In Brief The coronavirus (COVID-19) pandemic created a new working world for businesses, accounting firms, and government. Most offices, including CPA firms and the PCAOB,…
Examining the Recognition and Measurement of Financial Assets and Financial Liabilities under ASU 2016-01
Added Volatility or Improved Information Value?
In Brief Accounting Standards Update (ASU) 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, became effective for financial statements beginning after December 15, 2017. One…
Government Accounting and Auditing
Clearing a Cloud of Confusion
In Brief An estimated 3,000 audit practice units in the United States engage in state and local governmental audits. Most of these (65%) are members…
The question of how to teach ethics has plagued academics for generations, with some even wondering whether it can be taught at all. Steven Mintz,…
Implementation of Critical Audit Matters
Lessons from Other Countries
On October 23, 2017, the SEC approved Auditing Standard (AS) 3101, The Auditor's Report on an Audit of Financial Statements When the Auditor Expresses an…
Whether or not a business owner plans to sell or transfer their business in the next few years, obtaining a proper business valuation is critical.…
Expanding Options for Providing Attestation Services
A Review of AT-C Sections 205 and 206
In September 2020, the Auditing Standards Board issued Statement on Standards for Attestation Engagements (SSAE) 21, Direct Examination Engagements. Its provisions are effective for assertion-based and direct…
Asset Acquisition Accounting
Understanding the Available Guidance
A business combination is a transaction or event by which an acquirer obtains control of a business (i.e., the acquiree). If the acquisition of an…
FASB Streamlines Income Tax Accounting
Some Simplification for Franchise Taxes
Recently, FASB issued a new Accounting Standards Update (ASU 2019-12), Simplifying the Accounting for Income Taxes. The new standard amends section 740 of the Accounting Standards…
Seeking Truly Global Financial Reporting Standards
Should U.S. Standards Setters Re-Engage with IFRS (and the IASB and ISSB)?
In Brief For decades, leading standards setters have advocated a single set of global financial reporting standards. After large strides were made in converging U.S.…
An Introduction to Lattice Allocations
A Better Method for Service Department Cost Allocations
The invention of the system of equations method (i.e., the reciprocal method) was a significant step in the allocation of service department costs to production…
How Long is a Year?
A Deeper Look at 52/53-Week Reporting Conventions
In Brief Although many businesses operate on a fiscal year distinct from the calendar year, some use a distinctive 52/53-week fiscal year. This reporting convention…
In October 2016, FASB issued Accounting Standards Update (ASU) 2016-16, Intra-Entity Transfers of Assets Other Than Inventory, amending Accounting Standards Codification (ASC) Topic 740. The new…
ICYMI | Accounting for Operating Leases
Initial Observations
This article examines the initial impact of the adoption of ASU 2016-02 (ASC Topic 842, Leases), which requires lessees to record assets and liabilities for…
To Confirm or Not to Confirm—Risk Assessment is the Answer
The Wise and Proper Use of Bank Confirmations
Bank confirmations have been a valuable source of audit evidence since the dawn of the profession. Like all confirmations, they can be both effective and…
Accounting for Operating Leases
Initial Observations
This article examines the initial impact of the adoption of ASU 2016-02 (ASC Topic 842, Leases), which requires lessees to record assets and liabilities for…
In October 2016, FASB issued Accounting Standards Update (ASU) 2016-16, Intra-Entity Transfers of Assets Other Than Inventory, amending Accounting Standards Codification (ASC) Topic 740. The new…
Dividend-Protected Stock Compensation Awards
Accounting and Tax Considerations
The recipients of stock compensation awards may be entitled to the dividends that companies pay on their underlying equity shares, while the stock awards are…
Accounting Standards Update 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, modifies the accounting and reporting of foreign currency forward contract…
ICYMI | Audit Oversight and Effectiveness
Understanding the Past and Looking toward the Future
In Brief It has been nearly two decades since the creation of the PCAOB in response to a series of major financial reporting failures. But…
The Impact of COVID-19 on Sales and Production
SFAS 151’s Guidance for Financial Statements
The decline of economic activity due to the coronavirus (COVID-19) pandemic and resulting economic disruptions will certainly require some manufacturing companies to make adjustments under…
In Brief The AICPA Auditing Standards Board recently issued SAS 134, Auditors Reporting and Amendments, Including Amendments Addressing Disclosures of Financial Statements, and SAS 135,…
In Brief Since the PCAOB issued its requirements for the reporting of critical audit matters (CAM), there has been much debate about how to interpret…
Audit Oversight and Effectiveness
Understanding the Past and Looking toward the Future
In Brief It has been nearly two decades since the creation of the PCAOB in response to a series of major financial reporting failures. But…
Mind the GAAP
The Evolution of the Auditor’s Role and the ‘Fraud Expectation Gap’
Newly minted CPAs typically have limited hands-on auditing experience. They almost always have no training in specialty areas, such as forensics. A term now commonly…
ICYMI | Seven Years at the Forefront of Standards Setting
A Look Back from Outgoing FASB Chairman Russell G. Golden
In Brief For the last seven years, Russell G. Golden has served as FASB's chairman. During this time, and for the nine years previously, he…
ICYMI | Managing the Going Concern Risk in an Uncertain Environment
An Analysis of Regulatory Guidance and Financial Relief for the COVID-19 Pandemic
In Brief The worldwide COVID-19 pandemic has affected businesses of every size in every country, and the United States has been hit particularly hard. Many…
In Brief Although its full implementation has been delayed, FASB's new standard on current expected credit losses (CECL) continues to create issues for financial statement…
Preparing for Peer Review in a Pandemic
Tailoring Internal Quality Control Inspections for New Risks
In this author's article in the May 2020 CPA Journal (“Financial Reporting and Auditing Implications of the COVID-19 Pandemic: Some Practical Guidance,” pp. 26-33, https://www.cpajournal.com/2020/06/08/financial-reporting-and-auditing-implications-of-the-covid-19-pandemic/), many new…
Factor Fiction under ASU 2016-15
A Deep Dive into Cash Flows from Trade Receivable Arrangements
The implementation of ASU 2016-15, Statement of Cash Flow Classification of Certain Cash Receipts and Cash Payments (Topic 230), has led to an increased focus on…