Financial Accounting Foundation Releases Annual Report
Available on the Financial Accounting Foundation’s (“FAF”) website is a copy of its 2017 FAF Annual Report, “Standards That Work.” The annual report covers what the Financial Accounting Standards Board and the Governmental Accounting Standards Board do to support their standards so that the boards offer important information to investors and other financial statement users. Visit the FAF website to read the 2017 FAF Annual Report.
PCAOB Chief Auditor Steps Down
After 12 years with the Public Company Accounting Oversight Board (“PCAOB”), chief auditor Martin Baumann has announced that he will leave the board on May 31. Baumann’s departure follows recent announcements made by senior officials Helen Munter and Gordon Seymour, who also plan to leave the PCAOB at the end of this month. Previously executive vice president of finance and chief financial officer of Freddie Mac, Baumann joined the board in 2006. He later became the director of the Office of Research and Analysis and was appointed chief auditor in 2009. As the chief auditor, Baumann pushed to make the audit. Read More.
PCAOB Considers New Approach to Agenda-Setting
Public Company Accounting Oversight Board (“PCAOB”) chairman William Duhnke plans to take the organization’s approach to setting its long-term agenda in a new direction. Breaking from his predecessors’ leadership, Duhnke wants to establish a set of benchmarks that will help the PCAOB set its agenda and evaluate the progress made in achieving its mission. The new direction includes conducting a complete assessment of the PCAOB’s operations. In particular, Duhnke wants the PCAOB’s programs to receive a fresh look and a possible update to their operations. He said the revamped operations should reflect today’s financial markets and the audit profession, not. Read More.
FASB Deems Regulatory Guidance from Financial Services Standard Irrelevant
The Financial Accounting Standards Board (“FASB”) has published a small U.S. GAAP update that removes decades-old bank regulatory guidance from its financial services standard. Accounting Standards Update No. 2018-06, Codification Improvements to Topic 942: Financial Services—Depository and Lending, eliminates a reference to the Office of the Comptroller of the Currency’s Banking Circular 202, Accounting for Net Deferred Tax Charges, from FASB Accounting Standards Codification 942-740-45-1, Financial Services—Depository and Lending—Income Taxes — Other Presentation Matters — Differences Between Regulatory Accounting Principles and GAAP. Published in 1985, the guidance has since been rescinded. Per the FASB, the Codification guidance related to the. Read More.
SEC Proposes Changes to Auditor Independence Rules
To address circumstances when auditors borrow funds or issue debt to accrue working capital, the Securities and Exchange Commission (“SEC”) has proposed updates to its auditor independence rules for lending relationships. The proposed amendments include updating Rule 2-01 of Regulation S-X to replace the current 10 percent bright-line shareholder ownership test with what the SEC calls a “significant influence” test and introducing a “known through reasonable inquiry” standard for recognizing the beneficiaries of the audit client’s equity securities. The SEC also wants to change its definition of “audit client” to exclude funds that are otherwise deemed affiliates of the audit. Read More.
AICPA Revenue Recognition Working Drafts Issued
The American Institute of Certified Public Accountants’ (“AICPA”) Financial Reporting Executive Committee has released the following working drafts concerning revenue recognition guidance: Issue #6-9B, Gaming Entity’s Accounting for Management Contract Revenues, Including Costs Reimbursed by Managed Properties Issue #15-3, Contract Modifications The working drafts propose guidance for implementation matters with the five-step revenue recognition model under Topic 606, Revenue from Contracts with Customers. Specifically, Issue #6-9B relates to the gaming industry and Issue #15-3 focuses on the telecommunications industry. Feedback on both working drafts is due by Monday, July 2.