Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Articles for CPAs during the pandemic.

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Image courtesy of Dollar Photo Club before their merger into Adobe Stock.

Lots of articles are appearing that can help CPAs during the pandemic. There are new and depressingly creative ways this is going to affect financial reporting. I’ll start mentioning some of those articles that grab my attention and may be of interest to you.

3/31/20 – FEI Daily – How Lease Accounting Will Be Affected by Coronavirus – Turmoil in leasing office space will create lots of complications under ASC 842, the new lease accounting rules. Article calls attention to: rent concessions, discount rate, fair market values, impairment, partial termination, reassessment, full termination abandonment, and information delay.

3/29/20 – Forbes – For Higher Education, Nothing Matters More Than September In higher education there is a massive cash inflow in August/September and then again in December/January. Essentially a full year of income is received in those two time frames. If campuses are closed in late August or early September or if large volumes of students postpone college by one year, the impact on colleges and universities will be severe.

Two thoughts come to mind.

Imagine doing a going concern analysis with the possibility that a large portion or perhaps the vast majority of half the annual income will not appear over the course of 30 or 45 days.

Also, consider the contingent liability as of June 30 for refunds that will be expected by students who lost half a semester’s worth of room and board.

3/26/20 – Journal of Accountancy – How auditors can test inventory without a site visit – Creative ideas on how to perform required observation of inventory without being on site. Several old standby ideas, like cycle counts and rollforward/rollback.

Great discussion of how to use video observation and the downside of using that solution.

3/24/20 – Journal of Accountancy – Remote auditing come to forefront during pandemic – Good reminders on maintaining performance and documentation standards.  Tips on how to use video conferencing.

3/31/20 – Wall Street Journal – Coronavirus Forcing Home Buyers to Scramble to Close Deals – Insight to how the residential real estate industry is dealing with social distancing rules. Inspections, appraisals, and in-person closings are a few of the areas affected.

Written by Jim Ulvog

March 31, 2020, 10:54 am at 10:54 am

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