We have been locked down long enough for the volume of statistics to build up to the point of allowing deeper analysis. As is always the case, the statistics can also be manipulated to give whatever answer you want. Deeper, honest analysis is starting to show surprising results, for example, the lack of correlation between infection rates and lockdown policies.
Surprising results on the low correlation will be mentioned after some game playing is described.
The annual motorcycle rally in Sturgis, South Dakota routinely draws huge numbers of people to the town, whose population is only 7,000 people. Attendance at the 10-day event this year was lower than usual with an estimated 460,000 motorcycle enthusiasts hanging around.
Frightening news reports at the time said this would cause massive numbers of Covid infections leading to massive numbers of deaths.
“Three very definite propositions were set out in its (the Declaration of Independence) preamble regarding the nature of mankind and therefore of government. These were the doctrine that
all men are created equal,
that they are endowed with certain inalienable rights, and that
therefore the source of the just powers of government must be derived from the consent of the governed.” (emphasis added)
He explained these issues are settled, resolved, final.
We can expand on those ideas. We need to bring them into further fruition. We can dive deeper into their meaning.
Setting them aside or replacing them means we go backwards. Declaring they are no longer true is regression to the ancient past.
More eloquently than I could ever describe, the president said:
“About the Declaration there is a finality that is exceedingly restful. It is often asserted that the world has made a great deal of progress since 1776, that we have had new thoughts and new experiences which have given us a great advance over the people of that day, and that we may therefore very well discard their conclusions for something more modern. But that reasoning can not be applied to this great charter. If all men are created equal, that is final. If they are endowed with inalienable rights, that is final. If governments derive their just powers from the consent of the governed, that is final. No advance, no progress can be made beyond these propositions. If anyone wishes to deny their truth or their soundness, the only direction in which he can proceed historically is not forward, but backward toward the time when there was no equality, no rights of the individual, no rule of the people. Those who wish to proceed in that direction can not lay claim to progress. They are reactionary. Their ideas are not more modern, but more ancient, than those of the Revolutionary fathers.”
If you are a CPA serving the not-for-profit community, you need to read this document each year. It provides a survey of the accounting and auditing issues affecting the nonprofit world.
If you are an auditor, there are several other risk alerts you ought to be reading every year.
(Cross-posted from my other blog, Nonprofit Update, since this information is useful for many CPAs.)
If you are working for a nonprofit, these alerts would give you a good survey of accounting issues in general and the audit issues your CPA will be dealing with this year.
Valuation of Gifts in Kind
Of particular interest are new comments responsive to the challenge from the California AG over valuation of GIK. The 2017 and 2016 editions had minimal comments on GIK.
The 2018 edition has a new section, Gifts-in-Kind: Reporting Contributions of Nonfinancial Assets, in paragraphs .53 through .57, which describes the AICPA’s interpretation of GAAP.
Years after the mebendazole issue has faded away, the second bullet point of paragraph .56 says that when GIK is sourced outside the U.S. and is not approved for distribution in the U.S., the meds should be valued at international prices. (If you have been following this issue for years, you realize the concession made by that comment.)
As mentioned in the previous post, I’ve reread my notes from several continuing education classes this year. Thought I would share a variety of stray ideas.
For what it is worth here are some tidbits you might enjoy:
Presentation of not-for-profit financials – ASU 2016-14
Presenter said that if an organization wanted to break out the with restriction column into more detail there is nothing to resented been broken into two or three columns. Perhaps it could be columns for:
donor endowment
other with restriction contributions
time restrictions
total with donor restriction
without donor restriction
total (total column is not required, but total change in net assets is)
Another possibility to present more detail would be to present multiple lines within the with donor restriction column, such as contributions to donor endowment, various purpose restrictions, time restriction, and a subtotal.
As part of working on a big writing project, I’ve reread my notes from several continuing education classes this year. (More details later and a link to the published material much later.) Thought I would share a variety of stray ideas. Here are a few tidbits from the classes.
Probably need to note that I have not gone back and read the original pronouncements supporting each idea and therefore I do not have a specific citation for you. (Reading three of the documents is the next step for my writing project.)
For what it is worth here are some tidbits you might enjoy:
Leases – ASU 2016-02.
One of the key on/off switches is whether a particular transaction or document is a lease. That will require an assessment of each transaction.
Right of use assets (the new description) resulting from operating and financing leases need to be listed separately on the statement of financial position. Those two categories (operating right of use and financing right of use) will be presented separately from fixed assets.
If we keep learning, robots will free us up from dreary work but won’t take away our jobs
Federal court keeps PTIN requirement in place but overturns the fee requirement
PCAOB expands standard auditor’s report
5/30/17 – Bill Sheridan at Business Learning Institute – Robots aren’t stealing our jobs. They’re setting us free. – Mr. Sheridan describes how we as accountants could thrive as computers take away the basic number crunching parts of our work.
Those tasks we do that can be automated will shift. That will leave the strategic thinking, critical thinking, collaboration, communication, and anticipation to us.
In my little brain, I have a way to describe this – So let’s say you have a program that can review 100% of disbursements instead of you drawing a sample of 40 or 60 items. Cool.
In any client that still uses humans to run their organizations, how many exceptions do you know think you will need to address?
I thought IFRS in the US was dead. In case you didn’t know, I have a fairly strong opinion on the issue.
A presenter at the CalCPA’s Accounting and Auditing Conference on April 25, 2017 had the following comment on IFRS at the end of the presentation:
Death, taxes, cockroaches, and IFRS aren’t going away.
My immediate thought:
Unfortunately, that now seems to be true.
IFRS is baaaack
He perceives the pendulum of discussion on IFRS is swinging back to the topic being on the table.
His comments consistently contained the inference that IFRS is one body of knowledge, consistent in its application in every country across the planet that has adopted the rules.
Manual accounting records. Anyone miss those? Didn’t think so. Image courtesy of Adobe Stock.
A few fun reads for accountants:
Why no Hollywood movie will ever show a profit.
Adrienne Gonzalez is back at Going Concern, talking about the idea of TBTF Big 4 firms possibly, maybe, becoming SIFI (not likely to ever happen, but a fun read anyway).
Several years ago I took a fraud education CPE course in which the instructor went on a tangent to explain why no Hollywood movie has ever made a profit and none of them ever will.
What I like about this particular list is that it is short enough to actually provide focus. Frequently such lists have the filter set so broadly that the list covers practically all the findings that have surfaced during all peer reviews. Sometimes I’m left with the feeling that a list of findings reads like a list of every single step you need to perform during an audit.
Here is the short list provided in the risk alert, along with my explanation:
Incorrect dating of audit report – The auditor’s report needs to be dated no earlier than when sufficient appropriate audit evidence has been obtained to support the opinion. This means …
The primary focus in media coverage is on tax evasion. There are other ways to look at the offshore industry. There are more and deeper legal issues involved. The tax evasion concerns under discussion are just the starting point on the list of issues that ought to generate irritation.
Following articles provide a variety of alternative views of what is going on in the Panama Papers leaks. That the articles I mention contradict each other illustrates my point that there are more issues involved than just tax evasion.
Question for you to ponder: Why have people been hiding their money for over 2,000 years?
In 1934 when Switzerland made it a crime for a banker to reveal a customer’s name, they were a bit behind the curve. Liechtenstein, Luxembourg, and Bermuda were tax havens a couple of decades earlier. As a depressing note, the Swiss offered confidentiality for a fee all the way back in 1789.
