Audit

By my count, Securities and Exchange Commission Chairman Christopher Cox must have stamped out at least another couple of brushfires over these recent summer months.

Kathleen L. Casey was sworn in as the 88th Securities and Exchange Commission commissioner by Chairman Christopher Cox on Monday.

The Financial Accounting Standards Board is likely to formally add a project on lease accounting to its agenda this week, according to published reports.

Late last month, the SEC announced the institution and simultaneous settlement of an enforcement action against Morgan Stanley (Morgan Stanley & Co. Incorporated and Morgan Stanley DW Inc.). The SEC action alleged that Morgan Stanley failed to maintain and enforce adequate written policies and procedures to prevent the misuse of insider information in its possession.

More than 2,000 companies appear to have used backdated stock options, according to a new paper from professors at the University of Iowa and Indiana University.

New rules will allow the New York State Board of Regents stronger local oversight of CPAs who are disciplined by the Securities and Exchange Commission.

The Financial Accounting Standards Board issued an interpretation that clarifies the way companies account for uncertainty in income taxes.

New guidance, stressing efficient application of effective internal control over financial reporting, was released this week by the Committee of Sponsoring Organizations of the Treadway Commission.

Following a judge's suggestion, 16 former KPMG partners facing charges over their role in selling questionable tax shelters are suing the Big Four firm for legal fees.

The Securities and Exchange Commission requested that the Public Company Accounting Oversight Board delay issuing guidance related to backdating stock options.According to The Wall Street Journal, the PCAOB had planned to issue an alert to accounting firms about the front-burner topic, which would have advised auditors about grant issues they should examine in audits.

KPMG LLP announced that it has formed a U.S.-based India Tax Center of Excellence to assist and advise companies that have, or are planning, operations in India. The center will also provide tax services to India-based companies with investment interests in the United States.

Yale University officials said that they have received three subpoenas as federal regulators have launched a probe into the Ivy League school's accounting practices surrounding its government research grants.According to published reports, Yale received the subpoenas from the Department of Health and Human Services, the Department of Defense and the National Science Foundation. The subpoenas cover some 47 grants valued at roughly $45 million.

James Lockhart, director of the Office of Federal Housing Enterprise Oversight, said that mortgage finance concerns Fannie Mae and Freddie Mac should each be allowed to prop up the U.S. home mortgage market in periods of financial malaise.In an interview with The Wall Street Journal, Lockhart said the companies, whose combined mortgage portfolio is roughly $1.4 trillion, creates a serious risk if they fail to control their interest-rate risks, but nevertheless both have a role for their portfolios, albeit on a smaller scale, to ensure monies available for home loans.

The Securities and Exchange Commission is looking into the relationship between the former First Union Corp. and KPMG, according to published reports.

Shareholders of a company that went bankrupt after a fraud by some officers can sue its accounting firm on charges it failed to detect the fraud, New Jersey's Supreme Court ruled this week.

Defense contractor Raytheon Co. and two of its former top executives have settled improper accounting charges brought by the Securities and Exchange Commission.

A judge has ruled that it was unconstitutional pressure from the government that led KPMG to place a cap on how much of the legal tab it would pick up for 16 former employees facing federal charges over the sale of questionable tax shelters.

More companies are using "continuous auditing" techniques, which are designed to use technology to accelerate the internal audit cycle and improve risk and control assurance, according to a new study from PricewaterhouseCoopers.

The Siegfried Group and AccountAbilities bear watching. They are two examples of what I expect to be a growing trend--entities entering into arrangements to provide staff to CPA firms on a retainer type of basis. The idea is that if a firm doesn't have enough internal staff for an engagement, the entity will provide the necessary seasoned staff and expertise.

The Financial Accounting Standards Board will hold two public roundtable meetings today to discuss the board's proposal to improve accounting for postretirement benefit plans, including pensions.