Peeling away financial reporting issues one layer at a time

Will CAMs Get the Shaft from the ‘New’ PCAOB?

In recent years I have presented an update on the activities of the PCAOB at the annual meeting of the Association of Audit Committee Members.  From that experience — particularly this [Read More...]

GAAP and the Federal Budget Deficit

The accounting topic of the season is income taxes.  But, as the nation contemplates what Congress could end up passing, I want to talk about how one under-the-radar amendment to financial accounting standards has [Read More...]

Walter Schuetze: 1932 – 2017

I marvel at how much mere happenstance can play in a career.  I might not have become a teacher, or gone to graduate school but for one meeting with an administrator when I was [Read More...]

Rays of Sunlight to Shine on Audits — and Auditability

Yesterday was a very good day for investors! The SEC finally approved PCAOB rules that will make a lot more information public about what actually went down during [Read More...]

A Perspective on “Professional Skepticism” — Part 2 of 2

(Part 1 is here.)

I have found that a useful way to home in on the drivers of audit quality is to regard an audit as two distinct engagements: (1) verifying facts, [Read More...]

A Perspective on “Professional Skepticism” (Part 1 of 2)

I was recently invited to make a presentation to a conference of auditors. The leadership asked me to address “professional skepticism,” one of those difficult-to-nail-down ideas, yet a recent point of emphasis in PCAOB inspections.

The [Read More...]

Re-introducing Principles to Financial Accounting

A long time ago —  in 2004, to be exact — the FASB and IASB announced that they would jointly develop a common “conceptual framework.” They divided the work into eight phases.  It took them [Read More...]

“Going Public” is More than a Memoir by an SEC Staffer — Which is Unfortunate

There is more to the securities laws and their administration by the SEC than just the ’33 and ’34 Acts.  The Investment [Read More...]

Double-Entry Accounting in Modern Times

My Shareholder Oriented Financial Accounting (S-OFA) Standards will require that debits equal credits.

Duh.  But if I am truly going to start with a clean sheet of paper, then I am compelled [Read More...]

Non-Voting Shares are in Vogue: Do (Lousy) Accounting Rules Play a Part?

I’m starting a company and I want you to invest.  I will put up $100 of my money for $10 million of yours.  I will own 100 shares of voting stock, and you will [Read More...]

The Asset Impairment Song and Dance (Part 2 of 2)

My latest post was about general problems with asset “impairment” accounting —  its absurdity, high cost and dubious information value.  And I haven’t even begun to hone in on the wurst part: goodwill impairment.

It is [Read More...]

The Asset “Impairment“ Song and Dance (Part 1 of 2)

Two recent news items have made this an opportune time for a post — actually, two posts —  about the accounting for the “impairment” of an asset.

The SEC is considering whether Exxon violated the [Read More...]

Introducing ‘Shareholder-Oriented Financial Accounting’

Last December, I announced that I have started to write a book that would propose a very different basis for financial accounting by public companies.  I’m calling it ‘Shareholder-Oriented Financial Accounting’ (S-OFA), and this [Read More...]

Revenue by (Logical) Deduction

It seems there is always good reason to write a post about revenue recognition.  I can even envisage an entire blog on  the FASB’s new standard (ASC 606). It could go on for years without [Read More...]

Could Wells Fargo be the Next Big MD&A Enforcement Action?

The question occurred to me after reading Francine McKenna’s coverage of Senate hearing testimony by Wells Fargo’s CEO about the nearly 2 million unauthorized credit card and savings account openings.  I don’t know if the [Read More...]