Podcast Series Launched on Implementation of Revenue Standard
FASB began a series of podcasts on May 11 about its landmark revenue recognition standard. The aim of the podcasts is to aid companies that are implementing the standard. The first podcast addresses issues for aerospace and defense companies, and while the sessions are planned to continue at a pace of once a month through an initial stage, no firm number of sessions has been determined. “We’ll see how the first one goes,” FASB member Marc Siegel said. “We’re hoping to do something for software after that.” FASB published its landmark revenue recognition standard in May 2014 as Accounting Standards Update (ASU) 2014-09, Revenue From Contracts With Customers (Topic 606). The standard goes into effect for public companies in 2018. Privately held businesses will adopt it in 2019.
Investors Left Off of Insurance Transition Resource Group
The IASB said its advisory panel for the planned standard to overhaul insurance accounting will not include investors or analysts. Instead, the group, to be called the Transition Resource Group, will be made up of auditors and representatives from insurance companies. The goal, the IASB said, is for the group to handle questions about putting the new standard into practice and provide a forum “for stakeholders to learn about implementation from others involved in implementation,” an IASB spokesperson said in an email. “As such we are looking for members that will be able to discuss implementation issues.” Regulators will be at the meetings of the group as observers, and the IASB plans a “separate stream of outreach” to investors and analysts, the spokesperson said. “The focus there is on helping users of financial statements to understand what information will be available from the new standard, and how it changes from today. So, given the different focus, we are talking to them separately,” the spokesperson said.
Advances in Technology Present Opportunities and Challenges for Auditors
During a recent conference, PCAOB member Steven Harris said that advances in technology are facilitating audit work, but auditors must be careful about using technology. He emphasized that technological tools do not substitute for an auditor’s knowledge, skepticism, and judgment. Accounting firms have been spending about $3 billion to $5 billion a year on technology, according to a recent report cited by the AICPA, allowing major accounting firms to enhance audits by automating time-consuming manual and rote tasks. But Harris said the effect of technology on the future of the audit is yet to be determined. “I applaud the profession for seeking to innovate the audit by adding these tools,” Harris said at the PCAOB-American Accounting Association (AAA) Annual Meeting in Washington, D.C., on April 20. “As powerful as these tools are, or are expected to become, they nonetheless are not substitutes for the auditor’s knowledge, judgment, and exercise of professional skepticism.”
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