‘5 internal obstacles that block social media progress’ is a post on my other blog describing things that typically get in the way of an organization developing an effective social media program. I evaluate the obstacles in terms of my firm and CPA firms in general.
(cross-post from Nonprofit Update.)
The 7-26-12 edition of CPA Letter Daily says a working draft is expected soon:
The AICPA’s Financial Reporting Executive Committee is expected to issue a working draft of the accounting content of a proposed Audit and Accounting Guide, Not-for-Profit Entities, on Aug. 15
If you work in the financial area of the NPO world, this would be something to watch for. The revised guide has been in development for a number of years.
If you are an auditor, you really ought to be watching the story unfolding in New Mexico about the allegedly faked 6-30-11 financials for the New Mexico Finance Authority. Is it okay to drop the alleged when the person submitting the report said it isn’t the real audit report? My previous posts here and here.
If you want an evaluation of the quality of the forgery, you can check out Jim Scarantino’s post on July 19: The Cheap Forgery That May Cost New Mexico Millions. He has an extended discussion of the report. He’s talking photocopies and whiteout.
One more thing to watch for is the idea of photocopies being present when originals are expected. Look at the visual quality of the accountant’s reports. Typically those would be printed originals, if not electronically generated. In the copy on the web site, the accountant’s reports appear to be a second or third generation copy. The pages in the basic financials are not as ‘dirty’ as the opinion. That should be odd to an auditor’s eyes.
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The New Mexico State Auditor claims audited financial statements for the New Mexico Finance Authority were fabricated in their entirety. I mentioned this in my previous post, Faked audit report in New Mexico.
This has been the cause of an uproar in Santa Fe and Albuquerque, as you can imagine. The local news station, KOB 4, found the controller allegedly behind the fiasco at his home on Friday. They spoke to him before the investigators did. You can read KOB’s report at NMFA Comptroller on bogus audit: Not malicious.
His explanation at the moment is that he prepared a draft report for the audit. This would be fine up to a point. The concept is that the client ought to prepare the financial information, including all necessary notes. Even the single audit schedules ought to be prepared by the auditee.
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Accountant who allegedly fabricated audit report appears on cameraRead More »
Financial Executive Institute has an executive summary of their most recent survey of audit fees – FEI Audit Fee Survey: Companies’ Audit Fees and Hours Slightly Increase in 2011.
Results from private companies is of most interest to readers of this blog:
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Audit fees for private companies started increasing in 2011Read More »
Wow. Check out the report in the Albuquerque Journal – State finance authority audit faked, officials say. The New Mexico Finance Authority issues bonds to raise funds and then loans the money to public entities.
The state auditor says the audited financial statements for the agency’s year ended June 30, 2011 were fabricated. From the Journal’s article:
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We are now supposed to think that cooking the LIBOR index is the crime of the century. Yet U.S. and U.K. regulators knew of it in 2007 and 2008. If this is now considered a horrid crime, then why didn’t the regulators do something about it at the time?
The nonchalant reaction of the New York Fed is described in The Wall Street Journal’s editorial New York Fed to Barclays: “Mm hmm”.
Here’s what the Fed says they did:
In June 2008, Timothy Geithner, then head of the New York Fed, sent Bank of England Governor Mervyn King two pages of recommendations for “Enhancing the Credibility of LIBOR” and wrote that he would be “grateful if you would give us some sense of what changes are possible.”
This is not exactly the language of a regulator who has just uncovered what we’re now told is the financial crime of the century.
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As expected, the SEC staff released a report on IFRS that does not contain a recommendation on whether to adopt IFRS or when to adopt.
The report is called Work Plan for the Consideration of Incorporating International Financial Reporting Standards into the Financial Reporting System for U.S. Issuers.
I have not read the full 137 page report, and don’t plan to. As I browsed the first 28 pages, what struck me is the large number of observations in the report that are actually fairly major criticisms of IFRS and reasons not to adopt it.
Here’s a small number of examples:
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The city of San Bernardino is the fourth in California to file for bankruptcy protection. That city is not too far from where I live.
Part of the news about the bankruptcy filing is accusations by the city attorney that budgets have been falsified in 13 of the last 16 years. That story has gotten lots of play. Check out this article from my local paper.
A couple of days after the story blew up, the city’s auditor had some comments. We CPAs would typically be quiet in such a situation so I found it interesting and encouraging that the auditors are saying something.
Keep the discussion in this post in the back of your mind when you start to hear the Where was the auditor? questions.
I describe the following article because it is a rare illustration of an auditor explaining to a reporter what an audit involves.
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More info on the financial condition of the city of San BernardinoRead More »
The Wall Street Journal has a copy of the criminal complaint filed against the owner of Peregrine Financial Group. You can find it here.
I’m going to take a shot at developing a fraud case study of the Peregrine fiasco and try to do so in real-time.
Here is what I know so far:
I will pull in some of the info provided publicly by the FBI. This provides more depth of interest to CPAs that is currently visible in the media.
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Select paragraphs of criminal complaint in Peregrine fiascoRead More »
The Wall Street Journal article Peregrine CEO Arrested says that the suicide note left by Mr. Wasendorf claims to have been running a fraud for 20 years.
The article reports Mr. Wasendorf was arrested and arranged on Friday, July 13.
In just one paragraph, here is a very rough outline of the length and depth of the alleged fraud:
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Peregrine CEO charged – allegation is he ran fraud for 20 yearsRead More »
Things are falling apart faster on the PFGBest fiasco than I can read the news articles. So I’ll take this on just one bite at a time.
The Wall Street Journal reports in their article, Red Flags at Failed Broker, that the regulators of Peregrine Financial Group, Inc. were successfully mislead by the company. Far more details will follow in the near future, I’m sure. Perhaps every few hours.
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That’s the question Mark Schaefer asks in his post, It’s not just ROI. It’s RELEVANCE!
Do you use a Rand McNally map to get anywhere? Not likely. Smart phones, GPS, and mobile apps have left the long-time map maker in the dust.
Likewise Kodak. That venerable company is now being sold for parts because they didn’t see any value in digital pictures.
Don’t ask what the ROI is on social media. It’s the wrong question.
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What’s the ROI on social media? Perhaps a better question is what’s the ROI on bankrupt?Read More »
The Wall Street Journal reports that the SEC staff will have a report in a few weeks addressing adoption of IFRS for the US. The report won’t have a recommendation on whether or how to make the switch.
The expectation is a final decision has been pushed off until at least 2013.
The article is Delay Seen (Again) for New Rules on Accounting, by Michael Rapoport.
For more detail that will actually tell the story better for us accountants, check out Tom Selling’s post, What the Chief Accountant’s Resignation Means for the Future of IFRS in the U.S., posted two days before the above article from the Wall Street Journal.
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In addition to the now-denied wink and nudge from Paul Tucker to Barclays that their LIBOR rates didn’t need to always be so high, the New York Fed was told repeatedly of the possible problems with LIBOR.
The Washington Post’s article, In 2007, New York Fed was told about problems with Libor, summarizes the communication from Barclays to the NY Fed.
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Let’s keep an eye on the role of regulators in the LIBOR fiascoRead More »