Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Posts Tagged ‘audit methodology

IT tools for auditors – Extract from PR Prompts!, part 4

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Description of research tools for auditors working in the IT area is courtesy of the AICPA’s Spring 2020 PR Prompts! newsletter. The format of the newsletter is set up to allow firms who provide peer reviews to put their logo and branding information at the top of the newsletter, print it, and send it to all their clients.

Since the AICPA is making it available for firms to use in their marketing, an extract follows.

For ease of reading, following text will not be put into quotation marks even though it is a verbatim quote from the AICPA.

 

Digital Assets

The digital asset ecosystem is changing and expanding rapidly. For financial statement preparers or auditors, either currently in the digital asset ecosystem, or considering entering it, the AICPA’s Digital Assets Working Group developed a practice aid, which includes vital information for you on how to account for and audit digital assets. It is intended for those with a fundamental knowledge of blockchain technology, is based on existing professional literature and the experience of members of the Digital Assets Working Group and is specific to U.S. GAAP and GAAS.

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Written by Jim Ulvog

June 11, 2020, 7:15 am at 7:15 am

Posted in Audits

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Resources for auditors during pandemic – Extract from PR Prompts!, part 3

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Image courtesy of Adobe Stock.

Following news on variety of audit issues is courtesy of the AICPA’s Spring 2020 PR Prompts! newsletter. The format of the newsletter is set up to allow firms who provide peer reviews to put their logo and branding information at the top of the newsletter, print it, and send it to all their clients.

Since the AICPA is making it available for firms to use in their marketing, an extract follows.

For ease of reading, following text will not be put into quotation marks even though it is a verbatim quote from the AICPA.

 

Resources from the AICPA’s Enhancing Audit Quality(EAQ) Initiative

Through the EAQ,  the AICPA shares resources and education to help you avoid the most common audit quality issues. Check out the latest resources:

COVID-19 Audit Implications

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Written by Jim Ulvog

June 8, 2020, 6:45 am at 6:45 am

Deferral of SASs #134 to #140 – Extract from PR Prompts!, part 2

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Following news on deferral of a long string of major SASs is courtesy of the AICPA’s Spring 2020 PR Prompts! newsletter. The format of the newsletter is set up to allow firms who provide peer reviews to put their logo and branding information at the top of the newsletter, print it, and send it to all their clients.

Since the AICPA is making it available for firms to use in their marketing, an extract follows.

For ease of reading, following text will not be put into quotation marks even though it is a verbatim quote from the AICPA.

Ready, Set, Implement: News on A&A Standards

Deferral of effective dates for SAS Nos. 134-140

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Written by Jim Ulvog

June 4, 2020, 6:50 am at 6:50 am

Posted in Audits

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News For CPAs During The Pandemic: AICPA guidance on accounting, reporting, and auditing – 4/10

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Guidance from AICPA can help with financial reporting and auditing. Also, there is a need for COBOL programmers.

If you had not noticed, the California Society of CPAs is offering a lot of CPE webcasts on tax and auditing issues during the pandemic. Many of them are free. Yeah, no charge CPE. How ‘bout that?

4/8/20 – Journal of Accountancy – AICPA issues audit and accounting guidance FAQs on COVID-19 – The AICPA published a 21 page document on accounting and audit issues: Audit Matters and Auditor Reporting Issues Related to COVID19

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Written by Jim Ulvog

April 10, 2020, 8:33 am at 8:33 am

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 Read the rest of this entry »

Written by Jim Ulvog

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

Financial reporting issues to consider during early stages of COVID-19 pandemic

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A range of financial reporting issues need careful attention during the COVID-19 pandemic. These issues are old news in the professional literature but need to be considered more intentionally.

The AICPA published a special report on March 18, 2020. The report, Consequences of COVID-19 Financial Reporting Considerations, was drafted by the Center for Plain English Accounting and is available at no charge.

On 3/14/29, I was Pondering impact of coronavirus prevention steps on financial statements. An auditor’s perspective. The AICPA report goes into far more detail.

Here, in bullet point italics, are the items mentioned for your focus, with a few of my comments for highlight:

  • Subsequent Events

Type II subsequent events are those which take place after the financial statement date which are so significant that they warrant mention in the financial statements to keep those statements from being misleading.

  • Subsequent Events – Market-Value Declines

A technical Q&A (TQA 9070.06) indicates there are some occasions that can arise which warrant adjusting financial statements based on subsequent declines in market value.

  • Subsequent Events – COVID-19

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Written by Jim Ulvog

March 26, 2020, 8:08 am at 8:08 am

“Resources from the AICPA’s Enhancing Audit Quality (EAQ) Initiative” – PR Prompts!, part 6

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In November 2019, the AICPA published the first of a new semi-annual newsletter, PR Prompts!, designed to help CPAs keep current on peer review news.

The AICPA gave me permission to reprint portions of the newsletter on my blog.

This is the last of six posts to help you stay up to date.

The following comment is quoted verbatim. For ease of reading it will not be set inside quotation marks:

 

Resources from the AICPA’s Enhancing Audit Quality (EAQ) Initiative

Through the EAQ, the AICPA provides resources and education to help you avoid the most common audit quality issues. Check out their latest resources:

Risk Assessment and Response

In a survey of peer reviewers, over 50% of firms reviewed failed to comply with the risk assessment standards. Access free risk assessment tools, including industry-specific resources, to help you avoid common issues.

Also, watch the EAQ’s ENGAGE conference presentation with methodology providers to learn how to properly apply their methodologies and avoid the areas creating the most challenges for practitioners.

Internal Control

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Written by Jim Ulvog

January 20, 2020, 6:00 am at 6:00 am

“Auditor Reporting” – PR Prompts!, part 5

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A complete overhaul of the auditor’s report for audits of 12/31/20 financial statements is going to be a very big deal. Please tune in to the new standards!

In November 2019, the AICPA published the first of a new semi-annual newsletter, PR Prompts!, designed to help CPAs keep current on peer review news.

The AICPA gave me permission to reprint portions of the newsletter on my blog.

This is the fifth of six posts to help you stay up to date.

I have looked at this page on the AICPA website. It is quite helpful. If you provide audits to your clients, it would be worth your time to find, browse, and bookmark this page.

The following comment is quoted verbatim. For ease of reading it will not be set inside quotation marks:

 

Auditor Reporting

The form and content of the auditor’s reports will change substantively which will be effective for audits of financial statements for periods ending on or after December 15, 2020. Statement on Auditing Standards (SAS) No. 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements, was issued in May 2019. SAS No. 134 includes a new AU-C section 701, Communicating Key Audit Matters in the Independent Auditor’s Report, and replaces the following AU-C sections in AICPA Professional Standards:

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Written by Jim Ulvog

January 13, 2020, 6:00 am at 6:00 am

“Auditing Standards Issued in 2019: Information and Resources” – PR Prompts!, part 4

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Image courtesy of Adobe Stock.

In November 2019, the AICPA published the first of a new semi-annual newsletter, PR Prompts!, designed to help CPAs keep current on peer review news.

The AICPA gave me permission to reprint portions of the newsletter on my blog.

This is the fourth of six posts to help you stay up to date.

 

I have looked at the following page on the AICPA website. It is quite helpful. If you provide audits to your clients, it would be worth your time to find, browse, and bookmark this page.

The following comment is quoted verbatim. For ease of reading it will not be set inside quotation marks:

 

Auditing Standards Issued in 2019: Information and Resources

This is an exciting time in the auditing space. Standards are changing to keep up with today’s business environment. To set you up for success, we’ve gathered resources on auditing standards that include on changes to the auditing reporting standard, the employee benefit plan auditing standard and the other information standard. These include backgrounders, FAQs and news articles.

 

As mentioned at the top of this post, this article is reprinted with permission of the AICPA.

 

Written by Jim Ulvog

January 6, 2020, 6:00 am at 6:00 am

“Single Audits – 2019 Compliance Supplement” – PR Prompts!, part 3

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Image courtesy of Adobe Stock.

In November 2019, the AICPA published the first of a new semi-annual newsletter, PR Prompts!, designed to help CPAs keep current on peer review news.

The AICPA gave me permission to reprint portions of the newsletter on my blog.

This is the third of six posts to help you stay up to date.

The following comment is quoted verbatim. For ease of reading it will not be set inside quotation marks:

 

Single Audits – 2019 Compliance Supplement

The 2019 Compliance Supplement (Supplement) used for conducting single audits includes extensive changes from prior years. The most significant change relates to the Office of Management and Budget (OMB) requirement for federal agencies to limit the number of requirements identified as being subject to the compliance audit; it was decreased from a maximum of 12 to 6. Read the rest of this entry »

Written by Jim Ulvog

December 23, 2019, 6:00 am at 6:00 am

New SAS and SSAE modify definition of materiality

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The Auditing Standards Board has issued SAS 138 and SSAE 20 which change the definition of materiality. Under current audit standards, the materiality definition matches what is currently in use by IASB and IAASB. The revision will get the definition to match what is currently used by the American legal system, PCAOB, SEC, and FASB.

The new definition:

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Written by Jim Ulvog

December 5, 2019, 12:52 pm at 12:52 pm

Posted in Audits

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Average cost of health insurance plan. Reference point for your next analytical review of health insurance costs.

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Here are some tidbits for your next analytical review of health insurance costs during an audit or review.

From annual survey by Kaiser Family Foundation of employer provided health insurance:

  • $20,576 – average annual cost of family plan in 2019
  • $19,616 – average annual cost of family plan in 2018
  • 71% – average portion of costs paid by employer

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Written by Jim Ulvog

September 25, 2019, 10:50 am at 10:50 am

Peer review tips – tidbits from the 2019 Peer Review Conference

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If you get a peer review of your attestation practice, I heard a few ideas in the AICPA’s Peer Review Conference you might want to know about.  I attended this year’s conference via webcast. First time I’ve gone through a 16 hour class online. The technology worked acceptably well. Saving the travel time was wonderful.

Annual update to Peer Review Information form

Starting next year, May 2020 specifically, every firm enrolled in the peer review program will need to update the Peer Review Information (PRI) form annually. Each firm will have to log into PRIMA and update the list of the type of engagements performed.

Not sure the reasons this change is going into effect. One component is so AICPA can monitor for changes the nature of a firm’s client base to see if a higher level of service is needed.

Focus areas in system reviews

The AICPA surveyed CPAs who provide a large number of reviews asking them what portion of their peer review clients had significant struggles with complying with the risk assessment standards. Read the rest of this entry »

Written by Jim Ulvog

August 8, 2019, 7:00 am at 7:00 am

New audit standards for ERISA audits and other information in annual reports (SAS 136, 137)

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Two more audit standards have been issued by the Auditing Standards Board addressing ERISA audits and other information in an annual report:

  • SAS 136Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA
  • SAS 137The Auditor’s Responsibilities Relating to Other Information Included in Annual Reports.

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Written by Jim Ulvog

July 17, 2019, 8:34 am at 8:34 am

Posted in Audits

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Comments from recent continuing education classes worth repeating: not-for-profit entities.

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Here are some fun or interesting or useful tidbits from the October 2018 A&A and the June 2019 Not-for-profit conferences presented by California Society of CPAs that apply to not-for-profit organizations.

Previous posts had comments on

Non-attest services and Yellow Book independence. Everyone probably knows that charities with more than $2 million of revenue who are registered with the California Attorney General must have an audit. Excluded from the requirement would be religious organizations, who are exempt from registering with the AG.

That requirement was created by the Nonprofit Integrity Act of 2004, so it’s old news.

The best payoff from attending CPE conferences is to compare every piece of information you hear to what you think you know. So, here is one of the big rewards for me attending this class…

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Written by Jim Ulvog

July 5, 2019, 8:36 am at 8:36 am

Posted in Accounting, Audits

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