AICPA released an exposure draft in early November which would revise some aspects of the peer review program.
The Journal of Accountancy has an article summarizing Changes proposed to peer review standards.
I have read through the exposure draft only once, which means I am just starting to understand the proposed changes. Three items jump out at me after my first read:
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Proposed changes to Peer Review program Read More »
A few articles on various bank fiascos: first private settlement for manipulating LIBOR, two rumored criminal investigations for selling MBS’s, and a billion dollar settlement for money laundering.
11/13 – Reuters – Barclays in $120 mln settlement of Libor case – lawyers – Barclays is first out of the gate settling private lawsuits in US for manipulating Libor. …
Minor updates on bank fiascoes and settlements Read More »
By a 6-1 vote, on 11/11/15 FASB authorized their staff to prepare the final draft of the lease standard. When the final draft is ready, it will be routed to the board members for a final, written vote.
Final standard is expected in early 2016.
(Cross-post from my other blog, Nonprofit Update.)
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FASB moves lease standard to final draft Read More »
When sitting down to read my copy of The Wall Street Journal on Friday, I was surprised to read that a Jury Delivers First U.S. Libor Manipulation Convictions. This is even more intriguing after I mentioned last week that Explaining complex financial details to jurors is an obstacle to putting senior executives in jail and previously asked back in November 2014 So you think tons of bankers should be in jail? Getting a jury to agree seems to be a problem.
In this case, two bankers were indicted for conspiracy and wire fraud for manipulating Libor interest rates while they worked for Rabobank. On November 5 they were convicted by a jury. Therefore we no longer need to use the word allegedly when discussing their manipulation of interest rates.
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So it *is* possible to persuade a jury to return a guilty verdict against a bankerRead More »
So it *is* possible to persuade a jury to return a guilty verdict against a banker Read More »
Another bank, Credit Agricole, settles up for money laundering, with tab under a billion. Standard Chartered under a new investigation. Toshiba identifies 30 more senior staff who participated in the accounting schemes.
10/1 – Accounting Today – Toshiba Says 30 More Executives Names in Accounting Scandal – In addition to three former presidents resigning, an additional 30 executives have been identified in as players in the Toshiba book cooking scandal. None of the 30 will be fired.
Current over statement of income is estimated at US$1.3B in the article with a US$6B loss in market value.
10/20 – Wall Street Journal – Credit Agricole to Pay $787 Million in U.S. Sanctions Case and IRS – Credit Agricole Corporate and Investment Bank Admits to Sanction Violations, Agrees to Forfeit $312 Million.
Another bank had institutional policies to willfully circumvent US rules on money laundering for banks and individuals in sanctioned countries. NY DFS says total laundered amount was $32B. The bank admitted to one felony charge in a deferred prosecution agreement.
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More articles on banking and accounting fiascos Read More »
If you would like to compare the various definitions in play for materiality, then Emily Chasan has the article for you at the Wall Street Journal on 11/3: Definition of Materiality Depends Who You Ask.
The definition readers of this blog have incorporated deep into their brain is from FASB, as follows:
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Multiple definitions of materiality are in play Read More »
Chicago Business reports on 10/30 that Grant Thornton settles lawsuit for $4.4 million. Another quick survey: Reuters – 11/2 – Parmalat settles dispute with Grant Thornton.
If I got it straight, the international consortium of Grant Thornton is writing the check to settle up for the fiasco on the Parmalat audit.
You may vaguely recall that mess. In two sentences, Parmalat had a fake bank account in the Cayman Islands that supposedly held €3.95B (yes, four billion Euros, that’s 4,000,000,000) which was around half of the consolidated balance sheet of about €8B as of 12/31/03. The auditors in the Italian affiliate (if I recall correctly) of GT sent a confirm to the address the client gave them for the bank in the Caymans which was, of course, intercepted, signed by company staff, and returned to the auditor.
The scheme fell apart and has been rattling around in the legal system for just over a decade, in and out of the US and bouncing between circuits when here.
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For all of you who think there should be hundreds of bankers in jail, keep in mind one of several hurdles to clear is getting a jury to go along with you. Major lesson in the result from the Dewey & LeBoeuf trial is that complicated financial stuff is really, really difficult to explain to a jury.
10/21 – Wall Street Journal – Jury in Dewey Law-Firm Case Felt Inundated by Details –
There were 150 counts against the three senior executives of the law firm. If I get the case correctly, the core issue is manipulating the financial statements through the means of inappropriate journal entries. Alleged goal was to cook the books in order to keep the lenders happy and thus keep the law firm alive.
The jury acquitted on a couple of dozen charges and was deadlocked on all the others. They did not return a guilty verdict on any charge.
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For some reason, my article two years ago describing A Halloween costume that would make any CPA pass out from fright – an auditor performing one pension plan audit, has been getting extra visits this week.
Check out the post above. It will be funny for accountants.
The joke is based on how frightening the idea is for an auditor to perform one or two pension audits. The risk is astronomical of doing something seriously wrong. Just as frightening is the idea of an accountant only doing one or two audits.
Yesterday, at the Accounting and Auditing Conference presented by CalCPA, I heard the statistics that made the Department of Labor so upset.
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Why you see so much discussion of quality in pension plan auditsRead More »
Why you see so much discussion of quality in pension plan audits Read More »
On October 28, 2015, FASB voted to split in two the exposure draft to overhaul presentation of not-for-profit financial statements. You can see their summary of the decision here, although that appears to be a dynamic link and the discussion will likely move soon. Extract of minutes on this issue on can be found here. That appears to be a link that will be in place a long time.
Reason for breaking this in two is that some components of the exposure draft received serious pushback. Those items will be considered in more detail and addressed at a later, yet-to-be-determined date.
The less contentious items will move forward “in the near term.” One article I read, but for which I don’t know how to provide a link, said FASB hopes to have what they call workstream one finished in mid-2016.
(Cross-post from my other blog, Nonprofit Update.)
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FASB splits revision of NPO accounting into two workstreamsRead More »
FASB splits revision of NPO accounting into two workstreams Read More »
Previously mentioned FASB has released two exposure drafts to change the definitions of materiality. I am just beginning to understand the issue. Most of the significance plays out in the world of publicly traded companies, which is light years removed from my practice. Most readers of this blog likely stay far away from that world. Yet what goes in that distant galaxy will have a large impact on private companies.
Here are a few articles to fill you in on the implications and behind-the-scene issues. Will also touch on the current definitions of materiality and how to dispose of immaterial misstatements.
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More background on FASB’s proposed changes to materialityRead More »
More background on FASB’s proposed changes to materiality Read More »
The AICPA has summarized the FASB’s Preliminary Analysis of the Comment Letters on the Not-for-Profit Financial Statement Exposure Draft .
I realize I’m going at this backward, what with commenting on the feedback before I’ve described the content of the exposure draft, but here goes….
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FASB has issued an exposure draft to modify the discussion of materiality in the conceptual framework along with a proposed ASU to add comments on materiality into the ASC.
Some background discussion from AICPA can be found here: How should materiality be applied? FASB weights in.
I have only read a few articles on the exposure draft and only browsed through the text once. That means I’m not ready to make an extended comment.
For the moment, consider that the entire text of the change to the ASC can be found in these three sentences, which will eventually be found in sections 235-10-50-7 through -9:
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Exposure draft on materiality Read More »
Knowing a former employer held open a three-million-a-year job awaiting his return had no impact on the objectivity of at least one departed government worker.
10/16 – BoingBoing – Eric Holder: I didn’t prosecute bankers unrelated to my $3M/year law firm salary – Article points to the discussion in the next article.
Mr. Holder left a law firm where he was reportedly earning $3M a year to become the attorney general. After completing his government service, he returned to the law firm. Presumably his salary will resume or even increase since he now has humongous amounts of inside information on government strategy, capabilities, and intentions for enforcement of criminal law. That will be tremendously valuable knowledge for banks that find themselves talking to various US Attorneys in the near future.
One pertinent comment: …
A while back I discussed a comment I read saying that when Caesar crossed the Rubicon, the Roman treasury held 17,410 pounds of gold, 22,070 pounds of silver and 6,135,400 sesterces.
I made a bunch of wild assumptions and estimated that volume of precious metals would be worth about $361M at today’s market prices.
See my post How much wealth was in the Roman treasury in 49 B.C.? How about annual tax revenue under Augustus? I’m going to cross-post this discussion and that previous post to my other blog, Outrun Change.
A reader, Caleb, has expanded the discussion by indicating he thinks the value of gold was dramatically higher back then in relative terms that it is today. He estimates gold was around $7,000 an ounce in today’s dollars. See his comments at the above post for further explanation.
I enjoyed his comments so much I decided to create new post in order to extend the discussion.
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More ideas on the wealth in the Roman treasury back in 49 B.C.Read More »
More ideas on the wealth in the Roman treasury back in 49 B.C. Read More »