Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Free update on new and recent accounting rules from CCH

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For a summary of the accounting rules released in 2017 and the most significant new rules from 2016, 2015, and 2014, check out A Closer Look: Discussion and Analysis of Current Accounting and Audit Issues.

CCH made this update available for free to people on their mailing list. I received permission from my editor at CCH to make it available on my blog.

Click here to download the 54 page newsletter. CCH does not  have a separate landing page for the document, so that link automatically downloads the newsletter. UPDATE:  If link didn’t work for you, please try again. I reloaded the link and it is working now.

For each of the accounting rules covered, the newsletter provides:

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Written by Jim Ulvog

January 29, 2018, 7:32 am at 7:32 am

Posted in Accounting

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Recap of indictments for KPMG inspection document fiasco

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For a year we have known of a fiasco at KPMG in which the firm obtained a list of PCAOB’s plans for inspecting KPMG audit workpapers. That information was floated around at the senior levels of the firm. Multiple people were fired.

This week, the Department of Justice unsealed indictments against four former KPMG employees and one former PCAOB employee.

Let’s dive into the details.

Players

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Written by Jim Ulvog

January 25, 2018, 9:47 am at 9:47 am

Posted in Audits

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Common deficiencies in audit engagements

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Let’s look at an eight point list of common deficiencies in audits for a quick check of the quality of our engagements. Often times those lists of common deficiencies run for pages and pages, essentially covering just about every major component of an audit. Those kinds of run-on lists don’t really help.

The AICPA’s Audit Risk Alert – General Accounting and Auditing Developments – 2017/18 provides a usable list of eight most common deficiencies identified in the recent peer reviews. Pondering this list provides a good way to do a self-check of your engagements.

Here is my paraphrase of the eight points:

Incorrect dating of the auditor’s report. The report date needs to match the release date which should be after the date all the documentation has been reviewed, the financial statements been prepared, and management has taken responsibility for the financial statements. The risk alert refers to AU-C 700.41.

Inadequate documentation of sampling methodology. AU-C 530 explains how to perform a sample. The methodology must be documented or the reviewer won’t be able to understand why the audit evidence is sufficient.

Insufficient audit documentation. Read the rest of this entry »

Written by Jim Ulvog

January 23, 2018, 12:08 pm at 12:08 pm

Posted in Audits

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What can you learn from a list of common auditor mistakes?

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You might learn a few things from a list of Forty Mistakes Auditors Make. If you can identify a few ways to improve your audit approach you could save time, improve the quality of your audit, and maybe reduce your risk.

Lots of auditors are in the midst of planning their year-end audits and reviews. Now would be a really good time to think about how to do better, more efficient work.

Writing at CPA Scribo, my friend Charles Hall outlines a number of goofs made by auditors. I’ll list a few tidbits in order to encourage you to read and ponder the whole list:

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Written by Jim Ulvog

January 15, 2018, 8:18 am at 8:18 am

Highlights of common deficiencies in compilation and review engagements

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There is a six page listing of common deficiencies identified during peer reviews of complexion and review engagements described in the AICPA’s new risk alert Developments in Preparation, compilation, and Review Engagements – 2017/2018.

Here are a few paraphrased highlights of the deficiencies. I will list items that I perceive are more serious or more pervasive.

You might consider reading through the full list and mentally comparing it to how you perform review and compilation engagements to see if there’s something you are missing.

Here are some of the highlights:

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Written by Jim Ulvog

January 10, 2018, 9:26 am at 9:26 am

Exposure drafts on major revisions to auditor’s report

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In November the AICPA released three exposure drafts which, if approved, would overhaul the auditor’s report.

Here are two articles to give you an overview:

An extremely condensed summary of the changes:

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Written by Jim Ulvog

December 21, 2017, 6:00 am at 6:00 am

Posted in Audits

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Reduced staffing and funding for the Exempt Organization division of the IRS

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Staffing and funding for the IRS division that oversees tax exempt organizations has fallen dramatically in the last six years or so.

According to a behind-the-paywall article at the Washington Post, the budget for the Exempt Organization division has dropped from $102M to $82M between 2011 and FY 2017. That is a $20M decline, or 19.6%.

For the same years, staffing has declined from 889 to 642, according to the article. That is a decline of 247 positions, or 27.8%.

(Cross-posted from my other blog, Nonprofit Update, because this issue is of interest to most CPAs.)

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Written by Jim Ulvog

December 20, 2017, 8:25 am at 8:25 am

Posted in Other stuff