This analysis was originally posted by Audit Analytics.   Since our last analysis of key audit matters in December 2019, the Audit Analytics KAMs database has grown to include over 40,000 KAMs from the audit opinions of over 4,600 companies. KAMs, required under ISA 701 for fiscal years ending on or after December 15, 2016, are intended to increase the usefulness and information provided in the auditor’s opinion. The disclosures made by the auditor are supposed to…

This analysis was originally posted by Audit Analytics. Auditor market share is extremely concentrated in the Netherlands due to the dwindling number of audit firms registered to audit public interest entities (PIEs). In 2018, there were nine audit firms licensed to audit PIEs. However, in the past year, three have chosen to leave the PIE market, leaving both listed and non-listed PIEs searching for new auditors long before the mandatory rotation. Following Regulation (EU) No 537/2014 of…

This analysis was originally posted by Audit Analytics. This post will be updated to reflect the current number of filings citing the COVID-19 pandemic in a going concern opinion, key audit matter, or emphasis of matter.   Overall Statistics As of the week ended 17 July 2020, Audit Analytics has observed the following trends in European audit opinions referencing COVID-191: Going Concern Modifications: 126 Emphasis of Matter: 215 Key Audit Matters: 336 Based on company…

The Brazilian Accounting Association (ANPCont – Associação Nacional de Programas de Pós-Graduação em Ciências Contábeis) is organizing a webinar on Data Analytics in Accounting and Auditing. The Webinar is free for the community, it's only necessary the registration here (Link: https://bit.ly/AnpcontDataAnalytics). Date: 07/22/2020 at 6pm – São Paulo Time Zone UTC -3.   Prof. Partha Mohapatra is Accounting Analytics assistant professor of California State University at Sacramento. He teaches Accounting Analytics, Accounting Information Systems and Managerial Accounting…

As accounting educators, our job is to impart knowledge and skills that will make our students successful in their careers, and then test them on how well they retained them. Right? My 10-year-old son's primary school farewell party last week made me wonder if that is all, and not for the first time. The kids had made a heart-warming 25-minute video for their teacher. Asked about what they liked most about her, many said things…

Last Friday, 10 July 2020, the EAA collaborated with the IASB to bring you another mosaic piece in the EAA’s virtual events initiative: the IASB/EAA virtual workshop on the IASB’s Primary Financial Statements project and its related Exposure Draft ED/2019/7 General Presentation and Disclosure (watch the video here). IASB Board members Ann Tarca and Tom Scott as well as Staff members Ana Simpson and Aida Vatrenjak shared their expertise and gathered important insights and comments…

On behalf of the CSEAR Council and Directorate   We are deeply saddened for the loss of our friend, colleague and mentor Professor Rob Gray. Rob pioneered the field of social and environmental accounting (SEA) and was the founder of the Centre for Social and Environmental Accounting Research (CSEAR), of the Social and Environmental Accounting (now Accountability) Journal and established the CSEAR UK Conference in the early 1990s, which has now developed into a series…

This analysis was originally posted by Audit Analytics.   The Financial Reporting Council (FRC) is now acting on changes recommended by the recent independent reviews of the audit market in the UK. Deloitte, EY, KPMG, and PwC have each been notified on 6 July 2020 that they have four years to complete the separation of operations between the auditing and the consulting arms of their businesses. The FRC’s Business Case Paper highlights the main objectives of the regulation as:…

In a recent study, published in the European Accounting Review (EAR), Yining Chen, Baohua Liu and I study the impact of internal control (IC) on corporate innovation. Per the Committee of Sponsoring Organizations (COSO), IC has five components (i.e., control environment, risk assessment, control activities, information & communication, and monitoring). Surprisingly, with a few exceptions, studies on IC seldom examine how these five components individually impact corporate policies and activities. The literature on IC primarily…

“An accounting scandal at one of Germany’s fastest-growing blue-chip companies has raised doubts about the national financial watchdog and, coming on top of other high-profile cases of fraud, led to questions about the country’s ability to oversee its corporate titans.” How did it come to that? As I say in an Associated Press article appearing in the New York Times and Washington Post, it’s too early to say what happened at Wirecard – and why…