AICPA Seeks to Preserve Use of Cash Method Accounting
The American Institute of Certified Public Accountants (“AICPA”) wants Senate Finance Committee Chairman Orrin Hatch to prevent restricting the use of cash method accounting. In a July 17 letter to Hatch on Congress’ current tax reform efforts, the AICPA said cash method accounting provides a simpler application choice than the accrual method. In addition, the AICPA argued that the cash method creates fewer compliance expenses, and taxpayers aren’t required to pay tax prior to receiving related income. Companies that apply cash accounting disclose revenue and costs when they are received and paid. Small companies with yearly gross receipts of under. Read More.
FASB Rejects Pleas for More Implementation Guidance on Credit Loss Standard
As concerns mount regarding implementation of Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, the American Institute of Certified Public Accountants’ Private Companies Practice Section Technical Issues Committee (“the Committee”) wants the Financial Accounting Standards Board (“FASB”) to provide more guidance on the standard. FASB members, however, have no plans to offer additional implementation guidance. Addressing the matter this week with Committee representatives, FASB members said that the board’s credit loss standard for writing down losses on bad loans contains sufficient accounting guidance and examples. FASB Vice Chairman. Read More.
New Code of Professional Conduct Ethics Interpretations Issued
The American Institute of Certified Public Accountants’ Professional Ethics Executive Committee has published the following new interpretations of the Code of Professional Conduct: Hosting Services (ET sec. 1.295.143) under the Independence Rule (ET sec. 1.200.001). Effective September 1, 2018, this interpretation offers guidance in circumstances when a member providing non-attest services, and the member is the sole host of a financial or non-financial information system for an attest client, in charge of or protecting the client’s data or records or keeping electronic security or reserve services for an attest client’s data or records. Pressure to Breach the Rules (ET sec.. Read More.
FASB Member Says No Major Accounting Changes Coming
In the last 18 months, the Financial Accounting Standards Board (“FASB”) has issued Accounting Standards Updates (“ASU”) for leases, credit losses, and revenue recognition. FASB member Christine Botosan, however, stated last week that the board has no immediate plans to publish additional major accounting changes. During the American Institute of Certified Public Accountants’ Not-for-Profit Conference in Maryland, Botosan assured attendees by announcing the board’s plans to pause on adding major accounting standards to its agenda. Botosan said the FASB is considering undertaking other significant accounting projects, but is also aware of how much effort goes into complying with ASU No.. Read More.
Topics: Accounting Standards Update "ASU", AICPA, American Institute of Certified Public Accountants "AICPA", FASB, FASB credit loss standard, Financial Accounting Standards Board "FASB", Financial Instruments - Credit Losses (Topic 326), Leases (Topic 842), Revenue From Contracts With Customers, Revenue Recognition
AICPA Group Seeks Academic Research on Audit Work of Private Companies
The American Institute of Certified Public Accountants’ (“AICPA”) Assurance Research Advisory Group (“ARAG”) is seeking proposals for academic research on the auditing process. Announced by the ARAG on June 1, the research will be used to help the AICPA’s standard-setting efforts for private businesses and the Enhancing Audit Quality initiative. Proposals are due Tuesday, October 6. Grants funding academic research efforts will be announced before February 28, 2018.
Final Standard for Securities Offerings Documents Approved
Last month, the American Institute of Certified Public Accountants’ Auditing Standards Board unanimously approved a final standard concerning an auditor’s responsibility regarding securities offerings documents not registered with the Securities and Exchange Commission (“SEC”). The final standard will likely be issued as Statement on Auditing Standards No. 133: Auditor Involvement With Exempt Offering Documents. It would impact securities that are not required to follow the SEC’s registration requirements and rules under the Securities Act of 1933. In addition, the standard will affect franchise offerings controlled by the Federal Trade Commission or appropriate state franchise laws. The standard could become effective. Read More.