Though we have known for centuries of the globes spherical dimensions, the last few decades have proven that the earth might be “flat” after all. People communicate all over the world like never before, allowing transactions to flow freely from country to country. Because this is a first time occurrence as never seen in history, people are adapting rapidly to new types of problems or ways that we could make these interactions more efficient. One problem is that because of the free flow of business transactions through different countries and different law enforcements, one set of accounting standards needs to be put in place to have easier access to financial information. International Financial Reporting Standards are one set of accounting standards, put in place by the International Accounting Standards Board, which is becoming the global standard for the preparation of public company financial statements. The current lack of a uniform set of accounting standards creates problems for companies preparers and users. Many multinational companies, creditors, and investors support the idea for a global set of accounting standards, which would make it easier to compare the financial statements of a foreign competitor, to better understand opportunities, and to cut cost by using one accounting procedure company-wide.

Currently over 12, 000 companies in 113 countries have adopted international financial reporting standards as their new accounting standards. The SEC believes that this number will continue to increase. Japan, Brazil, Canada and Indian countries plan to start using IFRS in 2010 & 2011. Mexico will adopt IFRS in 2012. This same year the U.S. will include IFRS questions on their CPA exams. President Obama released the financial regulatory reform proposals, on June 17, 2009, which called for accounting standard setters to “make substantial progress toward development of a single set of high-quality global accounting standards” by the end of 2009. The United States are expected to converge and/or adopt the international standards, IFRS and cease to use their current generally accepted accounting principals, as early as 2012. The proposed deadline, which requires U.S. public companies to use IFRS, has been postponed to 2015. In order to do this, differences between GAAP and IFRS need to be recognized and eliminated.

+ READ MORE

• 0 Comments

Accounting is one of the most important internal aspects to any business that is to be financially successful in today’s market. It is the process of documenting all relevant economic information about a firm and communicating that information to key players. Managers and Executives need accounting information to make decisions and run their business to achieve maximum profitability. Shareholders need accounting information to make informed investments.

There are many types of accounting that all have different roles in the business world. Probably the best-known and most ‘classic’ type of accountant is a CPA, or Certified Public Accountant. A CPA has a very diverse client list. They can serve anyone including individuals, private firms, large publicly traded corporations, the government, or non-profit organizations. They can perform the role of an independent auditor, tax advisor, or financial consultant.

+ READ MORE

• 0 Comments

The Public Company Accounting Oversight Board (PCAOB), sometimes referred to as Peekaboo, is a private-sector, nonprofit corporation that was created by the Sarbanes-Oxley Act of 2002. The PCAOB is under the jurisdiction of the SEC (Securities and Exchange Commission). The Sarbanes-Oxley Act and the creation of the PCAOB was a direct result of the accounting fraud scandals of Enron and WorldCom. The purpose of the PCAOB is to oversee auditors of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, fair, and independent audited financial statements. This was the first time that public companies were required to have audits on the effectiveness of their internal control over corporate financial reporting. The PCAOB has established auditing, quality control, ethics, and independence standards to be used by registered public accounting firms in the preparation of audited financial statements for publicly traded companies, as required by the Sarbanes-Oxley Act of 2002 and the rules of the Securities and Exchange Commission (SEC).

The Sarbanes-Oxley Act of 2002 requires the PCAOB to: register accounting firms that audit publicly companies,; inspect registered accounting firms and their associated Certified Public Accountants (CPA’s) annually for those whom annually audit over 100 public companies and a minimum of once every three years for those that audit under 100, assess the degree to which the firms comply with the act, the rules of the PCAOB and the SEC, professional standards in connection with the performance and issuance of audited financial statements and attest services; related matters involving public companies, and investigate and discipline any accounting firms and related accountants who are in violation of specific laws or standards. All firms are still required to have peer review of their auditing and accounting practice in order to satisfy the American Institute of Certified Public Accountants (AICPA) membership, federal regulatory (Generally Accepted Auditing Standards) and/or state licensing requirements. There are currently over 2,000 public accounting firms registered with the PCAOB, with more pending registration. A list of current and pending registered firms can be found on the PCAOB website.

+ READ MORE

• 0 Comments

Cash is a vital component of any profit-generating organization. An organization’s assets generate revenue, which in turn generates cash inflows. These cash inflows are used for several purposes: to pay creditors, compensate employees, reward shareholders, provide asset replacement, and provide for growth.

Cash is unique because it’s the single asset that is readily convertible into any other type of asset. Therefore, it’s also the most widely desired asset. However, cash is also the asset that is most susceptible to fraud and abuse. Therefore, management has to ensure that adequate controls and safeguards are in place to eliminate any unauthorized transactions with cash.

+ READ MORE

• 0 Comments