Audit

When I was a kid, sometime around the Battle of Gettysburg, I had run up a pretty good comic book collection. I was addicted to comic books and had first editions, first issues of Batman, Superman, Joe Palooka, Little Lulu, and The Katzenjammer Kids, to name a few. The dimes I got from my grandparents went a long way then.But, alas, you know exactly what happened to them, don’t you? I left for four years of college, plus a couple of years in the service (it was mandatory at that time), and by the time I came home (along with many of my neighborhood friends), those cartons in the garage? Well, where they are, I’m unsure but it could have been income in retirement.

Resolutions relating to improving personal finances in the New Year will likely hold steady year-over-year, according to an unscientific survey.

Fannie Mae has filed a lawsuit against former auditor KPMG, accusing the Big Four firm of 17 counts of negligence and breach of contract.

U.S. Deputy Attorney General Paul McNulty has authored a memo revising the Department of Justice’s guidelines for federal prosecutors looking to press charges against white-collar criminals.

After a federal judge denied a request from Jeffrey Skilling to remain free on bond pending an appeal, the former Enron chief executive reported to a low-security federal prison in Minnesota Wednesday.

Aside from identifying a number of nuances in last year’s tax law changes and interpreting the effects of congressional leadership turnover, a new tax guide should help midsized business owners monitor a series of federal tax trends for 2007.Published by national CPA firm RSM McGladrey, the “2006 Tax Planning Guide” includes a Top 10 list of tax-planning strategies for midsized companies and issues owners should watch for on the horizon.

Grant Thornton International announced that revenues for its worldwide member firms were up 12 percent, to $2.8 billion, for the fiscal year ending Sept. 30.

The U.S. Court of Appeals in New Orleans has given a reprieve to Enron’s former chief executive, who was due to report to prison yesterday and begin serving a 24-year sentence.The court’s stay of the order will keep Jeffrey Skilling, 53, out of the low-security Federal Correctional Institution in Waseca, Minn., for a while longer. He was convicted in May on securities fraud and conspiracy charges, related to his role in the accounting fraud that led to the company’s historic collapse.

A federal banking regulator has fined Grant Thornton LLP $300,000 for “reckless conduct” in performing a 1998 audit of the failed First National Bank of Keystone.

A proposal from the Financial Accounting Standards Board would require companies to provide more information about the effects of derivative and hedging activities on financial statements.

In an effort to foster dialogue between auditors and those who govern non-public companies - including not-for-profits and governmental entities - the Auditing Standards Board has issued a standard requiring auditors to communicate certain issues with whomever is charged with corporate governance.The board has also established a formal attestation hierarchy and fine-tuned a few existing standards.

I noted a few weeks ago that the "Joy of Cooking" celebrated its 75th anniversary with the publication of its ninth edition.

The Public Company Accounting Oversight Board will meet on Dec. 19 to consider exactly what changes to Sarbanes-Oxley’s internal control measures it will issue for public comment.

Deloitte & Touche is the first of the Big Four to have its annual inspection posted by the Public Company Accounting Oversight Board this year.The PCAOB’s Nov. 30 report was posted to the board’s Web site late last week and cites Deloitte for failing to obtain sufficient evidence to back up decisions in a number of audits of public companies. The firm disagreed with the board's conclusions in nearly two-thirds of the audits cited, offering a rebuttal of many of the board's criticisms as part of a response letter included with the PCAOB's report

Mayer Hoffman McCann had expanded its presence again in Maryland, with the acquisition of the 14-employee Riggleman Smyth Accounting Services LLC.Financial terms of the deal were not disclosed, though Riggleman Smyth’s partners were admitted as shareholders in Mayer Hoffman.

Gerry Golub, who helped build Goldstein Golub Kessler LLP into one of New York’s most high-profile and progressive firms, announced that he will retire after a 44-year career in public accounting -- the last 25 spent as managing partner of GGK.

In the next couple of weeks, we will be sending out Accounting Today's annual Top 100 Firms survey, to be published in March 2007. The list, and our accompanying report on the profession's trends can only be as good as the data you provide.Over the years, the contact list for the survey has grown to more than 150 firms, all of which we will be sending this year's survey to via e-mail. The rankings are compiled according to annual revenues and this year, firms with over $25 million in revenue for 2006 should be certain they return the paperwork.

San Diego’s City Council has approved paying another $2.2 million to KPMG for the Big Four firm’s long overdue 2003 audit. The additional spending approval brings the city’s total KPMG tab to $6.6. million.

I am working on an article for the January issue of Practical Accountant on the risk assessment standards that apply to all non-public company audits. They are effective for audits of financial statements for periods beginning on or after Dec. 15, 2006.

Just a few days after receiving the Public Company Accounting Oversight Board’s proposed budget for 2007, the Securities and Exchange Commission unanimously approved the document, which includes a 4.2 percent increase in funds, setting next year’s outlays at $136.4 million.The board’s budget, less registration fees collected from accounting firms throughout 2006, form the basis for assessment of accounting support fees in 2007. The budget also includes a provision that the board will tap into an excess of its working capital reserve fund to reduce the overall accounting support fee by $10 million next year.