The Center for Audit Quality (CAQ) would like the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to provide more transition guidance for users implementing COSO’s updated internal control framework. COSO is updating its 20-year-old internal control framework to provide a fresh, modern approach with explicit advice and implementation
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TIGTA recommends improvements to IRS cybersecurity system
The Treasury Inspector General for Tax Administration (TIGTA) reports that the IRS’s computer security response center is performing effectively, but further improvement is needed (TIGTA Rep’t No. 2012-20-019 (3/12/12)). Part of TIGTA’s mandate is to review the adequacy and security of IRS technology. From March through September 2011, TIGTA performed
Medical Center’s FICA refund claim dismissed as untimely
The First Circuit Court of Appeals dismissed a suit for refund of Federal Insurance Contributions Act (FICA) taxes Maine Medical Center mistakenly paid for its medical residents in the 2001 tax year, upholding a lower court determination that Maine Medical’s discovery requests were not warranted and that the information it
GASB issues guidance on deferred outflows and deferred inflows, plus technical corrections
In separate statements of standards for state and local governments issued Monday, GASB clarified the appropriate reporting of deferred outflows and deferred inflows of resources, and issued technical corrections to resolve conflicting accounting and financial reporting guidance. GASB issued Statement No. 65, Items Previously Reported as Assets and Liabilities, and
Some tax-exempt organizations are receiving erroneous penalty notices; relief available
Practitioners are reporting that some tax-exempt organizations have received penalty notices from the IRS for late filing of Forms 990, 990-EZ, 990-PF, and 1120-POL, even though they received an automatic extension and filed during March, as instructed by the IRS. The IRS’s e-filing computer system was not available for filing
Court upholds IRS’s denial of college insurance fund’s application for tax exemption
An association of tax-exempt secondary schools and universities in Florida formed to pool insurance risk and obtain insurance for its members did not qualify for federal tax-exempt status because it fell under the prohibition against exemption for commercial-type of insurance companies in Sec. 501(m) (Florida Indep. Colleges & Universities Risk
IRS and OECD separately address transfer pricing issues
On Tuesday, the IRS announced a reorganization of its advance pricing agreement (APA), mutual agreement, and competent authority programs into one new program (IR-2012-38). All three programs dealt with transfer pricing rules, which determine how international transactions within a multinational company must be priced to ensure each country receives its
Audit rotation debated in House subcommittee hearing
Members of Congress asked pointed questions of PCAOB Chairman James Doty on Wednesday as the hot topic of mandatory audit firm rotation was debated during a wide-ranging discussion of accounting and auditing issues in front of a House subcommittee. Rep. Scott Garrett, R-N.J., the chairman of the House Subcommittee on
Auditor’s reporting model proposal scheduled for third quarter
The PCAOB’s proposed changes to the auditor’s reporting model are on track to be issued for public comment in the third quarter of 2012, according to a standard-setting agenda the board released Monday. PCAOB Chairman James Doty said in December that he thought the proposal would be out by the
Global economic survey, pension accounting discussion coming this week
The AICPA and the Chartered Institute of Management Accountants on March 29 will release results of the first CGMA Global Economic Survey. The quarterly survey is designed to capture the views of CGMA executives on economic conditions worldwide and in their respective countries. A panel of leading CGMA executives will
TIGTA calls for improvements to IRS volunteer tax prep program database
The Treasury Inspector General for Tax Administration (TIGTA) reported Monday on its study of the IRS’s monitoring of volunteer tax preparation services (TIGTA Report No. 2012-40-021 (2/23/12)). The IRS has developed a database, the Stakeholder Partnerships, Education and Communication Total Relationship Management System (SPECTRM), to monitor the performance of organizations
Repurchase agreements added to FASB’s agenda
In response to concerns from stakeholders, FASB on Wednesday added repurchase agreements and similar transactions to its agenda. In repurchase agreements, an entity transfers financial assets with an agreement that entitles and obligates the transferor to repurchase the financial assets at a fixed price at a later date. If the
Roth IRAs cannot be S corporation shareholders, Ninth Circuit holds
The Ninth Circuit, affirming the Tax Court, held that a corporation whose sole shareholder was a Roth IRA was not a valid S corporation when it was created in 2003 (Taproot Administrative Services, Inc., No. 10-70892 (9th Cir. 3/21/12), aff’g 133 T.C. 202 (2009)). The taxpayer who established the Roth
PCAOB panelists say mandatory firm rotation could be harmful, helpful
Panelists voiced opposing views of mandatory audit firm rotation Wednesday during the first of two days of PCAOB hearings on the concept. Critics of mandatory rotation said it would be costly with questionable benefits, while proponents said rotation would increase auditors’ objectivity. Many panelists proposed strategies other than rotation that
Review of FIN 48 isn’t necessary, FASB decides
FASB has concluded that it is not necessary to review or reconsider FIN 48 as a result of a “post-implementation review” conducted by FASB’s parent organization, the Financial Accounting Foundation (FAF). The FAF review found that FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48), is resulting
Debate continues over auditor independence and audit firm rotation
On Wednesday and Thursday, what’s likely to be a robust discussion on audit firm rotation for public companies in the United States kicks off. Meanwhile, markets will get a glimpse of the U.S. housing situation, and FASB and the International Accounting Standards Board (IASB) will meet in London to discuss
GASB proposes M&A standards for government
GASB issued for public comment Friday a proposed statement that aims to improve accounting and financial reporting by providing standards for combinations and disposals by state and local governments. Under the proposal outlined in the exposure draft, Government Combinations and Disposals of Government Operations, state and local governments would be
IRS suspends repair/capitalization exams pending accounting method changes
On Thursday, the IRS issued a Large Business & Industry (LB&I) Directive for field examinations on the repair vs. capitalization issue that essentially suspended current examinations so as to permit taxpayers to file accounting method changes under just-issued revenue procedures (LB&I-4-0312-004). Taxpayers that are subject to the new temporary regulations
New online search tool makes it easier to find information about exempt organizations
On Thursday, the IRS announced that taxpayers can find information about tax-exempt organizations in a new online search tool called Exempt Organizations Select Check (IR-2012-34). The information that is searchable online includes whether the organization: Is eligible to receive tax-deductible contributions. Had its tax exemption automatically revoked for failing to
CPAs prioritize security, unsure how to best leverage new technologies
CPAs are confident that their organizations can secure their IT networks and manage data, but they doubt whether their employers will be able to generate revenue streams and other benefits from emerging technologies such as cloud computing and mobile devices, the AICPA reported Wednesday in releasing the results of its
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Current developments in S corporations
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