Treadway Commission: its initial conclusions

Article Abstract:

The National Commission on Fraudulent Financial Reporting, also known as the Treadway Commission (since it is led by Representative James C. Treadway, Jr.), is a joint investigative committee sponsored by several professional accounting associations, including the National Association of Accountants. The commission was formed in response to increased public scrutiny of the accounting profession and the growing need for prevention of fraudulent financial statements issued by corporate bodies. The preliminary findings of the commission were discussed by chairman Treadway at the recent convention of the American Institute of Certified Public Accountants. The topics discussed include the causes, prevention, and detection of fraud in audits and other financial reports. Eleven conclusions arrived at by the commission are also identified; these include: (1) all publicly traded corporations should be required to form audit committees, risk assessment programs, risk management programs, and internal auditing departments, (2) audit committees should be responsible for the accuracy of corporate financial reports, (3) corporate executives (as well as outside accountants) should issue opinions on financial reports, (4) corporate executives should be responsible for the accuracy of reports to shareholders, and (5) internal auditing departments should participate more in the reporting of financial results of operations.

United States, Reports, Investigations, Associations, Corporation reports, Company reports, Governmental investigations, Government investigations, Legislative hearings, Treadway, James C., Jr.

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The National Commission on Fraudulent Financial Reporting: an update

Article Abstract:

The National Association of Accountants has established the National Commission on Fraudulent Financial Reporting to investigate ways of preventing fraud related to financial statement preparation. Among the issues being considered by this Commission are: (1) whether publicly reporting companies should be required to establish audit committees, (2) what the duties of the audit committee should be, (3) whether audit committees should have to report to shareholders, and (4) how the audit committee should interact with internal auditors. A progress report by the Commission's director includes an analysis of the bill proposed by Congressman Wyden that would require outside auditors of publicly reporting companies to report any suspected fraud or illegality to the Securities and Exchange Commission.

Management, Services, Prevention, Disclosure statements (Accounting), National Commission on Fraudulent Financial Reporting

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Surviving the IRS tax accrual decision

Article Abstract:

If the unacceptable risk of business is formulated based on the possible disclosure of work documents, then the accountants can use an alternative technique of auditing the reserve for contingent tax liabilities. The Internal Revenue Service won its case on accounting disclosure against Arthur Young and Co. in the Supreme Court. Consequently, the IRS can subpoena from public accounting firms financial and other documents that had been classified as private and sensitive. Tax accrual papers if reviewed by the Internal Revenue Service auditors will usually uncover 'soft spots' in the corporation's tax reporting, and in light of this new court decision the tax accrual papers are subject to scrutiny.

Usage, Cases, Tax administration and procedure, Tax administration, Accounting firms, Accounting services, Evidence (Law), United States. Internal Revenue Service, Subpoena, Arthur Young & Co. (Chicago, Illinois)

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