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Financial Services

CAQ Issues Audit Planning Alert

The Center for Audit Quality (“CAQ”) has issued an alert to improve audit quality and assist in the planning of 2018 audits. Released as Audit Planning Alert for Auditors of Brokers and Dealers , the alert outlines questions auditors of brokers and dealers should consider when preparing audit and attestation engagements. It also focuses on the following areas: Auditing revenue; Auditing related party transactions; Auditing the supplemental information; Performing examination engagements; and Performing review engagements. While certain areas are highlighted in this alert, the CAQ cautions that the guidance should not be considered definitive or all-inclusive. The CAQ advises that the alert must be read alongside the appropriate rules,. Read More.

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President Signs Bill that Reverses Dodd-Frank Banking Reforms

President Trump has signed a bill to roll back systemic risk regulations under the Dodd-Frank Act. Approved on May 22 by the House of Representatives, the Economic Growth, Regulatory Relief, and Consumer Protection Act (“the Act”) represents the most substantial changes to the Dodd-Frank Act since its enactment. The new legislation is viewed as a partial rollback of the 2010 law. Although heralded in the media as a dramatic step away from regulatory reforms introduced by Dodd-Frank, the changes included in the Act will generally have the greatest impact on small banks. Sen. Mike Crapo praised the legislation as a. Read More.

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FASB Deems Regulatory Guidance from Financial Services Standard Irrelevant

The Financial Accounting Standards Board (“FASB”) has published a small U.S. GAAP update that removes decades-old bank regulatory guidance from its financial services standard. Accounting Standards Update No. 2018-06, Codification Improvements to Topic 942: Financial Services—Depository and Lending, eliminates a reference to the Office of the Comptroller of the Currency’s Banking Circular 202, Accounting for Net Deferred Tax Charges, from FASB Accounting Standards Codification 942-740-45-1, Financial Services—Depository and Lending—Income Taxes — Other Presentation Matters — Differences Between Regulatory Accounting Principles and GAAP. Published in 1985, the guidance has since been rescinded. Per the FASB, the Codification guidance related to the. Read More.

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Amended Capital Rule for FASB Credit Loss Standard Proposed

The Federal Reserve, Office of the Comptroller of the Currency, and Federal Deposit Insurance Corporation have proposed amending regulatory capital rules to improve consistency among bank regulation and the Financial Accounting Standards Board’s credit loss standard. Issued as Regulatory Capital Rules: Implementation and Transition of the Current Expected Credit Losses Methodology for Allowances and Related Adjustments to the Regulatory Capital Rules and Conforming Amendments to Other Regulations, the proposal would give banks the choice to phase-in the capital impacts of implementing Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial. Read More.

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GAO Asks Regulators to Increase Fintech Protections

The Government Accountability Office (“GAO”) wants securities regulators to step up their efforts in safeguarding investors and consumers from financial technology (“fintech”) products. In its March 22 report, the GAO said fintech products present the same risks as traditional products, but current laws and regulations may not sufficiently address such risks. How much fintech firms must comply with applicable federal laws differs. Regulators like the Securities and Exchange Commission (“SEC”) can supervise fintech investment advisors just as they do traditional advisors, but the GAO said that digital assets could create unique risks to investors. The SEC, however, believes digital assets. Read More.

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FASB to Curtail Fair Value Disclosure Requirements

The Financial Accounting Standards Board (“FASB”) has finalized amendments that would prevent companies from disclosing irrelevant and unnecessary information on financial statement footnotes related to how they measure the fair value of select assets and liabilities. Decided at the FASB’s March 7 meeting, the amendments will be based on Proposed Accounting Standards Update No. 2015-350, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement. The FASB believes the changes will lower costs for companies and improve disclosures for investors and analysts. Companies will have to adopt the amended disclosure requirements for fiscal. Read More.

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