Home' A Plus Magazine : Jan 2013 Contents 10 January 2013
The Securities and Exchange Commission in the United States has approved a
new standard that requires greater transparency and communication between
auditors and audit committees.
The rule, Communications With Audit Committees, was submitted by the
Public Company Accounting Oversight Board and will come into effect for
audits of fiscal years that ended on or after 15 December.
The new standard requires auditors and the audit committee to establish
an understanding of the terms of the audit engagement in order to enable an
exchange of information between the two parties.
Under the new rule, auditors are also required to provide audit committees
with their own evaluation of the company’s financial reporting and issues
surrounding the company ’s accounting practices, policies and estimates. It
will also oblige auditors to provide any information about significant unusual
transactions, the rationale behind those transactions and any other issues that
arise during the audit.
Martin Baumann, the PCAOB’s chief auditor and director of professional
standards, said that the standard would improve audit quality. “It emphasizes
effective two-way communication on matters of great importance to the
audit and financial statements, such as significant risks, critical accounting
estimates, difficult or contentious matters, significant unusual transactions
and going concerns.”
The board initially proposed the standard in March 2010 and re-proposed
it in December 2011 with revisions based on comments at a roundtable in
ICAEW urges IFRS option
for all listed companies
A report by the Institute of Chartered Accoun-
tants in England and Wales released last month
urged the International Accounting Standards
Board to give all listed companies around the
world the option of applying International Fi-
nancial Reporting Standards. “All listed com-
panies in major countries currently not part of
the IFRS family should be given the option of
reporting under IFRS, including [those in] the
United States,” said Nigel Sleigh-Johnson, head
of ICAEW’s financial reporting faculty.
KPMG profits rise amid
cooling in Asia Pacific
KPMG International saw revenues grow to
US$23 billion for the year ending 30 Septem-
ber 2012, which is a 4.4 percent increase on the
previous year. Advisory revenue grew by 8.3
percent, tax revenues by 6.3 percent and audit
revenues by 0.9 percent. The strongest region
for the firm was the Americas, with 7 percent
revenue growth. Asia Pacific, by contrast, grew
just 1.1 percent.
Big Four firms bank on
PricewaterhouseCoopers and KPMG have
opened their first offices in Myanmar as the
Southeast Asian country liberalizes its econo-
my. The firms will provide assurance, tax and
advisory services to support large local busi-
nesses and foreign corporations’ investments
see high demand in U.K.
Revenue accountant was Britain’s most in-
demand finance job during 2012, according to a
survey by a recruiter. Demand for this position
increased by 55 percent over the previous year,
the highest increase of any job. It was followed
by commercial finance analyst, the 2013 Michael
Page salary survey found. “Revenue accountants
play a key role in advising a business of the risks
and opportunities associated with deals,” said
Gareth Davage, managing director of Michael
Page Finance. Demand for reporting analysts fell
by 256 percent in 2012, according to the survey.
IFIAR survey findings reveal common
problems surrounding inspections
The International Forum of International Audit Regulators released the findings
of a global sur vey of audit inspections, identifying the most common problems
affecting audit firms around the world.
The forum asked members to report findings from their inspections of audit
engagements and areas where they had noted deficiencies.
The sur vey results identified common findings in a number of areas. It showed
that the largest number of inspection findings in audits of public companies
occurred in fair value measurements, internal control testing and engagement
quality control reviews.
In audits of financial institutions, it was revealed that the largest number of
inspection findings occurred in internal control testing, valuation of investments
and securities and audit of allowance for loan losses and impairments.
“ The sur vey results suggest that audit firms need to do more to improve
the consistency of performance on individual audit engagements,” the report
SEC approves new standard
on audit panel communication
PCAOB official says rule will improve quality
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