PCAOB Considering Revenue Recognition Interpretive Guidance for Auditors
Auditors could receive interpretive guidance on the Financial Accounting Standards Board’s (“FASB”) revenue recognition standard. Last month, Public Company Accounting Oversight Board (“PCAOB”) Chief Auditor Martin Baumann said a project is in the works to determine what type of guide the board should release concerning Accounting Standards Update (“ASU”) No. 2014-09, Revenue From Contracts With Customers (Topic 606).
To help public companies implement ASU No. 2014-09, Baumann remarked that the PCAOB is considering releasing an Audit Practice Alert. The PCAOB staff has already reviewed Staff Audit Practice Alert (“APA”) No. 12, Matters Related to Auditing Revenue in an Audit of Financial Statements, which covers fundamental matters of reporting revenue from FASB Accounting Standards Codification (“ASC”) 605, Revenue Recognition. FASB ASC 605 is being replaced by the new revenue standard. Staff members are also reviewing APA No. 11, Considerations for Audits of Internal Control Over Financial Reporting, and APA No. 10, Maintaining and Applying Professional Skepticism in Audits.
ASU No. 2014-09 will be effective for public companies on January 1, 2018.