Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Archive for the ‘Accounting’ Category

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

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Image courtesy of Dollar Photo Club

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?

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Written by Jim Ulvog

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

Posted in Accounting, Audits

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Comments on changes to financial statement presentation during 2017 CalCPA Not-for-profit conference, part 2

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Image courtesy of Adobe Stock.

Here are a few of the comments from CalCPA’s May 24, 2017 Not-for-profit conference about major overhaul of financial statement presentation that I thought would be of interest to others in the nonprofit community. This post addresses ASU 2016-14. Part 1 addressed tax, revenue recognition, and single audit update sessions.

(Cross-posted from my other blog, Nonprofit Update.)

Accounting update – The first presenter is a FASB staff person. While comments made are the presenter’s opinions, we ought to pay attention to such a person’s opinions. Another disclaimer is the following summaries are from me.

ASU 2016-14 is the document changing not-for-profit financial statement presentation. We all need to get to the place where ASU 2016-14 or 16-14 easily rolls off our tongues.

ASU 2016-14:

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Written by Jim Ulvog

June 2, 2017, 15:52 pm at 3:52 pm

Posted in Accounting

Brain stretching accounting articles for CPAs

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

Here are a few articles to stretch your brain when you are ready for some mental exercise:

  • Is the double-entry accounting system broken?
  • What is the recidivism rate for white-collar criminals and how could that affect my audits?
  • What  possible changes are on the horizon for the audit opinion?

5/17/17 – Tom Selling at The Accounting Onion – Double-Entry Accounting and Modern Times – As a real brain stretcher, consider whether our double-entry accounting system is fundamentally broken.

Work with me a minute while I highlight and summarize a few ideas from the article.

A basic concept of double-entry accounting is that debits on the left side of the balance sheet represent all the assets of the entity. This includes all of the resources that are available for the entity to use in order to make money and all the assets against which creditors have a claim.

On the credit side, liabilities represent all of the claims against the organization. The equity section represents the value that belongs to the owners.

Prof. Selling points out there’s a variety of problems with using the statement of financial position as a representation of economic reality.

He points out and then moves past the idea that not all debits are assets and not all credits are liabilities. That’s easy to understand.

More significantly is that not all assets are reflected as debits and not all liabilities are reflected as credits.

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Written by Jim Ulvog

June 1, 2017, 9:43 am at 9:43 am

Posted in Accounting, Audits

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Helpful comments from 2017 CalCPA Not-for-profit conference, part 1

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Image courtesy of Adobe Stock.

Here are a few of the comments from the May 24, 2017 Not-for-profit conference presented by California Society of CPAs that I thought would be of interest to others in the nonprofit community. Since all comments are the opinion of the speaker, neither their name nor organization will be mentioned. The ideas mentioned can stand or fall on their own.

This is the first of two posts. The next discussion will address changes in financial statement presentation outlined in ASU 2016-14. In this post: tax, revenue recognition, and single audit.

(Cross-posted from my other blog, Nonprofit Update.)

Tax update:

  • It might just be possible that filing a form 1023 or 1023-EZ is so easy that people can get exempt status for an organization without knowing the requirements to properly operate a charity and maintain exempt status. In examinations to follow-up on exempt status, the IRS is finding a lot of charities are out of compliance.
  • One of several focuses of the IRS is filing of FBARs, those forms used to report overseas bank accounts. One ripple effect of chasing money laundering is the impact on charities who have overseas accounts. Even though there is minimal risk of those accounts being used for tax evasion the FBAR filing requirement still apply. As a reminder, the deadline for filing FBARs is now April 15 with a six-month extension available.

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Written by Jim Ulvog

May 30, 2017, 7:46 am at 7:46 am

Posted in Accounting, Audits

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Not-for-profit risk alert for 2017 is available

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Cover of 2017 risk alert from the AICPA, used under fair use since I’m urging you to buy their product.

The 2017 risk alert for non-profits is available from the AICPA.

Highlighted updates this year include:

  • AUS 2016-14 – New financial statement presentation
  • ASU 2016-02 – Leases
  • SAS 132 – Going concern

If you don’t feel overwhelmed, you haven’t been paying close enough attention to recent pronouncements. If so, the risk alert will help you catch up.

If you are feeling overwhelmed, the risk alert is a great first step towards to getting comfortable.

Written by Jim Ulvog

May 25, 2017, 21:01 pm at 9:01 pm

Posted in Accounting, Audits

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IFRS adoption is not quite as widespread as you think

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Image courtesy of Adobe Stock.

A presenter at the CalCPA’s Accounting and Auditing Conference on April 25, 2017 said IFRS has been adopted by over 120 countries, essentially every country on the planet with the holdout exceptions of:

  • U.S.
  • China
  • Japan
  • India

The inference is the overwhelming majority of the stocks in the world are reported on a consistent basis.

The US is the main stubborn hold out. He suggests China is holding back to see what the US does. Ripple effect is that if the US continues to hold out, China will too. If we adopt, China will too.

There is still the uncomfortable reality that each country chooses which aspects of IFRS to adopt or reject.

Apart from that precisely-consistent-across-the-planet idea, the comment that only a few countries have not adopted and eeeeevryone else is doing it makes it sound like most stocks are reported on IFRS.

I checked.

That isn’t the case.

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Written by Jim Ulvog

April 28, 2017, 7:29 am at 7:29 am

Posted in Accounting

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Like a persistent vampire in a horribly bad horror movie, IFRS just won’t stay dead in the U.S.

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Image courtesy of Adobe Stock.

I thought IFRS in the US was dead. In case you didn’t know, I have a fairly strong opinion on the issue.

A presenter at the CalCPA’s Accounting and Auditing Conference on April 25, 2017 had the following comment on IFRS at the end of the presentation:

Death, taxes, cockroaches, and IFRS aren’t going away.

My immediate thought:

Unfortunately, that now seems to be true.

IFRS is baaaack

He perceives the pendulum of discussion on IFRS is swinging back to the topic being on the table.

His comments consistently contained the inference that IFRS is one body of knowledge, consistent in its application in every country across the planet that has adopted the rules.

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Written by Jim Ulvog

April 26, 2017, 7:15 am at 7:15 am

Posted in Accounting, Audits

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