Accounting & Auditing Highlights for the Week Ending Sept. 28, 2018


U.S. Highlights:

CECL

Sept. 24: Bank of America Corp. is busy fine-tuning models to identify lending risks and figure out how much money it should set aside to cover expected losses on loans. Click here to read the full report. (Subscription required.)

Auditor Oversight

Sept. 24: Auditing firm BDO USA LLP racked up dozens of audit violations across a spectrum of procedures examining accounts receivable, inventory, acquisitions, and loan losses, according to the firm’s 2016 audit inspection report. Click here to read the full report. (Subscription required.)

Sept. 27: Affiliates of two global accounting networks stumbled when auditing estimates related to intangible assets and uncertain tax positions, according to their most recent U.S. audit inspection reports. Click here to read the full report. (Subscription required.)

Accounting Fraud

Sept. 26: The former chief financial officer of Bankrate Inc. was sentenced to the maximum 10 years in prison for accounting and securities fraud charges that resulted in $25 million losses for shareholders. Click here to read the full report. (Subscription required.)

Business of Accounting

Sept. 24: A former female partner of Ernst & Young LLP said the firm fosters a culture of misogyny and sexual harassment that keeps women from climbing the career ladder, according to a charge filed Sept. 24 with the Equal Employment Opportunity Commission. Click here to read the full report. (Subscription required.)

Sept. 25: Certified public accountants are mobilizing against an effort in several states to ease occupational-licensing laws that could include their profession and erode its professional integrity. Click here to read the full report. (Subscription required.)

Sept. 25: A defense agency properly eliminated auditing firm BDO USA LLP from a contract competition to provide financial operations and systems support services because it couldn’t demonstrate possession of a required secret facility clearance, the Government Accountability Office ruled. Click here to read the full report. (Subscription required.)

Corporate Reporting

Sept. 24: Symantec’s audit committee, originally announced in May 2018, reviewed a transaction with a customer for which $13 million was recognized as revenue in the fourth quarter of fiscal year 2018. The company has concluded that $12 million of the $13 million should be deferred. Click here to read the full report. (Subscription required.)

Sept. 25: Confusion about pending U.S. tax regulations is bringing volatility where multinationals want it least: earnings reports. A lag between deadlines for Securities and Exchange Commission filings and the IRS’s expected final rules on accumulated foreign earnings means companies are announcing tax liabilities and benefits they may need to change later. Click here to read the full report. (Subscription required.)

SEC Enforcement

Sept. 28: Salix Pharmaceuticals Inc., the gastrointestinal-drugs division of the company formerly known as Valeant, agreed to settle a Securities and Exchange Commission probe over the company’s inventory accounting. Click here to read the full report. (Subscription required.)

Cryptocurrencey

Sept. 28: More than a dozen House lawmakers are asking the Securities and Exchange Commission for clarity on when securities laws apply to virtual currency assets. Click here to read the full report. (Subscription required.)

International Highlights:

U.K.

Sept. 25: Very few large companies in the U.K. are meeting requirements to disclose information on their strategies, employment diversity, and their effects on the environment, according to the accounting regulator and complaints from an environmental litigation organization. Click here to read the full report. (Subscription required.)

Sept. 28: U.K. Court of Appeal judges dismissed a case Sept. 28 against KPMG, in which the property developer Holmcroft Properties Ltd. said the accountants breached their duties in overseeing a Barclays Plc mis-selling compensation program. Click here to read the full report. (Subscription required.)

Sept. 28: Big accounting firms continue their aggressive expansion into legal services, with PricewaterhouseCoopers LLP announcing an alliance with an international law firm to strengthen its immigration practice. Click here to read the full report. (Subscription required.)

Canada

Sept. 27: Canadian authorities are struggling to devise rules for letting companies report unaudited alternative financial data that won’t mislead investors about actual performance and business risks. Click here to read the full report. (Subscription required.)

Australia

Sept. 25: Climate change could be a “material business risk” that corporate directors should consider when making shareholder disclosures, the Australian securities regulator said. Click here to read the full report. (Subscription required.)

Denmark

Sept. 26: As multiple investigations into Danske Bank A/S get under way, Denmark’s government wants to know why the bank’s auditors appear to have missed signs that one of Europe’s biggest money laundering scandals was unfolding in front of them. Click here to read the full report. (Subscription required.)

Norway

Sept. 28: Ending the requirement for retailers to issue paper receipts will save costs, an official at the Norwegian Institute of Public Accountants told Bloomberg Tax Sept. 27. Click here to read the full report. (Subscription required.)

Steinhoff Scandal

Sept. 26: A shareholder group got a green light to sue Steinhoff International Holdings NV in the Netherlands, kicking off a legal fight to recover some of the billions of dollars investors lost after the South African retailer’s accounting scandal. Click here to read the full report. (Subscription required.)

Sept. 27: Steinhoff International Holdings NV’s Asia Pacific unit changed its name and refinanced some of its debt, joining other divisions in distancing themselves from their parent company’s accounting scandal. Click here to read the full report. (Subscription required.)

Composed and compiled by Amanda Iacone, accounting reporter for Bloomberg Tax.

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