Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Update for auditors

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A touch of humor before more serious thinking.

5/9 – Reddit – “These auditors are tying things out just for the sake of doing more work. They’d tie their shoelaces together to test the existence of both their feet.” – Humor you will only appreciate if you have audit experience. If you’ve been an auditor, this is superb.

5/4 – Edward Trott at CFO magazine – Exceptions for Private Companies Are Damaging the GAAP BrandFormer member of the FASB thinks the options for private companies of picking and choosing which PCC cutouts to apply are damaging to GAAP as a brand.  His point is that someone picking up a private company financial statement doesn’t have a large print notice that the financials have carveouts. He suggests a GAAP-exception report would be better.

I disagree, but the article is worth a read to stretch your brain.

7/6 – Accounting Today – Vague Warnings in Audit Reports Could Lead to Trouble – Three academic researchers found a strong correlation between emphasis of a matter paragraphs in the auditor’s report and a restatement in the following year. Also found a strong correlation between having a restatement in the current or previous year and having another restatement in the next year.

5/5 – The Accounting Onion – The Grim Political Realities of the Impending Revenue Recognition Standard. Tom Selling comments on the proposal to delay implementation of the revenue recognition standard by one year, to 2018 for public and 2019 for nonpublic. He says the reasons for the new rule have all disappeared since the project started.

Amongst many other points, he highlights that comparability across the economy is a dead issue. Leasing, insurance, and financial services are scoped out. (Nonprofits as well.)

He also suggest there is plenty of wiggle room in managing contract terms and applying judgment. To extent that idea, think about how many leases were structured to get the desired result. I wonder how much engineering will go into designing revenue contracts to get the intended income when intended.

One more light-hearted article to wrap up:

5/22 – Going Concern – More Quick and Dirty Tips for Your Insider Trading Scheme – Five examples of how not to commit insider trading from people who are on their way to prison.

One pair of schemers aaaaaaalmost had a good plan. They used burn phones, encrypted emails, and a dummy email account for communication. Good scheming so far.

The massive oopsie was one of the perps using his work computer to access non-public information. Should have bought a super cheap computer and logged in from a coffee shop somewhere across town.

I don’t mention this article as a how-to guide for putting together a scheme. Instead, keep in mind that fraudsters usually slip up on one little thing somewhere. Massive legal costs and likely jail time awaits those who are not perfect in their schemes.

Written by Jim Ulvog

July 8, 2015, 8:44 am at 8:44 am

Posted in Accounting, Audits

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