The move to principles-based accounting raises concerns; paid sick time may become mandatory; the DoJ looks at private-equity ‘’clubs'’; Six Sigma gets bad press; a medical-records database alarms privacy experts; and more.

Even before President Bush told an enthusiastic Wall Street audience in January that “we don’t need to change the [Sarbanes-Oxley] law, we need to change the way the law is implemented,” the Public Company Accounting Oversight Board (PCAOB) was taking steps to do precisely that. But as it advances an openly “principles-based” approach in replacing Auditing Standard No. 2 with Auditing Standard No. 5, some question whether the new standard is doomed to fail unless associated laws and practices also change.

In an effort to make the auditing of internal controls more efficient, the new AS #5 would no longer require auditors to offer an opinion on management’s evaluation of internal controls. It would instruct auditors to cover the areas of greatest risk, rather than obliging them to visit the majority of operations, and also permit them to rely on previous audits rather than start from scratch each year.

[1] cfo.com: Standard vs. Practices