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Disclsoure and Reporting Manager Wins Innovation Award
The Disclosure and Reporting Manager Wins 2008 Tax & Accounting Technology Innovation Award
Crossroads Blog
Crossroads Blog - Helping CPA firms implement technology best practices
President and CEO Named to Top 40 Under 40
Fort Worth, Texas - Marty McCutchen, CPA has been recognized in The CPA Technology Advisor's Top 40 Under 40.
Disclosure and Reporting Manager Release
CPA Service Group releases the Disclosure and Reporting Manager
Has Sarbox worked regarding nonaudit fees?
Pre-Sarbanes-Oxley, there was a lot of consternation about the many conflicts of interest posed by audit firms that also performed a lot of nonaudit work for the same client. The law, which prevented accounting firms from performing any nonaudit service for a client while they were working on a tax audit of the client, was meant to crack down. It has apparently succeeded.
CFO.com notes some data from Audit Analytics that shows a steady decline in nonaudit fees as a share of all fees. Nonaudit fees seem to have leveled off at about 21 percent of total fees from a high of 51 percent in 2002. Is this good news or bad news? On one hand the amount of nonaudit work has fallen, even as the industry has thrived, and that has reduced the perception of conflicted auditors. But for some, 21 percent is still high. Should it be zero? It depends on the composition of that revenue. My sense is that audit firms have to be smart about all this. I would think an audit company would prevent nonaudit work when an audit is in progress. But even when an audit is not in progress, is there still not a desire to please a perennial tax client?
For more:
- here's the article
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Consulting work thrives all over again
Internal auditors expanding scope of duties
Small company compliance timeline issues heat up
Audit firms charging small companies too much?
Top exchanges have long blamed Sarbanes-Oxley for making IPOs that much more scarce. The reality may not be simple, but you can hardly blame exchange officials for lambasting anything that cuts into their business. The latest from the NYSE Euronext's CEO Duncan Niederauer seems to shift the focus a bit. He suggests that accounting firms are charging small companies too much for audits.
He's smart enough to know that Sarbanes-Oxley will not be repealed anytime soon. But he has apparently discussed pricing issues with the SEC. "The accounting firms end up charging a lot more to small companies to remain compliant than regulators in Washington probably think is the case," he said in an interview with the Wall Street Journal. There may be some signs of excess capacity at small accounting firms. But all in all it's hard to make the case for forcing auditors to cut fees. I doubt the SEC would be willing to dictate what audit firms ought to charge certain customers. Still, these comments highlight the issue of small company 404(b) compliance, which will be painful and costly for many.
For more:
- here's an article from WebCPA
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Do you know who's doing your audit work?
The downside of auditor independence
Study finds continuing auditor deficiencies
Who will audit the auditors?
Study finds continuing auditor deficiencies
Section 104(b) of Sarbanes-Oxley requires that accounting firms that provide audit reports for more than 100 issuers must be inspected annually. The rule was intended as a check on the audit firms, to essentially hold their feet to the fire in order to enhance the quality of the audit process.
So how are the big auditors doing? The PCAOB just released a report that found "deficiencies in important audit areas, both established and emerging. These areas include critical and high-risk parts of audits, such as revenue, fair value, management's estimates, and the determination of materiality and audit scope." However, auditors are doing better when it comes to confirmation of AR and income tax accounts.
For more:
- here's the report
Related Articles:
Public Company Accounting Oversight Board (PCAOB) news from FierceSarbox