THIS WEEK'S NEWS HEADLINES
August 28, 2014
COSO transition getting a close look from auditors
Many companies are finished with the early stages of implementation of the updated internal control framework of the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Now companies’ auditors are reviewing the work done during implementation.
August 27, 2014
Five keys to effective auditor judgment
Auditors face many challenges to their professional judgment as they make decisions that are critical to the integrity of capital markets. An effective decision-making process can enable objective, professionally skeptical judgments, according to a new Center for Audit Quality resource.
FASB defines management’s going-concern responsibilities
A new financial reporting standard issued by FASB defines management’s responsibilities for evaluating and providing footnote disclosures about whether there is substantial doubt about an entity’s ability to continue as a going concern.
ARSC approves clarified and revised standards for reviews, compilations, and engagements to prepare financial statements
A clarified and revised Statement on Standards for Accounting and Review Services addressing reviews, compilations, and engagements to prepare financial statements has been approved by the AICPA’s Accounting and Review Services Committee and is expected to be issued in the fourth quarter of 2014.
August 26, 2014
IRS issues final regulations on straddles
The regulations allow an issuer’s obligation under a debt instrument to be part of a straddle if the obligation is linked to the value of personal property.
SEC names former Deloitte LLP exec Schnurr as chief accountant
James Schnurr, former vice chairman and senior professional practice director for Deloitte LLP, was named as the SEC’s new chief accountant. He replaces Paul Beswick, who is leaving to join the private sector.
LAST WEEK'S NEWS HEADLINES
August 22, 2014
New IRS appeals process starts Sept. 2
The Appeals Judicial Approach and Culture project aims to stop appeals officers from acting as investigators and to have them take a quasi-judicial approach to cases.
August 20, 2014
FASB proposes simpler accounting for fees paid to cloud service providers
FASB issued a proposal designed to simplify the accounting for fees that public and private companies pay as customers in cloud-computing arrangements with third-party service providers.
How CPAs can provide clients added value
Accountants have opportunities to provide forward-looking services that could create added benefits for their clients, according to a new survey.
August 19, 2014
AICPA membership eclipses 400,000
The AICPA announced that its membership has eclipsed the 400,000 mark. The accounting profession’s largest membership organization worldwide has seen its number of members grow 25% in the past 20 years.
SEC will scrutinize municipal advisers’ rules compliance
The SEC is launching a new initiative that will examine whether municipal advisers are following new rules and regulations.
FASB share-based payments standard challenges private companies
Although a review found that FASB’s share-based payments standard achieves its purpose, private company stakeholders told a post-implementation review team that the standard is sometimes difficult for them to understand and costly to apply.
PCAOB requests comments on auditing accounting estimates and fair value measurements
The PCAOB is seeking input as it weighs possible standard-setting activities related to auditing accounting estimates and fair value measurements.
August 18, 2014
PCAOB calls for improvement in audits of brokers and dealers
The PCAOB urged audit firms to review independence rules and areas with frequent inspection findings related to audits of brokers and dealers. The board’s guidance was issued as a result of the most recent findings from its interim inspection program.
NEWS HEADLINES FOR AUG. 10–16, 2014
August 14, 2014
IRS clarifies retailers’ computation of ending inventory value
The Internal Revenue Service on Thursday issued final regulations governing the retail-inventory method of accounting. The new rules clarify how retailers should handle sales-based vendor allowances and vendor markdown allowances when valuing inventory.
Regs. govern dispositions of depreciable property
Regulations issued provide the final piece of the Internal Revenue Service’s recent overhaul of the tangible property or “repair” regulations.
August 13, 2014
IASB official: Global accounting standards are “achievable,” “inevitable”
Ian Mackintosh, vice-chairman of the International Accounting Standards Board (IASB), said that the goal of global accounting standards is achievable. Mackintosh said the pace of globalization in business makes adoption of a unified set of standards “inevitable.”
NEWS HEADLINES FOR AUG. 3–9, 2014
August 7, 2014
AICPA seeks feedback on private-entity audit quality initiative
The AICPA released a discussion paper seeking input on its Enhancing Audit Quality initiative, a major effort to coordinate resources and improve performance of private entities, which are defined as non-SEC registrants, including not-for-profits, employee benefit plans, and governmental entities.
Final rules issued on IRS whistleblower awards
The new rules broaden the definition of “collected proceeds” (which determines the amount of the award to the whistleblower) and allow the IRS to take into account not just actual revenues collected but the effect of the reduction of tax attributes such as net operating losses as a result of the whistleblower's information.
August 4, 2014
Proposed new guidance outlines 12 principles for internal auditing
Proposed changes to guidance followed by internal auditors include a new mission statement and a set of 12 core principles that highlight what effective internal auditing looks like in practice.
NEWS HEADLINES FOR JULY 27–AUG. 2, 2014
August 1, 2014
AICPA advises CPA firms to review state registration and compliance
The AICPA State Regulation and Legislation team issued an advisory urging CPA firms to ensure that they are in compliance with out-of-state requirements when performing attest engagements.
July 30, 2014
IRS issues final regulations on material adviser reportable transaction penalties
The IRS issued final regulations regarding the imposition of the Sec. 6707 penalty on material advisers for failing to furnish correct information regarding a reportable transaction and the factors considered in determining whether to grant a request for rescission of the penalty.
NEWS HEADLINES FOR JULY 20–26, 2014
July 25, 2014
IRS issues guidance on health insurance premium tax credits
The IRS issued regulations and revenue procedures addressing how to calculate the Sec. 36B premium tax credit, including how the credit is calculated in conjunction with the Sec. 162(l) deduction for health insurance premiums of self-employed individuals.
ASB issues SAS No. 129 to amend letters for underwriters auditing standard
The AICPA Auditing Standards Board issued Statement on Auditing Standards No. 129 to amend its auditing standard on letters for underwriters and certain other requesting parties by addressing implementation issues and avoiding unintended changes to previous practice.
July 24, 2014
Convergence unachieved after IASB publishes financial instruments standard
The International Accounting Standards Board issued a new financial instruments standard that creates an expected-loss model for impairment but is not converged with the standard FASB is developing.
Restatements dropped after initial post-SOX surge, study shows
Restatements by SEC-registered companies have dropped significantly since a surge in the years after implementation of the Sarbanes-Oxley Act, new research commissioned by the Center for Audit Quality shows.
July 23, 2014
New IRS rules simplify compliance for money market fund shares
To help taxpayers comply with new SEC rules on money-market fund share prices, the IRS issued guidance making easier to calculate gains and losses on certain floating net asset value funds.
Technology plays a role in board members’ top two concerns
In a business environment where a damaging Twitter post can have disastrous effects on a company’s financials, reputational risk remains the top nonfinancial concern for corporate directors, according to a new survey report.
July 22, 2014
Federal courts disagree on health care credits for federal exchanges
Two federal appellate courts issued conflicting decisions regarding the availability of the Sec. 36B premium tax credit for taxpayers who purchase health insurance on exchanges set up by the federal government.
Big Data tops issues facing forensic and valuation accountants
Electronic data analysis, also known as “Big Data,” is the most pressing issue that forensic and valuation services (FVS) accountants expect to face in the near future, according to survey results released by the AICPA.
What the PCAOB’s new related-party standard means for auditors
As a result of the PCAOB’s new related-party auditing standard, audit firms may need to revise their audit plans and methodologies to ensure that newly required procedures are fully incorporated.
Final rules issued on bona fide indebtedness and terminating partnership’s startup expenses
The final regulations were adopted without substantive change, other than changes to the effective/applicability date and minor clarifying revisions.
July 21, 2014
PCAOB reaches agreement with audit regulator in Denmark
The PCAOB and Denmark’s audit regulator have entered into a cooperative arrangement for oversight of audit firms in their respective jurisdictions, the PCAOB announced.
New rules on covered asset acquisitions will shut down transactions to avoid Sec. 901(m)
The IRS announced that it would issue regulations to prevent taxpayers from misapplying the statutory disposition rule in cases where the gain or loss from the disposition of the relevant foreign asset (RFA) is recognized for U.S. income tax purposes but not for foreign income tax purposes.
NEWS HEADLINES FOR JULY 13–19, 2014
July 18, 2014
Definitions of R&E expenditures are amended under final rules
The IRS issued final regulations that change the tax treatment of certain research and experimental expenditures incurred by a company in developing a product.
Revenue transition group debates difficult implementation issues
The joint transition resource group created by FASB and the International Accounting Standards Board gave the boards plenty to think about while discussing implementation questions during the group’s inaugural meeting.
July 17, 2014
Effective date of fiduciary fee unbundling rules delayed until 2015
This will give fiscal-year trusts and estates of decedents dying this year more time to implement changes required by the new rules.
Court halts IRS regulation of contingent fees for refund claims
A federal district court has permanently enjoined the Internal Revenue Service from prohibiting tax practitioners from charging contingent fees for the preparation of ordinary refund claims.
July 16, 2014
Partnership interest expense allocation rules are finalized
The IRS has finalized, without substantive changes, proposed regulations that were issued in conjunction with temporary regulations in January 2012.
FASB votes in favor of new consolidation standard
FASB voted to approve an accounting standard that is intended to increase transparency and consistency in financial reporting about consolidation.
July 15, 2014
AICPA sues IRS to stop return preparer program
The complaint alleges that the IRS’s implementation of the program violates the Administrative Procedure Act and amounts to an end run around the recent decision striking down the IRS’s mandatory preparer registration program.
FASB proposals on inventory, extraordinary items seek simplification
Proposals released by the Financial Accounting Standards Board seek to simplify inventory measurement and alleviate uncertainty for preparers, auditors, and regulators by eliminating the concept of extraordinary items.
No answer yet for private companies on acquired intangible assets
Despite more than three hours of deliberations, the Private Company Council could not arrive at a GAAP alternative to simplify accounting for intangible assets in a business combination for private companies.
July 14, 2014
Fighting identity theft, IRS issues final rules on truncated identification numbers
The Internal Revenue Service issued final regulations that allow the use of truncated taxpayer identification numbers, such as Social Security numbers, on information returns provided to payees.
NEWS HEADLINES FOR JULY 6–12, 2014
July 10, 2014
One-IRA-rollover-a-year rule will be effective in 2015, IRS says
Starting in 2015, taxpayers will only be able to make one rollover per year no matter how many IRAs they own.
July 9, 2014
E-filing of amended returns, elimination of Form 1040X among TIGTA recommendations
The Treasury Inspector General of Tax Administration recommended in a report that the Internal Revenue Service do away with Form 1040X for amended returns and instead allow taxpayers to simply make amendments on Form 1040.
July 7, 2014
Limit on direct deposit of refunds will go into effect in 2015
In its latest attempt to fight tax refund fraud, the IRS said that, beginning in January 2015, it will impose a limit of three electronic direct deposits of tax refunds into a single financial account or prepaid debit card.
How internal audit can meet growing expectations
Internal audit’s responsibilities are evolving along with the business environment. Focusing on some key strategies can help internal audit provide more value in this changing environment.
Six ways not-for-profits can get value from risk management
Although not-for-profits trail public companies in use of formal enterprise risk management, experts say they are paying a lot of attention to how managing risk can further their mission.
NEWS HEADLINES FOR JUNE 29–JULY 5, 2014
July 1, 2014
Streamlined tax-exempt application process introduced
The IRS introduced a streamlined application process for small organizations that want tax-exempt status under Sec. 501(c)(3). Final and temporary regulations were also issued on July 1 to allow the IRS to adopt this streamlined application process.
ITINs will expire after five years under new IRS policy
The IRS announced a new policy concerning individual taxpayer identification numbers (ITINs): ITINs that are not being used will expire after five years (IR-2014-76). The policy will go into effect in 2016.
IRA participants can purchase longevity annuities
The rules allow participants in 403(b) and eligible governmental 457 plans as well as IRAs (but not Roth IRAs or defined benefit plans) to purchase these contracts, which are called qualifying longevity annuity contracts.
June 30, 2014
Complete rules for the IRS’s voluntary return preparer certification program are released
The IRS published guidance introducing its new, voluntary Annual Filing Season Program, which permits tax preparers who are not CPAs, attorneys, or enrolled agents to complete tax education requirements and receive a certificate, called a Record of Completion.