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IRS warns of criminals taking over preparers’ computers.
The IRS has warned tax professionals of a new wave of attacks that allow identity thieves to file fraudulent tax returns by remotely taking over tax preparers’ computers. IRS, state tax agencies, and the tax industry—working as partners in the Security Summit—recently launched the “Protect Your Clients; Protect Yourself” campaign to increase awareness that criminals are increasingly targeting tax professionals and the taxpayer data they possess.
Thieves have been able to access tax professionals’ computers and use remote technology to take control, accessing client data and completing and e-filing tax returns but directing refunds to criminals’ own accounts. Victims in the tax community learned of these thefts while reconciling e-file acknowledgements. The IRS has urged preparers to take defensive steps, including reviewing their computer settings, running a “deep scan” for viruses and malware, and strengthening passwords for both computer and software access.
Final rules adopted for swap data access.
On August 29, the SEC adopted rules to set up a process that lets regulators and other authorities have access to data on swap trades. Under Release No. 34-78716, agencies that want to get information from swap data repositories must sign a memorandum of understanding on safeguarding the confidentiality of the data. On request to the commission, U.S. banking regulators, the Department of Justice, the Commodity Futures Trading Commission (CFTC), the Financial Stability Oversight Council (FSOC), and other bodies deemed appropriate by the SEC can have this information. The SEC also has the authority to grant foreign banking, market, and futures regulators access to the data, as well as foreign ministries and central banks.
Disclosure debate blocks completion of technical corrections for revenue standard.
A debate among FASB members about some limited corrections to its revenue standard held up the finalization of the board’s overall package. At its August 31 weekly meeting, FASB planned a quick review to clear up some remaining issues about the landmark standard, but lingering questions on a well-worn topic—disclosures of remaining performance obligations in a customer contract—prevented the accounting board from confirming the planned revisions. There was no debate for the proposal’s eight other elements. FASB agreed to conduct more research before finalizing the disclosure exemptions.
Uncertainty clouds accounting treatment of not-for-profit grants.
Not-for-profit entities want more clarity about applying FASB’s revenue standard ahead of the 2019 implementation date. Charities, universities, foundations, and other organizations have sought guidance about how to recognize grants and similar contracts with government agencies and whether they should be characterized as exchanges or contributions. They also want to know how and when to distinguish between conditions and restrictions attached to contributions, which FASB calls “nonreciprocal” transactions. FASB used its August 31 weekly meeting to revisit the issue after adding it to its agenda in April. The board has yet to decide how it will resolve the questions raised.
More work needed in planned expansion of auditor’s report.
Despite several years of work to expand the auditor’s report to make it more useful for investors, the PCAOB still must perform a delicate balancing act in finalizing the rules by early 2017. Comment letters indicate that the PCAOB still has a way to go in finalizing the rules, given criticisms by companies, auditors, and investors on its latest plans to require auditors to communicate critical audit matters. “We continue to seriously question the need for this initiative,” Andres Gil, a director with the U.S. Chamber of Commerce, wrote on August 15.
Insurance standard will end “unacceptable” reporting practices.
The IASB’s long-awaited overhaul to insurance accounting will get rid of “unacceptable” current practices that make insurance company financial statements a leading source of investor frustrations, IASB Chairman Hans Hoogervorst said in a speech in Berlin on September 8, 2016. “The lack of comparability and the often poor quality of current accounting practices in the insurance industry around the world is clearly unacceptable,” he said. “Investors know it and the insurance industry itself knows it too and I am happy to say the industry is very supportive of us creating a new standard.” The IASB wrapped up deliberations in June, and the board’s research staff is currently drafting the final standard.
Guide clarifies updates in IFRS Taxonomy.
The IFRS Foundation has issued a guide to explain common practice content in the IFRS Taxonomy. The parent organization of IASB believes that the guide will help the public make more informed comment when the content of the IFRS Taxonomy is updated. “Entities and regulators do not need to add their own taxonomy elements for IFRS disclosures that are commonly disclosed across jurisdictions,” the guide noted. “This makes it easier for investors and other users of the IFRS Taxonomy to consume the data, as the number of elements that users would have to handle is significantly reduced.”