Audit News Briefing: 01 September 2015

Audit-is-cool is pleased to accumulate and provide its readers with the news on audit and related topics:

September 1, 2015

Accountancy Live

Audit Updates: September 2015

Charity Commission financial probe of Swimming Teachers’ Association

The non-ministerial government department that regulates registered charities recently held a financial investigation at Swimming Teachers’ Association (STA) – to inquire upon the charity’s governance, financial controls and a plan for organisational changes, which posed a potential risk to its assets.

10-year audit tender rules for public interest entities

The UK government recently pronounced thru a written ministerial statement that public interest entities (PIEs) will be required to put their audit out to tender at least every 10 years. Further, the requirement to change auditor was ruled every 20 years. The confirmation statement also emphasized the authority and audit regulation roles of the Financial Reporting Council (FRC) and recognised supervisory bodies such as the Institute of Chartered Accountants in England and Wales (ICAEW).

Audit win: PwC keeps flying with easyJet

 After meetings with each of the top 10 audit firms in the UK, the board of easyJet is set to recommend the reappointment of PricewaterhouseCoopers (PwC) as the company’s auditor for the year ending 30 September 2016 to shareholders at the annual general meeting in February 2016.

Please follow link for details: https://www.accountancylive.com/audit-updates-september-2015

Audit News Briefing: 27 August 2015

Audit-is-cool is pleased to accumulate and provide its readers with the news on audit and related topics:

August 25, 2015

Tax News

Country-By-Country Reporting: The Transfer Pricing Game-Changer

The Tax-News.com Editorial featured the proposals for new tax information reporting requirements for large multinational businesses. An introduced concept of standardized three-tier format on transfer pricing document serves to enhance determinations about where audit resources can most effectively be deployed, and, in the event audits are called for, provide information to commence and target audit inquiries. Please follow link for details: http://www.tax-news.com/features/CountryByCountry_Reporting_The_Transfer_Pricing_GameChanger__573035.html

August 18, 2015

Corporate Social Responsibility and the Law

U.K. Modern Slavery Act: New Disclosure Requirements for Companies Operating in the United Kingdom

This October, companies that do business in the U.K. should assess their exposure to the U.K. Modern Slavery Act. Among the steps required for compliance involve – review or implementation of auditing and verification mechanisms. The significant audit policy evaluation questions are:

•  How does your company verify compliance with its human rights policies?
•  Does your company have systems in place to audit its operations and its suppliers for compliance with corporate human rights policies?  What performance indicators support these systems?
•  Are existing, or planned, auditing procedures sufficient to evaluate the specific risks of slavery and human trafficking associated with your company’s business?
• Does your company use independent auditors?

Please follow link for details: http://www.csrandthelaw.com/2015/08/18/u-k-modern-slavery-act-new-disclosure-requirements-for-companies-operating-in-the-united-kingdom/?utm_source=Mondaq&utm_medium=syndication&utm_campaign=View-Original

August 25, 2015

Accountancy Live

Deloitte picks up Admiral Group audit

The largest professional services network, Deloitte, will replace Klynveld Peat Marwick Goerdeler (KPMG) as Admiral Group auditor. This is according to the insurer company’s interim financial statements on 15 August 2015. Please follow link for details: https://www.accountancylive.com/deloitte-picks-admiral-group-audit

August 20, 2015

Accountancy Live

Woolf: Toshiba audit raises red flag over quality and independence

Hyperion Insurance Group Board Director, Emile Woolf, articulated the professional significance of external audit on the edge of recent accounting scandals. On fraud investigation, he opined: “While audit methodology fails to reflect the environment in which results are reported, the real question concerns the corporate culture of the audit firm itself, as much as its client.” Please follow link for details: https://www.accountancylive.com/woolf-toshiba-audit-raises-red-flag-over-quality-and-independence

June 2015

ICAEW Press Release

Bank auditors could add credibility to capital numbers

The Institute of Chartered Accountants in England and Wales (ICAEW) has called for auditors to be ready to give independent assurance on bank capital numbers. Iain Coke, head of ICAEW’s Financial Services Faculty, said: “People need to have confidence in banks’ capital ratios. We need to know what society expects from bank auditors and how the auditors can meet those expectations. ICAEW will then design a framework that allows auditors to deliver this consistently across banks.” Responses are invited by 16 October 2015. Please follow link for details: http://www.icaew.com/en/about-icaew/newsroom/press-releases/2015-press-releases/bank-auditors-could-add-credibility-to-capital-numbers

  

List of SOURCES:

https://www.accountancylive.com/

http://www.accountancyage.com/

http://www.icaew.com/en/about-icaew/newsroom/press-releases/2015-press-releases

http://www.fca.org.uk/news

http://www.sfo.gov.uk/

http://pwc.blogs.com/press_room/

Real News: Audit News Briefing: 20 August 2015

Audit-is-cool is pleased to accumulate and provide its readers with the news on audit and related topics:







July 29, 2015

Euro News

Outside auditors should check bank capital, UK industry body says

Bank of England asked ICAEW to initiate public consultations regarding the methodology of audit bank ratios. Please follow link for details:

http://www.euronews.com/business-newswires/3046534-outside-auditors-should-check-bank-capital-uk-industry-body-says/

August 5, 2015

Financial Times

SFO and UK regulator launch probes into Quindell practices

The SFO and the Financial Conduct Authority are both investigating Quindell, after a review by PwC – the accounting firm, identified “aggressive” and “unacceptable” practices. Please follow link for details:

http://www.ft.com/cms/s/0/a355e568-3b69-11e5-8613-07d16aad2152.html#axzz3ijJMako8

August 6, 2015

Reuters

UK Anti-fraud agency to investigate claims firm Quindell

SFO Director confirmed the opening of criminal investigation into business and accounting practices at Quindell. Please follow link for details:

http://www.reuters.com/article/2015/08/06/quindell-results-idUSL3N10G49B20150806

August 10, 2015

Accountancy Live

NAO seeks feedback on draft auditor guidance

The National Audit Office has launched a consultation on the draft guidance to local government auditors in respect of their duties under the Code of Audit Practice. The deadline for responses is set on 30 September 2015. Please follow link for details:

https://www.accountancylive.com/nao-seeks-feedback-draft-auditor-guidance

August 11, 2015

Treasury Insider

UK financial services firms are sitting on data time bombs

In relation to audit trail retention – Director Stuart Clarke of cybersecurity and investigations services gave five proactive steps that financial services firms can take against data privacy breaches. Please follow link for details:

http://www.treasuryinsider.com/2015/08/11/uk-financial-services-firms-are-sitting-on-data-time-bombs/

August 19, 2015

Accountancy Live

Charities under-reporting charitable expenditure

The Charity Commission found that 43% of regulated high-income charities made errors either in their annual returns or their trustees’ annual reports and accounts, with the effect of significantly underreporting the level of their charitable expenditure. Please follow link for details:

https://www.accountancylive.com/charities-under-reporting-charitable-expenditure

August 19, 2015

Accountancy Age

Mid-tier firms avoid listed audits as high regulatory fees bite

Subject accountancy firms have hit out at ICAEW-imposed excessive fees and what they believe are restrictive and prohibitive financial hurdles to entering the listed audit market. Please follow link for details:

http://www.accountancyage.com/aa/analysis/2422182/mid-tier-firms-boycott-listed-audits-as-high-regulatory-fees-bite

News from Airstrip One: Violation of Independence

                                                 

The AKKA accounting qualification has been revoked for the partner, senior manager and manager who worked in audit firm KTC33. The investigation has been opened by firm ethics committee. The secret sources from KTC33 say that audit senior had a conflict with partner regarding preparation of cash flow statement for client. Partner asked audit senior to prepare the cash flow statement to speed up completion of audit. However the audit senior disagreed and reported the case directly to AKKA ethics committee. Management of KTC33 decided not to defend partner and fired audit team management. Our correspondent, Rob, asked for the comments from the audit specialist, Mr Task, in the city of Airstrip One:

• Rob: Is it common case when audit team in fact assists client to prepare financial statements instead of auditing them?
• Mr Task: These cases happen when client personnel do not understand value of audit and not motivated to supply audit team with evidence and deliverables. Audit firm partner should do his/her best a) to understand if client ready to have audit, including if the accounting personnel can provide adequate audit evidence; b) to explain the client the nature of services provided by audit firm. 

Disclaimer: all situations and names in this blog post are not real.

News from Airstrip One: Promotions case

The investigation has been opened regarding integrity of promotions in the audit firm KTC33. The investigation was triggered by the embarrassing fact about the audit partner in KTC33 who advocated for promotion of one of his mistresses (Jenny): from audit manager to senior manager. The interesting moment is that the fact was reported to the firm management by his another lover (Kelly). She was jealous of what was happening and decided to revenge. Kelly reported of number of similar cases when promotion  was gained “through bed” or other non-professional activities regarding other partners. Our correspondent, Rob, asked for the comments from audit specialist, Mr Task, in the city of Airstrip One:

• Rob: What could be done to prevent such cases in the Oceanian audit firms? Should firms inspire whistleblowing in case of any relations at job?

• Mr Task: I do not think we need to inspire unnecessary whistleblowing. People might become too focused on somebody’s sins and not on their own. What I suggest we can put some procedures to mitigate such risks. For example, we might establish system where voice of one or two partners would not be decisive. I think, the investigation is just invitation for broader discussion about the systems used by audit firms to assess employees.

Disclaimer: all situations and names in this blog post are not real.

News from Airstrip One: Toxiba case

Toxiba company, one of the biggest in the region of Eurasia, apologised for using fraudulent methods of inflating its profit. The company artificially increased its profits by USD 1.2 bln during preceding 7 years.  The technique of defrauding financial statements was not innovative and referred by Capitalist (magazine in Oceania) as “101”. This usually includes overstating net revenues, booking early revenues and postponing expenses. The company had the auditor R&U, which failed to detected fraud. R&U is multinational company founded in Oceania, having offices in all big cities, including Airstrip One. Our correspondent, Rob, asked for the comments from the audit specialist, Mr Ask, in the city of Airstrip One:

• Rob: What could be done to prevent such cases?
• Mr Task: Well, first of all the corporate culture in Eurasia should change towards being more open and this depends from tone at the top. Second, I think the auditors from R&U should review their fraud detection and cut-off procedures, and then, question themselves, why they were not able to find the intentionally made errors.

Disclaimer: all situations and names is this blog post are not real.