Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Accounting for donated medicine drawing regulatory attention: California A.G. files 3 cease and desist orders.

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Image courtesy of Adobe Stock.

The California Attorney General has taken exception to the valuation of donated medicine by three large charities.

In March 2018 MAP International, Food for the Poor, and Catholic Medical Mission Board were served with cease and desist orders insisting the charities cease using their claims of extremely high program service percentages. The AG also seeks to revoke charitable registration status in the state for MAP and FftP. The cease and desist orders seek to impose substantial fines on the charities.

The AG also claims that FftP incorrectly applied joint cost allocation.

The filed actions alleged that financial reporting for the years 2012 through 2015 is incorrect. This would include the audited financial statements, 990s, and RRF-1s (for MAP and FftP).

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Written by Jim Ulvog

March 20, 2018, 8:33 am at 8:33 am

Posted in Accounting, Audits

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New CPE requirement in California for CPAs who only perform preparation engagements

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Image courtesy of dollarphotoclub before merger with Adobe Stock.

Big news from CBA if the highest level of service you provide clients is a preparation engagement.

First, if you don’t perform compilations, reviews, audits, or other services covered by peer review, you don’t need to get a peer review.

Second, there is a specific CPE requirement:  4 hours in fraud education and 8 hours in prep or A&A.

The following article from the California Board of Accountancy, quoted with permission, provides more detailed explanation.  Since it is quoted verbatim, I won’t put quotes around the entire article.

 

NEW CONTINUING EDUCATION REQUIREMENT FOR PREPARATION ENGAGEMENTS

CPAs who perform preparation engagements as their highest level of service are subject to a new continuing education (CE) requirement.

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Written by Jim Ulvog

February 19, 2018, 7:57 am at 7:57 am

How to stay away from the most popular ways to get in trouble with the California Board of Accountancy.

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Don’t send one of these to CBA unnecessarily. Image courtesy of Adobe Stock.

These must be the preferred ways CPAs pick to get in trouble with the regulators because the board of accountancy says these are the three most common reasons they issue monetary penalties.

What are the three most popular ways to draw a fine from CBA?

  • Don’t get minimum of 20 hours each year of your license term or don’t get 12 of those hours in technical topics.
  • Ignore a formal inquiry from CBA.
  • Don’t submit that Peer Review Reporting Form with your license renewal.

For more detail, check out the following article, quoted with permission, from the California Board of Accountancy.  Since it is quoted verbatim, I won’t put quotes around the entire article.

 

IT’S EASY TO AVOID CBA CITATIONS

To help increase awareness of CBA requirements and prevent licensees from receiving a citation, below are the top three violations that led to a citation in the previous fiscal year. Citations are posted on the CBA website and may include an administrative fine of $100 to $5,000.

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Written by Jim Ulvog

February 16, 2018, 5:00 am at 5:00 am

Another round of disciplinary actions from California Board of Accountancy

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The firms that make up the following list were not traveling on the above highway. Image courtesy of Adobe Stock.

Starting with the newest Update report for Fall 2017 (#85), the California Board of Accountancy has stopped listing the underlying problem leading to disciplinary action. This means it only took 16 pages to list the 44 actions reported currently. It also seems the CBA is listing actions against firms and the practitioner together.

This means the cringe inducing details are not immediately visible, even though the full disciplinary reports are public records and publicly available. I didn’t bother to take the time to research the reports.

I have tallied the current batch of discipline cases. Underlying problem is inferred by me based on the comments in the newsletter. I haven’t looked up any of the cases or looked up the reg sections cited for discipline. So, with those caveats, here are my inferences of the current disciplinary actions:

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Written by Jim Ulvog

February 7, 2018, 7:45 am at 7:45 am

Fed imposes stiff sanctions on Wells Fargo

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Photo at Wells Fargo San Diego museum in January 2018 by James Ulvog.

The Federal Reserve will prohibit Wells Fargo from growing in size past its $1.95 trillion asset base in place as of 12/31/17. That means any gains from new deposits must be offset by selling off other assets and liquidating some liabilities.

In addition, the bank will be replacing three directors by April who previously announced their retirement and replacing another director by December 2018.

Article at Wall Street Journal by Ryan Tracy and Emily Glazer, Wells Fargo’s Growth Will Be Limited, Directors to Be Replaced After Fed Cites “Abuses”, provides more details.

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Written by Jim Ulvog

February 5, 2018, 7:21 am at 7:21 am

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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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Image courtesy of Adobe Stock

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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