June 2014 archive

Ninth Circuit Issues Reminder on Daubert: Trial Court Is A Gatekeeper, Not A Fact Finder

In a recent case involving the City of Pomona (“Pomona”) v. SQM North America Corporation (“SQM”), Pomona alleged that SQM’s importation of sodium nitrate for fertilizer caused a perchlorate contamination in the city.  Although the district court excluded under Daubert the expert testimony of Pomona’s expert witness on causation, the Ninth Circuit reversed the ruling, …

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Permanent link to this article: http://betweenthenumbers.net/2014/06/ninth-circuit-issues-reminder-on-daubert-trial-court-is-a-gatekeeper-not-a-fact-finder/

New Rules Aimed At Increasing Auditor Scrutiny Of Critical Fraud Areas

With its new audit standards and amendments aimed at specific transaction types, the Public Company Accounting Oversight Board (“PCAOB”) has targeted three critical areas in its ongoing efforts to combat financial reporting fraud.  A more comprehensive article found here describes the new rules to heighten auditor scrutiny regarding (i) related-party deals, (ii) significant unusual transactions, …

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Permanent link to this article: http://betweenthenumbers.net/2014/06/new-rules-aimed-at-increasing-auditor-scrutiny-of-critical-fraud-areas/

Washington Redskins Trademark in Flux

The Washington Redskins’ trademark registration has been cancelled by the Patent and Trademark Office (“PTO”) after petition by members of the Navajo Nation, Paiute Indian Tribe of Utah, Kiowa Tribe of Oklahoma and Muscogee Nation of Florida.  The PTO found that the Redskins’ six registrations were obtained contrary to Section 2(a), 15 U.S.C 1052(a), which …

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Permanent link to this article: http://betweenthenumbers.net/2014/06/washington-redskins-trademark-in-flux/

Better Accounting Controls Would Likely Have Prevented Inventory Fraud at Jewelry Company

The Securities and Exchange Commission (“SEC”) filed a claim stating that DGSE Companies Inc. (“DGSE”) and its former chief financial officer (“CFO”) engaged in accounting fraud by manipulating inventory accounts.  DGSE transacts in jewelry, diamonds, fine watches, rare coins, precious metals and other collectibles and valuables.  DGSE’s CFO allegedly made numerous false accounting entries that …

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Permanent link to this article: http://betweenthenumbers.net/2014/06/better-accounting-controls-would-likely-have-prevented-inventory-fraud-at-jewelry-company/

First Circuit Disallows Event Study Which Fails to Connect to Key Events

An event study provides the basis for identifying movements that can attributed to specific events and illustrate how the public markets react (or fails to react) to a specific event.  Identifying and measuring such activity can substantiate (or counter) a claim for economic damages. In Bricklayers & Trowel Trades Int’l Pension Fund v. Credit Suisse …

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Permanent link to this article: http://betweenthenumbers.net/2014/06/first-circuit-disallows-event-study-which-fails-to-connect-to-key-events/

New standard for revenue recognition

The newly converged standard for revenue recognition has arrived. Both ASU 2014-09 (issued by FASB) and IFRS 15 (issued by IASB) are entitled “Revenue from Contracts with Customers”.  They represents a principles-based framework that is effective for revenue-generating public entities with reporting periods after December 15, 2016.  Private entities will have an additional year to …

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Permanent link to this article: http://betweenthenumbers.net/2014/06/new-standard-for-revenue-recognition/