THIS WEEK'S NEWS HEADLINES
December 8, 2013
IIRC releases International Integrated Reporting Framework
The International Integrated Reporting Council (IIRC) on Sunday made public an approved framework for integrated reporting. The group intends for the framework to guide companies on how to best communicate with their stakeholders.
PCAOB seeks improvement in engagement quality reviews
Audit firms should take steps to ensure that engagement quality reviews discover the audit deficiencies they are designed to detect, the Public Company Accounting Oversight Board said in a report released Friday.
LAST WEEK'S NEWS HEADLINES
December 6, 2013
Proposed rules would require terminating partnerships to amortize startup expenditures
The IRS issued proposed regulations aimed at preventing partnerships from using technical terminations to accelerate their deductions of startup and organizational expenses.
Standard mileage rates go down slightly in 2014
Optional standard mileage rates for use of a vehicle will go down by one-half cent per mile for 2014, the IRS announced.
December 5, 2013
Numerous provisions expire at year end
Here is a roundup of all those provisions, which include the research and development credit, bonus depreciation, and the deduction for state and local sales tax in lieu of state and local income tax.
Finance executives show increasing optimism about their companies
A year ago, U.S. finance executives seemed uncertain about the future of their companies and the domestic economy. But they’re upbeat about numerous business factors these days, according to the latest AICPA Business & Industry Economic Outlook Survey.
December 4, 2013
PCAOB proposal could result in public tracking of auditors
The PCAOB proposed a standard that would require disclosure of the engagement partner’s name in the audit report. One PCAOB member said that could lead to third-party monitoring of auditors’ professional track records.
December 3, 2013
Supreme Court resolves circuit split on 40% gross valuation misstatement penalty
The U.S. Supreme Court held that the 40% penalty for a gross valuation misstatement applied when the partnerships at issue had been determined to be shams that lacked economic substance, and, as a result, the partners’ outside basis in the partnerships was zero.
FASB to seek feedback on accounting for income taxes
FASB plans to ask financial statement users, preparers, auditors, and others for feedback on how to best address concerns about its standard on accounting for income taxes.
AICPA groups seek consistency in insurance contract standards
The AICPA Financial Reporting Executive Committee and Insurance Expert Panel encouraged FASB and the International Accounting Standards Board to converge on at least a few key issues in accounting rules for insurance contracts.
December 2, 2013
PCAOB proposal to name engagement partner may generate debate
The PCAOB is expected to propose a rule that would require engagement partners’ names to be disclosed in public company auditor’s reports. Some in the auditing profession opposed a similar proposal in the past.
IASB proposes amendments to IAS 27 to allow equity method
Narrow-scope amendments to IAS 27 proposed by the IASB would allow entities to use the equity method to account for investments in subsidiaries, joint ventures, and associates in their separate (parent-only) financial statements.
NEWS HEADLINES FOR NOV. 24–30, 2013
November 27, 2013
Final and proposed regs. issued on 3.8% net investment income tax
The IRS issued final and proposed regulations giving guidance on the application and computation of the 3.8% net investment income tax imposed by Sec. 1411.
Final rules released on 0.9% Medicare surtax
The IRS has adopted final rules on the 0.9% Medicare tax that is imposed on high wage earners, starting this year. The rules cover, among other things, withholding requirements, reporting and payment obligations, and claims for refund.
PCAOB to consider requiring name of engagement partner in auditor’s report
The PCAOB will consider reproposing amendments to auditing standards that would require disclosure in the auditor’s report of the name of the engagement partner and certain other participants in the audit.
November 26, 2013
Top risk for businesses: Regulation, compliance overload
Corporate directors believe regulatory and compliance overload is the greatest risk facing their business, well ahead of cyber threats and corruption, a new survey shows.
IRS proposes curbing political activities of Sec. 501(c)(4) social welfare organizations
The IRS announced its intention to amend the regulations governing social welfare organizations, a topic that has recently created an enormous amount of political controversy, especially during the recent scandal over how the IRS was mishandling applications from groups that had “tea party” and other terms in their names.
November 25, 2013
Private company GAAP exceptions get thumbs up from FASB
FASB endorsed two GAAP exceptions for private companies, marking a milestone in the work to provide simpler, less costly rules for private companies while producing financial statements that reflect economic reality.
GASB makes fix in pension standard transition
GASB altered the transition provisions of a new pension standard in order to eliminate a potential source of understatement.
NEWS HEADLINES FOR NOV. 17–23, 2013
November 21, 2013
IASB makes change to defined benefit contribution accounting
Small-scale changes to financial reporting rules for employee benefit plans were published by the International Accounting Standards Board (IASB).
TIGTA report says IRS should do a better job protecting taxpayer data
A report issued by the Treasury Inspector General for Tax Administration says the Internal Revenue Service does not have proper internal controls in place to ensure that security weaknesses are properly corrected.
November 20, 2013
Final IASB approval of rev rec standard imminent
Members of the International Accounting Standards Board indicated that they will approve the proposed, converged standard for revenue recognition and instructed staff to prepare a ballot draft for a final vote.
Survey: Data security concerns soar as more CPA firms access cloud
Concerns about data security are surging as the percentage of CPA firms tapping cloud computing continues to increase, according to a survey from CPA2Biz, the AICPA’s for-profit technology subsidiary.
More transparency sought from audit committees
A consortium of U.S. governance organizations is calling on public company audit committees to enhance reporting about their activities.
November 19, 2013
Whistleblower tips to SEC rise 8%
Tips to the SEC by whistleblowers rose 8% in fiscal year 2013 over the previous fiscal year, according to an SEC report to Congress.
IASB releases new rules to better reflect hedge accounting
The International Accounting Standards Board released new rules for hedge accounting intended to more accurately reflect businesses’ risk management activities in financial statements.
For penalty calculation, amount of tax shown on return reduced by credits, Tax Court holds
For purposes of calculating the accuracy-related penalty, the amount of tax shown on a married couple’s return was reduced by refundable tax credits they claimed—but were not entitled to—the Tax Court held.
Accounting for income taxes standard achieves purpose, panel finds
A review panel has concluded that a 1992 financial reporting standard addressing accounting for income taxes generally achieves its purpose but may not have reduced complexity.
November 18, 2013
Five things the PCAOB considers in assessing firms’ remediation
The PCAOB requires corrective changes from firms whose quality-control procedures are criticized in board inspections. Board inspectors examine five key criteria as they assess those corrective changes.
Costs often derail qualitative goodwill impairment assessment
A qualitative “Step 0” approach to goodwill impairment testing recently was introduced by FASB to help companies save costs by sparing them from having to perform costly quantitative testing.
NEWS HEADLINES FOR NOV. 10–16, 2013
November 15, 2013
Fed change won’t improve economy, U.S. finance execs say
Although U.S. CFOs and finance chiefs say a Federal Reserve chairman has the ability to significantly affect the world’s economy, they are not optimistic that the coming change in Fed leadership will hasten the economic recovery.
November 14, 2013
Regs. permit midyear changes to employer contributions to 401(k) plans
The final rules remove a proposed “substantial business hardship” requirement and allow the reduction or suspension in cases where the employer is operating at an economic loss or, in some cases, if notice is provided ahead of time to plan participants.
United States and France sign FATCA agreement
The Treasury Department announced that the United States and France have signed a bilateral agreement requiring French banks to report to the French government information about their U.S. account holders.
November 13, 2013
Significant changes to compilation included in 3 proposed standards
Three standards proposed by the AICPA Accounting and Review Services Committee (ARSC) as part of its clarity project include a proposal that would significantly change compilation literature.
November 12, 2013
IRS targeting return preparers who file inaccurate earned income credit claims
As part of its recent stepped-up efforts to increase earned income tax credit due diligence, the Internal Revenue Service told tax practitioners that it will be sending letters to tax return preparers who it suspects are filing inaccurate EITC claims.
GASB’s five things to watch in pension standards implementation
Implementation is underway for new financial reporting standards for state and government pensions. Read about the key issues that need to be considered.
Private company VIE exception approved by PCC
The Private Company Council approved a GAAP exception that—if endorsed by FASB—would allow private companies to elect not to apply consolidation guidance for variable-interest entities under common-control leasing arrangements.
November 11, 2013
Prepare for new revenue guidance with six key actions
Companies need to move quickly, experts say, to consider how they will be affected by the new revenue recognition standard under development by FASB and the International Accounting Standards Board.
NEWS HEADLINES FOR NOV. 3–9, 2013
November 8, 2013
Permanent injunction closes large tax preparation firm
A federal district court in Ohio has issued a permanent injunction ordering ITS Financial LLC, the parent company of Instant Tax Service tax franchiser, to cease operations.
New guide helps navigate goodwill impairment testing challenges
A new guide issued by the AICPA Financial Reporting Executive Committee provides direction for handling goodwill impairment testing challenges.
November 7, 2013
Affordable Care Act holds opportunities, challenges for internal auditors
Internal auditors have new opportunities to help organizations prepare for Affordable Care Act risks, but they may need more familiarity with provisions.
FASB proposes eliminating “development stage entity” distinction
A new FASB proposal seeks to eliminate the designation of “development stage entity,” as well as related disclosure requirements, from U.S. GAAP.
November 6, 2013
IRS extends fast-track settlement to smaller businesses nationwide
Fast-track settlement can help small businesses under examination reach agreement with the IRS without a formal appeal or litigation.
Historic revenue recognition standard takes big step forward
A new, globally converged standard on revenue recognition is close to reality after FASB voted to instruct the board’s staff to prepare a ballot draft for final approval.
PCAOB establishing Center for Economic Analysis
The PCAOB is creating a Center for Economic Analysis to provide the board with insight on using economic theory, analysis and tools to strengthen its programs.
November 4, 2013
SEC’s ramped-up scrutiny means CFOs need to reevaluate processes
CFOs and finance departments may want to undergo a careful evaluation of their financial reporting systems and processes, experts say, now that the SEC is ramping up its scrutiny of accounting and auditing.
NEWS HEADLINES FOR OCT. 27–NOV. 2, 2013
November 1, 2013
Health FSA use-it-or-lose-it rule modified to allow a $500 carryover
The IRS issued Notice 2013-71, which permits companies to amend their Sec. 125 cafeteria plans to allow participants in health flexible spending arrangements who do not use all of the money in a plan year to use up to $500 in the next plan year.
October 31, 2013
IRS releases inflation adjustments for 2014
They cover more than 40 provisions, including new personal exemption and standard deduction amounts, new AMT exemptions, new contribution limits for pension plans, and new tax tables.
PTIN renewal system reopens
Two weeks after the end of the government shutdown, the IRS reopened its registration system for renewing preparer tax identification numbers (PTINs) for the 2014 filing season.
October 30, 2013
Social Security wage base rises to $117,000 for 2014
The Social Security Administration announced that the wage base above which taxes for old age, survivors, and disability insurance are not due will increase from $113,700 to $117,000 in 2014.
Collectibility threshold added in significant change to rev rec proposal
A collectibility threshold added represents a significant change to the converged revenue recognition proposal FASB and the International Accounting Standards Board are developing.
October 29, 2013
Guidance issued for FFIs with FATCA agreements
The IRS issued its latest guidance in preparation for the implementation of the Foreign Account Tax Compliance Act reporting and withholding requirements.
October 28, 2013
PCAOB standard for auditing revenue may be on the horizon
Auditing revenue will need to be an area of focus for PCAOB standard setting in the near future, PCAOB member Jay Hanson said in a speech Monday.
Ineffective income and withholding verification hinder IRS in detecting fraudulent returns
On Monday, the Treasury Inspector General for Tax Administration released the results of its review of the IRS’s fraudulent tax return detection system, the Electronic Fraud Detection System, concluding that inadequate income and withholding verification resulted in the IRS’s missing many fraudulent returns
Strategic planning leads list of finance priorities
Harnessing data for strategic planning, streamlining processes, and bracing for heightened regulatory concerns are the top priorities for CFOs and the finance function, according to a new survey report.
NEWS HEADLINES FOR OCT. 20–26, 2013
October 24, 2013
PCAOB continues focus on audits of internal control over financial reporting
The PCAOB maintained its focus on audits of internal control over financial reporting (ICFR) Thursday by issuing its second report in 11 months on the subject.
October 23, 2013
New opportunities for CPAs in proposed crowdfunding rules
Rules on crowdfunding proposed by the SEC on Wednesday would create opportunities for startups and small, private businesses to raise cash through internet-aided sales of securities—and would create opportunities for work by CPAs.
October 22, 2013
Filing season will be delayed, IRS says
For the second year in a row, the start of tax season will be delayed, the Internal Revenue Service announced. Due to the 16-day government shutdown, the IRS says it needs more time to program and test its systems.
October 21, 2013
Private company initiatives making progress
The AICPA is educating banks and the small business community on the features of the Financial Reporting Framework for Small- and Medium-Sized Entities, one of two new financial reporting initiatives for private companies.
A leadership tutorial from education innovator Sal Khan
Read here about the investment analyst turned social entrepreneur’s thoughts on sparking innovation, competing for talent with the likes of Google and Goldman Sachs, and the magic of real mentoring.
Internet Tax Freedom Act preempts Illinois click-through nexus law
The Supreme Court of Illinois held that Illinois’s click-through nexus law is expressly preempted by the federal Internet Tax Freedom Act (ITFA), which prohibits states from imposing discriminatory taxes on electronic commerce.
October 20, 2013
Survey will take pulse of diversity in accounting
The AICPA National Commission on Diversity & Inclusion will conduct a survey designed to gauge views on diversity and inclusion in the accounting profession. The recently formed commission also is developing a “road map” to help businesses and firms develop diversity initiatives.
Six demographic trends that demand attention
Read about six demographic trends that will make promoting diversity and new business practices essential in the accounting profession.