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News Headlines From the Journal of Accountancy

THIS WEEK'S NEWS HEADLINES

October 24, 2014

Defined contribution plans can offer deferred annuities to older participants
The annuities must be held in “target date funds” that meet a series of requirements spelled out in the notice.

October 23, 2014

Pension plan limitations are increased for inflation
The IRS annually adjusts the limitations on pension plan contributions in cases where cost-of-living increases meet the statutory requirements for inflation adjustment.

Standards revised for reviews, compilations, engagements to prepare financial statements
Accounting (preparation) and reporting (compilation) services will be separated by a bright line as a result of clarified and revised standards released by the AICPA Accounting and Review Services Committee.

Social Security Administration announces 2015 wage base
The Social Security Administration announced that the maximum amount of wages subject to taxes for old age, survivors, and disability insurance will go up in 2015.

October 22, 2014

Four principles to improve the decision-making process
The American Institute of CPAs and the Chartered Institute of Management Accountants released the Global Management Accounting Principles, designed to help organisations improve their decision-making processes.

October 21, 2014

Reducing unnecessary complexity remains a key focus of FASB
Reducing complexity and cost — while retaining the relevance of financial reporting to users — will remain a focus of FASB in the coming years, FASB Chairman Russell Golden explained at the AICPA fall Council meeting.

COSO’s ERM framework to undergo update
The Enterprise Risk Management framework provided by the Committee of Sponsoring Organizations of the Treadway Commission is undergoing an update to improve its relevance in an increasingly complex environment.

October 20. 2014

Examine clichés in approach to innovation
To find business areas ripe for disruption, examine assumptions about your processes, your prices or your products, innovation expert Luke
Williams said in a speech Monday to the AICPA’s governing body.

How to deliver successful diversity and inclusion results and benchmark your progress
Accounting profession leaders working to improve diversity and inclusion in the profession and at their organization have new tools at their disposal.

October 19, 2014

Council vote updates resolution in AICPA code to match definition of attest
Changes to a resolution in the AICPA Code of Professional Conduct that were approved Sunday will conform the code to the definition of attest in the Uniform Accountancy Act, which was recently revised.


LAST WEEK'S NEWS HEADLINES

October 16, 2014

How to prepare for auditing in a digital world of Big Data
Changes in technology and the availability of unprecedented amounts of data present new challenges for auditors. How can technology be used to transform auditing and improve audit effectiveness?

SEC filed record number of enforcement actions in fiscal year 2014
New investigative approaches and analytical tools helped the SEC file a record number of enforcement actions in fiscal year 2014, which ended in September. The SEC filed 755 enforcement actions totaling $4.16 billion in disgorgement and penalties.

October 14, 2014

Proposed regs. would eliminate 36-month testing period from COD reporting requirements
In response to concerns that the existing rule was confusing, the Internal Revenue Service issued proposed rules removing the 36-month nonpayment testing period from the list of triggering factors for issuing debtors Form 1099-C, Cancellation of Debt.

October 13, 2014

Certain FATCA deadlines are postponed
The Internal Revenue Service said it will revise temporary regulations issued in March to ensure that a number of the requirements under the Foreign Account Tax Compliance Act for identifying foreign account holders will not apply before Jan 1, 2015.

Changes made to IRS streamlined offshore compliance procedures
The IRS updated its streamlined offshore compliance program to provide procedures taxpayers residing both inside and outside the United States should use to participate in the program.

 

NEWS HEADLINES FOR OCT. 5–OCT. 11, 2014

October 9, 2014

Notice defines terms for economic substance doctrine
The Internal Revenue Service issued a notice explaining how it would interpret the meaning of “transactions” for purposes of applying the codified economic substance doctrine in Sec. 7701(o) and “similar rule of law” for purposes of the accuracy-related penalty in Sec. 6662(b)(2).

AICPA asks for raise in repair regulations’ de minimis safe harbor threshold
AICPA wrote to the IRS conerning
the low amount of the de minimis safe harbor threshold in the tangible property regulations that were issued in September 2013, and about the retrospective application of the new rules.

Investors’ confidence in U.S. public companies grows
Investors’ confidence in investing in U.S. public companies—and in audited financial information released by those companies—has risen to a seven-year high in 2014.

October 8, 2014

Global cyberattacks rose 48% in 2014
The number of reported information security incidents around the world rose 48%, according to PwC’s The Global State of Information Security Survey 2015.

Ibanez ruling set precedent for right of CPAs to advertise dual credentials
A 1994 U.S. Supreme Court decision in a case pitting a state board of accountancy against an attorney with a CPA credential created a now well-established precedent protecting professionals’ rights to advertise their dual credentials.

 

NEWS HEADLINES FOR SEPT. 28–OCT. 4, 2014

October 2, 2014

Accounting salary forecast predicts rise for 2015
Starting salaries for various corporate and public accounting positions will continue to rise in the United States and Canada in 2015, according to a new forecast.

Companies paid higher audit fees in 2013, survey shows
PCAOB regulatory compliance drove fees higher for public companies, and inflation contributed to the rise for private companies and not-for-profits.

October 1, 2014

PCAOB may consider different mechanism for naming engagement partner
PCAOB Chairman James Doty plans to ask the board to consider seeking public comment on a new form that would be created to name the engagement partner and other firms participating in the audit, a board spokesman said.

September 30, 2014

Final regs. allow deduction for local lodging expenses
Under new rules, taxpayers who pay for local lodging because their employer requires it may be able to deduct the cost as an ordinary and necessary business expense.

Board members keenly focused on risk
Corporate board members of U.S. public companies are keenly focused on risk, but many are not comfortable with their understanding of which risks the companies are willing to take, according to new PwC survey results.

September 29, 2014

IRS issues final regs. on vision, dental, and long-term-care benefits
The Internal Revenue Service issued final regulations defining when limited-scope vision, dental, and long-term-care benefits can qualify as excepted benefits not subject to the health coverage portability and nondiscrimination rules.

 

NEWS HEADLINES FOR SEPT. 21–27, 2014

September 26, 2014

IRS signals PPACA compliance issues for 2015
Here is an early look at what to expect from the IRS as it starts to enforce the health care reform legislation.

New nonauthoritative guidance related to management representations, EBP accounting
New Technical Questions and Answers (TPAs) have been issued and are available on the AICPA website to provide nonauthoritative guidance.

September 25, 2014

AICPA identifies problems with IRS’s electronic signature rules
Among other things, the method for verifying the identity of a taxpayer who signs remotely raises issues about preserving the privacy of taxpayer data because it seems to require tax practitioners to send taxpayer information to third-party vendors.

September 24, 2014

Doctors lack standing to challenge delay of employer mandate
The Seventh Circuit affirmed the dismissal of a suit objecting to the IRS’s decision to delay imposing the Sec. 4980H employer mandate penalty until 2015.

September 23, 2014

IRS gives details of new anti-inversion rules
Following up on the Treasury Department announcement that it was prepared to act to stop corporate inversions, which involve corporate reorganizations that move assets overseas to avoid U.S. taxation, the IRS issued detailed guidance on the types of transactions it was attempting to curtail and the regulations it intended to issue to achieve that goal.

Treasury moves to curb tax inversions
The Treasury Department announced that it will take steps to curb corporate tax inversions, a growing tax minimization strategy that has been the subject of many headlines recently.

September 22, 2014

SEC expects to pay whistleblower a record $30 million
The SEC plans a record whistleblower payment of more than $30 million to an informant from outside the United States who provided valuable, original information that led to a successful enforcement action.

Auditors still responsible for going-concern evaluation under PCAOB rules
New U.S. GAAP requirements for management to assess going concern do not change public company auditors’ existing responsibilities to evaluate a company’s ability to continue as a going concern under PCAOB standards, the PCAOB said.

 

NEWS HEADLINES FOR SEPT. 14–20, 2014

September 19, 2014

Dispositions of property get automatic accounting method change procedures
The Internal Revenue Service issued procedures taxpayers can use to get automatic consent to accounting method changes required when they account for dispositions of tangible property. The procedures take into account changes made by recent final regulations that represent the final piece of the IRS’s update of the “repair” regulations.

Special per diem rates issued for 2014–2015 travel expenses
The IRS issued its annual updates of per diem rates for use in substantiating certain business expenses taxpayers incur when traveling away from home on or after Oct. 1. The notice contains the transportation industry meals and incidental expenses rates, the rate for the incidental-expenses-only deduction, and the rates and list of high-cost localities for purposes of the high-low substantiation method.

IRS announces proposed changes to cafeteria plan elections and lookback period
The IRS is proposing changes to health care coverage rules under the Affordable Care Act. The changes include a new method to calculate the lookback period when determining full-time employment for purposes of the large-employer penalty for not providing health care coverage and a proposed amendment to the rules for changing from an employer’s cafeteria plan health plan to coverage from an exchange.

Changes proposed to allocation rules for rollovers
The IRS announced that it would amend the rules that currently apply to treat distributions
from retirement accounts paid in direct rollovers as separate from distributions to taxpayers. The rules govern the allocation of pretax and after-tax contribution amounts to the distributions.

September 18, 2014

Regulations update hybrid defined benefit plan rules
Hybrid pension plans, which are plans for which no individual accounts exist within the pension plans, must meet a number of rules to qualify as defined benefit plans. New proposed and final regulations issued today explain these requirements in detail.

September 16, 2014

PCC approves private company GAAP exception for certain acquired intangible assets
The Private Company Council approved a GAAP alternative that would give private companies the option to elect not to separately recognize and measure certain intangible assets required in a business combination.

 

NEWS HEADLINES FOR SEPT. 7–13, 2014

September 12, 2014

ASB proposes moving content of AT Section 501 into GAAS
The AICPA Auditing Standards Board (ASB) is proposing moving a section of its attestation standards into generally accepted auditing standards (GAAS).

September 10, 2014

PFIC reporting rules do not apply to certain marked-to-market stock
Holders of stock in passive foreign investment companies (PFICs) that are usually subject to tax under the PFIC rules may be able to avoid both the taxes and the reporting requirements if they mark to market their PFIC stock under other parts of the Internal Revenue Code, the Internal Revenue Service announced.

September 9, 2014

PCAOB alert calls for auditors to focus on revenue
In a staff alert, the PCAOB urged auditors to follow the board’s standards for auditing revenue. Engagement teams and senior management team members should focus on revenue throughout the audit, the alert says.

IRS explains power-of-attorney requirements for corporate taxpayers
The Internal Revenue Service issued a directive distinguishing between corporate employees who are providing information to the IRS and those employees whose actions go further.

September 8, 2014

CPA practitioners sue to stop PTIN fees
Two CPA tax practitioners have sued the IRS over the fees the agency charges to issue and renew preparer tax identification numbers (PTINs). The plaintiffs have asked the court to prevent the IRS from charging the fees and to refund amounts already paid by practitioners.

 

NEWS HEADLINES FOR AUG. 31–SEPT. 6, 2014

September 4, 2014

CPAs continue to show optimism about the future of their companies
CPAs’ expectations for revenue, profit and hiring continued to rise, helping to push the CPA Outlook Index to its highest point since 2007. All nine components in the index have risen by at least four points in the past year, reflecting improved outlooks across multiple industry sectors and offsetting concerns about regulatory requirements.

September 2, 2014

AICPA seeks comment on next format of CPA exam
The AICPA released a document for public comment on what format should be taken by the next version of the Uniform CPA Examination in order to continue to reflect the skills newly licensed CPAs need.

 

NEWS HEADLINES FOR AUG. 24–30, 2014

August 29, 2014

FASB releases proposed 2015 GAAP taxonomy
FASB released its proposed 2015 GAAP Financial Reporting Taxonomy and requested public comment.

Capital gain, not amount realized, determines application of 6-year collection statute
The Tax Court held that a notice of deficiency was timely issued for two tax years because the taxpayers had failed to report income that exceeded more than 25% of the gross income reported on their returns for those years and therefore the six-year statute of limitation on assessment applied.

August 28, 2014

COSO transition getting a close look from auditors
Many companies are finished with the early stages of implementation of the updated internal control framework of the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Now companies’ auditors are reviewing the work done during implementation.

August 27, 2014

Five keys to effective auditor judgment
Auditors face many challenges to their professional judgment as they make decisions that are critical to the integrity of capital markets. An effective decision-making process can enable objective, professionally skeptical judgments, according to a new Center for Audit Quality resource.

FASB defines management’s going-concern responsibilities
A new financial reporting standard issued by FASB defines management’s responsibilities for evaluating and providing footnote disclosures about whether there is substantial doubt about an entity’s ability to continue as a going concern.

ARSC approves clarified and revised standards for reviews, compilations, and engagements to prepare financial statements
A clarified and revised Statement on Standards for Accounting and Review Services addressing reviews, compilations, and engagements to prepare financial statements has been approved by the AICPA’s Accounting and Review Services Committee and is expected to be issued in the fourth quarter of 2014.

August 26, 2014

IRS issues final regulations on straddles
The regulations allow an issuer’s obligation under a debt instrument to be part of a straddle if the obligation is linked to the value of personal property.

SEC names former Deloitte LLP exec Schnurr as chief accountant
James Schnurr, former vice chairman and senior professional practice director for Deloitte LLP, was named as the SEC’s new chief accountant. He replaces Paul Beswick, who is leaving to join the private sector.

 

NEWS HEADLINES FOR AUG. 17–23, 2014

August 22, 2014

New IRS appeals process starts Sept. 2
The Appeals Judicial Approach and Culture project aims to stop appeals officers from acting as investigators and to have them take a quasi-judicial approach to cases.

August 20, 2014

FASB proposes simpler accounting for fees paid to cloud service providers
FASB issued a proposal designed to simplify the accounting for fees that public and private companies pay as customers in cloud-computing arrangements with third-party service providers.

How CPAs can provide clients added value
Accountants have opportunities to provide forward-looking services that could create added benefits for their clients, according to a new survey.

August 19, 2014

AICPA membership eclipses 400,000
The AICPA announced that its membership has eclipsed the 400,000 mark. The accounting profession’s largest membership organization worldwide has seen its number of members grow 25% in the past 20 years.

SEC will scrutinize municipal advisers’ rules compliance
The SEC is launching a new initiative that will examine whether municipal advisers are following new rules and regulations.

FASB share-based payments standard challenges private companies
Although a review found that FASB’s share-based payments standard achieves its purpose, private company stakeholders told a post-implementation review team that the standard is sometimes difficult for them to understand and costly to apply.

PCAOB requests comments on auditing accounting estimates and fair value measurements
The PCAOB is seeking input as it weighs possible standard-setting activities related to auditing accounting estimates and fair value measurements.

August 18, 2014

PCAOB calls for improvement in audits of brokers and dealers
The PCAOB urged audit firms to review independence rules and areas with frequent inspection findings related to audits of brokers and dealers. The board’s guidance was issued as a result of the most recent findings from its interim inspection program.

 

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