Accounting

Another reason IFRS are a really bad idea

2 Comments / Accounting /

All economies, cultures, and societies operate the same way, right?

I just realized that’s a fundamental underlying concept of IFRS. One set of accounting rules can be applied consistently in all nations regardless of the divergence of legal systems, regulatory structures, ethical frameworks, and general worldviews.

I realized that is yet one more severe conceptual failure in IFRS after reading Global Accounting Rules – An Unfeasible Aim by professors Stella Fearnley and Shyam Sunder. David Albrecht has reprinted their op-ed in his blog post, UK Prof and USA Prof Against Global Accounting Rules.

Here is the key aha! sentence for me: …

Another reason IFRS are a really bad ideaRead More »

Another reason IFRS are a really bad idea Read More »

Outline of “small gaap” visible in the distance and it is not a mirage

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The general shape of the Financial Reporting Framework for Small-and Medium-sized Entities appears in a FAQ from the AICPA: AICPA’s Other Comprehensive Basis of Accounting (“OCBOA”) Project – 2012.

The Financial Reporting Framework will be referred to as FRF. The AICPA describes it as

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Outline of “small gaap” visible in the distance and it is not a mirageRead More »

Outline of “small gaap” visible in the distance and it is not a mirage Read More »

Should churches disclose open tax years? Probably not.

Leave a Comment / Accounting, Audits /

I previously discussed that NPOs should disclose open tax years – TIS 5250.15.

TIS 5250.15 says that NPOs without any uncertain tax positions still have to disclose open tax years.

ASC 740-10-55-217 suggests this wording:

The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-US income tax examinations by tax authorities for years prior to 20×1.

Does that apply to churches?

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Should churches disclose open tax years? Probably not.Read More »

Should churches disclose open tax years? Probably not. Read More »

Two new financial reporting frameworks. FAF makes a decision on private company accounting rules. AICPA starts work on new accounting rules for private companies.

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FAF has approved a new organization that will determine what rules in GAAP don’t need to be applied to private companies.

The lead paragraph from Accounting Today:

The Financial Accounting Foundation’s board of trustees has voted to establish a new Private Company Council that will determine whether exceptions or modifications to U.S. GAAP for privately held companies are necessary.

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Two new financial reporting frameworks. FAF makes a decision on private company accounting rules. AICPA starts work on new accounting rules for private companies.Read More »

Two new financial reporting frameworks. FAF makes a decision on private company accounting rules. AICPA starts work on new accounting rules for private companies. Read More »

Range of U.S., Chinese, and Japanese regulators’ responses to fraud in today’s news – Olympus and Longtop

Leave a Comment / Accounting, Audits, Fraud /

Sometimes you get fun results when you look at two news articles side by side. Let’s look at the responses of securities regulators in the US, China, and Japan.  Hat tip to Going Concern for highlighting the articles.

Olympus fine

Japan’s securities market regulator proposed a fine of $2.5M against Olympus for conducting a $1.7 billion financial fraud that was spread over 13 years – Japan market watchdog recommends $2.5 million fine for Olympus.

Let’s put that proposed fine into perspective. All amounts will be in US dollars.

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Range of U.S., Chinese, and Japanese regulators’ responses to fraud in today’s news – Olympus and LongtopRead More »

Range of U.S., Chinese, and Japanese regulators’ responses to fraud in today’s news – Olympus and Longtop Read More »

Time to call the game on IFRS adoption and go home?

1 Comment / Accounting /

That’s the argument from Jim Peterson at Re:Balance in his post, Unification of Global Accounting Standards? It’s Time to Call Time.

He is responding to the three-post series from Tom Selling in The Accounting Onion that I summarized here.

Mr. Peterson thinks it’s time to call the game.

His reasons?

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Time to call the game on IFRS adoption and go home?Read More »

Time to call the game on IFRS adoption and go home? Read More »

10 invalid arguments in favor of IFRS

3 Comments / Accounting /

Professor Tom Selling provides presents 10 arguments provided by others who are in favor of IFRS and then explains why those arguments are incorrect.  Actually, he uses the word false.

He provides some background on how we got to this place and starts the discussion at 10 Claims in Support of IFRS Adoption by the SEC – and Why They are False (Part One of Three).

He continues the discussion in part two and part three.

His discussion is quite lengthy, so get a large, fresh cup of coffee or an extra-large soda and settle in for a long read. Even this recap will run quite long.

Here is his list with my extremely short paraphrase that won’t come close to doing justice. …

10 invalid arguments in favor of IFRSRead More »

10 invalid arguments in favor of IFRS Read More »

Arguments against IFRS adoption – 10 problems with claims in favor

1 Comment / Accounting /

Just a quick note for the large number of people landing on my blog today after searching for arguments against IFRS adoption – Be sure to visit Dr. Tom Sellings’ blog, The Accounting Onion. 

Three great posts that I plan to comment on later, but you might find valuable today. They were posted this week, so they  may not yet be sorting high on the search engines. Check out all three parts.

 Ten Claims in Support of IFRS Adoption by the SEC – and Why They are False

You will also want to visit Dr. David Albrecht’s blog, The Summa.

Some of my other posts are here, here, here, and here. Or use the search button on top right corner.

 

Arguments against IFRS adoption – 10 problems with claims in favor Read More »

Panel clears E&Y over Olympus auditing – far less to the report than meets the eye

Leave a Comment / Accounting, Audits, Fraud /

The Wall Street Journal headline says Panel Clears Ernst & Young in Olympus Probe.

Cool update on the investigation, huh? An official panel looks at E&Y’s role and concludes their auditing was okay.  They have no legal liability.

I was quite interested in the article.  Then found out the details.

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Panel clears E&Y over Olympus auditing – far less to the report than meets the eyeRead More »

Panel clears E&Y over Olympus auditing – far less to the report than meets the eye Read More »

Prosecutors file official charges in Olympus fiasco

1 Comment / Accounting, Fraud /

On Wednesday, prosecutors in Japan filed official charges against six individuals for their role in the accounting scandal at Olympus.  They also filed charges against Olympus.

The six charged include the ex-chairman, former executive vice president, former corporate auditor and three outside bankers.

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Prosecutors file official charges in Olympus fiascoRead More »

Prosecutors file official charges in Olympus fiasco Read More »

Primer for CPAs on testing the functional allocation

Leave a Comment / Accounting, Audits, Books you might enjoy /

I discuss the e-book Lies, White Lies, and Accounting Practices; Why nonprofit overhead doesn’t mean what you think it means by Saundra Schimmelpfennig at my other blog, Nonprofit Update.

If you are a CPA working with NPOs, check out my description of the book in my post, Q: Are overhead ratios the perfect measure of NPO efficiency and effectiveness?   You ought to get the book.

I suggest you buy a copy of the book for all of your staff who work with NPOs. Would be a cheap and fast way to provide some education on testing the functional allocation.

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Primer for CPAs on testing the functional allocationRead More »

Primer for CPAs on testing the functional allocation Read More »

Remember to book construction retainages

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On construction projects, there’s typically a retention held back from the contractor until the project is complete.  Scott Moglia at Nonprofit GPS has a reminder in Don’ Forget about your Retainages:

Remember to pick up the liability for retainage on construction projects.

When I read his post, I pondered a moment and realized that if all of my clients were  a baseball team, the lifetime team batting average for booking that liability when it exists is about 0.000.

Remember to look for, and record, retainages.

Read the full, short article.

Remember to book construction retainages Read More »

Olympus sues current board members and current president

1 Comment / Accounting, Fraud /

Yesterday I mentioned that Olympus was going after its former chairman and two others.

Today we found out who was sued.

A WSJ report indicates Olympus has sued 19 executives, including the current president and four current directors who are also senior executives over the fiasco of hiding a $1.7M loss. 

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Olympus sues current board members and current presidentRead More »

Olympus sues current board members and current president Read More »