Management accounting

- A majority of senior finance executives say that risk management is not an important strategic tool at their organizations, and most have not articulated their risk appetite in pursuit of objectives, according to a new survey.

Additionally, fewer than half of respondents believe that existing risk exposures are considered when evaluating new strategic initiatives. That’s according to a survey of 1,093 CFO-level AICPA members.

Just 25% of companies have a formal enterprise risk management (ERM) process in place, according to results of the survey, which was conducted by the ERM Initiative at North Carolina State University. A survey report is available at

Companies are not as likely now, compared with a few years ago, to appoint a chief risk officer, one of several examples where ERM practices appear to have gone stagnant. In 2012, 38% of respondents said their companies had chief risk officers. In the most recent survey, conducted last fall, that number had fallen to 32%. The percentage is still higher than in the first edition of the survey in 2009, when 18% of respondents said their companies had a chief risk officer.


- During the recession, many companies were hesitant to buy new computer hardware or upgrade software. For some, it was hard to justify the investment when cost-cutting was the norm and aging equipment was still working.

But an improvement in economic conditions, the need to provide customers better technology, and heightened concern about cybersecurity have led to a steady increase in information technology investment over the past few years.

CPA decision-makers have carried a positive outlook on IT spending in recent quarters, according to the Business & Industry Economic Outlook Survey for the first quarter of 2015 released by the AICPA. Survey results are available at

Although IT spending projections declined slightly in the most recent outlook, it is one of four survey indicators that remained above 75. A reading above 50 indicates a generally positive outlook.

Meanwhile, more CPA decision-makers are optimistic about the U.S. economy than any time in the past 10 years, according to the outlook. While the momentum of executives’ optimism slowed overall in the most recent quarter, respondents remain positive about revenue and profit projections, especially when compared with first-quarter numbers in previous years. And that, in part, is emboldening companies to spend more on IT.


- Rules proposed by the SEC would require certain companies to disclose their hedging policies for directors and employees.

Under the proposal, companies would be required to disclose whether directors, officers, and other employees are permitted to hedge or offset any decrease in the market value of equity securities granted by the company.

The proposed rules, available at, would apply to securities granted as compensation or held—directly or indirectly—by employees or directors.

The disclosures would be required in proxy statements and information statements for the election of directors. The proposed rules would apply to companies subject to the federal proxy rules, including:

  • Smaller reporting companies.
  • Emerging growth companies.
  • Business development companies.
  • Registered closed-end investment companies with shares listed and registered on a national securities exchange.

Disclosure would apply to equity securities of the company, its parent, subsidiary, or any subsidiary of any parent of the company that is registered under Section 12 of the Exchange Act.

The proposed rules were mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, P.L. 111-203.

The SEC will seek public comment on the proposed rule amendments for 60 days following their publication in the Federal Register. Comments can be made at the SEC’s website at


- The AICPA Conflict Minerals Task Force has developed new questions and answers (Q&As .14–.15) to provide nonauthoritative guidance addressing matters that practitioners performing independent private-sector audit engagements of conflict minerals reports may wish to cover in management representation letters and practitioner responsibility with respect to internal controls.

The Q&As, available at, relate to representations that a practitioner might obtain from management in an engagement to perform an independent private-sector audit of a conflict minerals report, and the practitioner’s responsibility with respect to gaining an understanding of and testing internal controls in performing an independent private-sector audit.

In addition, the AICPA resource describing conflict minerals report attributes that facilitate an independent private-sector audit has been updated based on conflict minerals reports filed, and to reflect recent SEC guidance. The resource is available at

More information, including previously issued Q&As .01 to .13, is available on the AICPA Conflict Minerals Resources webpage at


Get your clients ready for tax season

Upon its enactment in March, the American Rescue Plan Act (ARPA) introduced many new tax changes, some of which retroactively affected 2020 returns. Making the right moves now can help you mitigate any surprises heading into 2022.


Black CPA Centennial, 1921–2021

With 2021 marking the 100th anniversary of the first Black licensed CPA in the United States, a yearlong campaign kicked off to recognize the nation’s Black CPAs and encourage greater progress in diversity, inclusion, and equity in the CPA profession.