PracticeAuditAll eyes on stock options

All eyes on stock options

Auditors are being warned by the US accounting watchdog to be on the lookout for problems in the timing and accounting of stock option grants

A huge financial scandal is percolating in the US over the use of stock
options – the must-have compensation of the internet boom days – and now the
Public Company Accounting Oversight Board has issued its first ever alert to
keep auditors on their toes.

The alert has gone out worldwide to the board’s members, who audit US
companies and their subsidiaries as well as British and other foreign companies
that are covered by the Sabarnes-Oxley Act.

The PCAOB was formed by the passage of Sabarnes-Oxley to ensure no repeats of
the Enron and WorldCom debacles.

Roughly 60 companies including Apple, Home Depot and Intuit have disclosed
being under investigation by the US Securities and Exchange Commission or the
FBI over issuing options, prompting another crisis of confidence in corporate
America.

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