Editors' Note: The CPA Journal staff would like to acknowledge the recent passing of longtime column editor, author, and Editorial Advisory Board member Howard Levy. His…
Government Accounting and Auditing
Clearing a Cloud of Confusion
In Brief An estimated 3,000 audit practice units in the United States engage in state and local governmental audits. Most of these (65%) are members…
To Confirm or Not to Confirm—Risk Assessment is the Answer
The Wise and Proper Use of Bank Confirmations
Bank confirmations have been a valuable source of audit evidence since the dawn of the profession. Like all confirmations, they can be both effective and…
The coronavirus (COVID-19) pandemic has seriously disrupted and threatened the lives of all Americans, causing nationwide shutdowns, curtail businesses, affecting daily routines, and suspending entertainment…
Although for more than half of my 53-year career in auditing, I managed to avoid any involvement with government GAAP. Yet I found myself interested…
In Brief The history of modern auditing coincides conveniently with the history of The CPA Journal. The 1930s not only saw the NYSSCPA begin publication of what…
Preparing for Peer Review in a Pandemic
Tailoring Internal Quality Control Inspections for New Risks
In this author's article in the May 2020 CPA Journal (“Financial Reporting and Auditing Implications of the COVID-19 Pandemic: Some Practical Guidance,” pp. 26-33, https://www.cpajournal.com/2020/06/08/financial-reporting-and-auditing-implications-of-the-covid-19-pandemic/), many new…
Since 1973, GAAP (APB Opinion 28) has recognized the acceptability of presenting condensed interim information by public companies as provided for in Article 10 of…
Analytical procedures have been part of the audit process for decades, but many auditors fail to understand their objectives or how these procedures should be…
Selecting Modified Retrospective Transition for Adopting ASC 606 and Related Standards
Minimum Disclosure Requirements and Management Options
The deadline for private companies to adopt Accounting Standards Codification (ASC) Topic 606, “Revenue from Contracts with Customers,” is fast approaching. This article contains a…
ICYMI | The Audit Report Returns to Its Roots
An Historical Perspective on Critical Audit Matters
The evolution of the standard audit report has been slow and cautious over the past century. Most recently, in 2011, the AICPA's Auditing Standards Board…
Until the issuance of Accounting Standards Update (ASU) 2013-07 [which introduced Accounting Standards Codification (ASC) 205-30 and amended other sections, primarily ASC 942-810, 960, 962,…
Since the issuance 14 years ago of the current audit documentation standards [now AU-C 230 and PCAOB Auditing Standard (AS) 1215, respectively], which are more…
ICYMI | Overcoming Disclosure Overload and Achieving Greater Disclosure Effectiveness
A Status Report
Although still in the proposal stage, there has been substantial movement by both FASB and the SEC on major issues discussed by this author in…
Since 1973, GAAP (APB Opinion 28) has recognized the acceptability of presenting condensed interim information by public companies as provided for in Article 10 of…
Auditors serving smaller businesses know that those clients often need help navigating the highly technical and overwhelming body of accounting standards. They also know that…
A search for unrecorded liabilities is a fundamental, almost universally applied procedure in all audits. The scope of such a search frequently includes a sampling…
How Many Engagement Inspections Is Too Many?
Streamlining the Scope of Quality Control Inspections
The inspection process is a critical part of any audit firm's accounting and auditing quality control (QC) system. The lack of precise guidance in the…
As the author of “Putting the Decades-Long ‘Plain Paper’ Debate to Rest: Will SSARS 21 be the Final Resolution?” (The CPA Journal, November 2015), I…
A number of communication responsibilities and reporting considerations necessarily arise whenever a successor auditor concludes that a client's prior year's financial statements require restatement, either…
AUD | The Costs of Running Employee Benefit Plans
A Flaw in FASB’s Standards
Accounting guidance formerly contained in early editions of the AICPA's Audit and Accounting Guide, Employee Benefit Plans, has been replaced by FASB's ASC Topics 960,…
The Other Expectations Gap in Auditing
Is the Profession Attracting the Right People to Meet its Intellectual Challenges?
Many aspiring CPAs and auditors have a certain image of the profession. Some are attracted because of its perceived order and structure. Others are pointed…
I was delighted to see Edward A. Weinstein's articulate and insightful account of his struggle to deactivate his New York CPA license in his letter,…
A basic postulate of financial accounting is that timely financial reporting requires the use of estimates. And it is a fact that all accounting estimates,…
AUD | Searching for Buried Treasure
The Elusive Completeness Assertion for Revenue, Part 2
Last month, this column discussed identifying and addressing risks of material revenue understatements in general, and those specific risks presented by outsiders who control and…
AUD | Searching for Buried Treasure
The Elusive Completeness Assertion for Revenue
Editor's Note: This month marks the introduction of a new column, Auditing, that will feature column editor Howard B. Levy's incisive take on selected issues…
Fighting Fraud—and Serving Famous Frankfurters—for Over a Century
The Story of Old-Fashioned Controls at Nathan’s Famous
One hundred years ago, an enterprising, bright, savvy, but uneducated young Polish immigrant started a modest business that would eventually grow to become one of…
Depreciable Asset Lives
The Forgotten Estimate in GAAP
In the early days of what is now modern, authoritative GAAP, paras. 46–52 of Accounting Terminology Bulletin 1, Review and Résumé, issued by the AICPA…
The Materiality Mystery
The Gap in GAAS
This article is intended primarily to provide an airing of omissions and other flaws in generally accepted auditing standards, primarily regarding the use of materiality…
Old Habits Are Hard to Break
The Expectation Gap and the Case against Careless Use of Outdated Language
“For in spite of language, in spite of intelligence and intuition and sympathy, one can never really communicate anything to anybody.” —Aldous Huxley, “Sermons in…