A shipbuilder for the US Navy got itself into some deep…ship…over fudged profits on major projects—you might say all hull broke loose—and its failures have some lessons for finance executives beyond the obvious advice not to do fraud.

Austal USA, a subsidiary of Australian company Austal Limited, pleaded guilty on Aug. 27 to resolve a Justice Department investigation related to accounting fraud and obstructing the Defense Contract Audit Agency (DCAA) during an audit, and agreed to pay a $24 million criminal fine to the Securities and Exchange Commission (SEC) plus restitution of up to $24 million that the commission will use to pay out investors harmed by the company’s misconduct.

The government alleged that Austal and co-conspirators worked from roughly 2013 to mid-2016 to fraudulently reduce the estimated costs of building ships by tens of millions of dollars, which “illegally inflate[d]” Austal USA’s profits on ships it was building for the Navy, Nicole M. Argentieri, head of the Justice Department’s Criminal Division, said in a press release.

Austal’s founder and director, John Rothwell, said the settlement was the best outcome, according to AFR Magazine. “Upon learning of this issue, Austal conducted its own independent investigation and we have made numerous governance changes to prevent similar issues from occurring again.”

Click here to read how the accounting fraud unfolded.—GD

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We have some good news…nothing that would make you jump and click your heels together, but maybe you’ll nod approvingly as if to say, Oh, that’s nice to hear.

Ready for it? Nearly all institutional investors use Critical Audit Matters (CAMs) to make investment decisions, according to a Sept. 5 report from the Center for Audit Quality, and most of them have been trained on why and how they’re important.

Many of the 100 investors the CAQ surveyed in July—mostly executives at investment and commercial banks and insurance companies—would love even more information.

Here are some of our top takeaways from their findings:

Investors get it. Five years after CAMs first became mandatory in some audit reports, institutional investors are widely using them, at least based on this survey. More than nine in 10 (92%) said they use CAMs to make decisions about investments and that “CAMs play an important role in their analysis of a potential investment” (93%). The CAMs they most often cited as influential were about valuation and goodwill appraisal, financial statements and misstatements, and revenue recognition. The type of information in a CAM that would sway them the most is, unsurprisingly, “the inherent risk level associated with the matter.”

For more on how investors are using CAMs, click here.—GD

Labor Day has come and gone. Yellow buses are clogging the roadways. Kids are whining about homework. And finance leaders are keeping their eye on another sign of the season: back-to-school earnings.

The verdict? Things are going…not that badly?

Consumers have largely been more cautious this year, choosing to cut back on discretionary spending. The back-to-school spending forecasts have thus been muted: Deloitte predicted that back-to-school spending would stay flat year over year, coming in at around $31.3 billion, while the National Retail Federation (NRF) anticipated that it would drop to $38.8 billion from last year’s record high of $41.5 billion.

And both Deloitte and the NRF have seen signs that back-to-school shoppers are pinching their pennies: More than half started their school shopping in early July, the NRF said, perhaps to take advantage of deals or to spread the shopping out over multiple paychecks.

“Retailers can expect headwinds to volume and loyalty as consumers seek to save money,” Stephen Rogers, managing director of the Deloitte Insights Consumers Industry Center, said in a report.

Click here to continue reading.—CV

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