ASB Publishes New Auditor Reporting Standards
On May 8, the AICPA’s Auditing Standards Board (ASB) published a set of standards intended to improve auditor reporting. Statement on Auditing Standards (SAS) 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements, is largely based on an earlier exposure draft. The exposure draft, issued in November 2017, proposed several changes to the form and content of the auditor’s report. SAS 134 becomes effective for audits of financial statements for periods ending on or after December 15, 2020. Auditors may not adopt early.
New Accounting Rules on Conduit Debt Obligations Forthcoming
Governmental entities can expect new rules in late May on conduit debt obligations (CDO), the GASB has announced. CDOs, which are certain types of debt instruments issued by a state or local government to provide capital financing for a third party, are generally tax exempt, provided that they conform to relevant portions of the Internal Revenue Code. These financings are a way for not-for-profit organizations—for example, hospitals, nursing facilities, and educational institutions—to secure funding at tax-exempt rates. The new rules will define CDOs, establish guidance for recognition and measurement, and improve disclosures, GASB said in its quarterly report, released on May 2. GASB said it decided to revise the guidance after a review of its current rules found that governments issuing CDOs vary in how they report them, which adversely affects the comparability of financial statement information. The forthcoming rules will eliminate the option for government issuers to recognize CDOs as liabilities, the GASB said. It also will clarify accounting guidance often characterized in practice as leases associated with CDOs.
IFRS Foundation Issues Fraud Alert
The IFRS Foundation, parent organization of the IASB, says it has been made aware of individuals who have been trying to scam the public by posing as auditors working on behalf of the board. Individuals pretending to be representatives of the IASB purported to undertake financial audits of investment companies on the board’s behalf, the foundation stated in a fraud alert posted to its website on May 13. “These individuals do not represent either the IFRS Foundation and/or the IASB, neither of whom conduct such range of activities,” the alert states. “In the event that you have received such communication, please contact your local financial conduct regulator.