ASB Encourages Auditors to Exercise Skepticism
The American Institute of CPAs’ (AICPA) Auditing Standards Board (ASB) has issued a Proposed Statement on Auditing Standards (SAS), Auditing Accounting Estimates and Related Disclosures, to supersede SAS No. 122 section 540, Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures, and amend various other AU-C sections in AICPA Professional Standards.
The proposed SAS is intended to help auditors appropriately address the complex scenarios that can occur with the new accounting standards. Those interested can submit their feedback to Sherry Hazel at Sherry.Hazel@aicpa-cima.com by November 22, 2019.
Business Execs Have Dimmer View of U.S. Economy
The AICPA Economic Outlook Survey polls chief executive officers, chief financial officers, controllers and other certified public accountants in U.S. companies who hold executive and senior management accounting roles.
Their most recent survey shows that only 42 percent of survey takers expressed optimism about the U.S. economy’s outlook over the next 12 months, down from 57 percent in the previous quarter. As recently as 2018, 79 percent indicated they were optimistic about the economy.
The global economy was viewed in an even worse light, with less than a quarter (24 percent) of executives expressing optimism, down from 35 percent last quarter, citing uncertainty over U.S.-China trade and tariff conflicts and the resolution of Brexit in the United Kingdom.
Other key survey findings include:
- Availability of skilled personnel remains a top challenge, as it has been since Quarter 3 of 2017
- Domestic economic conditions and political leadership joined skilled personnel as the top three business challenges for the quarter
- The percentage of U.S. executives who remain optimistic about their own company’s prospects fell from 62 percent to 58 percent
Discussion Paper Tackles Materiality in Attestations
A new discussion paper from the AICPA discusses the challenges of determining materiality in an attestation engagement when subject matters cannot be quantitatively measured.
Materiality Considerations for Attestation Engagements Involving Aspects of Subject Matters That Cannot Be Quantitatively Measured, was developed by a Working Group of the AICPA Assurance Services Executive Committee (ASEC), highlighting challenges that practitioners may face when making professional judgements about materiality.
The AICPA is seeking feedback on the issues discussed in the paper and would like to hear from those with experience in attestation engagements. Interested parties are encouraged to submit their feedback to Sherry Hazel at Sherry.Hazel@aicpa-cima.com by October 31, 2019.
Auditing Standards Board Proposes Amendments to Financial Statements
The AICPA Auditing Standards Board (ASB) has issued an exposure draft of a Proposed Statement on Auditing Standards (SAS) Amendments to AU-C Sections 800, 805, and 810 to Incorporate Auditor Reporting Changes From SAS No. 134.
In the ASB’s effort to conform Generally Accepted Auditing Standards (GAAS) to the new auditor reporting standards, the proposed SAS aligns:
- AU-C sections 800, Special Considerations—Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks, which addresses audits of financial statements prepared in accordance with a special purpose framework.
- 805, Special Considerations—Audits of Single Financial Statements and Specific Elements, Accounts, or Items of a Financial Statement, which addresses audits of a single financial statement, a balance sheet or an element of a financial statement.
- 810, Engagements to Report on Summary Financial Statements (the AU-C 800 series), which addresses audits of summary financial statements derived from financial statements audited in accordance with GAAS.
The SASs are combined with the reporting provisions of SAS No. 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements, and other recently issued SASs.
AICPA Awards 2019-20 Legacy Scholarships
The AICPA granted more than $650,000 in academic scholarships to 129 students as part of the AICPA Legacy Scholars program. The scholarships help students pay for college while providing opportunities to succeed in the accounting profession.
The Scholarships that comprise AICPA’s Legacy Scholars Program are:
- AICPA/Robert Half Student Scholarship Award, which provides $10,000 to up to four undergraduate and graduate students who intend to earn their CPA.
- American Woman’s Society of CPAs (AWSCPA) Scholarship Award, which offers $5,000 to up to four outstanding women pursuing a degree in accounting.
- AICPA John L. Carey Scholarship Award, which gives $5,000 to up to five non-accounting or business degree holders pursuing a graduate degree in accounting.
- AICPA Scholarship Award for Minority Accounting Students, which offers $3,000 to $5,000 to approximately 90 outstanding minority students to encourage their study of accounting.
- AICPA Foundation Two-year Transfer Scholarship Award, provides $5,000 to up to 25 students transferring from a two-year school to a four-year program to complete their accounting degree.
The complete list of recipients is available at https://thiswaytocpa.com/alsrecipients/. The AICPA will once again be offering scholarships for the 2020-2021 school year. Students interested in becoming one of the AICPA’s Legacy Scholars should review the eligibility criteria and submit their applications through www.ThisWayToCPA.com starting December 1, 2019.
See inside October 2019
Tax Advice for Business Clients Closing Out 2019
As 2019 comes to a close, many tax professionals are already providing their small business clients with tax planning advice for tax year 2019, in addition to tax compliance services. Tax reform presents a good opportunity for all practitioners to ...