PCAOB alert on stock option accounting and auditing
29 Jul 2006
The US Public Company Accounting Oversight Board has issued the first in a new series of Audit Practice Alerts issued by the Board's staff.
These alerts will highlight new, emerging, or otherwise noteworthy circumstances that may affect how auditors conduct audits under the existing requirements of PCAOB standards and relevant laws. The PCAOB has issued Staff Audit Practice Alert No. 1 addresses "Matters Relating to Timing and Accounting for Options Grants". It was prompted by recent reports and disclosures about issuer practices related to the granting of stock options, including the backdating of such grants. The alert advises auditors that these practices may have implications for audits of financial statements or of internal control over financial reporting and discusses factors that may be relevant in assessing the risks related to these matters. Click for: