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ACCOUNTING AND SEC HEADLINES:
Checklists – New Edition of US GAAP Disclosure Checklists Published
We have published new editions our General U.S. GAAP Financial Statement Disclosures Checklist
, the General U.S. GAAP Interim Financial Statement Disclosures Checklist
, and our various Industry-Specific Disclosures Checklists
. These new editions have been updated as necessary for the disclosure and presentation requirements in effect as of December 31, 2019.
These checklists include changes made by the FASB to the FASB Accounting Standards Codification™
(Codification) since the issuance of our checklists dated September 30, 2019, through Accounting Standards Update (ASU) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes
Checklists – New Edition of AutoCheck U.S. GAAP Disclosures Checklist and AutoCheck U.S. GAAP Interim Disclosures Checklist Published
The AutoCheck U.S. GAAP Disclosures Checklist
and the AutoCheck U.S. GAAP Interim Disclosures Checklist
have been updated for the disclosure and presentation requirements in effect as of December 31, 2019.
These checklists include changes made by the FASB to the Codification since the issuance of our checklists dated September 30, 2019, through ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses
. These checklists will be updated for ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes
in January 2020.
Auditor Independence – SEC Proposes to Codify Certain Consultations and Modernize Auditor Independence Rules
The SEC announced that it is proposing amendments to codify certain staff consultations and modernize certain aspects of its auditor independence framework. The proposed amendments would update select aspects of the nearly two-decade-old auditor independence rule set to more effectively structure the independence rules and analysis so that relationships and services that would not pose threats to an auditor’s objectivity and impartiality do not trigger non-substantive rule breaches or potentially time consuming audit committee review of non-substantive matters.
Since the initial adoption of the auditor independence framework in 2000 and revisions in 2003, there have been significant changes in the capital markets and those who participate in them. The proposed amendments primarily focus on fact patterns presented to Commission staff through consultations that involve a relationship with, or services provided to, an entity that has little or no relationship with the entity under audit, and no relationship to the engagement team conducting the audit. In these scenarios, the staff regularly observes that the audit firm is objective and impartial and, as a result, does not object to their continuing the audit relationship with the audit client.
The public comment period will remain open for 60 days following publication of the proposing release in the Federal Regist
Checklists – New Editions of Industry-Specific Disclosures Checklists Published
We have published new editions of various Industry-Specific Disclosures Checklists
. New editions of the following industry-specific checklists have been published with disclosure requirements in effect as of December 31, 2019:
AUDITING AND INTERNAL CONTROLS HEADLINES:
Not-for-Profit Entities – 2020 Edition of CCH’s Not-for-Profit Reporting Guide Published
- Brokers and dealers;
- Depository and lending institutions;
- Employee benefit plans;
- Health care entities;
- Not-for-profit entities;
- Oil and gas producing entities; and
- Real estate.
We have published the 2020 edition of CCH’s Not-for-Profit Reporting Guide
. This guide is a vital resource that puts expert analysis and explanations of not-for-profit accounting, financial reporting, and regulatory reporting at your fingertips.
This new edition has been reorganized and updated throughout with the very latest information from the FASB’s ASC and industry best practices that may assist preparers and users of not-for-profit organization financial statements. Not-for-Profit Reporting includes illustrative example financial statements for a not-for-profit organization.
This edition includes illustrative example financial statements for a not-for-profit organization. Appendix A presents a comprehensive example not-for-profit-entity set of financial statements with notes after implementation of ASU 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities
, and 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash
. Appendices B, C, and E present example financial statements. Appendix E illustrates the direct method of presenting the statement of cash flow. Appendices D1 and D2 illustrate presentation of functional expenses as a basic financial statement and as part of the statement of activity, respectively.
CPA Exam – AICPA Targets Technology and Core Skills in CPA Exam Practice Analysis
The AICPA has issued the Exposure Draft and Invitation to Comment, Maintaining the Relevance of the Uniform CPA Examination
, that also includes the AICPA 2019 Practice Analysis Report
. The Exposure Draft proposes amendments to the CPA Exam Blueprints that would focus on CPA core knowledge and skills. Comments are due by April 30, 2020.
The Exposure Draft incorporates feedback from 80 AICPA volunteer subject matter experts in addition to input from more than 130 CPAs who directly supervise newly licensed CPAs. The resulting Exposure Draft details major themes from the research along with proposed Uniform CPA Exam content additions, changes, and deletions. The goal is for the updates to appear in the CPA Exam Blueprints
no later than December 31, 2020. The 16-hour, four-section structure will remain the same.
At the same time, the AICPA and the National Association of State Boards of Accountancy (NASBA) are collaborating on CPA Evolution, a separate initiative that focuses on the future of the licensure model and the transformation of the profession as it relates to technology.
According to Michael Decker, AICPA vice president of examinations, the “last practice analysis laid a solid foundation with the creation of the CPA Exam Blueprints and the existing Exam structure.” Further, during “this year’s multi-phased research, we used a targeted approach that included working with firms of all sizes and their insights into technology, data analytics, and core competencies will help us ensure the Exam remains current and relevant.”
The Invitation to Comment gives stakeholders an opportunity to provide additional input on related topics or potential Uniform CPA Exam changes that are longer-term proposals and require further considerations. Given the need for more research, there are no definitive plans or anticipated implementation timelines.
Themes identified during the practice analysis included the following:
- The current Uniform CPA Exam structure and Blueprints are well-positioned to accept changes that reflect a greater assessment of technology and data analytics;
- Newly licensed CPAs must have an understanding of business processes, information systems, data flows and internal controls;
- Newly licensed CPAs must have a digital and data-driven mindset; and
- The profession is placing greater reliance on SOC reports as clients are outsourcing more accounting processes, which impacts the work of newly licensed CPAs.
The AICPA proposes 46 changes to the CPA Exam Blueprints
that include content to be added to the Exam in response to the identified themes. They also address content either to be removed or assessed at a different skill level to better focus on the core knowledge and skills required of newly licensed CPAs to protect the public interest.
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