are:

The Public Company Accounting Oversight Board's Standing Advisory Group met to discuss reports addressing the audit implications of International Financial Reporting Standards in SEC filings, as well as changes in market responses to financial restatements post-Sarbanes-Oxley.

The Public Company Accounting Oversight Board has issued staff guidance on auditing internal controls in smaller public companies, allowing less complex companies to adjust more easily to a recently issued auditing standard for Sarbanes-Oxley compliance.

Wolters Kluwer Tax and Accounting has signed an agreement to buy TeamMate from PricewaterhouseCoopers.

Grant Thornton, the U.S. member firm of Grant Thornton International, posted a 12 percent rise in fiscal 2007 revenues to reach $1.036 billion.

A majority of U.S. companies are being victimized by economic crime, with losses totaling $223 million, according to a new study.