Accounting & reporting news and resources

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April 1, 2005

No Longer an Option

EXECUTIVE SUMMARY IN DECEMBER 2004, FASB ISSUED ITS NEWEST standard, Statement no. 123(R), Share-Based Payment. It is proving to be as controversial as its predecessors. The most significant change is the requirement that companies use the fair value method to account for share-based compensation. STATEMENT NO. 123(R) ELIMINATES THE USE

March 1, 2005

Trust Services: A Better Way to Evaluate I. T. Controls

EXECUTIVE SUMMARY SARBANES-OXLEY REQUIRES MANAGEMENT to include an assessment of internal controls over financial reporting, using a suitable framework, in the annual report. While a number of frameworks are available, some do not adequately assess technology controls. SEC RULES SAY MANAGEMENT MUST BASE its evaluation of the effectiveness of internal

February 1, 2005

XBRL Revisited

XBRL: A Structure for Business Data This month the JofA begins a series of articles exploring how XBRL can help CPAs, their clients and employers, financial institutions, regulators, rating agencies and individual and institutional investors issue or obtain business information in a standardized format for sharing and viewing in any

December 1, 2004

The Components of Value Measurement

EXECUTIVE SUMMARY THE VALUE MEASUREMENT AND REPORTING Collaborative (VMRC) is a global effort intended to help boards of directors, senior management, investors and other stakeholders make better strategic decisions using value measurement and reporting. Its members believe the value of a company lies not only in its present operational value

December 1, 2004

Amortization of Certain Intangible Assets

EXECUTIVE SUMMARY EVEN WITH THE GUIDANCE IN FASB STATEMENT NO. 142, th e useful life of certain intangible assets is difficult to judge, particularly assets that involve contracted or other legally set terms. Companies use the useful life of assets to guide their decisions on whether or not to amortize

October 1, 2004

Section 404 Compliance in the Annual Report

EXECUTIVE SUMMARY BEGINNING IN 2004, MANY PUBLICLY traded companies must comply with SEC rules by reporting on the effectiveness of their internal controls in the annual report. The content should contain A statement of management’s responsibilities for establishing and maintaining an adequate system. The identification of the framework used to

September 1, 2004

Financial Reporting Goes Global

EXECUTIVE SUMMARY THERE IS A CLEAR TREND toward adopting IFRS as the single body of internationally accepted financial reporting standards. In the next few years, thousands of companies will move to IFRS as a primary basis of financial reporting. THE IFRS MANDATE WILL AFFECT U.S. COMPANIES. Some may be required

May 1, 2004

Tap Into XBRL’s Power the Easy Way

BRL—a specialized form of XML (extensible markup language)—is becoming more familiar to creators and users of electronic financial statements, but few people have actual hands-on experience with it. So, to bring XBRL to a wider business audience, Microsoft Corp. has released the Microsoft Office Tool for XBRL—a free, but important,

March 1, 2004

A Changing Corporate Culture

EXECUTIVE SUMMARY RECENT CORPORATE FAILURES HAVE CALLED INTO question the value of the financial statement audit. One of the results was the Sarbanes-Oxley Act of 2002, which has the potential to change corporate culture by mandating additional governance responsibilities and reporting requirements for top management. A SURVEY OF FINANCIAL EXECUTIVES

February 1, 2004

Sarbanes-Oxley: What It Means to the Marketplace

EXECUTIVE SUMMARY THE ACCOUNTING PROFESSIONALS interviewed for this article were positive about some Sarbanes-Oxley requirements, saying management’s reporting on and the external auditor’s attestation to the internal controls are good ideas. They advocated audit committees’ hiring CPAs because it could reduce the pressure on audit fees and lead to better-quality

February 1, 2004

Unclaimed Property

EXECUTIVE SUMMARY WITH MORE STATES CONDUCTING AUDITS, CPAs need to encourage companies to pay greater attention to their unclaimed property liability. This includes both reporting unclaimed assets to the right state and making sure the company properly reflects the liability on its balance sheet. UNCLAIMED PROPERTY HOLDERS MUST exhaust all

October 1, 2003

OCBOA Financial Statements

EXECUTIVE SUMMARY IN CERTAIN INSTANCES CPAs SHOULD CONSIDER preparing and reporting on financial statements using an “other comprehensive basis of accounting” (OCBOA). Tax-basis and cash-basis, including modified-cash-basis, financial statements are the most widely used OCBOA statements. A MAJOR ADVANTAGE OF OCBOA STATEMENTS is that many clients and external users understand

January 1, 2003

Accounting

AcSEC, the AICPA accounting standards executive committee, in agreement with FASB and the SEC, rescinds SOP 92-3, Accounting for Foreclosed Assets. FASB statement no. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, effectively superseded the SOP, the scope of which did not include non-long-lived assets such as inventories

January 1, 2003

Privacy

A new Federal Trade Commission publication, Financial Institutions and Customer Data: Complying with the Safeguard Rule ( www.ftc.gov/bcp/conline/pubs/buspubs/safeguards.htm ), explains important aspects of the regulation ( www.ftc.gov/privacy/glbact ), which applies to businesses “significantly engaged” in providing financial products or services to consumers. The report includes a section called “How to

January 1, 2003

Retirement

The IRS releases 2003 cost-of-living adjustments related to benefit and contribution limits for qualified retirement plans ( www.irs.gov/pub/irs-news/ir02-111.pdf ). Many such savings caps are not changing this year because the increase in the cost-of-living index fell below the statutory thresholds that otherwise would trigger their adjustment. However, several will increase

January 1, 2003

Financial Reporting

January 1, 2003

Auditing

The ASB issues Statement on Auditing Standards no. 100, Interim Financial Information, replacing SAS no. 71, with the same title. The new standard provides additional guidance on performing reviews of interim financial information and incorporates the SEC’s requirement for timely filing of interim data. It also includes recommendations from the

January 1, 2003

Auditors’ Responsibility for Fraud Detection.

Auditors will enter a much expanded arena of procedures to detect fraud as they implement SAS no. 99. The new standard aims to have the auditor’s consideration of fraud seamlessly blended into the audit process and continually updated until the audit’s completion. SAS no. 99 describes a process in which

January 1, 2003

FYI

Four practitioners replace departing members of the ASB. The appointees are Kenneth Macias, William F. Messier Jr., Steven L. Schenbeck and Michael T. Umscheid.

January 1, 2003

International

The International Accounting Standards Board (IASB) issues an exposure draft, Share-based Payment ( www.iasb.org.uk ), which proposes companies, on their financial statements, report as expenses any shares or options they grant to employees as compensation. The IASB concluded that such transactions are not different from those in which an entity