Webcast on Proposed Guidance for Grants, Contributions
On September 11, FASB plans to hold a webcast to explain its proposed guidance for not-for-profit entities and some business enterprises on recording grants and other funds received from foundations and government bodies. The proposal would clarify the difference between restrictions and donor-imposed conditions on a gift or grant and explain which arrangements qualify as exchanges. The distinction is important to not-for-profit entities, and some for-profit enterprises, because the categorization of a grant affects when the revenue can be recognized in the financial statements. The webcast is scheduled to feature Harold Monk, FASB Board Member, Jeffrey Mechanick, FASB assistant director–nonpublic entities, Richard Cole, supervising project manager, and Elizabeth Gagnon, project manager.
Audits of Broker-Dealers Still Deficient
The PCAOB reported that the widespread problems it previously found in the audits of broker-dealers have continued in the past year. All but two of the 75 accounting firms inspected for the audits they did of broker-dealers in 2016 were have found by the PCAOB to have been deficient. A year earlier, only three inspected firms escaped criticism. “The board continues to be concerned by the nature and number of deficiencies identified by the inspections,” the report said. “Many of these deficiencies relate to the fundamentals of audit, examination, or review procedures and are similar to those described in previous annual reports. The board is also concerned that, to some extent, the identified deficiencies appear to indicate disregard for very specific requirements of the rules and standards.”
Comment Period Extended for Exposure Draft on ERISA Plan Audits
The AICPA extended to September 29 the deadline for comment letters on its proposed standard addressing an auditor’s responsibility for issuing a report on a benefit plan’s financial statements. Under the proposed guidance, the report should discuss the limits a plan’s executives or administrator may have imposed on the auditor. Section 103(a)(3)(C) of the Employee Retirement Income Security Act of 1974 (ERISA) lets management or an administrator exclude from the audit assets held by a bank, trust company, or insurer. In its research of benefit plans and the quality of their financial reporting, the Department of Labor found that many plan beneficiaries do not understand the financial statements or the limits imposed on examinations by external auditors.