Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Before you wish for the feds to take over public accounting…

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Sometimes I see suggestions that the solution to the issues in our current model of CPAs auditing their clients is to have the government take over the auditing role.

Before you start wishing for that too hard, let me mention just three things I’ve noticed of late:

  • The IRS’s system for NPOs to electronically file their 990s will be down for January and February while the IRS updates their systems for the new filing year.  See my post here.
  • The IRS’s system for accepting 990-Ns (used by small NPOs to notify the IRS that said NPO is still alive and kicking) was off-line last Wednesday when I filed a 990-N for one of my clients.  The system will be up on 1-9-12.  Those forms can only be filed electronically.  Reason the system was down?  To allow the IRS to update their systems.
  • The Congress extended the payroll tax reduction from 12-31-11 through the end of February. Not March, which would be the end of a quarter, but February.  I’ll not get into the politics of the issue.  Other bloggers can do that quite well and will cover the issue from your chosen political perspective.  Instead, just ponder the mess created for every employer in the country to have two withhold rates within a quarter.

Can you picture Amazon going off-line for a weekend while they update their software? How about Paychex or ADP being closed from New Year’s Day through 1-9-12 while they update their databases for the new year?

Ah, but that’s different I hear you say.  Tax enforcement is different from payroll processing. 

I get it.  How are they different?

Payroll processing and book orders deal with current transactions and have to be taken care of right now.  Auditing is after the fact and not time critical.

Just like tax enforcement.  So, my analogy is weak, but that doesn’t affect the underlying issue.

Here’s my point:  Picture dealing with auditors coming from that kind of environment with rules created by those systems.

Written by Jim Ulvog

January 9, 2012, 8:52 am at 8:52 am

Posted in Audits

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