J2 Global Communications (NasdaqGS: JCOM ), better known as eFax, is under fire. Yesterday, Sam Antar tore into the company for an accounting gimmick that the company (and its auditors) had to know was wrong. The issue involves revenue and deferred revenue.
In the 10-Q for the first quarter of 2011, J2 reported an upgrade to its accounting system. The new system gave J2 the ability to properly calculate unearned revenue from annual contracts with customers: Continue reading
A few months ago, a committee advising Treasury Secretary Henry Paulson on the “state of auditing” recommended that Big 4 audit firms be required to submit audited financial statements to the Public Company Company Accounting Oversight Board (PCAOB). It’s suggested that the firms be required to report their financials in accordance with Generally Accepted Accounting Principles (GAAP), and that those results be made public. Continue reading
Auditors and consultants around the country would like to string me up for my vocal dislike of Sarbanes-Oxley. I frequently moan that the cost is too high, the results are too poor, and consumers are fooled into thinking there’s been a solution to the fraud problem when there hasn’t.
But Sarbanes-Oxley consulting is a billion-dollar industry.A 2003 study indicated that the total annual cost of complying with Section 404 of Sarbanes Oxley was over $1 billion. An average company spent $1.7 million on SOX compliance last year.
Auditors and consultants aren’t stupid. That’s a cash cow for them, and they don’t want to lose it. Continue reading
69 auditors have been charged by the Securities and Exchange Commission with issuing audit reports on the financial statements of public companies without first registering with the Public Company Accounting Oversight Board.
The SEC has named 37 unregistered audit firms and 32 audit partners in this violation of the Sarbanes-Oxley Act of 2002. According to the SEC: Continue reading