Audit Analytics Q2 Product Updates
We are halfway through the year, and it's shaping up to be another good one here at Audit Analytics. Below are some of the notable events and product releases that were highlights of the last six months.
- EU PIE Databases
- Accounting Quality + Risk Matrix
- ICFR COSO Framework
- Audit Analytics for Audit Committees
- Webcast: Audit Committee Update
- New Published Research:
- 2014 Financial Restatements
- Indefinitely Reinvested Foreign Earnings
- Canadian Filers Audit Fees
- CEO & CFO Departures
European Union Public Interest Entity (PIE) Databases
- Available in August
Audit Analytics is building a database of who audits European Union companies. The initial version of the product will track EU public interest entities (PIEs), and will include databases of Audit Fees, Auditor Tenure, Auditor Changes, Transparency Reports, Subsidiaries, and more. Keep an eye out for a more detailed product announcement.
Accounting Quality + Risk Matrix
Audit Analytics is excited to announce the release of the Accounting Quality + Risk Matrix (AQRM), now available on our company profile pages.
AQRM is an interactive tool designed to quickly identify and understand qualitative and contextual metrics of governance and reporting quality. The risk matrix highlights red flags and events, which are then used for screening, idea generation, portfolio monitoring, and risk management for every SEC registrant. Red flags indicated in the app include:
- Out of Period Adjustments
- Changes in Estimates
- Benford's Law Analysis
- Accounting Disclosure Complexity
- Beneish M-Score
- Going Concerns
- Ineffective Controls
- Significant Increases in Audit Fees
- And more...
For detailed information about the red flags and data points available in AQRM, please see the product manual.
COSO Framework Datapoint
Our SOX 404 Internal Controls database now includes a datapoint indicating which COSO Framework the company used for its disclosures.
For more information, see our June post on the subject.
Audit Analytics for Audit Committees
Our new relationship with Compliance Week is coming along nicely. Together, we offer a service geared towards helping the Audit Committees of public companies oversee the audit process. Covering items such as audit fee benchmarking and trends in PCAOB Inspection Reports and SEC Comment Letters, this report gives the audit committee a broad-but-detailed look at the company's audit and compliance environment.
Webcast: Audit Committee Update
On a related note, Audit Analytics and the Center for Audit Quality were recently invited to participate in a webcast on the topic of audit committee disclosures and activities. Hosted by Compliance Week, the webcast centered on trends and emerging issues concerning the audit committees of public companies. CPE credits available.
New Published Research
Audit Analytics research reports cover topics in more detail and with a larger scope. So far this year we have released four reports.
Insights from Audit Analytics
Our analysts continue to post their insights into filing trends and other interesting audit, regulatory and disclosure topics on our blog. Posts vary from our takes on current events, to analytical reviews of our many databases. Below are excerpts from some of the more popular posts of the past six months.
Pension Accounting: Transitioning to Mark-to-Market
FedEx's recent change to its pension accounting came with a $2.2 billion charge. In its disclosure, the company cited that other large US corporations have also adopted the method, and noted that it is now the preferred method. Our research shows that over the past five years, many public companies have switched from the amortize-the-excess-of-the-corridor method to the mark-to-market (MTM) method of accounting for pensions.
Research and Development Up Despite Stock Buybacks
We looked at S&P 500 companies and found that, despite some concern that record stock buybacks were cannibalizing investment, R&D expenditures have increased at a reasonable pace.
IPO Law Firm Leaders: 2013-2014
In this post, we provide a high-level overview of the law firm market share among IPO companies. Three firms dominate.
SEC Comment Letters: A Five-Year Trend
The overall trend in Comment Letters is quite clear: 2014 marked the fourth straight year of steady decline in the number of 10-K and 10-Q comment letters. Starting in 2010 with almost 14,000 letters, the total decreased more than 50%, to about 6,400 in 2014.
In this post, we also looked at other indicators that may shed some light on the materiality or significance of comments. Is there any indication, as we suggested above, that comment letters reveal a decrease in the number and complexity of the issues being raised in such letters?
The Problem with Pledging: Part I and Part II
In this two-part post, we investigate significant shareholders who pledge their shares as security for various reasons, such as collateral for a margin account or a personal loan.
IPO Accounting & Legal Fees: 2014 Update
2014 saw mixed trends related to the accounting and legal fees of IPO companies. Average fees steadily increased from 2008 to 2013, with particularly steep inclines being noted in 2012 and 2013. In 2014, however, there was a sharp decline both in average accounting fees for IPO companies and in legal fees for IPO companies. Of particular note is the 36% decrease in average legal fees from 2013 to 2014, which contrasts with the 38% increase in IPO proceeds over the last year.
Use of Non-GAAP Metrics in IPO Prospectuses: SEC Comment Letters
One aspect of S-1 disclosures that has attracted a lot of attention lately is the use of non-GAAP metrics to describe a company's financial performance, and the SEC is taking note.
In 2010, around 63% of IPO companies that used non-GAAP metrics in their S-1 received at least one comment from the SEC addressing their use of non-GAAP. In 2014 (from January to November), that percentage stood at approximately 41%.
Regional Auditor Market Share: Single Audits and ERISA Plans
In this post, we touch on the hundreds of local and regional firms that tend to provide services to entities besides large public companies. To do so, we picked a couple of counties -- Cass County, ND and King County, WA -- and, using our Market Intelligence App, focused on a specific portion of the audit market.
Audit Analytics in the News
Our data is frequently cited in accounting and business publications, and our analysts have relationships with a number of journalists and other news outlets. Below are some examples of Audit Analytics in the news.
At Audit Analytics we are dedicated to providing our customers with access to the most comprehensive audit, regulatory, and disclosure intelligence. We are happy to help you get the most out of our products. Our analysts are always available to answer any questions you may have. Feel free to give us a call or email us.