Audit News Briefing: 29 October 2015

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

October 28, 2015

Accounting Today

U.S.: AICPA Releases New Auditing Standard and Interpretation on Sustainability Financial Statements

The subject interpretation is concerning the sustainability financial statements used by the government for long-term projections of social insurance programs. In the interpretation - an auditor may report on the basic financial statements, which include the statements of social insurance, changes in social insurance amounts, and long-term fiscal projections, in accordance with Generally Accepted Auditing Standards. The interpretation also provides an illustrative auditor’s report containing an unmodified opinion on the U.S. government-wide financial statements.

Please follow link for details: http://www.accountingtoday.com/news/audit-accounting/aicpa-auditing-standard-interpretation-sustainability-financial-statements-76230-1.html

October 26, 2015

Business Insider

Marvell Technology's auditor resigned and now the stock is crashing

On October 20, PricewaterhouseCoopers (PwC) resigned as auditor of a leading fabless semiconductor company – Marvell Technology. The company audit committee neither made any request, recommendation, nor approval of said resignation.

PwC advised Marvell that in 2016 it will need to expand the scope of its audit in four areas. (1) Entity level controls (2) Process and controls over establishment of significant and judgmental reserves (3) Process and controls over identification, communication and approval of related party transactions (4) The adequacy of financial reporting resources.

Please follow link for details: http://www.businessinsider.com/marvell-technology-auditor-resigns-2015-10

October 23, 2015

Accountancy Age

PwC wrestles Virgin Money audit from KPMG

Global financial services brand, Virgin Money, released an audit committee statement thru chairman Norman McLuskie: "KPMG has been  auditor since 2004 and we would like to thank them for their significant contribution as auditors and for their consistently high standards of professionalism in executing this role. We have undertaken a very thorough, open and transparent tender process, a description of which will be included in the 2015 Annual Report and Accounts." This is in view of their intention to appoint PricewaterhouseCoopers (PwC) effective 1 January 2016, subject to shareholder approval at its 2016 Annual General Meeting.

Please follow link for details: http://www.accountancyage.com/aa/news/2431800/pwc-wrestles-virgin-money-audit-from-kpmg

Audit News Briefing: 23 October 2015

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October 21, 2015

Accountancy Live

Listed companies slow to adopt new UK GAAP as deadline looms

According to Deloitte research on annual reports of UK, listed companies are being slow to make the transition to the new UK GAAP financial reporting standards. This is despite the Cutting the Clutter campaign made by the Financial Reporting Council. Please follow link for details: https://www.accountancylive.com/listed-companies-slow-adopt-new-uk-gaap-deadline-looms

October 21, 2015

Accounting Today

What Star Wars Can Teach Us about Fraud and Recovery Audits

APEX Analytix’s senior vice president, global marketing & business development – Joseph Burke – recently featured a Star Wars inspired audit advisory on fraud and recovery.

Here are some excerpts:

• Lesson #1: “It’s a trap!” - Admiral Ackbar. Fraud runs rampant in organizations of any size.
• Lesson #2: “Fear is the path to the dark side.” – Obi-Wan Kenobi. Accounts payable professionals who let fear stand in the way of putting systems in place to detect duplicate payments and fraudulent losses are pulling their company down instead of raising it up.
• Lesson #3: “Do or do not. There is no try.” – Yoda. Many organizations attempt to handle recovery audits, overpayment detection and risk analysis in-house. What they’re finding is that they’re not getting the results they want.
• Lesson #4: “Someday I will be the most powerful Jedi ever.” – Anakin Skywalker. What does it take to create the most powerful of AP departments? Having a clean vendor master list is a powerful start.
• Lesson #5: “The force is strong in this one.” - Darth Vader. Isn’t this what you want your employees and customers saying about you? By putting best practices in place, you’ll have stronger internal employee relations and external supplier relationships.
• Lesson #6: “Hello, I am C-3PO, human cyborg relations. How might I serve you?” – C-3PO. There’s a sometimes unstated fear that duplicate payment and fraud detection technologies will replace a human workforce. The lesson from our goldenrod friend is that technologies are there to enhance, not replace, the workforce.
• Lesson #7: “You were the chosen one!… You were to bring balance to the force, not leave it in darkness.” – Obi-Wan Kenobi. We all have our secrets. In the AP world, for example, there are the dirty secrets of contract noncompliance and the disconnects in the procure-to-pay process that lead to big gaps in negotiated contracts and actual payment.
• Lesson #8: Luke… I am your father.” - Darth Vader. Never doubt that delivering the right punch of information can dramatically change the course of future events. Your punch should be broadcasting—both internally and externally—your intent to fight fraud and root out the source of errors in payments.

Please follow link for details: http://www.accountingtoday.com/news/audit-accounting/what-star-wars-can-teach-us-about-fraud-and-recovery-audits-76150-1.html

October 21, 2015

CGMA Magazine

U.S. Internal auditors receive modest raises

2015 Internal Audit Compensation Survey Study (published October 20, Tuesday) by the Institute of Internal Auditors (IIA) - Although internal auditors in the US and Canada generally received modest pay raises in the past year, the median salaries for many US internal audit positions decreased. Please follow link for details: http://www.cgma.org/Magazine/News/Pages/internal-auditor-salaries-201513222.aspx

October 16, 2015

Accountancy Live

PwC settles £1.6bn auditor negligence claim by subprime lender Cattles

As the case was due to be heard in the High Court in a trial starting this week and scheduled for up to four months – parties appeared before the judge to put forward their agreement. “Cattles, Welcome Financial Services and PwC confirm that they have resolved the claims between them. The terms are confidential,” PwC said in a statement.

Please follow link for details: https://www.accountancylive.com/pwc-settles-%C2%A316bn-auditor-negligence-claim-subprime-lender-cattles

October 12, 2015

Accountancy Live

Grafton Group ends KPMG 20-year audit relationship

In a Grafton Group statement: ‘The board would like to thank KPMG for their service as auditor to the group over a long period and looks forward to working with PwC in the future.’ PwC will take over as auditors with effect for the financial year ending 31 December 2016. Please follow link for details: https://www.accountancylive.com/grafton-group-ends-kpmg-20-year-audit-relationship

Audit News Briefing: 12 October 2015

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October 9, 2015

Accountancy Live

MEPs call for mandatory equal pay audits

Based on principles of respect to wage equality, Members of the European Parliament are calling for the European Commission to strengthen equal pay legislation - with proposals including mandatory pay audits with possible sanctions at EU level in cases of non-compliance. MEP Anna Záborská who proposed tightening up the rules said: ‘Equal pay for equal work is a fair principle that must be valued by all employers… ‘Today, this is not the case, which is why we need better legislation.’

Please follow link for details: https://www.accountancylive.com/meps-call-mandatory-equal-pay-audits

October 9, 2015

Journal of Accountancy

Audit fees rose in 2014 for SEC filers, private companies

According to a new survey by the Financial Executives Research Foundation (FERF), audit fees paid by SEC filers and private companies increased in 2014 - SEC filers reported a median increase of 3.4% over the fees they paid to external auditors the previous year.

Please follow link for details: http://www.journalofaccountancy.com/news/2015/oct/audit-fees-rise-in-2014-201513163.html

October 8, 2015

Accounting Web

Clarified Auditing Standards: Audits of Group Financial Statements

Larry Perry CPA recently published Part 2 of his column that featured the significant key definitions of AU-C Section 600 or Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors).

Here are the three majorly discussed group audit pre-engagement planning procedures:

1. The group engagement team should obtain an understanding of the business environments of the group and its components, and identify those that are significant.

2. The group audit partner must evaluate whether sufficient audit evidence can be obtained to report on the group financial statements.

3. The group audit partner must consider the information on the Client Acceptance and Continuance Forms for the group and component entities, and determine that sufficient evidence can be obtained to express an unqualified opinion on the group financial statements.

Please follow link for details: http://www.accountingweb.com/aa/auditing/clarified-auditing-standards-audits-of-group-financial-statements-part-2

Part 1: http://www.accountingweb.com/aa/auditing/clarified-auditing-standards-audits-of-group-financial-statements-part-1

Audit News Briefing: 08 October 2015

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October 2, 2015

Accountancy Live

Audit updates: October 2015

Audit tender: KPMG replaces PwC as auditor to Experian

KPMG is the new auditor of consumer credit check company, Experian plc – to replace PwC who have been pioneer external auditors from October 2006.

EU rules: BIS set to issue further consultation on EU audit directive

In accordance with the implementation of the EU Audit Directive and Regulation on 17 June 2016 – the Department for Business, Innovation and Skills (BIS) will publish a formal consultation this autumn focusing on the definition of a public interest entity (PIE), Financial Reporting Council (FRC) powers and the responsibilities of professional bodies. It will also consider issues around the introduction of mandatory retendering and rotation of PIE auditor appointments.

The practical application of the following requirements of the regulations need to be resolved: the types of entities in scope; prohibited non-audit services (NAS) to audit clients; application of independence principles across global accounting firms’ networks; and audit firm and key audit partner rotation.

KPMG ousts PwC as auditor of listed Premier Foods

KPMG will replace PwC after 11 years with Premier Foods. The latter’s statement explains: ‘The audit committee considered an audit tender in 2013 and it was agreed a formal tender exercise would be deferred until 2015, which represents the 11th year of the current auditor’s appointment.’

Please follow link for details:

https://www.accountancylive.com/audit-updates-october-2015

September 30, 2015

Accountancy Age

FRC consults in readiness for EU audit rules

The Financial Reporting Council (FRC) Chief Executive Stephen Haddrill’s statement reads: "The Audit Regulation and Directive is large and complex. We are working closely with professional bodies to make sure the new regulatory regime works as effectively as possible… We must ensure that it builds on the progress made in the UK in recent years in terms of the quality of audit, that competition in the audit market is strengthened in a way that supports innovation, and that the regulatory regime that emerges provides confidence to investors and to firms by being fair, understandable and independent." Please follow link for details: http://www.accountancyage.com/aa/news/2428095/frc-consults-in-readiness-for-eu-audit-rules

September 29, 2015

ICAEW

Press Release: Organise your financial filing says ICAEW

The Institute of Chartered Accountants in England and Wales (ICAEW) thru Tax Faculty Technical Manager Anita Monteith provided guidelines for financial filing, as published in their September 29 press release.

 

These are some of the most common items you should keep on file to keep on top of your financial paperwork:

    Payslips

    P45s/P60

    Dividend statements

    Records of charitable giving

    Bank statements and interest certificates

    Pension letters

    Pension contributions record

    Utility bills

    Mortgage statements

    Tax credit award notices

Please follow link for details: http://www.icaew.com/en/about-icaew/newsroom/press-releases/2015-press-releases/organise-your-financial-filing-says-icaew

Audit News Briefing: 24 September 2015

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September 21, 2015

Accounting Today

US: PCAOB Strikes Deal with Luxembourg

“This agreement with the Luxembourg audit regulator reflects the strength and depth of our relationships in Europe.” – is the statement of PCAOB Chairman James R. Doty when US accounting and audit regulator, Public Company Accounting Oversight Board has entered into a cooperative arrangement with Luxembourg’s audit regulator, the Commission de Surveillance du Secteur Financier of Luxembourg. This is in relation to the oversight of audit firms subject to the regulatory jurisdictions of both regulators. Please follow link for details: http://www.accountingtoday.com/news/audit-accounting/pcaob-strikes-deal-with-luxembourg-75850-1.html

September 16, 2015

Accounting Today

Global: Demands Increase on Financial Service Internal Auditors

“This latest report in the Common Body of Knowledge series provides a provocative and in-depth look at modern financial services internal auditing,” said Institute of Internal Auditors global chairman Larry Harrington in a statement. “Its analysis provides real insight into some of the most vexing challenges the profession will face as it meets growing demands for services.” This is concerning the financial service industry as pressures for internal auditors are growing quickly around the world. The report examined the challenges facing the profession, identified regulatory requirements, and technology risks or threats involved. Please follow link for details: http://www.accountingtoday.com/news/audit-accounting/demands-increase-on-financial-service-internal-auditors-75803-1.html

September 3, 2015

Computer Business Review

Top 5 IT Security Audit Questions

The CBR Online recently featured in their Cybersecurity/Business segment, the most common audit compliance questions asked by external IT auditors to determine whether a company is able to safeguard its most valuable assets.

They are, as follows:

1. Do you have a documented security policy?
2. Are access privileges in your organisation granted adequately?
3. What methods do you use to protect your data?
4. Do you have a disaster recovery plan?
5. Are your employees familiar with existing security procedures and policies?

Please follow link for details: http://www.cbronline.com/news/cybersecurity/business/top-5-it-security-audit-questions-4661821

Audit News Briefing: 20 September 2015

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September 10, 2015

Accountancy Live

Government has poor oversight of financial entities it controls - NAO

Due to double increase of up to 54, in the number of supposedly controlled financial institutions since year 2007, The National Audit Office (NAO) criticised the government for failure to effectively oversee the matter. NAO Head Amyas Morse, advised: “Financial institutions are becoming significant elements in the government balance sheet, creating a range of opportunities and risks but no one part of government is taking an overview. The government should adopt a portfolio management approach alongside the traditional departmental oversight model to provide heightened assurance over the portfolio.” Please follow link for details: https://www.accountancylive.com/government-has-poor-oversight-financial-entities-it-controls-nao

September 9, 2015

Corporate Crime Reporter

US: BDO Admits Wrongdoing, To Pay $2.1 Million to Settle Audit Fraud Charges

The US member audit firm of the BDO International network, BDO USA has been fined $2.1m (£1.37m) by US regulator – Securities and Exchange Commission (SEC), for ignoring red flags and issuing ‘false and misleading’ unqualified audit opinions about the financial statements of staffing services company General Employment Enterprises (GEE). Charges were also filed against five firm partners with fraud charges against GEE’s then-chairman of the board and majority shareholder. “Audit firms must train their audit and national office professionals not only to recognize red flags but also to have the resolve to refuse signing off on an audit if there are unresolved material issues. BDO failed to do that here, even though these issues were elevated to the highest levels of its audit practice,” SEC Director Andrew Ceresney explained. Please follow link for details: http://www.corporatecrimereporter.com/news/200/bdo-admits-wrongdoing-to-pay-2-1-million-to-settle-audit-fraud-charges/

September 9, 2015

Accountancy Live

Requirements for accounting skills and tougher independence for bank audit committees

In accordance with the government's implementation of the 2014 EU audit legislation, Financial Conduct Authority (FCA) consultations are being held to aid in the amendment of their existing rules under the Disclosure Rule and Transparency Rule (DTR) Sourcebook. Under new proposals, stricter rules around independence and requirements for technical accounting skills are on the cards for the audit committees of public interest entities (PIEs). The EU audit legislation must be implemented in the UK by 17 June 2016. The deadline for feedback on the FCA consultation is 5 November 2015 and details are available here: http://www.fca.org.uk/news/cp15-28-quarterly-consultation-paper-no-10

Please follow link for details: https://www.accountancylive.com/requirements-accounting-skills-and-tougher-independence-bank-audit-committees

Audit News Briefing: 10 September 2015

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September 8, 2015

Accounting Web

U.S.: Accounting Salaries Estimated to Rise 4.7% in 2016

The 2016 Salary Guide: Accounting & Finance by Robert Half Management Resources, issued last September 2, revealed that –

In corporate accounting, salary predictions for senior internal audit and internal audit manager, IT audit manager, and general accountant manager positions are expected to exceed the 4.7 percent increase. Increases in starting salaries for corporate accountants are projected to range from 4 percent to 5.2 percent. Please follow link for details: http://www.accountingweb.com/practice/team/accounting-salaries-estimated-to-rise-47-in-2016

September 7, 2015

Accountancy Live

Woolf: paying the price for delusional regulation

Well-acclaimed professional textbook author and Hyperion Insurance Group Board Director, Emile Woolf FCA, shared his expert view on Audit, he said: “The unbridled lack of measured regulation at every level is highlighted by the recent Quindell accounting fiasco which is now under investigation by the Serious Fraud Office which is now taking the lead in the probe into accounting irregularities.” Please follow link for details: https://www.accountancylive.com/woolf-paying-price-delusional-regulation

September 4, 2015

Journal of Accountancy

Rise in US accounting salaries accelerates

Starting salaries for accounting and finance positions in the United States are expected to rise in 2016 between 4.0% and 5.3% over the previous year. This is according to 2016 Salary Guide: Accounting & Finance by the world's premier provider of senior-level financial and business systems professionals, Robert Half Management Resources. According to their Vice President, Dan DeNisco, high-demand skill areas for accountants include:

·         A combination of audit/compliance and IT skills.

·         Senior accountant skills, such as the ability to do reconciliations and monthly closes.

·         Financial analysis skills, such as budgeting and variance analysis.

Please follow link for details: http://www.journalofaccountancy.com/news/2015/sep/accounting-salaries-rise-201512959.html

September 4, 2015

Accountancy Age

KPMG ends PwC's 11-year audit reign at Premier Foods

One of Britain's largest food producers, Premier Foods, has appointed KPMG as auditor for the 2015/16 financial year. Audit committee chairman Ian Krieger said, "We would like to thank PwC for their significant contribution as the company's auditor since the company's stock market listing in 2004 and look forward to working with KPMG going forward." Please follow link for details: http://www.accountancyage.com/aa/news/2424649/kpmg-ends-pwcs-11-year-auditor-reign-at-premier-foods

Audit News Briefing: 01 September 2015

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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