Audit

In mid-October, accounting firm Grant Thornton LLP was contacted by both the Securities and Exchange Commission and the Public Company Accounting Oversight Board about its role as auditor of Refco Inc.

The Committee of Sponsoring Organizations, the private sector group working to improve the financial reporting process, has issued a draft to help small filers comply with internal controls requirements on a cost-effective basis.

Big Four audit firm KPMG and its global network reported combined member firm revenues of $15.65 billion for the year ended Sept. 30, 2005, a 16.4 percent rise in U.S. dollars versus the prior year.

Since the passage of Sarbanes-Oxley more than three years ago, more than half of public and private companies participating in a survey revealed that they have changed their respective revenue recognition policies as a result of the sweeping reform act.

President Bush has nominated economic advisor Ben Bernanke to succeed Federal Reserve Chairman Alan Greenspan, who will retire January 31, after 18 years at the helm of the Fed.

Computer equipment and telephone lines don't fall within a reasonable definition of brokerage and research services that investment managers may charge to their clients, according to proposed guidance issued by the Securities and Exchange Commission on the use of "soft dollars."

In a unanimous voice vote, the governing Council of the American Institute of CPAs agreed to refocus the mission of its Center for Public Company Audit Firms.

STUN GUN MAKER SWAPS AUDITORS: Three months after restating its 2004 earnings, stun gun manufacturer Taser International Inc. said that it had fired Big Four firm Deloitte & Touche as its auditor.In May, Taser said that miscalculated tax amounts related to employee stock options had led to the restatement of its 2004 earnings - amounting to a penny per share.

In several sports, especially golf, tennis and baseball, a player occasionally makes contact with the ball in the exact right place on the club, racket or bat.Hitting it on the "sweet spot" brings about the maximum transfer of energy under full control. Last June's report out of the Securities and Exchange Commission on off-balance-sheet financing really hit a sweet spot by pointing out several areas for improvement in financial reporting practice.

Roughly two thirds of companies in the S&P 500 have exceeded analysts' estimates on earnings per share dating back to the first quarter of 2004 -- a signal that companies have become more conservative on their earnings guidance.

Since Section 404 of the Sarbanes-Oxley Act went into effect, both external and internal auditors have been unsure exactly how to treat "the work of others," not to mention "each other."The Securities and Exchange Commission and the Public Company Accounting Oversight Board have made it clear that public auditors need to scrutinize companies more carefully, including their internal controls over financial reporting, but at a PCAOB roundtable discussion in April, auditors and corporate financial officers complained of the increased cost of these intensified audits.

Weak financial management at the Securities and Exchange Commission has led to budget overruns of nearly $50 million in two years, according to a report issued by the Government Accountability Office.

Clerks at the nation's bankruptcy courts processed a record 205,129 personal bankruptcy filings last week, and a private consulting firm estimates that a backlog of unprocessed filings could push the total to 300,000.

A federal prosecutor asked a Los Angeles judge to deny bail to a former KPMG partner indicted in the government's tax shelter fraud case, calling him a flight risk.

According to a recent study, the value of stock options given to employees at the nation's largest companies dwindled by roughly 60 percent throughout 2001-04.

The Securities and Exchange Commission's Advisory Committee on Smaller Public Companies has announced plans for a two-day meeting in Washington, D.C., on Oct. 24 and 25.

The government added 10 defendants to its indictment in the KPMG LLP tax shelter investigation, including the Big Four accounting firm's former chief financial officer, bringing the number of people charged in the case to 19.

The Social Security Administration recently announced the highest cost-of-living increase since 1991, setting the adjustment at 4.1 percent for more than 52 million retired and disabled recipients.

PricewaterhouseCoopers announced that Samuel A. DiPiazza, Jr. has been reappointed to a second four-year term as chief executive of PricewaterhouseCoopers' global organization. His new term will begin Jan. 1.

After trade groups went public with auditor guidance outlined by the American Institute of CPAs in a draft white paper, a number of groups on Wall Street have turned to the federal government with their own concerns.