Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Trial of former partner at KPMG starts today

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Image courtesy of Adobe Stock.

One former partner at KPMG and a former PCAOB staffer get their day in court today, February 11, 2019. Actually, it will be about four weeks in court, according to Michael Rapoport of the Wall Street Journal: KPMG Ex-Partner Goes on Trial in ‘Steal the Exam’ Scandal.

David Middendorf was a KPMG partner until April 2017. He was National Managing Partner for Audit Quality and Professional Practice Group, in the Department of Professional Practice (DPP). He reported to the Vice Chair of Audit.

Jeffrey Wada was a PCAOB Inspections Leader from February 2012 through February 2017.

Both are in court today defending themselves against charges they received and leaked, respectively, the list of KPMG audits which were scheduled for inspection by PCAOB.

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Written by Jim Ulvog

February 11, 2019, 8:04 am at 8:04 am

Posted in Audits

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Update on KPMG gaining access to PCAOB inspection schedule. Possible impact on inspection results.

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….what might need improving at KPMG based on PCAOB reports. Image courtesy of Adobe Stock

The PCAOB released results of the inspections during the 2017 cycle. The results are not pretty.  In addition, PCAOB released previously confidential comments from the 2015 report.

Michael Rapoport has the details in the Wall Street Journal on January 25, 2019:  KPMG Gets Poor Marks From Audit  Regulator / Regulator unseals sharp criticism of Big Four accounting firm’s quality during period spanning leak scandal.

In a painful phrase, the article quotes prosecutors as labeling this as a

“steal the exam” scheme.

In the 2016 audit cycle, PCAOB replaced 11 engagements that had already been reviewed with 10 others. Of the 11 replaced, 3 had significant deficiencies. Of the 10 replacements, 9 had deficiencies.

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Written by Jim Ulvog

January 29, 2019, 7:00 am at 7:00 am

Posted in Audits

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Increases in audit fees during 2018 for work on 2017 financials

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Image courtesy of Adobe Stock.

Average increases in fees for audits in 2018 for work on 2017 financial statements:

  • +2.5% – public companies
  • +3.2% – private companies
  • Flat – nonprofit organizations

Article says a different survey of 6,340 public companies reported a median increase of 5.7% for audits of 2017 financials.

For comparison, article says median increases in 2017 for work on 2016 financials were:

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Written by Jim Ulvog

December 19, 2018, 5:51 am at 5:51 am

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Standard mileage rates for 2019

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The IRS has published the 2019 standard mileage rates. New rate for transportation and reimbursements is 58 cents, which is up from 54.5 cents in 2018. That is an increase of 3.5 cents.

(Cross post from my other blog, Nonprofit Update.)

New rates from the IRS, along with some comments on the impact of TCJA legislation are found in Notice 2019-02: Read the rest of this entry »

Written by Jim Ulvog

December 17, 2018, 7:47 am at 7:47 am

Posted in Other stuff

More disciplinary actions from California Board of Accountancy

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The Update #87 newsletter from California Board of Accountancy for Summer/Fall 2018 lists 38 disciplinary actions, by my count.

You can read my previous posts on CBA actions by clicking on this tag.

Here is my tally of license revocations, surrendered licenses, and revocations with stay (there are no suspensions or stayed suspensions this time around):

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Written by Jim Ulvog

November 30, 2018, 7:52 am at 7:52 am

List of key players in KPMG fiasco over leaked PCAOB inspection lists

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Three accountants in this story entered the above building innocent and left as a felon. Image courtesy of Adobe Stock.

Sometimes you gotta’ have a scorecard to keep track of the players and the story. After a former partner pled guilty this week in the fiasco at KPMG over leaking of PCAOB inspection targets, I had to sort out again who was who.

So, I sketched out a list of the players and a bit of info about each.

Will update this list as the criminal cases move forward.

The roster of players and their status: Read the rest of this entry »

Written by Jim Ulvog

October 31, 2018, 8:41 am at 8:41 am

Posted in Audits

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Been thinking the volume of accounting rules is growing a lot? It isn’t your imagination. Here’s a page count of GAAP.

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Is this how you’ve been feeling with all the changes in GAAP stacking up on your desk? Image courtesy of Adobe Stock.

Just in case you had been wondering in your idle time how many pages long the Accounting Standards Codification would be in print form, I have the answer.

10,068 pages.

How thick is that if you stacked the five volumes on top of one another?

12.75 inches.

I’m working on a writing project for which it will be convenient to have a hard copy of the ASC, so I ordered a copy. Yipee! It arrived yesterday!

In case it seems like the volume of rules is growing faster than you can keep track, here is a seven-year comparison, looking at the physical size and volume count of the 2017 and 2010 editions:

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Written by Jim Ulvog

September 13, 2018, 6:32 am at 6:32 am

Posted in Accounting