Francine McKenna asked me to combine my short comments on the Olympus fraud into a guest post on her blog.
I’m quite happy to announce my revised, expanded, and edited discussion is available. You can read the full thing at How Do You Hide A Multibillion Dollar Loss? Accounting For The Olympus Fraud
Many thanks to Francine for the wonderful opportunity to speak to a big audience.
(cross-post from my other blog, Attestation Update.)
In a webcast on August 31, 2011, Mr. Michael Glynn, CPA, of the AICPA staff, gave a wonderful word picture of the levels of assurance in a review and audit. Here’s his idea: Filling up a bucket with procedures produces different levels of assurance. I would like to expand Mr. Glynn’s description and provide an illustration.
Notice the similarity and difference? The overlap between these definitions is how much assurance the accountant obtains for himself or herself provides that there are no material errors in the financial statements.
The differences?
(more…)
(cross-post from my other blog, Attestation Update)
Extensions available!!!
Just a reminder, California now has mandatory peer review. First deadline is rapidly approaching for firms whose first peer review is due July 1, 2011. This would be CPAs whose licenses end in 01 through 33.
The Cal Society has a memo on their website allowing extensions.
See announcement here.
To get an extension, a firm must: (more…)
I’m writing a series of posts on my other blog about a corruption indictment of officials in the city of Upland. The focus of that series of posts is a case study for CPAs based on a live, developing situation. Since the audience will be CPAs, I will not cross-post those discussions to this blog. If you’re interested, the posts start here and continue here and here.
Might be worth your time to ask your funders if they really need to see audited financial statements. If the only reason you’re having an audit is to meet the requirements of a few foundations, call them to see if they still need it. Perhaps they would be happy with reviewed financial statements.
(cross-posted from my other blog for CPAs that stop by here. This is the start of a 3 post series)
All of the SASs are being rewritten. All those new/revised/updated/clarified/etc documents will go into effect on the same day.
Ouch. For us change-phobic CPAs, there is a world of change on the horizon.
Welcome to the CPAs arriving here from an internet search. This post is just for the CPAs in my audience.
I have discussed the differences between audits, reviews, and compilations here and here. Even developed a visual illustration here. Ask any CPA and you can get a long explanation of the distinctions.
For something shorter, consult this article by Angus Loten in the Wall Street Journal, which said:
The accounting rule makers are working on a massive change to the way financial statements are presented. Since NPOs will be exempted out of the new rules, I have only discussed them on my other blog. If you are interested, you can see my post here.
I started a new blog today, Attestation Update, www.attestationupdate.com. It will provide news and updates to the CPA community on audits, reviews, and compilations. Some posts are only at the new site and some attestation posts will be left here. In the future, posts that are focused more on the CPA community will be at the new site.
Why make this change? I realized there are very two distinct audiences for my writing: the non-profit community and CPAs. While there is a lot of overlap, particularly with the CPA firms in Southern California with whom I count as friends at the same time as competitors, the interests are very different. Thus, two blogs. This will allow for more focused attention by time constrained readers. Enjoy them both!
Article from CFO magazine, One Size Gives Fits to All addresses the exposure draft on revenue recognition. As expected, pushback against the exposure draft is building. See my post for a bit of background on the draft. (more…)
FASB has an exposure draft out on revenue recognition. This post is a ‘heads up’, not an overall summary. This will be a fairly substantive rule, so if you haven’t heard about it, might be good to take a look. The document has a great summary on the first five pages of the introduction. (more…)
There are three different levels of service that CPAs can provide when we look at your financial statements. We can provide a compilation, a review, or an audit. What are the differences? I have an article here that goes into some detail. It is an extract from one of my books.
The following post explains the differences visually.
Here is a visual picture that illustrates the different comfort levels someone can draw from financial statements that have been audited, reviewed, or compiled by a CPA.
Here is a picture of assurance levels from reports issues by CPAs.
This is an explanation of the visual picture I drew in the previous post. I will try to explain the differences between audits, reviews, and compilations with a minimal amount of the technical words we CPAs usually bring to an issue. (more…)