Audits

Ex-KPMG partner banned from practice before the SEC; sentencing date is in December

1 Comment / Audits, Fraud /

The SEC banned KPMG’s former regional audit PIC Scott London from SEC related work. The key sentence from Bloomberg’s article SEC Bars Former KPMG Partner fo Role in Insider-Trading Scheme:

The SEC’s order prohibits Scott London from practicing as an accountant on behalf of any publicly traded company or other entity regulated by the agency, according to a statement released today.

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Ex-KPMG partner banned from practice before the SEC; sentencing date is in DecemberRead More »

Ex-KPMG partner banned from practice before the SEC; sentencing date is in December Read More »

Update on wondering who first discovered the KPMG insider trading mess

Leave a Comment / Audits /

I previously concluded that FINRA, the self-regulatory branch of the securities industry, gets credit for discovering the insider trading scam involving a now-former senior level partner at KPMG.

Now, I’m not so sure.

By the way, we are still waiting for sentencing of Mr. Shaw. I’ve been watching the news closely but nothing has been visible this week. Back to the main question –

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Update on wondering who first discovered the KPMG insider trading messRead More »

Update on wondering who first discovered the KPMG insider trading mess Read More »

Who first discovered the KMPG insider trading mess?

2 Comments / Audits /

Who should get credit for discovering the insider trading by KPMG former partner Scott London and his golfing buddy, Brian Shaw?

That’s the question raised by a reader, Gary Zeune, after I posted this article yesterday: Minor updates on insider trading fiasco at KPMG.

I think the answer is …

Who first discovered the KMPG insider trading mess?Read More »

Who first discovered the KMPG insider trading mess? Read More »

More good stuff for auditors – 9-4-13

Leave a Comment / Accounting, Audits /

A few links and comments that I think would be of interest to auditors. This post: what do PCAOB deficiencies mean, their new report isn’t a big deal, sausage making at FAF, one possible surprise anti-fraud test, and the fun of investigating JPMorgan.

Going Concern – PwC and KPMG Inspection Reports Make Us Wonder: Are Shody Big 4 Audits Here to Stay? – Check out the comments for some good discussion on how important or inconsequential a PCAOB deficiency is.  I’ve long wondered …

More good stuff for auditors – 9-4-13Read More »

More good stuff for auditors – 9-4-13 Read More »

CPAs auditing Broker Dealers ought to take a hint from the second round of PCAOB inspections

Leave a Comment / Audits /

Results of the PCAOB’s CY12 inspections of 60 broker dealer audits are not a pretty picture.

Every one of the 43 firms contributed at least one deficient audit to the 57 of 60 engagements that had a deficiency. For me, the scary parts of the report are the widespread independence issues and the large number of firms whose involvement in the PCAOB world is performing exactly one BD audit.

Independence troubles

Differences of independence rules between the AICPA and PCAOB SEC caused some serious trouble for smaller firms. While the audit itself is performed under the AICPA SASs, auditors are required to comply with PCAOB SEC independence rules.

That didn’t go well.

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CPAs auditing Broker Dealers ought to take a hint from the second round of PCAOB inspectionsRead More »

CPAs auditing Broker Dealers ought to take a hint from the second round of PCAOB inspections Read More »

Report your peer review status to California Board every two years starting in 2014

Leave a Comment / Audits, Peer Review /

Staring with renewals in 2014, our requirement to report peer review status will take place every two years along with our bi-annual renewal. This is instead of reporting every 3 years. Should make the reporting easier. We will have one less deadline to track.

The following article is reprinted with permission of the California Board of Accountancy.

STREAMLINING PEER REVIEW REPORTING

Changes have been made to the Peer Review reporting requirements! Beginning January 1, 2014, the process will be streamlined and reporting peer review information to the CBA will be done at the time of license renewal. Even though reporting will be done at license renewal, peer reviews are still only required once every three years. In short, you need to report your peer review every two years and have a peer review every three years.

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Report your peer review status to California Board every two years starting in 2014Read More »

Report your peer review status to California Board every two years starting in 2014 Read More »

Fingerprints may be needed for your California CPA license renewal starting in 2014

Leave a Comment / Audits, Other stuff /

Your 2014 CPA license renewal in California may require getting your fingerprints taken.  If the board doesn’t already have a set of your prints in their files, you will be making a trip to a Live Scan facility before your next renewal.

Yeah, I know.  More requirements.  Go ahead and complain. I’ll wait.

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Feel better?  Good.

Like it or not, make a mental note you may have another one-time step involved with your next renewal. 

The following article is reprinted with permission of the California Board of Accountancy.

RETROACTIVE FINGERPRINTS: FAQS

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Fingerprints may be needed for your California CPA license renewal starting in 2014Read More »

Fingerprints may be needed for your California CPA license renewal starting in 2014 Read More »

3 bank confirmation frauds

2 Comments / Audits, Fraud /

Previously mentioned that AU-C 505.07 requires auditors to look at the address used on confirmations.

Here are three illustrations of how things can go sour when sending bank confirmations: PFGBest, Parmalat, and a small company in North Carolina:

PFGBest – Peregrin Financial Group

The organization’s CEO was sentenced to 50 years in prison and ordered to pay restitution of $215.5 million.

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3 bank confirmation fraudsRead More »

3 bank confirmation frauds Read More »

Auditors need to verify the addresses on confirmations. Oops.

2 Comments / Audits /

Clarified section 505, which you can find here, discusses external confirmations.  One thing I missed previously is a new requirement to verify the address used on confirmations. I looked in the pre-clarity standards and couldn’t find that requirement there.

Put simply, we as auditors need to make sure confirmations are using good addresses.

For cash, there is a commercial service, Confirmation.com, that can be used to make sure your confirm gets to where you want it to go.

This issue also applies to:

  • Accounts receivable
  • Notes receivable
  • Investments
  • Accounts Payable
  • Notes Payable

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Auditors need to verify the addresses on confirmations. Oops.Read More »

Auditors need to verify the addresses on confirmations. Oops. Read More »

NPO audit risk alert for 2013 available

Leave a Comment / Accounting, Audits /

The Not-for-Profit Entities Industry Developments – Audit Risk Alert for 2013 is available from the AICPA.

It provides an update on issues relevant to your audits and reviews of NPOs. Might even remind you of some technical issues you missed. I’m checking on a couple of things that I thought didn’t apply to my clients but just might.

If you work with a lot of NPOs, you really ought to check out this audit risk alert every summer.

NPO audit risk alert for 2013 available Read More »