Staff Audit Practice Alert Issued for Going Concern
Reminding auditors to continue abiding by its current standards in spite of recent U.S. GAAP changes related to recognizing a company’s ability to continue as a going concern, the Public Company Accounting Oversight Board (“PCAOB”) has issued Staff Audit Practice Alert No. 13 , Matters Related to the Auditor’s Consideration of a Company’s Ability to Continue as a Going Concern. The alert informs auditors to reference the appropriate financial reporting framework, U.S. GAAP or International Financial Reporting Standards (IFRS), to review management’s going concern evaluation and its related financial statement disclosures. Staff Audit Practice Alert No. 13 also advises auditors to continue using PCAOB AU sec.. Read More.
AICPA Auditing Standards Board Releases Agenda for October Meeting
Hosted at the American Institute of Certified Public Accountants (“AICPA”) offices in New York City, the organization’s Auditing Standards Board (“ASB”) is scheduled to meet October 21st-23rd. The meeting will cover various topics, including Attestation Standards: Clarification and Recodification, and proposed revisions of the first four chapters. Further, the agenda includes a possible revision of AU-C 570, The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern, auditor’s reports, competency model and performance audits. Meeting information and the event’s detailed agenda are available on the AICPA’s website.
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.
FASB’s Going Concern Amendment to Affect PCAOB Standards
In the coming weeks, the Financial Accounting Standards Board (“FASB”) plans to release an amendment that requires struggling companies to inform investors regarding their chances of surviving. Entitled proposed Accounting Standards Update No. 2013-300, Presentation of Financial Statements (Topic 205)—Disclosure of Uncertainties about an Entity’s Going Concern Presumption, the update is in response to investors and regulators who believed auditors issued going concern reviews of companies after the stock price mirrored the market’s knowledge of their pending demise. Per the FASB’s final update to U.S. GAAP, a company will be required to add in its financial statement footnotes when “substantial. Read More.
Topics: Accounting Standards Update, American Institute of Certified Public Accountants "AICPA", Audit, Auditing Standards Board "ASB", Bruce Webb, disclosure, Financial Accounting Standards Board "FASB", Financial Statements, Going Concern, International Financial Reporting Standards "IFRS", Public Company Accounting Oversight Board "PCAOB", U.S. GAAP, U.S. Securities and Exchange Commission "SEC"