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.
FASB Releases Agendas for This Week’s Meetings
With a busy week ahead, the Financial Accounting Standards Board (“FASB”; “the Board”) has scheduled meetings for today, Wednesday and Thursday. Today’s event, Liaison Meeting with the Institute of Management Accountants, is scheduled at 1:00 p.m. EST and will have FASB discuss subjects of interest to both the standard-setter and the Institute of Management Accountants’ Financial Reporting Committee. On Wednesday starting at 9:00 a.m. EST, FASB will hold a board meeting to share research updates and receive guidance on possible improvements to share-base payment accounting, and discuss the next steps for and comments from the proposed FASB Concepts Statement, Conceptual. Read More.
FASB Issues ASU No. 2014-15 to Help Reporting of Going Concern
Helping to disclose substantial doubt concerning a company’s ability to move forward as a going concern, the Financial Accounting Standards Board (“FASB”) has released Accounting Standards Update (ASU) No. 2014-15 , Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Announced on Wednesday, the ASU provides principles and definitions to an organization’s management for decreasing diversity in disclosures that are currently made available in financial statement footnotes. Presently, U.S. GAAP does not provide an organization’s management guidance regarding its responsibility to assess whether substantial doubt exists regarding the ability to continue as a going concern. Read More.
Exposure Draft Issued for Peer Review Performance and Reporting Updates
Facilitating in the proposed changes to Standards for Performing and Reporting on Peer Reviews, the American Institute of Certified Public Accountants (“AICPA”) has issued Proposed Changes to the AICPA Standards for Performing and Reporting on Peer Reviews – Preparation of Financial Statements Performed Under SSARS and the Impact on the Scope of Peer Review. As part of this Exposure Draft (the Draft), changes include preparation services completed under the Statements on Standards for Accounting and Review Services would be omitted from the scope of the peer review, and meaning of an accounting and auditing practice for such standards’ purpose. Comments. Read More.
FASB Announces Agenda for Board Meeting
With a board meeting set for tomorrow at 8:00 a.m. EST, the Financial Accounting Standards Board (“FASB”) has released a notice of open meetings: Insurance—targeted improvements to the accounting for long-duration contracts. FASB will discuss long-duration contracts improvements, particularly modifying assumptions and discount rate. Leases . Discussions will continue on FASB’s May 2013 Exposure Draft, specifically reviewing nonpublic business entity discount rate, related party leasing transactions, accounting for sale and leaseback transactions, and leveraged leases. Financial statements of not-for-profit entities . Ongoing discussions will continue over not-for-profit disclosures, such as cost allocations. Open discussion. If need be, FASB will discuss small issues on technical projects or. Read More.
FASB Revisiting Financial Performance Reporting Project
Resembling previous efforts, the Financial Accounting Standards Board (“FASB”) is considering adding a project on financial performance reporting to its current agenda. At its June 25th meeting, the staff began research on which issues the forthcoming project should address and discussed problems faced during prior attempts to improve the presentation of financial statements. Eventually, staff members were instructed to study how the income statement could be enhanced, but recognized that most income statement changes would have to be mirrored on the balance sheet. Also at the meeting, FASB members could not agree on the degree to which a balance sheet. Read More.