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A service for users of financial statements |
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Recent developments likely to affect you...
PCAOB Seeks Comments on Expanded Auditor's Reporting Model Investors would gain greater insights into the views of independent auditors under a concept release proposed in June 2011 by the Public Company Accounting Oversight Board (PCAOB). Among other things, the PCAOB is suggesting that auditors provide a supplemental narrative report known as the Auditor's Discussion and Analysis (AD&A). The AD&A report would contain useful information about a public company's financial statements, such as management's judgments and estimates, accounting policies and practices, and difficult or contentious issues including those the PCAOB refers to as "close calls." For more information, read our Special Report.
Investors Demand Straight Talk About Tax Risks in 2011 Straight talk about tax risks has been added to the list of investors' demands in today's uncertain tax environment. A handful of major companies recently faced high-profile demands for more information about their tax risks when a leading pension fund sought to place the matter on proxy statements for shareholder votes in 2011. The pension fund was concerned that it did not have sufficient information to assess whether lower-than-average effective tax rates would be sustainable in view of proposed legislation or mega-trends involving shifts in public policies and shortfalls in government financing. For highlights of the specific red flags that triggered the proposal and a list of questions for companies to consider in evaluating the risks and uncertainties, see Rosemary Schlank's article in the June 27th edition of Tax Notes.
Surprise Audits by CPA Firms May Help Prevent Future Ponzi Schemes
In the wake of the Madoff swindle, as well as other recent Ponzi schemes and abuses involving investment advisers, the SEC has initiated a number of reforms, including a requirement for annual "surprise exams" of investment advisers by independent public accountants to better assure the safekeeping of investor assets. These reforms took effect March 12, 2010. The SEC has also provided interpretive guidance for independent accountants who conduct the surprise audits. The new reforms and guidance are all designed to protect investors who do business with investment advisers registered with the SEC. (more)
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Rosemary SchlankDirector Center for Financial and Accounting Literacy
Center Salutes Life and Legacy of Accounting Icon Ben Neuhausen Ben lost his courageous battle with cancer on July 31, 2009. Though his distinguished career ended far too soon, Ben’s accomplishments were many, and he leaves a rich legacy of memories that are overflowing with lessons in both literacy and life. Read our summary of his views and accomplishments.
Quality-of-Accounting Scorecards Are US accounting standards getting better or worse? Are they more user-friendly for investors? Do they lead to better decisions? The Center monitors key benchmarks, including progress toward noteworthy reports and recommendations. You can trust our Scorecards for an objective assessment. (The scorecards are being updated and will be available soon.)
Recent Articles by Rosemary Schlank
Ready for FASB's Accounting Standards Codification?
Improving Transparency in Turbulent Times
Disclosures and Audit Committees are Key in Turbulent Times
Financial Reporting in Turbulent Markets
New
Accounting for M&A Affects Earnings and Deals
XBRL: What Should Companies Do Now?
Financial Reporting Directions Drawn From the Top
Governance Issues of 2005
FASB Must Weigh
Costs and Benefits of Accounting Changes Expected in 2005
Changing Capital
Markets - Risks for
the Information Age |
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Accounting Standards Codification
Investors in public companies that report under US generally accepted accounting principles (GAAP) can look forward to subtle but important improvements in financial reporting now that the US Accounting Standards Codification is live and operational. Many public companies are weighing the merits of a move toward more plain-English explanations and less technical jargon in the notes to the financial statements starting in third quarter 2009. More Accounting Topics
XBRL Reporting Happy news for investors. XBRL reporting has arrived, starting with 2nd quarter 2009 SEC filings. XBRL stands for eXtensible Business Reporting Language, a technology that allows companies to tag the information provided to the SEC in a way that allows investors and prospective investors to read the tags and interact with the data.
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The Value of a Good Board of Directors Boards of directors are in the public spotlight now. Recognizing that directors have a important role to play in restoring investor confidence, the SEC is taking a hard look at what more must be done so that directors can be held truly accountable to shareholders for their decisions. The key issues include:
Major changes have already been proposed in the areas of shareholder proxy access and added disclosures. |
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