The AICPA’s annual Audit Risk Alert General Accounting and Auditing Developments—2016/17 provides a useful summary of common peer review findings on audits.
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 Read the rest of this entry »
The AICPA’s annual audit risk alert had been out a little while. There is a lot of good stuff covered that all auditors really ought to check out. I heartily recommend reading the annual update before you get very far into your 12/31 audits. The document is Audit Risk Alert General Accounting and Auditing Developments—2016/17.
I will mention just a few highlights.
In case you hadn’t hear, those telephone calls claiming to be from the IRS demanding you immediately pay back taxes are a scam.
(Cross-posted from my other blog, Nonprofit Update, so you may refer your clients to an article that provides depth on how to avoid becoming victim of recent scams.)
The most frequent scam in 2016 was the phone calls saying “This is the IRS and if you don’t pay your past due taxes this instant we will send someone to your house to arrest you right now.”
There are many things wrong with those calls.
As a starter, your first contact with the IRS will never be by phone. You will instead get a letter explaining what the IRS thinks you messed up.
Postal rates will change again effective January 22, 2017.
Chronicle of Philanthropy reports New Postal Rates Will Boost Costs for Charities. Article says increase for charities will range from 2.8% up to 4.3%.
A significant change is that mail which was previously marked as “standard” will now be categorized and marked as “marketing mail.” That is a concern for an industry representative who said that may reduce the likelihood of recipients actually opening such items, which would obviously reduce the effectiveness of a mailing.
You can find the new rates at the USPS site: January 2017 Price Change.
The 2017 audit season is about to begin. Planning is well underway for all those 12/31 clients.
To help you get ready, the annual updates to AICPA risk alerts are available. Consider:
- General Accounting and Auditing Developments – 2016/17 Audit Risk Alert
- Developments in Preparation, Compilation, and Review Engagements 2016/17
- Government Auditing Standards and Single Audit Developments – Audit Risk Alert (16/17 edition)
I read the risk alerts every year. They are great for reminding me of what I already knew and even better for pointing out what tidbits I had missed.
You might want to check them out in the lull before the rush of field work hits.
Not a lot of news in the last few days about the Wells Fargo new account fiasco, but there are a few pieces of information.
12/12 – Reuters – Prudential stops distribution of policies sold through Wells Fargo – With the increased attention on the low-cost life insurance product from Prudential, called MyTerm, which was sold by Wells Fargo, the insurance company suspended sales of the product through the bank.
Article says that separately Wells Fargo suspended sales of renters insurance that goes through a different insurance company.
The California Insurance Commission has opened an investigation of the product sales.
Article says the California regulators says the New Jersey insurance regulator has also opened an investigation. Reporter cannot get confirmation from the New Jersey regulator.
12/16 – Francine McKenna at MarketWatch – Prudential allegations complicate Wells Fargo’s work with new partners – Read the rest of this entry »
More punishment on the way from the OCC.
Also, accusations emerged over the weekend that staff of Wells Fargo may have been opening insurance products from Prudential without customer permission. Keep in mind those are only accusations by terminated staff. If substantiated, this could be a new layer of the fake account scandal.
I previously mentioned OCC imposing additional consequences from the fake account scandal. Background for the next article:
- 11/18 – Wall Street Journal – Banking Regulator Imposes New Restrictions on Wells Fargo – Apparently the consent degree signed by Wells had some harsh language in it which was immediately waived by the OCC. On Friday the OCC unilateally revoked their waiver. As of now, Wells Fargo must get OCC permission before it hires or fires senior executives, before it make changes to the board of directors, and before making any “golden parachute” severance payments to executives. Approval will be required to changes in the bank’s business plans.
Update on that action: 11/20 – Wall Street Journal – Wells Fargo Grapples With OCC Move – Internal communication from the new CEO indicates the restrictions from OCC are not due to new developments. Sources for the article indicate uncertainty for the reason. Could be a bureaucratic reaction to criticism the OCC was slow to catch on to the issue or that the agency went too lightly on the bank.
12/9 – Wall Street Journal – Wells Fargo Likely Face Regulator Downgrade, harming Its Prospects – OCC may be downgrading Wells’ rating under the Community Reinvestment Act. This would be another round of extra-judicial punishment for the fake account fiasco.