Jun 10
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 …
Permanent link to this article: https://betweenthenumbers.net/2014/06/new-standard-for-revenue-recognition/
Apr 15
Investor claims were recently dismissed by a California district court against Mellanox Technologies Ltd. (“Mellanox”) for allegedly providing false or misleading statements related to the company’s prominence in the interconnect market and its prospects for future growth and revenue generation. The Court found that Mellanox had adequately cautioned investors regarding the risks associated with the …
Permanent link to this article: https://betweenthenumbers.net/2014/04/cautionary-language-is-key-in-securities-litigation-dismissal/
Apr 07
The European Parliament has adopted new rules regarding the statutory audit of public-interest entities in an effort to “considerably improve audit quality across the European Union and … ensure that auditors are key contributors to economic and financial stability….by strengthening of the independence of statutory auditors, making the audit report more informative, and improving audit supervision …
Permanent link to this article: https://betweenthenumbers.net/2014/04/eu-requires-10-year-auditor-rotation-and-other-efforts-to-improve-audit-quality/
Mar 17
The Supreme Court has held in the case of Lawson v. FMR LLC that the whistleblower protection available under the Sarbanes-Oxley Act of 2002 (“SOX”) properly extends to employees of privately held contractors and subcontractors who perform work for a public company. Although the case in question was brought by employees of advisors to a …
Permanent link to this article: https://betweenthenumbers.net/2014/03/sox-whistleblower-protection-extend-to-certain-private-company-employees/
Mar 14
The Financial Accounting Standards Board (“FASB”) is requesting input from stakeholders regarding FASB Statement No. 157, Fair Value Measurements, (“157”). 157 provides a single definition of fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. A Financial Accounting Foundation (FAF) review team found that some investors were struggling to understand the use of …
Permanent link to this article: https://betweenthenumbers.net/2014/03/fasb-wants-to-hear-from-stakeholders-on-fair-value-measurements/
Mar 10
Recently, the Wall Street Journal reported the shocking headline “One in Three Audits Fail, PCAOB Chief Auditors Says”. The PCAOB is the Public Company Accounting Oversight Board, so such a statement certainly has the ability to rattle not only the the audit community, but all users of audited financials. Reading the context of the quote …
Permanent link to this article: https://betweenthenumbers.net/2014/03/pcaob-quote-regarding-audit-failure-rate-raises-concerns/
Mar 05
In association with general cost cutting measures over recent years, many companies have pressured their vendors to reduce fees. This downward pressure has extended to the accounting firms hired to provide independent audit opinions, resulting in a significant drop in audit fees. According to Audit Analytics, audit fees in 2012 were $472 per $1 million …
Permanent link to this article: https://betweenthenumbers.net/2014/03/reducing-audit-fees-increases-restatement-risk/
Feb 18
The Auditing Standards Board (“ASB”) has issued its Statement on Auditing Standards (SAS) No. 128, “Using the Work of Internal Auditors”. SAS 128 defines the external auditor’s responsibilities in situations where they are (a) using the work of the internal audit function to obtain audit evidence or (b) using internal auditors to provide direct assistance …
Permanent link to this article: https://betweenthenumbers.net/2014/02/auditing-standards-board-provides-guidance-for-reliance-on-internal-auditors/
Feb 05
When a financial restatement is necessary, it is not surprising that investors will take some time to regain trust and give full credit to future earnings announcements. A recent study, developed through a collaboration of professors from Singapore Management University and Boston College, suggests that the three quarter rebuilding period described in prior research may be …
Permanent link to this article: https://betweenthenumbers.net/2014/02/recovering-investor-confidence-after-a-restatement/
Jan 09
A recent story in the Los Angeles Times describes how DWP Union Chief Brian D’Arcy did not attend a scheduled meeting with auditors trying to investigate the spending of over $40 million in ratepayer money by two nonprofits he co-manages. The Joint Training Institute and the Joint Safety Institute were established to foster better relations between managers …
Permanent link to this article: https://betweenthenumbers.net/2014/01/dwp-union-chief-avoids-meeting-with-auditors/
