Audit

The Securities and Exchange Commission has begun asking for comments on a document that outlines a variety of proposed changes in the way companies do their financial reporting.

The International Federation of Accountants has released a paper describing the experiences of 10 senior-level accountants with establishing effective internal control systems inside businesses.

If forensic accounting is sexy, litigation support is hot - and CPAs who offer these specialty services are finding their firms' business boiling over into new areas.Being retained by legal counsel to give an expert opinion is at the core of litigation support, a subset of forensic accounting. The two fast-growing niches are very much related, but experts say that forensic accounting is more of an umbrella term that encompasses litigation support.

NEOPHARM RETAINS BDO SEIDMANPharmaceutical concern NeoPharm Inc., a marketer of cancer treatment drugs, has engaged BDO Seidman as its new independent accountant, succeeding Big Four firm KPMG.

Two years ago, we criticized the Financial Accounting Standards Board for publishing an exposure draft that proposed doing away with the Rule 203 exceptions that permit, and even encourage, departures from generally accepted accounting principles when compliance would produce misleading financial statements. Underlying this proposed action was a presumption that compliance with published GAAP always leads to relevant and reliable information. Back then we prepared a series of columns describing the intolerable flaws in this premise.The first two focused on how essential it is to allow Rule 203 exceptions to foster innovations when the old ways can no longer be considered adequate.

Computer maker Dell said its audit committee has finished its investigation into the company's accounting and financial reporting issues and has identified significant errors and irregularities.

On a muggy July day five years ago, President George W. Bush put his pen to the Sarbanes-Oxley Act, an expansive piece of corporate reform legislation designed to help restore investor confidence in a nation scarred by an apparently unending series of accounting scandals.The 11-section measure, which essentially changed the way public companies do business, ushered in a cascade of new reforms, service prohibitions and standards for public issuers, their boards and the CPA firms that audit them. It was the most deliberately invasive regulatory reform passed since the Roosevelt administration, touching nearly every aspect of the financial reporting process.

The Securities and Exchange Commission approved the Public Company Accounting Oversight Board's new internal control auditing standard by a 5-0 vote in late July.Registered audit firms are now required to use the new standard for all audits of internal controls no later than for fiscal years ending on or after Nov. 15, 2007. Auditing Standard No. 5 replaces the older AS2.

PricewaterhouseCoopers and IBM agreed to pay about $5.3 million to settle a lawsuit brought by the Justice Department over accusations that they paid and solicited kickbacks for technology contracts with government agencies.

Thomson Tax & Accounting's Practitioners Publishing Co. unit has beefed up its audit guidance line with two products aimed at auditing construction contractors and financial institutions.

Microsoft has launched Microsoft Money Plus, an update to its personal financial software targeted at consumers, entrepreneurs and small businesses.

The future of the accounting profession will be largely determined by its response to escalating talent shortages and other challenges of the post-regulatory-reform era, says a distinguished group of leaders in this field. The Robert Half International Financial Leadership Council recently met and recommended a number of strategies for addressing these issues. It’s all set forth in a new report, Charting the Future of Accounting, Finance and Audit Professions. The Council, which represents a diverse range of leaders from the corporate world, public accounting firms, industry associations, and top accounting universities in the U.S. and Canada, discussed the impact of changing workforce demographics on today’s accounting landscape and the recruitment and retention challenges associated with these shifts. Some of the key findings and recommended solutions are:

Albridge Solutions has added mutual fund and exchange-traded fund research to its Albridge Wealth Reporting software.

BDO Seidman was ordered to pay $170 million in compensation and $350 million in punitive damages by a Florida jury that blamed the accounting firm for negligence in failing to uncover fraud in its audits of a financial services company.

Grant Thornton said that its Business Optimism Index has hit an all-time low, the lowest point since the accounting firm introduced the semiannual confidence measure in May 2002.

Just recently, I was reading an online article in the East Bay Business Times, a California business-to-business newspaper, and I noticed a very effective ad for the San Ramon Valley Conference Center. It linked me to www.sanramonvalleyconferencecenter.com, the Web site for the conference site, where I was able to take a virtual tour of the facilities.

Accounting irregularities caused Beazer Homes to delay its third-quarter financial report after the company said in a financial filing that it had encountered accounting problems.

Linden Lab, creator of the online virtual world Second Life, has begun outsourcing its finance and accounting work to Consero Global Solutions.

Board directors and general counsel are spending more time on enterprise risk management as a result of Sarbanes-Oxley compliance, but they would prefer not to, according to a newly released study.

Grant Thornton named David Auclair as head of the accounting firm's National Tax Office.