The U.K. government is joining up the dots on the need for trust to build a strong commercial ecosystem for business. It intends to broaden the remit of audit, introduce new reporting obligations on businesses, and break the dominance of the Big Four accounting firms by requiring the use of smaller “challenger” firms by large…
Tag: accounting
Accountants work to counter climate change | Accounting Today
Accounting groups are reacting to the latest reports about the accelerated pace of climate change as global warming reaches record levels. Against the backdrop of the United Nations’ 25th annual Conference of the Parties, or COP25, in Madrid, the International Federation of Accountants published a Point of View on climate action to highlight the role…
Francine McKenna: A tale of two SEC enforcement actions — Luckin Coffee and GE
Francine McKenna’s columns on The Dig are always thoughtful and informative. We particularly appreciate her comments on two last-minute settlements by the Trump/Clayton SEC. A week after it announced a $200 million settlement with GE for “disclosure failures,” the Securities and Exchange Commission settled with China’s Luckin Coffee for $180 million. “The Securities and Exchange…
German cabinet approves tougher oversight after Wirecard scandal | Reuters
The German cabinet passed a package of reforms to financial and accounting rules on Wednesday aimed at avoiding another Wirecard scandal amid criticism from opposition lawmakers who say the government’s measures do not go far enough. Chancellor Angela Merkel’s conservatives and the co-governing Social Democrats (SPD) agreed to extend the powers of the BaFin watchdog…
It’s Not What You Look at that Matters: It’s What You See, Revealing ESG in Critical Audit Matters
PCAOB Board member J. Robert Brown, Jr. spoke to ICGN about audit disclosures and ESG. An excerpt (footnotes omitted): I’m guessing that when you think about Environmental, Social and Governance or ESG disclosure, audit regulators are not usually top of mind. Today, though, I want to share some thoughts about why they should be. The…
Our Audit of EY’s Apology for Wirecard Finds it Inadequate
Note use of passive voice and that faintest of excuses: it was really, really hard. Not acceptable when the auditor’s primary job is to verify the company’s accounts, and that included detecting fraud. “Many people believe that the fraud at Wirecard should have been detected earlier and we fully understand that,” Mr Di Sibio wrote…
SEC Report: U.S. Investors’ Exposure to Domestic Chinese Issuers
The accounting fraud at Lukin Coffee is just the latest reason to raise concerns about investment risks in Chinese companies. The SEC has issued a new report that includes the exposure of the biggest pension funds in the UA. Excerpts here (footnotes omitted), full report below. More than 150 China-based companies with a combined market…
The economic crisis will expose a decade’s worth of corporate fraud | The Economist
Booms help fraudsters paper over cracks in their accounts, from fictitious investment returns to exaggerated sales. Slowdowns rip the covering off. As Baruch Lev, an accounting professor at New York University, puts it, “In good times everyone looks good, and the market punishes you harshly for not keeping up.” Many big book-cooking scandals of the…
Congress Gets Involved in Accounting Rules (Again) – The Dig
As part of the CARES Act, the coronavirus-relief measure enacted in late March, Congress is allowing banks to hold off on adopting a new method for them to record their losses on loans that aren’t repaid. The new rule – known as “CECL,” for current expected credit losses – forces banks to book and reserve…
CII Letter to SEC about PCAOB and China
The Council of Institutional Investors has written to the SEC to raise concerns about plans to cut back on investor protections and accounting oversight. The full letter is below. An excerpt (footnotes omitted): [We] respectfully request that the PCAOB investigate the matter to the extent possible and determine whether it is appropriate and in the…
