internal control: risk-based principles...

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Overview of the Auditor's Responsibility Regarding Fraud in a Financial Statements Audit ISA 240

This is a part of a workshop we conducted in Cairo in September 2010 at Safir Hotel for the PACPA. For more, you may visit our YouTube channel

the auditor's responsibility regarding ...

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Test Your Knowledge of Internal Control and Anti Fraud

If you have three minutes of your time, you may find out how far you are in control of your knowledge of internal control and anti fraud.

New Faces Enter Fray in Accounting

As the great accounting fight of the past decade moves near to a conclusion that seems likely to satisfy no one, the cast of characters is suddenly changing. The two most important accounting bodies in the world will be under new leadership as they try to move on from bruising battles that have pitted them against banks, bank regulators and politicians.

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Mike Theiler/Reuters

Robert H. Herz stepped down as head of the F.A.S.B. rule-making board this month.

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Leslie F. Seidman is acting chairwoman of the F.A.S.B.

The changes are coming before it is clear just how far the two boards — the Financial Accounting Standards Board, which sets accounting rules in the United States, and the International Accounting Standards Board, whose rules are followed in a growing number of countries — will have to back down in their efforts to force banks to report the current value of their assets.

CPA Exam Offered in Five International Locations Next Year

CPA Exam Offered in Five International Locations Next Year

The Uniform CPA Examination will be offered in Japan, Bahrain, Kuwait, Lebanon and the United Arab Emirates in 2011, marking the first time in the exam’s history that it will be offered outside the 55 U.S. jurisdictions.

PACPA in Cairo -The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements-

 

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Risk Assessment Standards in Action

By Paul Kiel, Jennifer Carney, Carla A. Gogin and David A. Johnson

january 2008

ight standards rolled out in 2006 by the Auditing Standards Board are sparking a cultural shift for auditors.

The standards—Statement on Auditing Standards nos. 104–111—are designed to enhance auditors’ responses to audit risk and materiality and encourage them to focus on areas with the greatest risk of misstatement. The standards are effective for audits of private company financial statements for periods beginning on or after Dec. 15, 2006.

The JofA asked partners at three accounting firms to write about how the new guidance has affected their work. In their first-person accounts, beginning below, the partners share their experience with putting the guidance into action and offer practical advice for tackling some of the common challenges of implementation.

Proposal Would Require Most Leases to Appear on the Balance Sheet

AUGUST 17, 2010

FASB and the International Accounting Standards Board (IASB) today unveiled a joint proposal to revamp lease accounting.

The proposal would result in a single “right-of-use” approach applied consistently to lease accounting for lessees and lessors. Among other changes, the approach would result in the liability for payments under all lease contracts within the scope of the standard and the right to use the underlying asset being included on the lessee’s balance sheet. The standard setters say the changes would improve the information available to investors and other financial statement users about the economics surrounding lease contracts.

Money Laundering

The Financial Crimes Enforcement Network (FinCEN) and several other financial institution regulators issued guidance to clarify and consolidate existing regulatory expectations for obtaining beneficial ownership information for certain accounts and customer relationships—information that the agencies said can help financial institutions better understand and address money laundering and terrorist financing risks, protect themselves from criminal activity, and assist law enforcement with investigations and prosecutions.

As part of an institution’s Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance program, a financial institution should establish and maintain customer due diligence (CDD) procedures that are reasonably designed to identify and verify the identity of beneficial owners of an account, as appropriate, based on the institution’s evaluation of risk pertaining to an account. CDD procedures may include:

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  Determining whether the customer is acting as an agent for or on behalf of another, and if so, obtaining information regarding the capacity in which and on whose behalf the customer is acting.
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  Where the customer is a legal entity that is not publicly traded in the U.S., such as an unincorporated association, a private investment company (PIC), trust or foundation, obtaining information about the structure or ownership of the entity so as to allow the institution to determine whether the account poses heightened risk.
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  Where the customer is a trustee, obtaining information about the trust structure to allow the institution to establish a reasonable understanding of the trust structure and to determine the provider of funds and any persons or entities that have control over the funds or have the power to remove the trustees.

The guidance says that certain trusts, corporate entities, shell entities and PICs are examples of customers that may pose heightened risk. In addition, FinCEN rules establish particular due diligence requirements concerning beneficial owners in the areas of private banking and foreign correspondent accounts. With respect to accounts that have been identified by an institution’s CDD procedures as posing a heightened risk, these accounts should be subjected to enhanced due diligence (EDD) that is reasonably designed to enable compliance with the BSA’s requirements.

Questions about the guidance may be directed to FinCEN’s Regulatory Helpline at 800-949-2732 begin_of_the_skype_highlighting 800-949-2732 end_of_the_skype_highlighting or the financial institution’s appropriate regulatory agency. The guidance is available at

tinyurl.com/ybp7k3q.

CPA Exam to Undergo an Evolution

By ALEXANDRA DEFLICE

MAY 2010

The CPA exam is undergoing its largest overhaul since moving from paper and pencil to computers. Jan. 1, 2011, will mark the launch of what people behind the exam are calling CBT-e (Computer-Based Testing evolution).

While news of these changes is obviously important for those who plan to take the exam, accounting professors and CPAs who employ future CPAs will also need to be familiar with the new format in order to mentor candidates to increase their likelihood of passing.

The first computerized Uniform CPA Examination took place on April 5, 2004. Slightly more than five years later, in July 2009, the millionth section was administered via computer.

The exam is offered jointly by three organizations: the National Association of State Boards of Accountancy (NASBA), the AICPA and Prometric. The AICPA is responsible for developing and scoring the exam, NASBA for the National Candidate Database, and Prometric, a wholly owned subsidiary of ETS, for examination delivery at authorized test centers. The three signed an amended agreement in March that extends the agreement to 2024.

International

MAY 2010

The International Accounting Standards Committee (IASC) Foundation published its second batch of training material for the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs). The training material is designed to assist companies and accountants in applying the standard. The remaining material will be published in the course of this year as it is completed. The free material is available for download from go.iasb.org/smetraining.

Project Management for Accountants

auBy ALEXANDRA DEFELICE

APRIL 2010

While the SEC moves toward a 2011 vote on whether to require U.S. public companies to report using IFRS, a more compact version of the international standards is already an option, subject to state board approval, for U.S. private companies. Now there’s a free online tool to help preparers understand how that streamlined standard compares to U.S. GAAP.

The IFRS for SMEs-U.S. GAAP Comparison Wiki, available at wiki.ifrs.com, is a collaborative resource launched in January for understanding differences between the two sets of financial reporting standards. IFRS for SMEs is a simplified version of full IFRS aimed at meeting the needs of private company financial reporting users. It eliminates some of the requirements meant specifically for public entities.

The Triangle of Truth

The most basic principle of project management is known technically as the triple constraint (also dubbed the “Triangle of Truth” by consultant Dave Franz).