Peeling away financial reporting issues one layer at a time

Accounting Estimates: What Investors Should Want

Last week, the PCAOB convened its Standing Advisory Group to discuss the topic of auditing accounting estimates and fair values.  I was invited to be on a panel providing investors’ perspectives.*

This post mainly consists [Read More...]

Revenue Recognition: A Litmus Test for Convergence with IFRS

Do you remember the Big Four mantra that IFRS adoption in the U.S. was “inevitable”?  Today, thankfully, the operative word is “dead.”  Even former SEC chair, Christopher Cox, whose brainchild was the IFRS adoption [Read More...]

Trying My Best to Save LOCOM for Inventory

In my previous post, I expressed my opposition to the FASB’s proposal for replacing the LOCOM rule for inventory with “lower of cost or net realizable value.”

I stated that the extant U.S. GAAP [Read More...]

The FASB Wants to Dumb Down Inventory Impairment

OK, let’s start with something positive.  The FASB recently issued proposals to simplify two accounting topics, and whaddya know, I am actually in favor of one of them.

The “extraordinary item” income statement category is [Read More...]

Loan Accounting: It’s High Time for the SEC to Step Up to the Plate

“Full convergence with the United States – leading to the creation of one single set of global accounting standards – is no longer an achievable project…   But IFRS moves on – we have [Read More...]

On Golden’s Con, Part III: Fixing the Disclosure Mess

…Eye of newt, and toe of frog, Wool of bat, and tongue of dog, Adder’s fork, and blind-worm’s sting, Lizard’s leg, and owlet’s wing …

If you have read my blog every now and then, it [Read More...]

On Golden’s Con — and Bain Capital’s Travels to Lilliput

There is so much I would like to write about, yet so little time…

I could write about the latest half measure on the accounting for repurchase agreements (ASU 2014-11)— and that Tom Linsmeier’s [Read More...]

On Golden’s Con: Selling False Hope for Fundamental Changes to Financial Reporting

“FASB is preparing to consider foundational changes that could significantly alter financial reporting in the future as well as standards improvements that will reduce complexity, board Chairman Russell Golden said … in a speech at [Read More...]

The Wild West of “Nonauthoritative” GAAP

Two posts ago, I provided two reasons for the PCAOB* to take the opportunity of its auditor’s report project to look closely at the meaning of, “fairly presented … in accordance with [Read More...]

High Frequency Trading: What Would Cicero Say?

This post is a little different from my posts on accounting issues.  I’m going to weigh in on the high frequency trading (HFT) brouhaha that was ignited by the recent 60 Minutes report [Read More...]

Look Beyond the Firms for the Root Causes of Audit Deficiencies*

The International forum of Independent Audit Regulators (IFIAR) has published its second annual survey of audit inspections of the Big Four plus BDO and Grant Thornton firms around the world:

“The leading areas of [Read More...]

One Shouldn’t Have to be an Auditor to Understand an Audit Report

The PCAOB* has proposed a new standard to make the auditor’s report more informative.  If finalized in its present form, it would provide more and/or better information concerning the following:

Critical audit matters (as determined [Read More...]

Accounting Complexity: What if “Truth in Labeling” were an Accounting Principle?

“I do not deny that what happened to us is a thing worth laughing at. But it is not worth telling, for not everyone is sufficiently intelligent to be able to see things from [Read More...]

Is XBRL the Future of Financial Reporting? (YES!)

For many of the financial reporting questions of the day, the right way forward is self-evident and direct. “Build it and they will come,” I say.

But far too often, policy makers allow themselves to [Read More...]

“Reducing Complexity” — The Latest Red Herring from the FASB

I don’t have exact figures, but I’m fairly certain that the AICPA’s annual Washington, DC conference on SEC-related developments may be the place where you can find the highest number of accountants crammed [Read More...]