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, …
Category: Forensic Accounting
Permanent link to this article: https://betweenthenumbers.net/2014/06/new-rules-aimed-at-increasing-auditor-scrutiny-of-critical-fraud-areas/
Jun 16
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 …
Permanent link to this article: https://betweenthenumbers.net/2014/06/better-accounting-controls-would-likely-have-prevented-inventory-fraud-at-jewelry-company/
May 15
Spring Break Turns Sour for Investor
In the matter of Division Entertainments, LLC and Wicks Walker v. Spring Breakers LLC and Muse Productions, Inc. et al., Mr. Walker asserts that he was denied a return of his investment, along with an additional profit, because of Defendants’ breach of contract via improper business practices and faulty accounting. Mr. Walker, a technology entrepreneur …
Permanent link to this article: https://betweenthenumbers.net/2014/05/spring-break-turns-sour-for-investor/
Apr 09
Fraud on the Rise
Economic crime is increasingly plaguing U.S. firms according to a recent survey by PWC. Key findings include: “45% of organizations in the U.S. suffered from some type of fraud in the past two years, more than the global average of 37%. More than half of U.S. organizations that experienced fraud in the last two years reported an …
Permanent link to this article: https://betweenthenumbers.net/2014/04/fraud-on-the-rise/
Mar 26
Quarter theft stacks up
A New Jersey man recently entered a guilty plea for his ongoing theft of quarters derived from parking meters. The individual, who had access to the room where the parking meter change was kept, took “handfuls” of change on a regular basis over approximately two years. At the end of the period, the theft had …
Permanent link to this article: https://betweenthenumbers.net/2014/03/quarter-theft-stacks-up/
Mar 25
Internal Audit’s Top Priorities Include Social Media
Protiviti’s 2014 Internal Audit Capabilities and Needs Survey Report queried more than 600 internal audit professionals about the social media risks that threaten their businesses. The five largest are: Financial loss Interrupted business continuity Loss of intellectual property Loss of employee productivity Viruses and malware However, despite this awareness of the risks, many companies are still not adequately …
Permanent link to this article: https://betweenthenumbers.net/2014/03/internal-audits-top-priorities-include-social-media/
Mar 17
SOX Whistleblower Protection Extend to Certain Private Company Employees
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 10
PCAOB Quote Regarding Audit Failure Rate Raises Concerns
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
Reducing Audit Fees Increases Restatement Risk
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
Auditing Standards Board Provides Guidance for Reliance on Internal Auditors
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/