Cristhian Caballero, CPA auditor, CA’s Post

« Mr. Hinchman’s report is a timely reminder of how easy it is to overlook the hidden systems that underpin society. You don’t think about the risk models of financial institutions until you’re scrambling to pull your money during a bank run. You don’t think about faulty airline systems until your flight gets canceled and you’re eating Christmas dinner at the airport Chili’s. And you almost certainly don’t think about the IT constraints of the IRS until your tax refund is months overdue and you can’t get anyone to explain why. » #tax #society #digitalbusinesstransformation #irs #internalaudit

https://lnkd.in/ehrkwvty Problematic audits are on the rise at Canada’s accounting firms, according to the industry’s national regulator, which found issues in a third of the audits it examined last year, up from 28 per cent in 2021. The Canadian Public Accountability Board, which oversees firms that audit publicly traded companies, said the increase came largely from problems at small firms with few listed clients, but there were issues all the way up the food chain. CPAB said one unnamed member of the Big Four accounting firms – Deloitte LLP, Ernst & Young LLP, KPMG LLP and PwC LLP – had issues with 29 per cent of its inspected audits and has been directed to develop a “quality action plan.” - Global News "This inconsistency is an unacceptable trend," said Carol Paradine, CPAB's chief executive officer. "CPAB is taking regulatory action to deal with specific concerns on a firm-by-firm basis." "High-profile ethical breaches in Canada and internationally underscore the importance of ensuring audit firms have a culture that prioritizes and supports ethical behaviour and decision-making at all levels," said Paradine. https://lnkd.in/eWT-CJd5 #audit #culture #canada #compliance #acccounting #auditquality #regulatory #regulatorycompliance #accountability #oversight #CPAB

Andy Fastow, Enron Former CFO & Convicted Felon ironically said: “accounting and auditing rules need to be changed to help prevent corporate fraud.” Former SEC Chief Accountant Lynn Turner: “When I was one of the founders and running Glass Lewis and we were doing financial research, what I found was the auditors really don’t understand at times the information that’s available” to analysts, and some “were not even aware of the information that Wall Street used …to analyze companies, which I found to be astounding.” Charles Niemeier, former founding member of the PCAOB said: “Andy has identified the gray area there that he knows well. The use of fair value. We all like the idea of having a presentation of what values are. But fair value, especially level three becomes very difficult for an auditor to address; it becomes often what management wants it to be. And it’s one of the reasons why in good times, everything looks good and in recessions, things look bad because just like a light switch, that value disappears. But how does the auditor address that when the accounting standards actually allow flexibility. That’s true for impairments, the way impairments work. There’s a number of areas where this level of discretion makes it very difficult for auditors to do their job.” This does not mean that auditors should not do their best job, but he believes there should be a larger discussion that includes the SEC, the FASB, auditors and the investing community. #valuation #compliance #fairvalue #level3 #audit #auditcommittee #governance

As Larsen puts it: “Volatility is always there, whether or not you measure it.” Enjoy the boni links!😉 SEC Risk Alert in 2022: https://lnkd.in/e6HUCaS4 SEC 2020: https://lnkd.in/evzE7Nfp Modeling Private Equity: https://lnkd.in/eEiG2HMb I.I observations: https://lnkd.in/evvVda7y UK parl. Library: https://lnkd.in/e_e3APem UK Parliament Debate: https://lnkd.in/e_XNVDqJ IFRS 9 Implementation: https://lnkd.in/eUgD4cJU SEC Rule 2a-5: https://lnkd.in/eMfvpHZC #Governance #riskmanagement #PE #valuation #liquidity #alternativeinvestments #ifrs9 #rule2a5 #sec

#riskmanagement #frm #compliance