SEC Fines Friedman For Piss-Poor Auditing So They Remember to Exercise Professional Skepticism Next Time
Last week the Securities and Exchange Commission charged Friedman LLP with with improper professional conduct for failing to comply with the standards of the Public Company Accounting Oversight Board while conducting audits of two public companies from 2017 through 2020. Friedman has agreed to settle the charges and will pay approximately $1.5 million in total […]
Big 4 Firms Are Fighting Engineers Over the Right to Bill Clients For Climate Disclosure Audits
Interesting piece over at the Wall Street Journal this morning about environmental disclosures or, more significantly, who gets to charge clients for auditing this data under SEC climate disclosure rules proposed in March. Read: Firms that verify businesses’ climate data are at odds over who is qualified to perform the work, a pivotal and potentially […]
Which Firm Had the Most IPO Audit Clients In Q1 2021?
The SPAC bubble didn’t burst during the first quarter of 2021. Of the 407(!) initial public offerings in U.S. markets between Jan. 1 and March 31, 298 (73.2%) involved blank check or special-purpose acquisition companies, according to a new analysis from Audit Analytics. In total, the 407 IPOs raised nearly $134.7 billion—an increase of more […]
Which Firm Had the Most IPO Audit Clients In Q4 2020?
Audit Analytics has released its analysis of a very lucrative fourth quarter of 2020 for initial public offerings in the U.S. Including blank check companies, also called special-purpose acquisition companies, there were 210 IPOs between Oct. 1 and Dec. 31, 2020, which raised more than $65 billion. Compared to the third quarter, total proceeds in […]
FASB and PCAOB Do a Poor Job on Diversity and Inclusion
I’ve spent a good portion of my career monitoring the accounting and auditing standard-setting world and Big 4 firms. So, I read with great interest the letter to the editor to Going Concern on whether the Big 4’s equity, diversity, and inclusion (EDI) efforts are corporate BS. It made me think about the FASB and […]
Which Firm Had the Most IPO Audit Clients In Q3 2020?
There was an explosion of initial public offerings in the U.S. in the third quarter, with 165 companies going public between July 1 and Sept. 30, raising more than $61.5 billion—by far the most active quarter in 2020 and the most active Q3 in the past five years, according to our friends at Audit Analytics. […]
Here Are 6 Reasons Why the SEC Whistleblower Program Is Successful
In response to the 2008 financial crisis, Congress passed the Dodd-Frank Act in July 2010, which, among other things, created the SEC Whistleblower Program. A decade later, the program has proven to be successful in generating high-quality information regarding securities laws violations that have enabled the SEC to halt fraud schemes and protect investors. Since issuing […]
SEC Employees In DC Will Be Working From Home for the Time Being
While some accountants are wondering why their firms haven’t told them to just work from home until the coronavirus hysteria dies down, the SEC told its employees in Washington, DC, just that in an email yesterday. The Washington Post reported: The Securities and Exchange Commission on Monday asked employees at its D.C. headquarters to stay […]
Senators to SEC Chair Jay Clayton: What the Hell Is Going On At the PCAOB?
It seems we weren’t the only ones who were disturbed by the Wall Street Journal article last week detailing the dysfunction at the PCAOB under the tremendous leadership of chairman and meetings hater William Duhnke. In a letter dated Oct. 17 to SEC Chair Jay Clayton, Sens. Sherrod Brown (D-OH) and Jack Reed (D-RI) called […]
PCAOB Fined RSM US $15,000 for Taking Its Sweet-Ass Time to File a Form 3
Say a PCAOB-registered accounting firm is a defendant or respondent in an administrative or disciplinary proceeding that was initiated by another regulator. That firm has to let the PCAOB know about this by filing Form 3, Special Report, within 30 days after the event. The firm also has to let the PCAOB know that it […]
Elon Musk Made It Clear He Gives an Immaterial Number of F*cks About the SEC
ICYMI, Elon Musk appeared on 60 Minutes on Sunday, and while it wasn’t quite as good as him sparking a blunt on Joe Rogan’s podcast, it was still a tad incendiary. Musk’s beef with the SEC started in August when he tweeted that he was “considering” taking Tesla private at $420 a share (LOL 420, […]
Three Ex-BDO USA Accountants Will Be Sitting on the Sidelines For a While Due to Really Bad Auditing Decisions
Coming off the heels of a horrible Public Company Accounting Oversight Board inspection report, in which 16 of 24 audits inspected in 2016 were found to have deficiencies, BDO USA is again in the news for all the wrong reasons. Three former BDO accountants were suspended by the Securities and Exchange Commission on Oct. 12 […]
Federal Judge Strikes Down Ex-KPMG Partners’ Request for SEC Evidence Search
If you’re dying to know what’s going on with David Britt, David Middendorf, and Thomas Whittle, the former KPMG partners who are accused of participating in a scandal in which confidential Public Company Accounting Oversight Board inspection information was leaked to the accounting firm, Law360 has an update: A group of former and would-be KPMG auditors […]
PCAOB Told SEC ‘Hold My Drink,’ Went All Enforcement-Crazy on Accountants in 2017
2017 was a banner year for the Public Company Accounting Oversight Board when it came to enforcement actions against accountants. For the Securities and Exchange Commission, not so much. The PCAOB finalized 35 enforcement actions involving “accountants”—otherwise known as CPAs employed by SEC registrants, auditors, and audit firms—last year, up from 28 in 2016, according […]
SEC Calls Off the Dogs on Exxon Mobil
Exxon Mobil Corp. is out of the Securities and Exchange Commission’s doghouse for now, as the regulator ended its two-year accounting investigation into how the company calculates the value of its assets, as well as possible oily investor disclosures about climate change. According to a Bloomberg News report, Exxon Mobil received a letter from the […]
The SEC Would Like a Word With Long Blockchain
Back in my day, it was enough to take an iconic cola brand and make a clear version to boost stock prices. Of course, that didn’t exactly work out for Pepsi in the long term either. In December of last year, New York-based Long Island Iced Tea Corp. changed its name to Long Blockchain Corp. and […]
Toshiba Seems to Have Escaped SEC Penalty After Accounting Probe Ends
It was reported in March 2016 that the Securities and Exchange Commission and the Justice Department were investigating the “accounting problems” at Toshiba Corp.’s business units in the United States. Well, according to Reuters, the SEC has completed the investigation, and Toshiba is likely breathing a sigh of relief. “We understand that all SEC investigations […]
SEC Chief Accountant Wesley Bricker Had Nice Things to Say About Management Accountants
Not that he would really say anything bad about management accountants since he was at the Institute of Management Accountants’ annual conference, but Securities and Exchange Commission Chief Accountant Wesley Bricker threw some bouquets their way during a speech on June 19. From Accounting Today: “As management accountants, your work is vital to the financial […]
Foreign Affiliates of Big Audit Firms Screwed Up Some Stuff
The Securities and Exchange Commission fined foreign affiliates of BDO, Deloitte, and KPMG for skirting oversight of the PCAOB. Here’s the skinny: According to the SEC’s orders, the Zimbabwe affiliates of Deloitte & Touche and KPMG improperly audited the majority of assets and revenues of a publicly traded company without registering with the PCAOB. The […]
Former KPMG Employees Learn That Using Confidential PCAOB Inspection Info Has Its Drawbacks
Six former employees of KPMG have been arrested and charged “with conspiring to defraud securities regulators and misuse of confidential auditing information.” These charges stem from the leak of confidential PCAOB inspection information that we learned about last year. The Securities and Exchange Commission also filed civil charges in a parallel action. The 54-page indictment lists […]
We Might Have New PCAOB Member Nominees Soon, Someday, Maybe
Just keeping it warm. Dave Michaels reports at The Wall Street Journal that SEC Chairman Jay Clayton’s preferred choice to lead the PCAOB is rumored to be the same person everyone thought it would be: SEC Chairman Jay Clayton wants William Duhnke to become the PCAOB’s next chairman, according to one of the people familiar […]
SEC Division of Economic and Risk Analysis Also Offers Respectable Twitter Chops
A few weeks back, we shared some of the witty banter from the SEC Fort Worth Twitter account. But then, late last week, we were referred to the SEC Division of Economic and Risk Analysis’s account, and it turns out, they’re holding their own. The account was created back in March but they seem to […]
As I Live and Breathe, the SEC’s Fort Worth Office Has a Great Twitter Account
Okay, if you hate puns, or word play in general, mixed in with your securities enforcement and oversight info then you won’t think it’s great, but then that would make you a hater of great things. Here’s today. We asked our accountants to move a heavy box out of the way, but they couldn’t budget. […]
The Trump Administration Will Drain the PCAOB Swamp
The election of Donald Trump is likely to transform the Public Company Accounting Oversight Board (PCAOB). While the PCAOB is technically a non-partisan private regulator, it will not likely escape Trump’s commitment to drain the swamp. Jim Doty’s term as PCAOB chairman expired in October of 2015. The PCAOB chairman is nominated by the SEC […]
Partner Names: Coming to an Audit Near You in 2017
After nearly seven years since the first concept release, the SEC approved the PCAOB's rules for disclosing the names of audit engagement partners and other participating firms. You can read the entire SEC order if you find the securities regulation apparatus fascinating. Personally, I think it's interesting that another round of comments is allowed prior […]
SEC in No Rush to Make a Decision on PCAOB Chair
SEC Chair Mary Jo White said that she'll wait until two new commissioners are appointed before deciding on whether James Doty will remain the head of the PCAOB. Currently, the SEC only has three commissioners after Dan Gallagher and Luis Aguilar both left last year. But how long do we have to wait?! That all […]
At Least One SEC Commissioner Has a Sense of Humor
Michael Piwowar made a funny: Imagine a world where GAAP or other reporting standards did not exist – where management could develop its own numbers based on its own poorly-defined criteria. Management might be tempted to create numbers that provide the illusion of performance but in reality are largely irrelevant to measuring the actual performance […]
Auditors, PCAOB Earn Attaboys From SEC Chief Accountant
SEC Chief Accountant James Schnurr says that, although "there's room for improvement" audit quality "is getting better" and the PCAOB has "deepened their expertise" and "their inspection process has matured." This explains why we've seen more deficiencies, he says. I'm sure KPMG appreciates the vote of confidence. [AT]
The SEC Put Out Its 2015 Highlight Reel
The SEC's fiscal year wrapped on September 30, so naturally, they wanted to take a victory lap with their enforcements results. Among the accounting and auditing highlights brought up are: Computer Science Corporation's manipulation of "accounting models that artificially increased its profits but had no basis in reality." Deutsche Bank's overvalued derivatives that exposed them […]
More Twists in the Race to Be The Next PCAOB Chairman
John White, a prominent lawyer with Cravath, Swaine & Moore, sits on the PCAOB's Standing Advisory Group. His wife, Mary Jo, chairs the SEC. She, along with the other commissioners, will choose the next PCAOB chair. Some people don't like how that looks: The Center for Effective Government, an advocacy group, said White should step […]
Bonus Watch: Anonymous Whistleblowers
Things are looking pretty good for someone who will not be named in the matter of something that will not be mentioned: The Securities and Exchange Commission today announced a whistleblower award of more than $3 million to a company insider whose information helped the SEC crack a complex fraud. The multi-million dollar payout is […]
Audit Committees Might Get More Homework
Chief Accountant James Schnurr let it slip that the Commission is preparing a concept release that will, "[seek] formal feedback from investors about whether they are getting enough information from audit committees." Former Deloitte CEO Jim Quigley, may be one of the few audit committee members who are saying, "BRING IT ON." [CFOJ]
SEC Didn’t Appreciate McGladrey Partner’s Lack of Attention to Detail
Here's a story of hedge fund of fund guys doing hedge fund of fund guy things — onshore fund, offshore fund, master fund, an investment advisor, along with a couple other affiliated companies — and not being very good at some of the finer points: An SEC investigation found that Alpha Titans LLC, its principal […]
The SEC Folded Like a Cheap Lawn Chair in Its Settlement With Big 4 Chinese Affiliates
As you know, the much-awaited SEC settlement with Big 4 China affiliates hit the pages on Friday. This particular dust-up came about over some workpapers the SEC has waiting on since the Ming Dynasty or thereabouts. Here's the TL;DR ICYMI: The Securities and Exchange Commission today imposed sanctions against four China-based accounting firms that had refused to […]
The SEC Finally Got Around to Sanctioning Big 4 Firms in China
The SEC has been pretty busy lately, what with tongue-lashing the PCAOB about their duties and all. But somehow they found time in their busy schedule to get around to that whole sanctioning Big 4 affiliates in China thing: The Securities and Exchange Commission today imposed sanctions against four China-based accounting firms that had refused […]
SEC Tired of Telling the PCAOB How to Do Their Job
Colin buried this one in ANR this morning but let's trot it out into the light where it belongs. Michael Rapoport writes for the Wall Street Journal: Renewing criticisms from December, SEC officials said the Public Company Accounting Oversight Board should be focusing on enacting rules governing the nitty-gritty of how auditors do their jobs. […]
FASB Supports the SEC’s Commitment to Tiptoeing Around IFRS Adoption Indefinitely
This week, the AICPA Conference on Current SEC and PCAOB Developments is going down in Washington and unfortunately I am missing it this year as I'm due in Dallas this week for AccountingWEB Live which is exponentially more exciting (or something). Today, SEC Chief Accountant Jim Schnurr reiterated the commission's commitment to pussyfooting around any […]
#TBT: Former SEC Chairman Christopher Cox on The SEC’s IFRS Roadmap
The great thing about speeches these days is that they generally live in perpetuity on the Internet, even if the speech-makers would hope that we have forgotten them. Oh, you wish. Today's Throwback Thursday comes from deep in former SEC Chairman Christopher Cox's closet. Made in March of 2007, over a year before the SEC […]
Florida Auditor Busted by SEC For Failure to Rotate
Come ON, man. This isn't even worth getting in trouble for. The Securities and Exchange Commission today sanctioned a Florida-based auditor for violating federal laws and regulations requiring lead audit partners to periodically rotate off their audit engagements with a publicly traded company in order to preserve the integrity of the financial reporting process. The […]
A Quick and Dirty Guide to Getting Away With Insider Trading
Insider trading: the classic white collar money-making scheme. Do it right, and you’ll amass a fortune. Screw it up, and you’ll wind up stamping out license plates and teaching ethics CPE from behind bars with Scott London. We're here today to tell you how NOT to get caught because who knows, some day you may […]
SEC Accuses Mayer Hoffman McCann of Really Stupid and Obvious Independence Violation
Let's break down this order from the SEC, filed last week, as simply as we can because A) I'm still high on cold pills and B) ain't nobody got time for that. Mayer Hoffman McCann (MHM) is "associated with" CBIZ (CBIZ) through an alternative practice structure (APS). This means MHM leases from CBIZ virtually all […]
SEC Not Happy With Bank of America’s Sloppy Accounting
The Securities and Exchange Commission today charged Bank of America Corporation with violating internal controls and recordkeeping provisions of the federal securities laws after it assumed a large portfolio of structured notes and other financial instruments as part of its acquisition of Merrill Lynch. Bank of America agreed to pay a $7.65 million penalty to […]
This Massive SEC Whistleblower Award Will Make You Wish You’d Seen Something and Said Something
The Securities and Exchange Commission today announced an expected award of more than $30 million to a whistleblower who provided key original information that led to a successful SEC enforcement action. The award will be the largest made by the SEC’s whistleblower program to date and the fourth award to a whistleblower living in a […]
Third Idiot Charged in Elaborate Post-It Eating Insider Trading Scheme
Do you all remember the Post-It note eating fools the SEC accused of insider trading? Well, now the SEC has charged the alleged "middleman," who was the one the SEC claimed was eating the Post-it notes with insider-y things written on them back in March though they didn't reveal his name at the time. Today's […]
The SEC Is Tired of Procrastinating Late Filers Taking Their Sweet Ass Time
The SEC announced action yesterday against 28 officers, directors, or major shareholders for violating federal securities laws requiring them to promptly report information about their holdings and transactions in company stock. Additionally, six publicly-traded companies were charged for contributing to filing failures related to this chronic procrastibation. From the SEC release: The charges stem from […]
Former SEC Chief Accountant Predictably Curmudgeony About the SEC’s New Chief Accountant
Financial Executives International (FEI) has a pretty good piece on the struggles newly-announced SEC Chief Accountant Jim Schnurr will face in his time at our favorite porn-loving securities regulator. You should go read it. Like the whole thing. Make sure you don't miss this part: Lynn E. Turner’s take on the matter, perhaps not unsurprisingly […]
SEC Names a New Chief Accountant, You’ll Never Guess Where He Worked Before
Did you like that lame Upworthy headline? Did it get you to click on this? Sorry about that, you're about to be disappointed. The Securities and Exchange Commission today announced it has named James Schnurr as its chief accountant. Mr. Schnurr will begin his new post in October. He will replace Paul A. Beswick, who […]
Audit Partners Will Definitely Be Named, We Just Don’t Know Where or How
This from ProPublica: In a letter dated August 15, Jeff Mahoney, the general counsel for the Council of Institutional Investors, a nonprofit that represents investment organizations with more than $3 trillion in assets under management, wrote, "to express our surprise and disappointment in the report earlier this week in the New York Times that the […]
Bipartisan Congressional CPA Caucus Warns SEC Against Taking IFRS Too Fast
Where exactly has the Congressional Caucus on CPAs and Accountants been all this time? The SEC has only been dragging its heels on convergadoption since, like, the beginning of time or at least 2008, which might as well be the beginning of time as far as we are concerned. Now, these guys — who, in […]
The SEC Is On An Insider Trading Losing Streak
The U.S. Securities and Exchange Commission, in a third insider-trading trial defeat in the past year, lost its lawsuit claiming STEC Inc.’s former chief executive officer made $134 million by selling stock before divulging a sales setback to investors. Federal jurors in Santa Ana, California, returned their verdict on the first day of deliberations. The […]
Former SEC Chair Chris Cox Goes From Cheerleading IFRS Adoption to Burying It
Before we talk about Chris Cox's recent comments on adoption of international standards in the U.S., allow us to look back. After all, you will recall Cox was the one pushing for them years ago when he was still chairman of the SEC. Let's see what he said at an SEC Open Meeting in August […]
SEC Working On Protecting Ridiculously Rich People From Investing In Stupid Startups
Since 1982, the SEC has defined an "accredited investor" as someone with $1 million sitting around collecting dust or annual income of $200,000 in each of the previous two years with the reasonable assumption of making at least $200,000 in the year ahead. In 2006, Chris Cox wanted to bump that up to $3 million, […]
The SEC Has Warned Against Investors Putting all Their Money into Marijuana
Thank goodness we have the SEC to protect us from ourselves. The SEC sent out a warning today cautioning investors to be on the lookout for shady "microcap companies that claim their operations relate to the marijuana industry after the agency suspended trading in the fifth such company within the past two months." The SEC […]
SEC Chief Accountant Paul Beswick Is Leaving For the Private Sector
The SEC announced today that Chief Accountant Paul Beswick is out, with his sights set on the private sector. He'll hang around for a bit (a "transitional period" for you corporate drones) to make sure his exit doesn't screw up all his hard work over the last 2 years. Beswick first joined the SEC in […]
Qualcomm Managers Accused of Insider Trading by SEC Didn’t Even Try to Hide It
When you think insider trading, you think throwaway pre-paid phones, scribbles on napkins, and clandestine meetings under the dark of night. For three Qualcomm sales managers accused yesterday by the SEC, all that was way too much work. From the SEC's press release: The SEC alleges that Derek Cohen, Robert Herman, and Michael Fleischli learned […]
Fannie Mae Confident That a $4 Billion Accounting Error Is Totally Not Material, Guys
The Street had an interesting piece about Fannie Mae's most recent "out-of-period adjustments," which is Fannie's casual way of explaining away a $4 billion error over five consecutive quarters from Q4 2011 through Q4 2012, as well as Q2 2010. While Fannie Mae did disclose the errors, one reason they did not attract more scrutiny […]
SEC Charges BP Insider With Cleaning Up His Portfolio After the Deepwater Spill
The Securities and Exchange Commission today charged a former 20-year employee of BP p.l.c. and a senior responder during the 2010 Deepwater Horizon oil spill with insider trading in BP securities based on confidential information about the magnitude of the disaster. The price of BP securities fell significantly after the April 20, 2010 explosion on […]
Retired SEC Lawyer Calls Agency Penalties “At Most a Tollbooth on the Bankster Turnpike”
James Kidney, who joined the SEC in 1986 and retired this month, offered the critique in a speech at his goodbye party. His remarks hit home with many in the crowd of SEC lawyers and alumni thanks to a part of his resume not publicly known: He had campaigned internally to bring charges against more […]
Crime May Not Pay But Whistleblowing Certainly Does
The Securities and Exchange Commission today announced that the whistleblower who received the first award under the agency’s new whistleblower program will receive an additional $150,000 payout after the SEC collected additional funds in the case. The whistleblower, who the SEC did not identify in order to protect confidentiality, has now been awarded a total […]
Investors Want Disclosures That Make Sense; Also a Pony, World Peace
This according to Compliance Week: “Investors pretty much said to a person they're not turning down disclosure,” says Kenneth Daly, president and CEO of the National Association of Corporate Directors, which recently convened an investor summit to hear from major investor groups. “At the same time, they made it abundantly clear, there are lots and […]
The SEC Wants a Bigger Allowance Because Robots
The U.S. Securities and Exchange Commission needs more money to properly police equity markets and detect potential misconduct, especially in a world of rapid-fire trading, SEC Chair Mary Jo White told lawmakers on Tuesday. "We… have focused intensively on potential misconduct in the equity markets," White told a U.S. House of Representatives appropriations panel in […]
Being a Good Husband Means Listening to Your Wife, Except When Insider Trading is Involved
Women everywhere who are convinced men never listen might gain just a small sense of satisfaction out of these two clowns who — despite getting in trouble with the SEC — prove that not all dudes check out once the lady starts talking. “Spouses and other family members may gain access to highly confidential information […]
Who Needs a CFO When You Have an Ex-KPMGer Running the Show?
Colin already got to this L&L Energy LOLery in ANR but in case you missed it, here's just a teaser from the SEC: The SEC’s Enforcement Division alleges that L&L Energy Inc., which has all of its operations in China and Taiwan, created the false appearance that the company had a professional management team in […]
If It Sounds Too Good to be True, It’s Probably a Pyramid Scheme
The SEC busted yet another alleged pyramid scheme, and this one implicated the cloud in their malfeasance: The SEC alleges that three entities collectively operating under the business names WCM and WCM777 are posing as multi-level marketing companies in the business of selling third-party cloud computing services, which can include website hosting, data storage, and […]
Idiots Accused of Insider Trading Used Sketchy Post-It Method, Creative Digestion
Insider trading accusations are often boring, routine and totally predictable. But this reads like something out of a poorly-written detective novel, for real: The Securities and Exchange Commission today charged a stockbroker and a managing clerk at a law firm with insider trading around more than a dozen mergers or other corporate transactions for illicit […]
SEC Floats the Idea That the More You Pay For an Audit, The Better the Audit Will Be
We'd say you heard it here first, kids but actually you heard it from CFO Journal: U.S. securities regulators are wary that pressure to reduce auditor fees could lead to worse audits. Regulators grow “worried” when auditor fees appear to fluctuate with economic cycles, Paul Beswick, chief accountant at the Securities and Exchange Commission, said […]
The SEC’s Four Year Plan Conspicuously Missing a Commitment to IFRS
The SEC is the worst long-distance boyfriend ever. For years it's been telling the IASB to just be patient and one day, they'll move in together, into an apartment with mostly the IASB's furniture except for the SEC's favorite ratty recliner and big screen TV. And everything will be wonderful! But the SEC's latest Strategic […]
Chicago CPA Charged By SEC For Insider Trading on His Wife’s Account
OH MAN. Someone is going to be in the doghouse for quite some time. Let's take a look at what this clown allegedly did: The Securities and Exchange Commission announced that it filed a civil enforcement action against Steven M. Dombrowski, a C.P.A. and formerly Director of Corporate Audit at Allscripts Healthcare Solutions, Inc. ("Allscripts") […]
The SEC and Deloitte Are Cool on That Whole Longtop Thing Now, Guys
In the ongoing battle to get their paws on Chinese workpapers, one battle seems to be won… er, solved? I don't know what you'd call this, exactly, but as long as the SEC has the "substantial volume of documents" it has been asking for all this time, then I guess everything is cool (for now): […]
The SEC is Not Pleased With KPMG’s Independence
Oh man. It's been a pretty crappy week for KPMG except for that whole Phil Mickelson sponsorship renewal… hopefully that will make up for this: The Securities and Exchange Commission today charged public accounting firm KPMG with violating rules that require auditors to remain independent from the public companies they’re auditing to ensure they maintain […]
Save the Date: AICPA Conference on Current SEC and PCAOB Developments
As Going Concern's official Washington correspondent (read: the one who lived in an awesome condo in the DC hood), it's up to me to head home next week to cover the AICPA Conference on Current SEC and PCAOB Developments from December 9 – 11. I know, you're as excited as I am about this JUST […]
The PCAOB Is Trying to Give Itself a Small Raise
And by "small" I mean $12.8 million. The Public Company Accounting Oversight Board today approved its 2014 fiscal-year budget of approximately $258.4 million and its 2013-2017 strategic plan. The budget is $12.8 million, or 5 percent, above the Board's 2013 budget of $245.6 million. The Board also approved its strategic plan for 2013-2017 to serve […]
SEC Union Warns SECers They Should Learn To Shovel Lunch Into Their Faces In a Prompt Manner
Of all the SEC's "time management" issues (I need not mention to what I am referring), is lunch really up there? Apparently so: Add the ability to eat quickly to the list of skills needed to work at the U.S. Securities and Exchange Commission. In a dispute that has sent pangs of resentment — and […]
SEC: Nothing Rotten About Apple
Four months after opening its review of Apple’s finances, the Securities and Exchange Commission has closed it, having found nothing untoward about the company’s handling of its overseas cash and related tax policies. In a September letter to Apple, released late last week, the SEC said it had completed its review of the company’s fiscal 2012 […]
Ex-SEC Chief Accountant Taking His Experience in Unfinished Business to the FASB
James Kroeker, 44, will be a vice chairman of the U.S. Financial Accounting Standards Board, the board's parent organization, the Financial Accounting Foundation said in a statement on Wednesday. Kroeker is known for handling difficult policy decisions during the 2008-2009 financial crisis and will face projects that have been slowed by disagreements between board members and […]
China Ready to Turn Over Audit Workpapers for Some Company at Some Point
The U.S. Securities and Exchange Commission has been struggling to obtain papers from China to investigate possible accounting fraud at dozens of Chinese companies listed on U.S. stock exchanges. China has resisted for years turning over documents because of state-secrets and sovereignty concerns. The China Securities Regulatory Commission (CSRC) is now ready to transfer audit papers […]
SEC Creates The Accounting Fraud Untouchables (or Something)
The Financial Reporting and Audit Task Force is one of the three new initiatives in the DepartmentDivision of Enforcement that were announced by the Securities and Exchange Commission today. So if you're one of those people that cause Andrew Fastow to blush, then you're likely to be right in the FRATF's wheelhouse: The Financial Reporting and Audit Task Force will […]
Deloitte Suggests SEC Call the PCAOB If It Wants Those Longtop Documents
Last Friday, the PCAOB announced it had reached Memorandum of Understanding on Enforcement Cooperation with Chinese Regulators. While not a great deal for the Board, most people agreed that, at the very least, it's good for formally asking the Chinese, "Pretty please with sugar on top, may we have a peek at these documents?" Which […]
The SEC Manages to Get Softer on Big 4 Audit Firms
Incredibly, the SEC has done something I didn't think was possible. It has, in its implicit blessing of Herbalife's selection of PwC as auditor, given the Big 4 and other audit firms more leverage in future debates over independence with regard to past non-audit services. And the last thing the Big 4 needs is more […]
Judge: Deloitte Can Handle Two Chinese-related Court Cases Just Fine
Deloitte Touche Tohmatsu CPA Ltd. lost a bid to delay a lawsuit brought by the U.S. Securities and Exchange Commission seeking documents in an investigation of the auditor’s former client Longtop Financial Technologies Ltd. U.S. District Judge Gladys Kessler in Washington today rejected Shanghai-based Deloitte’s argument that the case should be put on hold while an […]
Career Considerations: Accounting Fellaships
Do you think the people that make the rules have all the fun? Are you one of those people who squirms with glee when your firm’s technical update emails come through? Do you kinda wish you spent your entire day squirming with glee because you can’t really get enough of intricate accounting and financial reporting […]
The SEC is Developing an Army of Robots to Replace You
You're an accountant, so I'm going to assume you have self-esteem issues. On the off chance you were starting to think that your existence might be meaningful, the SEC announced that it's working on a project that may have the potential to eventually make your job completely irrelevant. The project is called the Accounting Quality […]
The PCAOB Is Really, Really Serious About Checking Chinese Auditors’ Work
Oh are we still on this?: The head of the U.S. audit watchdog said on Wednesday his organization may need to resort to enforcement actions against auditors based in China if they fail to hand over documents to U.S. regulators. Jim Doty, head of the Public Company Accounting Oversight Board, told the U.S. Securities and […]
SEC Charges Two KPMG Auditors with Something We’re All Accustomed to Auditors Doing
Way back in April 2010, KPMG resigned as the auditor of TierOne Bank. You see, TierOne was in a bit of a mess with its regulator, the Office of Thrift Supervision; the House of Klynveld risk gurus finally had enough, pulled everyone out of there, withdrew their 2008 audit, and told everyone they wouldn't touch […]
The SEC Investigation into Ernst & Young’s Lobbying Activities Isn’t Going to Amount to Much
Late yesterday, Sarah Lynch and Dena Aubin at Reuters reported that the SEC was poking around Ernst & Young's lobbying activities on behalf of audit clients. Apparently the investigation has been going on since Reuters first broke the story back in March that the specialized advisory group of Washington Council Ernst & Young was trotting around […]
What Would You Say if Someone Told You That a Trustee of the Financial Accounting Foundation Was on the Audit Committee of Morgan Keegan During a Huge Accounting Scandal?
Maybe, "Oh, that's fascinating." Perhaps, "Can't say that I'm surprised." Or, probably more likely, "Will this affect my raise?" Jonathan Weil has the story of Mary Stone, who is a trustee of the Financial Accounting Foundation, but prior to her appointment was an audit committee of Morgan Keegan & Co. when a bunch of their mutual […]
SEC, China Will Probably Compromise Over Big 4 Chinese Affiliates Someday, Says Guy
The SEC's move against the Big 4's Chinese affiliates on Monday has people all worked up. On the one hand, yes, if the SEC were to delist a lot of Chinese companies that would make a lot of people sad. Also, if fewer Chinese companies were to consider accessing U.S. markets because they aren't so […]
ICYMI: Here Are Some Accounting Execs Talking About How Useless XBRL Is
The mandatory use of eXtensible Business Reporting Language by large public companies began in 2009 and was extended to smaller filers in 2011. And while it has made searching for SEC filings a breeze, it was the sincere hope of the SEC that XBRL would also be a serviceable tool for companies to do similarly […]
SEC Finally Gets Around to Losing Patience with the Big 4’s Chinese Firms
China has been a thorny issue with the SEC and the PCAOB over the last couple of years. You see, there's been some concern that some Chinese companies have accessed U.S. markets through dubious means and then provided financial reporting and disclosures that weren't accurate in material respects. Audit firms charged with providing an opinion […]
SEC Completely Aware That Their Final Staff Report on IFRS Is Totally Jinxed
When a supporter of IFRS thinks about the SEC and how they've managed to successfully stall on making anything that closely resembles a decision about the future of financial reporting in the United States, it probably causes (s)he to fly into a rage that can only be abated by watching a live puppy cam for […]
Here Are Two CPAs That Are Perfect Examples of Setting a Bad Example
There are plenty of professional mentors out there for young accountants to look up to. Men and women of intelligence, integrity, work ethic, nice shoes, all that good stuff. After taking a look at this SEC Administrative Release, you can easily conclude that group does NOT include R. Jeffrey Rooks and another anonymous "accounting partner": […]
IIA Chief: Resist Temptation, Would-be SEC Whistleblowers
Last week, the SEC announced that it had paid out its first whistleblower award and that the program was coming along just grand as the Whistleblower Office said that the Commission receives "about eight tips a day" since the it started last August. That's great and all, but the internal auditors might be feeling slighted […]
Center for Audit Quality Feeling Unsatisfied After SEC’s IFRS Work Plan
Cynthia Fornelli & Co. appreciate the effort by the SEC but would have appreciated a little bit of cuddling: “The SEC staff is to be commended for completing its Work Plan on international financial reporting standards (IFRS). While staff recommendations of specific approaches or dates for the possible incorporation of IFRS into the U.S. financial reporting […]
Here’s the SEC’s Final Report on a Work Plan for Global Accounting Standards
Nothing like dropping this on everyone at 6 pm. On a Friday. In the middle of July. Half of the people that care about this thing are on vacation and the other half left at three o'clock. That's the SEC for ya. Have a read over the weekend and we'll debrief (if necessary) on Monday. […]
FINRA Lost a Bucketload of Money in 2011
According to FINRA's latest annual report, the agency reported an $84 million loss for the 2011 fiscal year, blaming low trading volume and poor industry revenue, among other factors. In the interest of keeping FINRA afloat, the SEC has allowed them to raise some fees as soon as July 2 to get the jump on […]
Hans Hoogervorst Creates Unrealistic Expectations For IFRS In the US
If I didn't know any better, I'd think this story was from 2008. The head of the International Accounting Standards Board said Tuesday it is "very important" for the U.S. to embrace global accounting rules and said he believes a key regulator would soon take a position on whether to adopt them for American companies. […]
Anyone Holding Their Breath for the SEC to Give Lehman Brothers a Slap on the Wrist Will Be Passing Out Soon
Bloomberg reports that an internal memo states that the crack squad looking at the Commission is wrapping up their investigation and a stern talking to is the probably the worst it'll get for Dick Fuld et al.: Under a heading reading “Activity in Last Four Weeks,” the undated document reads, “The staff has concluded its […]