THIS WEEK'S NEWS HEADLINES
December 20, 2013
SEC to update rules for corporate disclosures
SEC Chairman Mary Jo White directed the commission’s staff to develop recommendations for updating the rules for what a company must disclose in its public filings, according to an SEC news release.
Senate confirms John Koskinen as IRS commissioner
Koskinen was nominated by President Barack Obama on Aug. 1. The previous commissioner, Douglas Shulman, stepped down in November 2012 at the end of his term. Since May 22, Daniel Werfel has been serving as acting commissioner.
Grant reform increases single-audit threshold, changes audit rules
New guidelines by the Office of Management and Budget raise a key threshold for compliance audits of entities that receive federal award money from $500,000 per fiscal year to $750,000 per fiscal year.
EU audit reforms “raise serious concerns” for the CAQ
Audit market changes that were preliminarily agreed upon by European Union policymakers this week “raise serious concerns for audit quality,” Center for Audit Quality (CAQ) Executive Director Cindy Fornelli said in a statement.
December 19, 2013
Six more countries sign FATCA agreements with U.S.
The US Treasury Department announcedthat the United States has signed six more bilateral agreements to implement the reporting and withholding provisions of the US Foreign Account Tax Compliance Act.
Guidance issued on tax treatment of National Mortgage Settlement payments
The IRS issued guidance on the correct tax treatment of payments taxpayers receive under the National Mortgage Settlement when their house is foreclosed on.
December 18, 2013
SEC proposal aims to aid small businesses
Rules proposed by the SEC would build upon the Regulation A exemption with the intention of increasing smaller companies’ access to capital.
U.S. GAAP taxonomy for 2014 available
The 2014 U.S. GAAP Financial Reporting Taxonomy is available, pending final acceptance by the SEC, FASB announced.
IRS reveals start date for 2014 tax filing season
The IRS has finally announced an official start date for the 2014 filing season: It will start accepting returns on Jan. 31.
EU member states approve mandatory audit firm rotation
The European Union took another step toward a mandatory audit firm rotation requirement when member states approved new audit regulations.
December 17, 2013
Notice answers many post-Windsor questions on cafeteria plans, FSAs
The IRS continues to consider the effects of the Supreme Court’s Windsor decision on federal tax law, and its most recent guidance deals with elections and reimbursements for cafeteria plans, health savings accounts (HSAs), and health, adoption, and dependent care flexible spending arrangements (FSAs).
Preliminary EU agreement includes audit firm rotation
A preliminary agreement among European Union leaders would impose audit reforms including a mandatory audit firm rotation requirement of 10 years that could be extended in cases where the engagement is put out to bid or joint audits are performed.
Six key risk areas merit attention in 2013 audit cycle
Auditing of internal control over financial reporting, a topic that has received a lot of attention from the PCAOB this year, is among the key risk factors for the 2013 audit cycle, according to a new Center for Audit Quality (CAQ) alert.
SEC sanctions total a record $3.4 billion in FY 2013
Enforcement actions by the SEC netted a record $3.4 billion in monetary sanctions in fiscal year 2013. Investment advisers and investment companies were the most frequent subjects of SEC enforcement for the third straight year.
December 16, 2013
How to make sure controls align with COSO’s principles
Experts say using a mapping exercise will help organizations align their practices with the updated internal control framework of the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
FASAB seeks feedback on annual report
Board plans to consider feedback on the report in its agenda-setting discussion in early March.
LAST WEEK'S NEWS HEADLINES
December 13, 2013
Immediate year-end planning opportunity for existing CRTs
The Treasury Department issued final regulations addressing the 3.8% net investment income tax under Sec. 1411.
What accounting fraud risk factors will attract SEC’s attention?
The SEC’s new Financial Reporting and Audit Task Force is watching for certain risk indicators as it uses new initiatives and tools to pursue early identification of accounting fraud.
December 12, 2013
IRS releases rules for in-plan rollovers of Roth accounts
The IRS released rules in question and answer format for in-plan rollovers to designated Roth accounts in retirement plans.
December 11, 2013
Final rules permit agents to withhold FUTA for home care service recipients
The IRS issued final regulations permitting an agent authorized by the IRS under Sec. 3504 to perform certain acts normally required of employers to withhold Federal Unemployment Tax Act taxes owed by home care service recipients.
Five tips for successful revenue recognition implementation
Companies need to be ready to implement the new, converged revenue recognition standard that FASB and the International Accounting Standards Board are expected to approve this month.
CAQ suggests streamlining proposed auditor reporting duties
The Center for Audit Quality is urging the PCAOB to streamline a proposed process for auditors to provide investors more information on the audit.
December 10, 2013
PCAOB to consider quality-control standard
Audit firms’ quality controls will be the subject of PCAOB discussion in 2014 that could lead to a new auditing standard.
FASB aiming to make preparers’ jobs easier
FASB is trying to make financial statement preparers’ jobs easier without diminishing the useful information they provide to investors.
December 9, 2013
Effects of nonaudit services at audit firms concern PCAOB, SEC
Regulators are asking whether the increasing provision of nonaudit and consulting services by audit firms poses risks to audit quality, and the PCAOB plans a formal examination of the issue in 2014.
Beswick: Rule-making preventing SEC from deciding on IFRS
The SEC commissioners’ rule-making duties related to federal legislation have prevented them from deciding on the future of IFRS in the United States, SEC chief accountant Paul Beswick said.
December 8, 2013
IIRC releases International Integrated Reporting Framework
The International Integrated Reporting Council (IIRC) on Sunday made public an approved framework for integrated reporting. The group intends for the framework to guide companies on how to best communicate with their stakeholders.
PCAOB seeks improvement in engagement quality reviews
Audit firms should take steps to ensure that engagement quality reviews discover the audit deficiencies they are designed to detect, the Public Company Accounting Oversight Board said in a report released Friday.
NEWS HEADLINES FOR DECEMBER 1–7, 2013
December 6, 2013
Proposed rules would require terminating partnerships to amortize startup expenditures
The IRS issued proposed regulations aimed at preventing partnerships from using technical terminations to accelerate their deductions of startup and organizational expenses.
Standard mileage rates go down slightly in 2014
Optional standard mileage rates for use of a vehicle will go down by one-half cent per mile for 2014, the IRS announced.
December 5, 2013
Numerous provisions expire at year end
Here is a roundup of all those provisions, which include the research and development credit, bonus depreciation, and the deduction for state and local sales tax in lieu of state and local income tax.
Finance executives show increasing optimism about their companies
A year ago, U.S. finance executives seemed uncertain about the future of their companies and the domestic economy. But they’re upbeat about numerous business factors these days, according to the latest AICPA Business & Industry Economic Outlook Survey.
December 4, 2013
PCAOB proposal could result in public tracking of auditors
The PCAOB proposed a standard that would require disclosure of the engagement partner’s name in the audit report. One PCAOB member said that could lead to third-party monitoring of auditors’ professional track records.
December 3, 2013
Supreme Court resolves circuit split on 40% gross valuation misstatement penalty
The U.S. Supreme Court held that the 40% penalty for a gross valuation misstatement applied when the partnerships at issue had been determined to be shams that lacked economic substance, and, as a result, the partners’ outside basis in the partnerships was zero.
FASB to seek feedback on accounting for income taxes
FASB plans to ask financial statement users, preparers, auditors, and others for feedback on how to best address concerns about its standard on accounting for income taxes.
AICPA groups seek consistency in insurance contract standards
The AICPA Financial Reporting Executive Committee and Insurance Expert Panel encouraged FASB and the International Accounting Standards Board to converge on at least a few key issues in accounting rules for insurance contracts.
December 2, 2013
PCAOB proposal to name engagement partner may generate debate
The PCAOB is expected to propose a rule that would require engagement partners’ names to be disclosed in public company auditor’s reports. Some in the auditing profession opposed a similar proposal in the past.
IASB proposes amendments to IAS 27 to allow equity method
Narrow-scope amendments to IAS 27 proposed by the IASB would allow entities to use the equity method to account for investments in subsidiaries, joint ventures, and associates in their separate (parent-only) financial statements.
NEWS HEADLINES FOR NOV. 24–30, 2013
November 27, 2013
Final and proposed regs. issued on 3.8% net investment income tax
The IRS issued final and proposed regulations giving guidance on the application and computation of the 3.8% net investment income tax imposed by Sec. 1411.
Final rules released on 0.9% Medicare surtax
The IRS has adopted final rules on the 0.9% Medicare tax that is imposed on high wage earners, starting this year. The rules cover, among other things, withholding requirements, reporting and payment obligations, and claims for refund.
PCAOB to consider requiring name of engagement partner in auditor’s report
The PCAOB will consider reproposing amendments to auditing standards that would require disclosure in the auditor’s report of the name of the engagement partner and certain other participants in the audit.
November 26, 2013
Top risk for businesses: Regulation, compliance overload
Corporate directors believe regulatory and compliance overload is the greatest risk facing their business, well ahead of cyber threats and corruption, a new survey shows.
IRS proposes curbing political activities of Sec. 501(c)(4) social welfare organizations
The IRS announced its intention to amend the regulations governing social welfare organizations, a topic that has recently created an enormous amount of political controversy, especially during the recent scandal over how the IRS was mishandling applications from groups that had “tea party” and other terms in their names.
November 25, 2013
Private company GAAP exceptions get thumbs up from FASB
FASB endorsed two GAAP exceptions for private companies, marking a milestone in the work to provide simpler, less costly rules for private companies while producing financial statements that reflect economic reality.
GASB makes fix in pension standard transition
GASB altered the transition provisions of a new pension standard in order to eliminate a potential source of understatement.
NEWS HEADLINES FOR NOV. 17–23, 2013
November 21, 2013
IASB makes change to defined benefit contribution accounting
Small-scale changes to financial reporting rules for employee benefit plans were published by the International Accounting Standards Board (IASB).
TIGTA report says IRS should do a better job protecting taxpayer data
A report issued by the Treasury Inspector General for Tax Administration says the Internal Revenue Service does not have proper internal controls in place to ensure that security weaknesses are properly corrected.
November 20, 2013
Final IASB approval of rev rec standard imminent
Members of the International Accounting Standards Board indicated that they will approve the proposed, converged standard for revenue recognition and instructed staff to prepare a ballot draft for a final vote.
Survey: Data security concerns soar as more CPA firms access cloud
Concerns about data security are surging as the percentage of CPA firms tapping cloud computing continues to increase, according to a survey from CPA2Biz, the AICPA’s for-profit technology subsidiary.
More transparency sought from audit committees
A consortium of U.S. governance organizations is calling on public company audit committees to enhance reporting about their activities.
November 19, 2013
Whistleblower tips to SEC rise 8%
Tips to the SEC by whistleblowers rose 8% in fiscal year 2013 over the previous fiscal year, according to an SEC report to Congress.
IASB releases new rules to better reflect hedge accounting
The International Accounting Standards Board released new rules for hedge accounting intended to more accurately reflect businesses’ risk management activities in financial statements.
For penalty calculation, amount of tax shown on return reduced by credits, Tax Court holds
For purposes of calculating the accuracy-related penalty, the amount of tax shown on a married couple’s return was reduced by refundable tax credits they claimed—but were not entitled to—the Tax Court held.
Accounting for income taxes standard achieves purpose, panel finds
A review panel has concluded that a 1992 financial reporting standard addressing accounting for income taxes generally achieves its purpose but may not have reduced complexity.
November 18, 2013
Five things the PCAOB considers in assessing firms’ remediation
The PCAOB requires corrective changes from firms whose quality-control procedures are criticized in board inspections. Board inspectors examine five key criteria as they assess those corrective changes.
Costs often derail qualitative goodwill impairment assessment
A qualitative “Step 0” approach to goodwill impairment testing recently was introduced by FASB to help companies save costs by sparing them from having to perform costly quantitative testing.
NEWS HEADLINES FOR NOV. 10–16, 2013
November 15, 2013
Fed change won’t improve economy, U.S. finance execs say
Although U.S. CFOs and finance chiefs say a Federal Reserve chairman has the ability to significantly affect the world’s economy, they are not optimistic that the coming change in Fed leadership will hasten the economic recovery.
November 14, 2013
Regs. permit midyear changes to employer contributions to 401(k) plans
The final rules remove a proposed “substantial business hardship” requirement and allow the reduction or suspension in cases where the employer is operating at an economic loss or, in some cases, if notice is provided ahead of time to plan participants.
United States and France sign FATCA agreement
The Treasury Department announced that the United States and France have signed a bilateral agreement requiring French banks to report to the French government information about their U.S. account holders.
November 13, 2013
Significant changes to compilation included in 3 proposed standards
Three standards proposed by the AICPA Accounting and Review Services Committee (ARSC) as part of its clarity project include a proposal that would significantly change compilation literature.
November 12, 2013
IRS targeting return preparers who file inaccurate earned income credit claims
As part of its recent stepped-up efforts to increase earned income tax credit due diligence, the Internal Revenue Service told tax practitioners that it will be sending letters to tax return preparers who it suspects are filing inaccurate EITC claims.
GASB’s five things to watch in pension standards implementation
Implementation is underway for new financial reporting standards for state and government pensions. Read about the key issues that need to be considered.
Private company VIE exception approved by PCC
The Private Company Council approved a GAAP exception that—if endorsed by FASB—would allow private companies to elect not to apply consolidation guidance for variable-interest entities under common-control leasing arrangements.
November 11, 2013
Prepare for new revenue guidance with six key actions
Companies need to move quickly, experts say, to consider how they will be affected by the new revenue recognition standard under development by FASB and the International Accounting Standards Board.
NEWS HEADLINES FOR NOV. 3–9, 2013
November 8, 2013
Permanent injunction closes large tax preparation firm
A federal district court in Ohio has issued a permanent injunction ordering ITS Financial LLC, the parent company of Instant Tax Service tax franchiser, to cease operations.
New guide helps navigate goodwill impairment testing challenges
A new guide issued by the AICPA Financial Reporting Executive Committee provides direction for handling goodwill impairment testing challenges.
November 7, 2013
Affordable Care Act holds opportunities, challenges for internal auditors
Internal auditors have new opportunities to help organizations prepare for Affordable Care Act risks, but they may need more familiarity with provisions.
FASB proposes eliminating “development stage entity” distinction
A new FASB proposal seeks to eliminate the designation of “development stage entity,” as well as related disclosure requirements, from U.S. GAAP.
November 6, 2013
IRS extends fast-track settlement to smaller businesses nationwide
Fast-track settlement can help small businesses under examination reach agreement with the IRS without a formal appeal or litigation.
Historic revenue recognition standard takes big step forward
A new, globally converged standard on revenue recognition is close to reality after FASB voted to instruct the board’s staff to prepare a ballot draft for final approval.
PCAOB establishing Center for Economic Analysis
The PCAOB is creating a Center for Economic Analysis to provide the board with insight on using economic theory, analysis and tools to strengthen its programs.
November 4, 2013
SEC’s ramped-up scrutiny means CFOs need to reevaluate processes
CFOs and finance departments may want to undergo a careful evaluation of their financial reporting systems and processes, experts say, now that the SEC is ramping up its scrutiny of accounting and auditing.