Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Archive for the ‘Audits’ Category

Trial of former partner at KPMG starts today

leave a comment »

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.

Read the rest of this entry »

Written by Jim Ulvog

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

Posted in Audits

Tagged with ,

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

leave a comment »

….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.

Read the rest of this entry »

Written by Jim Ulvog

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

Posted in Audits

Tagged with ,

Increases in audit fees during 2018 for work on 2017 financials

leave a comment »

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:

Read the rest of this entry »

Written by Jim Ulvog

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

Posted in Audits

Tagged with

More disciplinary actions from California Board of Accountancy

leave a comment »

Image courtesy of Adobe Stock.

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):

Read the rest of this entry »

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

with 2 comments

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

Tagged with ,

How to get more of the messy details on disciplinary actions by the California Board of Accountancy

leave a comment »

Image courtesy of Adobe Stock.

A colleague asked me a question on how to find out more details on the disciplinary actions taken by the CBA. Let me give you the answer too.

To look up details, you can go to the newsletter mentioned. For Winter 2018 that would be here.

Read the rest of this entry »

Written by Jim Ulvog

August 8, 2018, 7:00 am at 7:00 am

Summary of disciplinary actions from California Board of Accountancy, Winter 2018

leave a comment »

What you will be doing if you ignore professional standards and then get caught messing up your audits and reviews, although the amount won’t be quite as large. Image courtesy of Adobe Stock.

The new Update newsletter from the California Board of Accountancy goes back to providing details on disciplinary actions. The Winter 2018 edition (#86) takes 20 pages to describe the 24 actions. The previous Update provided far less detail, which generated lots of feedback to the board, so the newsletter will again give the ugly details for the causes for discipline.

Update 11/30/18:  Thanks to CBA for listing the messy details on what CPAs are doing to earn their consequences.

Three things jump out at me from the current list of discipline.

First, every action comes with a substantial financial penalty in the form of reimbursing the CBA for their investigative costs.

Second, just about every CPA that got in trouble for audit or review problems was given a ban from performing attestation work until some time in the future when the firm requests and receives permission from CBA to again perform such work.

Third, several CPAs received a suspension from their CPA practice. This means the individual may not perform any actions which would otherwise require a license. I think that means the firm halts all their attestation work and unless also holding an enrolled agent credential ceases their tax compliance work.

Here is my summary of the causes of discipline for the license surrenders and the stayed revocations:

Read the rest of this entry »

Written by Jim Ulvog

August 6, 2018, 6:41 am at 6:41 am