Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Been thinking the volume of accounting rules is growing a lot? It isn’t your imagination. Here’s a page count of GAAP.

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Is this how you’ve been feeling with all the changes in GAAP stacking up on your desk? Image courtesy of Adobe Stock.

Just in case you had been wondering in your idle time how many pages long the Accounting Standards Codification would be in print form, I have the answer.

10,068 pages.

How thick is that if you stacked the five volumes on top of one another?

12.75 inches.

I’m working on a writing project for which it will be convenient to have a hard copy of the ASC, so I ordered a copy. Yipee! It arrived yesterday!

In case it seems like the volume of rules is growing faster than you can keep track, here is a seven-year comparison, looking at the physical size and volume count of the 2017 and 2010 editions:

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Written by Jim Ulvog

September 13, 2018, 6:32 am at 6:32 am

Posted in Accounting

How to get more of the messy details on disciplinary actions by the California Board of Accountancy

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Image courtesy of Adobe Stock.

A colleague asked me a question on how to find out more details on the disciplinary actions taken by the CBA. Let me give you the answer too.

To look up details, you can go to the newsletter mentioned. For Winter 2018 that would be here.

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Written by Jim Ulvog

August 8, 2018, 7:00 am at 7:00 am

Summary of disciplinary actions from California Board of Accountancy, Winter 2018

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What you will be doing if you ignore professional standards and then get caught messing up your audits and reviews, although the amount won’t be quite as large. Image courtesy of Adobe Stock.

The new Update newsletter from the California Board of Accountancy goes back to providing details on disciplinary actions. The Winter 2018 edition (#86) takes 20 pages to describe the 24 actions. The previous Update provided far less detail, which generated lots of feedback to the board, so the newsletter will again give the ugly details for the causes for discipline.

Three things jump out at me from the current list of discipline.

First, every action comes with a substantial financial penalty in the form of reimbursing the CBA for their investigative costs.

Second, just about every CPA that got in trouble for audit or review problems was given a ban from performing attestation work until some time in the future when the firm requests and receives permission from CBA to again perform such work.

Third, several CPAs received a suspension from their CPA practice. This means the individual may not perform any actions which would otherwise require a license. I think that means the firm halts all their attestation work and unless also holding an enrolled agent credential ceases their tax compliance work.

Here is my summary of the causes of discipline for the license surrenders and the stayed revocations:

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Written by Jim Ulvog

August 6, 2018, 6:41 am at 6:41 am

Updated warning for tsunami on the horizon for charity financial statements.

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tsunami” by hansol is licensed under CC BY 2.0

The July 2017 post explaining Before the tsunami hits it might be time to tune into the accounting rules on the horizon  at my other blog, Nonprofit Update, has been updated to mention ASU 2018-08, which addresses accounting for contributions and grants. Might be worth your time to think about the major changes in accounting rules coming into play over the next few years.

Written by Jim Ulvog

August 5, 2018, 14:56 pm at 2:56 pm

Posted in Accounting

Major privacy bill approved in California

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Image courtesy of Adobe Stock.

To prevent an even stronger privacy proposition from appearing on the ballot in the fall, the California legislators rushed through a bill providing strong  privacy rights for all California citizens. Companies making lots of money from the ‘net dislike the bill but supported it in order to derail the proposition.

(Cross posted from my other blog, Nonprofit Update.

Since the law doesn’t go into effect until 2020, there is plenty of time for the legislators to agree with the inevitable demands from tech companies to water down the bill. Pending the expected vast dilution, the bill provides a few landmark protections for consumers, including:

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Written by Jim Ulvog

July 16, 2018, 7:58 am at 7:58 am

Posted in Other stuff, Social media

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2018 nonprofit risk alert is available. New edition adds discussion on valuation of GIK as rebuttal to California AG.

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Cover of 2018 NFP risk alert, used under fair use since I’m recommending you buy the document.

The AICPA has released the 2018 edition of Not-for-Profit Entities Industry Developments.

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.)

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Written by Jim Ulvog

June 11, 2018, 8:40 am at 8:40 am

Posted in Accounting, Audits

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Accounting for donated medicine drawing regulatory attention: California A.G. files 3 cease and desist orders.

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Image courtesy of Adobe Stock.

The California Attorney General has taken exception to the valuation of donated medicine by three large charities.

In March 2018 MAP International, Food for the Poor, and Catholic Medical Mission Board were served with cease and desist orders insisting the charities cease using their claims of extremely high program service percentages. The AG also seeks to revoke charitable registration status in the state for MAP and FftP. The cease and desist orders seek to impose substantial fines on the charities.

The AG also claims that FftP incorrectly applied joint cost allocation.

The filed actions alleged that financial reporting for the years 2012 through 2015 is incorrect. This would include the audited financial statements, 990s, and RRF-1s (for MAP and FftP).

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Written by Jim Ulvog

March 20, 2018, 8:33 am at 8:33 am

Posted in Accounting, Audits

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