Peeling away financial reporting issues one layer at a time

» Accounting Concepts and Conceptual Framework

On the Use of “Fair” in the Auditor’s Report: A Conversation with David Damant

My previous post addressed three aspects of the auditor’s report:

The PCAOB* proposal to require a discussion of “critical audit matters”; Whether use of non-authoritative GAAP should be given special mention by the auditors; and The [Read More...]

The PCAOB on the Auditor’s Reporting Model: Great Progress and More To Do

Why is it that shareholders of the largest public companies could pay around $80 million for their boilerplate audit reports, if the shareholders of smaller public companies pay only $80 thousand for exactly the same [Read More...]

FASB Decrees that 2 + 2 < 4

On the one hand, I am happy to report that we are approaching the end of the darkest era in the history of U.S. accounting standards, during which the Accounting Establishment did their best [Read More...]

On Its “Materiality” Proposals, Will the FASB Heed the Handwriting on the Web?

As I described in a previous post the FASB has two related proposals on the table related to materiality and financial statement notes:

An amendment to Concepts Statement No. 8 to replace its ersatz definition [Read More...]

“Fairly Presented” in the Auditor’s Report—Puffery or Principle?

From the preface of Political Standards: Corporate Interest, Ideology, and Leadership in the Shaping of Accounting Rules for the Market Economy:

In subtle but significant ways, our corporate accounting system has been captured…. [Read More...]

FASB’s Proposed Materiality “Clarifications” are Backfiring

Something must have happened between my post criticizing the FASB’s proposals to reduce materiality to a legal exercise and last week’s meeting of the SEC Investor Advisory Committee.  Just prior to the [Read More...]

Materiality: The FASB is Shrinking the Envelope

This is the second of three posts today.  In this one, I want to talk about materiality — in general, and the recent proposals issued by the FASB. (The first post, a related one, [Read More...]

The Earnings Management is Hidden in the Details

With inspiration and encouragement from the John Hughes IFRS Blog, this post is a partial recycling from 2010 of Merrily We Roll Along — Forward and Up.   I had observed way back [Read More...]

Hoogervorst Hokum Re Historic Cost

After years of trying to work with the FASB on a revised conceptual framework, the IASB finally decided to abandon the goal of a fully converged framework and to finish a document for its [Read More...]

Proposed ASU EITF 2015-15B: Lipstick for a Pig of a Revenue Presentation Standard

The FASB has issued Proposed Accounting Standards Update EITF 2015-15B, Recognition of Breakage for Certain Prepaid Stored-Value Cards.  If finalized, it would change the way that retail merchants who sell gift cards for [Read More...]