Audit & assurance news and resources -- Journal of Accountancy

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A Better Way to Gauge Profitability

EXECUTIVE SUMMARY Return-on-equity (ROE) is the correct profit metric to evaluate the performance of a business. However, the primary emphasis on financial ratio analysis must be on operating performance. The “advanced” version of the DuPont model remedies the original model’s failure to cleanly separate the effects of operating and financing...

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September 15, 2022

A quick tour of student loan forgiveness, a quiz, and a letter to the IRS

This express podcast episode with transcript hits the highlights of recent Journal of Accountancy news coverage of student loan debt forgiveness, an AICPA letter urging penalty relief from the IRS, and more.

September 12, 2022

Significant risk revised: Concept changes under SAS No. 145

SAS No. 145 revises the definition of significant risk. The revisions alter how you conduct elements of your risk assessments. Get the updated information you need and be ready for your 2023 audits.

September 7, 2022

SEC to auditors: Use care with Chinese engagements

Public audit firms must make sure issuers in China and Hong Kong will grant new lead auditors appropriate access to previous engagements, an SEC official warns.

September 1, 2022

The ‘mixed bag’ of economic sentiment; recent IRS news; a PCAOB update

Economic optimism is dimming, bringing revenue and profit projections down as well, but more than half of U.S. finance decision-makers say they can use more workers. Learn more about quarterly sentiment, along with a look at IRS news and more, in this podcast episode with transcript.

September 1, 2022

Using Benford’s Law to reveal journal entry irregularities

Benford’s Law can help uncover indicators of fraud — and anomalies that arise from legitimate business practices.

August 31, 2022

PCAOB releases review of 2021 inspections, looks forward to 2022 review

The board’s target team provides insights in four areas of focus to provide guidance for public company auditors and shape the PCAOB’s approach to future inspections.

August 26, 2022

PCAOB, China sign agreement opening door for inspections

The Statement of Protocol allows the PCAOB access to inspect Chinese companies the same way it does in other countries. The PCAOB said it plans to put the agreement “to the test” by mid-September.

August 22, 2022

PCAOB report: Quality of audits improves in 2021 but still lacking

Deficiency rates decreased in 2021 broker-dealer audits reviewed by the PCAOB, but the board’s report calls for more progress.

August 16, 2022

PCAOB seeks public comments on 5-year strategic plan

The PCAOB’s Strategic Plan 2022–2026 aims to modernize standards, enhance inspections, strengthen enforcement, and improve organizational effectiveness.

August 15, 2022

SEC approves PCAOB standards for multi-firm audits

New standards target the growing number of public company audits that feature multiple firms, aiming to strengthen the requirements for lead auditors.

August 3, 2022

IAASB issues new FAQs for reporting going concern matters

The IAASB has issued a nonauthoritative publication to address some of the common questions related to reporting going concern matters in the auditor’s report.

August 1, 2022

More companies obtaining ESG assurance, according to global survey

The percentage of companies worldwide providing assurance on ESG reporting increased between 2019 and 2020, but are auditors getting their share of the work?

August 1, 2022

Untangling client affiliates

The AICPA Code of Professional Conduct requires CPA firms to identify all their financial statement attest client affiliates.

August 1, 2022

Fraud is suspected: Now what?

Follow these do’s and don’ts for auditors when potential wrongdoing surfaces.

July 29, 2022

PCAOB, SEC chairs look to strengthen oversight of auditing practices

The Sarbanes-Oxley Act created the PCAOB in 2002 to oversee public company audits. Twenty years later, the PCAOB — backed by the SEC — is emphasizing inspection and enforcement as ways to strengthen investor protections.

July 29, 2022

What’s new in SAS No. 145: Enhanced definitions mean stronger audits

Don’t delay. Understand SAS No. 145, from the AICPA Auditing Standards Board (ASB), and be ready.

July 6, 2022

Audit partners see signs that inflation will persist

Three-fourths of public company audit partners believe inflation will persist for at least 12 months, according to a Center for Audit Quality survey.

July 1, 2022

New possibilities when performing attestation services

Recently issued standards provide options for clients and flexibility for practitioners.

July 1, 2022

Auditor independence relating to government client affiliates

You must apply, with one exception, the “Independence Rule” and related interpretations of the AICPA Code of Professional Conduct to your state or local government client’s affiliates.

June 30, 2022

PCAOB reveals selected areas of focus for 2022 inspections

The report highlights 10 areas of focus for inspections and shares five key reminders aimed at helping auditors as they navigate the current economic landscape.