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1. Embracing the automated audit   CPEDirect

BY Miklos A. Vasarhelyi, Ph.D., J. Donald Warren Jr., Ph.D., Ryan A. Teeter, Ph.D. and William R. Titera, CPA
Big Data demands and enterprise resource planning (ERP) systems are now commonplace in the business environment and not restricted to larger audit engagements. Auditors must deal with the lack of transparency that automated systems create by placing computer procedures and configurable controls between the auditor and data. To facilitate data access and automation opportunities for auditors, the AICPA Assurance Services Executive Committee (ASEC) has developed a new set of data specifications, the Audit Data Standards (ADS), and is exploring ways to work with vendors to facilitate the development of semiautomated to fully automated audit tools.

2. Patent predicaments: Be wary of dubious claims   CPEDirect

BY Ken Tysiac
Judges, legislators, and lawyers have wrestled in recent months with the complicated issue of how to decide fair compensation for intellectual property, as a new threat to U.S. businesses has emerged. Patent-holding companies (PHCs) and patent-assertion entities (PAEs) have attempted to get businesses—including CPA firms—to pay licensing fees for technologies and business processes that seem common.

3. Cloud Security Alliance endorses AICPA SOC report   WebExclusive

BY Jeff Drew
The AICPA’s framework for assessing the reliability of a cloud provider’s technology and systems controls has won the endorsement of the Cloud Security Alliance (CSA), a not-for-profit coalition with members including Google, Microsoft, Ernst & Young, Deloitte, and PwC. The AICPA is a CSA affiliate member. In a position paper released Monday, the CSA threw its support behind one of the AICPA’s three Service Organization Control (SOC) reports.

4. Online shopping sends business productivity down the Amazon   WebExclusive

BY Ken Tysiac and Jeff Drew
With the arrival of the holiday shopping season, the analysis of a particular work email account serves as a cautionary tale to employers. Barb Bowes, a human resources consultant and president of Legacy Bowes Group in Winnipeg, Manitoba, offered the example of a company that found an average of 35 emails a day from shopping sites crammed into the email inbox of a former employee who had left for a new job.

5. COSO sheds light on managing cloud risks   WebExclusive

BY Ken Tysiac
Management should begin control-related activities before an organization contracts with a cloud-computing service provider (CSP), according to guidance provided in a new thought paper released Wednesday by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The paper, Enterprise Risk Management for Cloud Computing, provides a thorough examination of how to follow COSO’s Enterprise Risk Management (ERM)—Integrated Framework to assess and manage the risks presented by cloud computing.

6. Data breaches emerge as tech sector’s fastest-rising risk factor   WebExclusive

BY Jeff Drew
Concerns over technology breaches and data security are soaring among the largest U.S. tech companies, according to a new report from accounting and consulting firm BDO. An examination of the most recent SEC 10-K filings for the 100 biggest publicly traded technology companies found that 71% listed data-security breaches as a major risk to their operations, according to the 2012 BDO Technology RiskFactor Report.

7. Safeguarding Data: Requirements and Resources  

BY SIMON PETRAVICK and STEPHEN G. KERR
Editor's note: This is a sidebar for "Protect Your Portable Data - Always and Everywhere." CPAs should understand their ethical, legal and regulatory responsibilities to safeguard data. The following listings direct you to primary sources: LAWS, REGULATIONS Federal laws Federal Trade Commission, Gramm-Leach-Bliley Act, Disclosure of Nonpublic Personal Information, tinyurl.com/8k3e6 Department of Commerce, National Institute of Standards and Technology, Federal Information Processing Standards (FIPS), csrc.nist.gov/publications/PubsFIPS.html Department of Education, Family Educational Rights and Privacy Act (FERPA), tinyurl.com/3ydvw Department of Health and Human Services, Office for

8. Execs Facing Discovery Challenges  

A Deloitte online poll found that two out of five executives felt data volumes in their organizations are becoming unmanageable. Almost 20% of executives said their companies are not ready to handle complex discovery requests. Their greatest concerns about document discovery included: Expensive vendor or in-house costs to go through large volumes of files (47.5%) Damaged productions and exposure to sanctions due to error (16.3%) Failure to meet court-set deadlines (12.9%) According to Deloitte Financial Advisory Services LLP, data volume in general doubles every 18 to 24 months.

9. Minding One's Own Business  

BY Chuck Barnewolt
I find it ludicrous that your article, “Software Revenue Recognition on the Rise” (Dec. 07, page 50) not only insinuates but even goes so far as to actually state that companies are changing their business practices because of SOP 97-2. While the accounting profession, of which I am part, is indeed an honorable one, our profession should in no way dictate, or limit, how we, as businessmen, conduct business with our customers.

10. Software Revenue Recognition on the Rise   CPEDirect

BY Greg Regan, Tim Regan
EXECUTIVE SUMMARY Statement of Position (SOP) 97-2 provides guidance on applying GAAP in recognizing revenue from software and software-related transactions. The SOP provides instruction on recognition for licensing, selling, leasing or otherwise marketing software. As technology becomes further entrenched in consumer and enterprise products, companies outside of the traditional software sector are beginning to realize that the economic value of their offerings resides in the underlying technology—software—subjecting those products to software revenue recognition rules.
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