Ungarbling Financial Accounting
Alas, I have not posted very much of late. But, it's only because I am trying to find as much time as possible to write my book describing a simple, comprehensive and robust basis of accounting that any public company could…
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 past year — I can tell you that audit…
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 been quietly adding to the federal…
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 a senior at Cornell. Twenty years…
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 the audit. It is certainly fair to say that the new model…
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, and (2) assessing whether management’s estimates “appear” reasonable.…
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 person who invited me knew…
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 almost seven years to complete the…