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AICPA Committee Proposes Updated Information System Services Interpretation

The American Institute of Certified Public Accountants’ Professional Ethics Executive Committee (“PEEC”) has proposed amendments to its interpretation of an independence rule concerning nonattest services associated with an attest client’s information systems. Outlined in the exposure draft Proposed Revised Interpretation – Information System Services (formerly Information, Systems Design, Implementation, or Integration) , the proposed changes relate to the PEEC’s review of the “Nonattest Services” subtopic under the “Independence Rule” as well as its application to existing information technology services provided to clients. During the project, the PEEC has examined its “Information Systems Design, Implementation, or Integration” interpretation to assess major threats to independence that could occur when such services are offered. The PEEC’s proposed. Read More.

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AICPA Updates SOC 2 Guide and Issues Description Criteria

Earlier this month, the American Institute of Certified Public Accountants (“AICPA”) announced the issuance of its revised  SOC 2® Reporting on an Examination of Controls at a Service Organization Relevant to Security, Availability, Processing Integrity, Confidentiality, or Privacy . The updated SOC 2 guide features insights from Certified Public Accountants (“CPAs”) who perform such engagements. CPAs must apply the updated guidance to SOC 2 reports distributed for reporting periods ending on or after December 16, 2018, with earlier adoption permitted. The AICPA has also issued the following professional standards related to the description criteria (“DC”) for SOC 2 reports: Description Criteria Section 200, Description Criteria for a Description of a Service Organization’s System in a SOC 2 Report. The 2018 description criteria. Read More.

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AICPA Board Offers New Auditor Reporting Guidance

The American Institute of Certified Public Accountants’ (“AICPA”) Auditing Standards Board has released new guidance to help auditors comply with AU-C section 700, Forming an Opinion and Reporting on Financial Statements, when performing an audit under the Public Company Accounting Oversight Board’s (“PCAOB”) revised reporting standards. Issued as Interpretation No. 4, “Reporting on Audits Conducted in Accordance With Auditing Standards Generally Accepted in the United States of America and the Standards of the PCAOB,” the guidance is presented in a questions and answers format. The guidance covers standard fact patterns and includes illustrative examples and reports. Interpretation No. 4 was. Read More.

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AICPA Updates Attest Interpretation No. 4

The American Institute of Certified Public Accountants (“AICPA”) recently amended Attest Interpretation No. 4, Performing and Reporting on an Attestation Engagement Under Two Sets of Attestation Standards, of AT-C section 105, Concepts Common to All Attestation Engagements. Interpretation No. 4 offers guidance on conducting attestation engagements under two sets of attestation standards, such as the AICPA standards and standards from either the PCAOB or the International Auditing and Assurance Standards Board. Practitioners can perform and report an attestation engagement compliant with two sets of attestation standards providing that both sets of standards are followed. The updates impact paragraphs .31 to. Read More.

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Revenue Recognition

By: Brynn McNeil, Partner Revenue is critically important in the financial statements of companies. Thus, revenue recognition remains a priority for regulators and the accounting profession as a whole. Implementing the new revenue recognition standard, Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, will likely be the most significant and comprehensive change in many years for most companies. The core principle of FASB ASC 606 is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for. Read More.

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AICPA Board Could Revise Benefit Plan Audit Proposal

The American Institute of Certified Public Accountants’ Auditing Standards Board could revise a proposal for audits of benefit plans under the Employee Retirement Income Security Act of 1974 (“ERISA”). At a meeting last month in New Orleans, the board discussed possible changes after reviewing comment letters on Proposed Statement on Auditing Standards: Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA. The proposed standard aims to help auditors understand their role and provide interested parties additional information on auditors’ responsibilities, especially in circumstances when the audit’s scope is limited. After previous talks on submitted. Read More.

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