Jim Ulvog

Fingerprinting all California CPAs – proposal from CBA

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Something else for you to keep an eye on – The California Board of Accountancy just announced a proposal to require all CPAs to submit fingerprints to the Department of Justice as a condition for renewing licenses.  Would apply for the next renewal after 6-30-14.

Hearing on the proposed rule will be on 1-27-12. Written comments must be submitted by 1-23-12. Send a letter if you have a comment.

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Fingerprinting all California CPAs – proposal from CBARead More »

Fingerprinting all California CPAs – proposal from CBA Read More »

What’s going on in the big firms? Part II. – Time pressures affect small firms too.

1 Comment / Audits /

Background – Previous post mentioned the PCAOB found deficiencies in 12 of 52 engagements at KPMG and in 28 of 71 engagements at PwC.  Deloitte is publicly arguing with PCAOB.

Two questions:

  1. What is the underlying pressure causing the high number of deficiencies and some substandard engagements?
  2. Why does that matter to those of us in small firms?

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What’s going on in the big firms? Part II. – Time pressures affect small firms too.Read More »

What’s going on in the big firms? Part II. – Time pressures affect small firms too. Read More »

Summary of Olympus financial fraud – part 2a

4 Comments / Accounting, Audits, Fraud /

Article in the Wall Street Journal on 12-7-11 gives more background on the methodology of the Olympus fraud:  Panel Calls Olympus ‘Rotten’ at Core. (article behind paywall)

I made a few updates on my part 2 post. Have a few more comments in this post – things that are interesting to me.

Hiding losses was legal and normal

Apparently, moving underwater investments off the books was so common in Japan that it had a nickname, tobashi.  …

Summary of Olympus financial fraud – part 2aRead More »

Summary of Olympus financial fraud – part 2a Read More »

Summary of Olympus financial fraud – part 2

5 Comments / Accounting, Audits, Fraud /

Previous post described the investigative report of the Olympus financial fraud.

Now a discussion of the debits and credits. Final post will discuss the underlying causes identify by the investigative committee and some of their recommendations.

Update 2 – When accounting rules changed in 2000, the report says Olympus management decided to move the investments off the books instead of taking the write down. Thus phase 1 was launched.

How do you hide a $1.7B loss?

This is what I was most curious about and what prompted me to read the report.

Here is a one paragraph summary from the report: …

Summary of Olympus financial fraud – part 2Read More »

Summary of Olympus financial fraud – part 2 Read More »

What’s the impact when there is zero cost to distribute one more item?

Leave a Comment / Pondering /

I have a series of posts up on my other blog, Outrun Change, discussing the radical changes in how books, music, and video are distributed today without having to use a traditional middleman.  There is a dramatic shift when it doesn’t cost anything to make and distribute one more copy of something.

This doesn’t just impact writers and musicians.  This has a huge impact on nonprofits that want to get their message and resources out, or businesses that want to start producing materials for education and promotion.

Check these out:

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What’s the impact when there is zero cost to distribute one more item?Read More »

What’s the impact when there is zero cost to distribute one more item? Read More »

Summary of Olympus financial fraud – based on independent report – part 1

3 Comments / Accounting, Audits, Fraud /

The investigative report on the Olympus fraud has been released. The fact pattern, causes, and recommendations are scathing.

This and my followup post are a thumbnail description.  These are the result of just an hour or two of research.  If you wish to expand the summary, point out errors, or clarify, feel free to do so.  My guess is that readers of this blog won’t want as many details as I am providing, but do want to know more than just what shows up in the general news reports.

You can see one news article here: Olympus faces Tokyo delisting after management hid $1.7 billion of losses.

The Wall Street Journal has a good report, but it is behind a pay wall. WSJ also has a copy of the report, but I caution you on getting their copy.  I was able to access the report once, but when I went back to it, accessing the report crashed my computer. Twice.

Update: Olympus has made the report available here.

The report’s conclusion compares management to a cancer:

Olympus had originally been a sound company, with diligent employees and high technical strength. Not all part (sic) of the company was involved in this misconduct. Olympus should remove its malignant tumor and literally renew itself. (Page 30)

What is the amount of the fraud and time frame?

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Summary of Olympus financial fraud – based on independent report – part 1Read More »

Summary of Olympus financial fraud – based on independent report – part 1 Read More »

Some clues to interpret behind-the-scenes fight over Little GAAP

Leave a Comment / Accounting /

Don’t know about you, but I’m not perceptive enough at reading the back room maneuvering to figure out what is going in the battle for turf between the AICPA and FASB over Little GAAP and Big GAAP.

I’m smart enough to know there is a fight.  See my post here for discussion of AICPA announcing they will set up a new standard-setting body if FAF goes forward with its plan to keep PCSIC (Pic-sic?) under the control of FASB.

In his post Little GAAP – Big GAAP Territorial Fight, John Hufnagle suggests that a few of the FASB’s recent projects are designed to make GAAP more user-friendly for private companies.  Here are three illustrations: …

Some clues to interpret behind-the-scenes fight over Little GAAPRead More »

Some clues to interpret behind-the-scenes fight over Little GAAP Read More »

Not so fond memories of Enron

3 Comments / Accounting, Audits /

December 2 was the 10th anniversary of the Enron bankruptcy.

Just a few of the big consequences of that massive fraud were Sarbanes-Oxley legislation and the bankruptcy of Arthur Andersen. 

Two of the subtle consequences are that it’s now a federal felony to destroy any documents after a federal investigation has begun (when the IRS or ICE has merely started asking questions about one of your clients, it becomes a felony to do a routine shredding in your office or cleanup of your e-mail) and PCAOB is setting standards for public company audits.

If you need to refresh your memory of what happened, here are just a few of the recent blog posts discussing that not-so-wonderful time:

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Not so fond memories of EnronRead More »

Not so fond memories of Enron Read More »

What’s going on in the big firms? Part I

3 Comments / Audits /

A number of bloggers have been talking about audit quality issues in the Big 4 environment. Francine McKenna has a lengthy post that provides some background. Also focuses on the visible attitude of Deloitte.  Read her post:  At Deloitte, More Pain Before Any Quality Gain.

For those of us in small firms, the Big 4 world is far removed from our life.  And for all the CPAs I know, that is a good thing.

On the other hand, it would be good for us to pay occasional attention to that world because if they get in trouble, it affects all of us.  This article would be a very good place to start to get a feel for what’s going on that world.

There seems to be some issues with audit quality. …

What’s going on in the big firms? Part IRead More »

What’s going on in the big firms? Part I Read More »

GAAP Guide – Research tool for CPAs

2 Comments / Accounting, Audits /

You may recall the Miller GAAP Guide from days long past.  It’s now the CCH GAAP Guide.  The 2012 edition will be published 12-26-11.

You really should have a copy handy.  It is a superb research tool for CPAs having to deal with issues they haven’t delved into before.

I was honored to have been asked to look at the revisions for the current year.  Just finished that project this week.  It has been a few years since I looked at the book.  Looking at it again reminded me of what an incredible resource it is.

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GAAP Guide – Research tool for CPAsRead More »

GAAP Guide – Research tool for CPAs Read More »

More tidbits on the clarity project (SAS 122)

Leave a Comment / Audits /

Mr. Charles Landes, CPA, MBA, was a speaker at the 2011 CalCPA A&A conference.  As always, lots of great comments.

He spent some time talking about the Clarity Project.  That has resulted in rewriting the entire body of GAAS, putting everything into a new format, and renumbering everything.

I’ve discussed SAS 122 here.

One particular comment from Mr. Landes was that the clarity project was not intended to turn our world upside down. 

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More tidbits on the clarity project (SAS 122)Read More »

More tidbits on the clarity project (SAS 122) Read More »

Update on project to overhaul financial statement presentation

1 Comment / Accounting /

At the 2011 CalCPA A&A conference, Suzan C. Dennis, CPA, discussed the FASB’s project to completely change the presentation of financial statements.  I previously discussed that here. What she provided is background you won’t read in the official documents.

Just a quick recap.  If you think about the current cash flow statement, you will recall that it summarizes cash flows in three sections: operating, investing, and financing.  Transactions related to purchasing or liquidating investments or equipment are in the investing section. Loans and equity transactions are in the financing section.

To get a very rough picture of what’s involved in changing the financial statement presentation, imagine restructuring the balance sheet and income statement into the same format as a cash flow statement.  …

Update on project to overhaul financial statement presentationRead More »

Update on project to overhaul financial statement presentation Read More »

“Once Upon Internal Control” is available on Kindle platform

Leave a Comment / Accounting, Books you might enjoy, Other stuff /

My tale on internal control done well and poor at two churches is now available in Kindle format at Amazon.

Price is $0.99.

You can read the book on your Kindle device, on any smart phone with a Kindle app, or on your computer using the Kindle-for-PC application.

At Amazon, search for my name, Ulvog, or the book title, Once Upon Internal Control.

Or click here to go directly to the book.

“Once Upon Internal Control” is available on Kindle platform Read More »