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Significant Proposed Changes to DFARS Business System Monitoring Requirements

On July 15, 2014, the Department of Defense (“DoD”) issued a proposed rule to amend the Defense Federal Acquisition Regulation Supplement (DFARS) on government contractor business system requirements. The comment period for the proposed change ended on September 15, 2014. The proposed rule requires that contractors begin annual self-evaluations and reporting on their accounting system, material management and accounting system (MMAS), and estimating system, for those contractors required to maintain approved systems in accordance with the DFARS business system requirements. In addition, a Certified Public Accountant (CPA) audit is required to be performed by an independent firm of the contractor’s. Read More.

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PCAOB Issues Staff Audit Practice Alert on Revenue Requirements

To help with auditing revenue requirements listed under its standards, the Public Company Accounting Oversight Board (“PCAOB”) has issued Staff Audit Practice Alert No. 12: Matters Related to Auditing Revenue in an Audit of Financial Statements. The release is a result of audit shortcomings commonly found in PCAOB inspections. Per the inspection reports, revenue has been frequently noted as a major audit deficiency. Staff Audit Practice Alert No. 12 discusses matters such as: Testing revenue recognition from contractual arrangements; Responding to material misstatement risks as a result of fraud related to revenue; Assessing and reviewing controls over revenue; Using audit sampling procedures to test revenue; Performing. Read More.

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COFAR Issues New FAQs on Uniform Guidance for Federal Awards

To answer grant stakeholder questions about the new Uniform Guidance for Federal Awards , the Council on Financial Assistance Reform (“COFAR”) on Friday issued Frequently Asked Questions For The Office of Management and Budget’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards At 2 CFR 200 . The new frequently asked questions document (FAQ) covers parts of 2 C.F.R 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and incorporates the February document released by the COFAR. Furthermore, the Governmental Audit Quality Center (“GAOC”) is reviewing the FAQ document and plans to issue a GAQC Alert with additional information soon. In the meantime, register for the Firm’s upcoming free live webinar, Supercircular 101—Proposed New Regulations for Grant Requirements and Compliance” .

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IESBA Releases Exposure Draft to Improve Independence Standard

Addressing stakeholder concerns about independence and ensuring threats caused by the long association of audit firm personnel with an audit client receive attention on audit engagements, the International Ethics Standards Board for Accountants (“IESBA”) has released Proposed Changes to Certain Provisions of the Code Addressing the Long Association of Personnel with an Audit or Assurance Client. Issued as an exposure draft for public comment, the IESBA’s proposal focuses on threats associated with familiarity and self-interest, which could occur from a long association with the audit client and fears of losing the client. Changes proposed to the Code of Ethics for Professional Accountants consist. Read More.

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Staff Consultation Paper Issued by PCAOB’s Chief Auditor Office

Pursuing feedback on auditing accounting estimates and fair value measurements, the Public Company Accounting Oversight Board’s (“PCAOB”) Office of the Chief Auditor (“the Office”) has released a Staff Consultation Paper (the Paper) for public comment. As part of its efforts to find audit deficiencies throughout various firms, the Office issued the Paper for comments on current audit practices, examining the possible need for PCAOB standards changes, and likely alternative actions associated with auditing accounting estimates and fair value measurements. For the news release on the Paper , visit the PCAOB website. Also, don’t forget to check out our Audit & Attest page for information on Cherry Bekaert’s services.

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PCAOB Looking to Move Forward with Audit Participant Disclosure Standard

As part of a major initiative to help investors receive more information about auditors and their work for public companies, the Public Company Accounting Oversight Board (“PCAOB”) is looking to adopt rules based on the proposed Release No. 2013-009, Improving Transparency Through Disclosure of Engagement Partner and Certain Other Participants in Audits. Hoping to issue the new rules soon, the proposed requirement of disclosing the lead partner on an auditor’s report has received the most attention. However, several financial professionals argue that investors may favor details regarding other audit participants. Under Release No. 2013-009, the names of outside firms and. Read More.

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