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SEC limits auditor-client ties

In the wake of accounting scandals at Enron, WorldCom and Tyco, the Securities and Exchange Commission adopted rules Wednesday to define what services auditing firms will be allowed to provide to their clients. As part of the biggest spate of rule making in recent SEC history, SEC commissioners approved staff recommendations designed to specify exactly what kinds of non-audit services ...

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KPMG faces audit charges

Accountancy giant KPMG LLP expects to face civil charges, which it vehemently denied, over audits of Xerox Corp. accounts. KPMG said it had learned the Securities and Exchange Commission would file a complaint in federal district court against the firm, three current partners and one former partner. The charges were in connection with its disputed audits of the 1997-2000 Xerox ...

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Deloitte chief quits amid contorversy

Deloitte Touche Tohmatsu chief executive Domenic Martino has quit his post, amid controversy surrounding his previous involvement with the failed junior telco, New Tel. Mr Martino, who took on Deloitte's top job in May 2001, has been dogged by controversy surrounding his position as a director of New Tel and whether it was trading while insolvent before he resigned last ...

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Big Four Escape SEC Wrath

While the Securities and Exchange Commission has trumpeted its record 598 enforcement actions for 2002, a Washington Post investigation noted that the actions were skewed toward smaller firms with only two Big Four auditors targeted for any sanctions or censure. The paper found that the SEC was much more likely to discipline auditors employed by smaller accounting firms. Former SEC ...

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Accounting firms offer to open their books to public scrutiny in UK

Accounting firms have for the first time offered to open their books to public scrutiny as part of a package of measures being reviewed by the Treasury and the Department of Trade & Industry. Although the level of disclosure will fall short of a publicly listed company's report and accounts, it will provide better access to the workings and pay ...

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PwC Outlines Strategies for Internal Control Framework

PricewaterhouseCoopers has released to the public a white paper on how executive officers can meet new reporting requirements mandated by the Sarbanes-Oxley Act. Affecting all public companies, the Act has established a new requirement that CEOs and CFOs explicitly evaluate and report to the public on the effectiveness of internal controls over financial reporting. To assist companies' compliance, PricewaterhouseCoopers' paper, ...

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Big accounting firms difficult target for SEC

WASHINGTON – The last fiscal year was a busy one for enforcement at the Securities and Exchange Commission. As departing chairman Harvey Pitt noted, the agency took a record 598 enforcement actions, up 24 percent from the year before. But a closer look at the numbers reveals one of the agency's persistent weaknesses: The big accounting firms that audit the ...

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Reforms to exorcise auditing's dark side

Changes to the way audit committees are bodied are aimed to prevent an Enron-style scandal happening in the UK, says Jim Gough Chairmen and women of listed companies are expected to be barred from membership of audit committees as part of a package of reforms aimed at reducing the risk of an Enron-style scandal in the UK. And non-executive directors ...

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Accountant gets jail time in fraud in the US

“Creative accounting” almost a half million dollars worth – on clients' tax returns has landed a Bronx tax preparer a year and a day in jail. Toni-Ann Landi received the sentence in Manhattan Federal Court this week after an earlier guilty plea to preparing false income tax returns for clients. She could have received up to five years. The Internal ...

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FASB Tightens Rules on Special Purpose Entities

The board that writes U.S. accounting rules issued new guidelines today aimed at preventing the kind of abuse of financing partnerships that helped trigger Enron Corp.'s collapse. The Financial Accounting Standards Board's rule on so-called special purpose entities, which Enron used to hide massive amounts of debt, requires that outside investors provide at least 10 percent of the SPE's capital ...

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