Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Accountants coping with change. PTIN fees tossed out. New audit report from PCAOB.

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A few interesting reads for accountants.

  • 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?

You may have saved the dreary time of testing 5 or 20 attributes for each of those 60 items, but I’ll guess you have added the time of figuring out what happened on 100 or 200 exceptions and how to comprehend what those exceptions tell you. It will take focused thought to evaluate the impact those exceptions have on control testing and further audit procedures.

Understanding that huge number of exceptions is a task where you will need a human accountant.

Back to the article…Mr. Sheridan describes what changes in attitude we will need to make in order to thrive. We will need to be constantly learning, picking up new skills on the fly, and vastly improve our ‘soft skills.’

It may be a bumpy ride, but we are not all going to lose our jobs.

Update:  Article at Director of Finance on 6/8/17 makes the same case: How artificial intelligence is set to transform the accounting industry. Main point in this article is that freeing up our time on routine bookkeeping and spreadsheet analysis will allow us accountants to provide more and higher quality consulting services.

6/5/17 – Kelly Phillips Erb at Forbes – IRS Loses $175 Million Class Action Lawsuit – A federal trial court ruled that the fees charged to obtain or renew a PTIN are not allowed because there is not a “service or thing of value” which would otherwise allow charging a fee. Lacking the status of “service or thing of value” the fees fall into the category of regulatory licensing, which is an authority the Congress has not granted to the IRS.

Thus, the fees are not allowed and the judge ordered a refund to all members of the class action case.

6/5/17 – Journal of Accountancy – Federal Court strikes down PTIN fees, upholds PTINs – A more technical explanation of the ruling if you want to follow the details of the ruling and the citations.

The IRS has suspended the PTIN system while it consults with the Justice Department to figure out how to proceed.

6/1/17 – Journal of Accountancy – PCAOB expands auditors’ reporting duties – Auditors’ reports for most entities in the public company world will now have to address ‘critical audit matters’, which are

the most challenging, subjective, or complex aspects of the audit.

The items to be described are those which

  • were communicated to the audit committee,
  • relate to material items in the financials, and
  • meet that “challenging, subjective, or complex” threshold.

Discussion of CAMs need to identify the matter, explain why it is a CAM, what the auditor did to address the issue, and reference to the item in the financial statements.

A variety of other changes will be required in the auditors’ report.

My comments here are not sufficient to understand the changes if you work in the PCAOB world. For those of us who want to avoid ever touching that world, this summary gives a hint of what might be in our future.

Written by Jim Ulvog

June 8, 2017, 8:20 am at 8:20 am

Posted in Accounting, Audits

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