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/
Jan 08
The final touches are being put on the new single, principles-based standard that will update and converge revenue recognition under the Financial Accounting Standards Board (“FASB”) and the International Accounting Standards Board. The change will impact entities that use US generally accepted accounting principles (“GAAP”) or International Financial Reporting Standards (“IFRS”). The new principles-based approach indicates …
Permanent link to this article: https://betweenthenumbers.net/2014/01/new-standard-for-revenue-recognition-is-coming/
Dec 10
A recent study reported in the American Accounting Association’s The Accounting Review suggests that in many cases the relationship between the the top executive and the respective audit committee members may be too comfortable to achieve truly independent oversight. The study found that approximately 40 percent of the 2000 companies analyzed have committee members who are socially …
Permanent link to this article: https://betweenthenumbers.net/2013/12/audit-committee-members-and-ceos-too-close-for-comfort/
Oct 18
A recent article about a convicted Kiwi fraudster demonstrates the fraud triangle (described here) at work. Hohepa Morehu-Barlow claims his 14 year jail sentence is too harsh given that, while he defrauded the Australian state of Queensland out of more than A$16 million, the judge failed to consider the impact of the theft on the victim, …
Permanent link to this article: https://betweenthenumbers.net/2013/10/fake-prince-rationalizes-embezzlement-asks-for-leniency/
Oct 16
A patent and license portfolio can provide a consistent and reliable revenue stream. However, many companies have technology, trademarks, and merchandising opportunities that are not fully exploited. Even if fully licensed, there is often considerable upside available via vigilant enforcement of audit provisions to ensure all amounts due are paid. Unlike almost any other business …
Permanent link to this article: https://betweenthenumbers.net/2013/10/too-many-fail-to-audit-their-licensing-agreements-leaving-royalties-on-the-table/
Sep 04
Are women being unfairly prevented from engaging in corporate fraud? That seems to the be conclusion espoused by sociologist Darrell J. Steffensmeier of Pennsylvania State University in his recent study published in the journal American Sociological Review: “Typically, women were not part of'[fraud] conspiracy groups. When women were involved, they had more minor roles and made less profit …
Permanent link to this article: https://betweenthenumbers.net/2013/09/questions-of-fraud-and-gender/
Sep 03
In 2012, the Public Company Accounting Oversight Board (“PCAOB”) conducted inspections of registered public accounting firms pursuant to the Sarbanes-Oxley Act of 2002 According to the PCAOB: “The inspection process is designed, and inspections are performed, to provide a basis for assessing the degree of compliance by a firm with applicable requirements related to auditing issuers. The …
Permanent link to this article: https://betweenthenumbers.net/2013/09/pcaob-finds-fault-with-kpmg-and-pwc-audits/
Aug 20
The Public Company Accounting Oversight Board (“PCAOB”) has issued its second report regarding auditors of brokers and dealers registered with the Securities and Exchange Commission (“SEC”). This report relates to inspections of 60 audits conducted by 43 firms, which the PCAOB performed from March 1, 2012 to December 31, 2012. The overall result was dismal, and as follows: In contrast to …
Permanent link to this article: https://betweenthenumbers.net/2013/08/pcaob-reports-auditors-and-broker-dealers-are-too-close-for-comfort/
Jul 25
The U.S. Court of Appeals for the Fifth Circuit’s decision in Asadi v. G.E. Energy provides a new take on whistleblower protections under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Court found that, by definition, a whistleblower must have reported the claimed violation(s) to the U.S. Securities and Exchange Commission (“SEC”) in …
Permanent link to this article: https://betweenthenumbers.net/2013/07/fifth-circuit-takes-different-stance-on-dodd-frank-whistleblower-status/
