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Category Archives: Accounting Standards

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Posted in Accounting Standards, Broker-Dealer Regulation, PCAOB Enforcement

The PCAOB adopted two attestation standards relating to auditors’ examinations and reviews of broker-dealer compliance and examination reports and adopted an auditing standard for the audits of supplemental information that broker-dealers file with the SEC. The preparation by broker-dealers of compliance or exception reports are new requirements that were added by the SEC when it… Continue Reading

SEC’s New Task Force on Financial Reporting Fraud

Posted in Accounting Standards, Broker-Dealer Regulation, Financial Industry Trends

The Securities and Exchange Commission announced three new enforcement initiatives, including a task force aimed at rooting out potential fraud involving issuer disclosures and audit failures.  See http://www.sec.gov/news/press/2013/2013-121.htm. The SEC said its Financial Reporting and Audit Task Force will expand the Enforcement Division’s efforts to identify securities law violations relating to the preparation of financial… Continue Reading


Posted in Accounting Standards, PCAOB Enforcement

The PCAOB issued a policy statement regarding its enforcement investigations, in that it will consider extraordinary cooperation, including voluntary and timely self-reporting, remedial or corrective action, and providing substantial assistance during the investigative process.  This type of cooperation may result in reduced charges and/or sanctions.  The settlement documents may also indicate the cooperation, or there… Continue Reading

Has the Pre-Sox Era Returned?

Posted in Accounting Standards, Sarbanes-Oxley, SEC Enforcement

Auditors engaging in non-audit consulting?  A major accounting firm pushing for more consulting work?  Recently, the SEC’s chief accountant indicated that there were concerns at the SEC regarding auditor independence as a result of this push for non-auditing work from accounting firms. In particular, the concern related to auditing firms boosting their non-audit consulting business. … Continue Reading

Auditors And Accountants Need To Be Skeptical in Their Reviews

Posted in Accounting Standards, PCAOB Enforcement

In early December, the PCAOB issued a release indicating that accounting and auditing professionals need to be skeptical regarding their work. The PCAOB is suggesting that professionals in the accounting and auditing profession must be critical of their oversight responsibilities with their clientele.  Regulators expect them to continue to exercise that skepticism in their judgments as… Continue Reading

Is the U.S. Moving Towards International Accounting Standards. . . Not Really (Again)

Posted in Accounting Standards, International Securities Regulation

Although it has been somewhat circumspect, the SEC seems to be stalling on a move towards adopting the international accounting standards of International Financial Reporting Standards (“IFRS”).  Such an approach has left the Europeans in a tizzy!! The United States has an interesting history with international accounting standards.  The SEC and the American accounting industry has in… Continue Reading

How Do Accountants Look in Prison Stripes? You Do Not Want to Find Out

Posted in Accounting Standards, Federal and State Criminal Activities, PCAOB Enforcement

Accountants beware – prison lurks. Recently, a certified public accountant and auditor was sentenced to 54 months in prison for his role in a nearly half-billion dollar investment scam that impacted over 3,500 investors.  In the sentencing, the court indicated accountants and auditors are gatekeepers of our financial system, and must protect that system and those who… Continue Reading

Non-US Auditors Are Being Scrutinized by SEC

Posted in Accounting Standards, Capital Formation, PCAOB Enforcement

The SEC is extremely concerned about foreign auditors. In particular, the SEC is worried that those who work in certain European countries and in China are not subject to auditor requirements or the PCAOB.  Essentially, the SEC is concerned over the lack of US oversight over these foreign auditors.  Further, the SEC is concerned about if… Continue Reading

Auditors Are Subject to SEC Action

Posted in Accounting Standards, PCAOB Enforcement, SEC Enforcement

We have repeatedly stated that auditors are significant players in today’s securities industry.  No other than the SEC has made this point on numerous occasions.  Recently, the SEC brought this fact home with the filing of administrative proceedings against two auditors.  See http://www.sec.gov/litigation/admin/2013/34-68605.pdf. The SEC claimed these individuals failed to follow professional standards in reviewing… Continue Reading

Ernest Badway Appears on CNBC-India to Discuss Securities Class Action Dismissal

Posted in Accounting Standards, Securities Class Actions, Securities Litigation

Ernest Badway, recently, appeared on one of the top-rated business programs in India, The Firm, to discuss United States District Court Judge Barbara Jones’ dismissal of a major securities class action involving a major, Indian based, multi-national company, Satyam.  The Firm airs on CNBC-India.  The video is in two parts.  Please click ‘Next’ icon on the bottom right… Continue Reading