• Restricted Cash and the Statement of Cash Flows

    In 2016, the Financial Accounting Standards Board’s Emerging Issues Task Force deliberated nine issues concerning cash flows, including the diverse ways restricted cash is classified and presented in the statement of cash flows.
  • Complex Partnerships Under New Review

    The Bipartisan Budget Act of 2015 (BBA) was passed Nov. 2, 2015. It was then modified by the Protecting Americans from Tax Hikes Act on Dec. 18, 2015. Those new laws substantially changed how partnerships will be audited by the IRS. The statutes will take effect in a few weeks, on Jan. 1, 2018.
  • Blockchain and the Future of Accounting

    CPAs must be aware of emerging technologies that have the potential to disrupt their profession. Blockchain technology is one of them. Blockchain streamlines trans-action accounting and enables real-time reporting and real-time audit. We are still at the early days of the technology, but considering the potential impact on the profession, CPAs need to understand what this new technology will bring.
  • Judgment Days Fast Approaching on Revenue Recognition

    In May 2014, the Financial Accounting Standards Board (FASB) in conjunction with the International Accounting Standards Board (IASB) developed a converged revenue recognition standard. Accounting Standards Update 2014-09, Revenue from Contracts with Customers, which is ASC 606 in the FASB Codification, will replace decades-old ASC 605. ASU 2014-09 moves away from the many levels of industry-specific and transaction guidance toward a broader, principles-based approach. Many may welcome the replacement of narrow-scope specifics found in the current revenue recognition model, but it must be noted that it is being replaced with a model that significantly increases the amount of judgment in the revenue recognition for many industries.
  • Lean Accounting Brings Focus and Direction to Company Performance

    Companies across all industries for the past 20 years have been adopting lean manufacturing as a strategy to improve performance. Lean accounting emerged soon after, and it has grown in recent years as a related strategy to align the financial side of an organization with the overall lean effort.
  • Finding the Value in Fair Value

    Over the past 15 years, fair value accounting has evolved to become a part of many private companies’ financial statements. This evolution has not come without controversy.
  • Not-for-Profit Statements Being Overhauled by ASU 2016-14

    The Financial Accounting Standards Board revised the not-for-profit reporting model in its Accounting Standards Update 2016-14, released in August 2016. ASU 2016-14 is effective for fiscal years beginning after Dec. 15, 2017.
  • Lease Accounting: 842 Wake-Up Call

    A decade of effort that began in 2006 has resulted in the issuance of ASU 2016-02, Leases (Topic 842), by the Financial Accounting Standards Board. The 10-plus years of work may have lulled some to sleep, but it’s time to start paying attention to what’s coming.
  • Common IS Audit Pitfalls When Conducting an Engagement

    In the winter 2017 Pennsylvania CPA Journal, I discussed certain challenges that auditors tend to encounter as they begin and end an information systems (IS) audit engagement (“Common IS Audit Pitfalls at the Bookends of an Engagement”). This column is the second part, and it provides additional guidance when conducting walkthroughs and testing procedures during IS audits.
  • SSARS No. 21 a Year Later

    Statement on Standards for Accounting and Review Services No. 21 has been effective for more than a year now – for engagements on financial statements for periods ending on or after Dec. 15, 2015. Sufficient time has passed to allow the peer review process to shine a light on some of the implementation issues that firms and practitioners may be experiencing.
  • California Malpractice Case Highlights Audit Defenses

    When an audit client is exposed as a corrupt enterprise and a court-appointed receiver pursues claims against the auditors for malpractice and aiding and abetting, what defenses are available to the auditor? There are some, but you must make sure they are strong and in place at the beginning of an engagement.
  • Revenue Recognition: A Work in Progress

    ASU 2014-09, Revenue from Contracts with Customers, was issued in May 2014. The amended effective date of implementation is for reporting periods beginning after Dec. 15, 2017, for public companies, and for reporting periods beginning after Dec. 15, 2018, for nonpublic entities.
  • Finance and Operating Leases under ASC Topic 842

    A new Financial Accounting Standards Board (FASB) leasing standard is finally available, and it likely will impact many companies in a wide array of industries. The major change in ASC Topic 842 is to put most leases, which reflect the right of the lessee to secure the asset in accordance with the underlying contract, on the lessee’s balance sheet instead of only in the footnote disclosures. This will affect corporate balance sheet and income statement ratios, the nature of corporate financing, and the leasing industry.
  • EU Audit Reform May Bring Unforeseen Opportunity to Your Doorstep

    New European Union (EU) audit reforms will take effect on June 17, 2016. The changes to existing statutory audit requirements have the potential to affect many companies in the United States, especially those with an EU-based parent or those with banking, insurance, or certain other subsidiaries domiciled in the EU.
  • FASB Issues Long-Awaited Financial Instruments Standard

    On Jan. 5, 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This updated standard changes current generally accepted accounting principles and potentially affects both public and private companies, employee benefit plans, not-for-profits, the equity method, financial liabilities reported using fair value, as well as presentation and disclosures.
  • Be Sure to Properly Consider IT Risks in Your Audits

    Information technology (IT): the more we rely on it, the greater the impact it has when something goes wrong. It’s our job as auditors to ask “What could go wrong, and how could it affect the financial statements?”
  • New Financial Statement Service a Gift to CPAs and Clients

    A winter 2016 Pennsylvania CPA Journal feature that zeroes in on Section 70 of SSARS 21 and its impact on the CPA profession.
  • Changes Bring Clarity to EBP Disclosures

    A winter 2016 Pennsylvania CPA Journal feature that addresses two recent Accounting Standards Updates that are set to clear up some of the confusion over disclosures in financial statements of employee benefit plans.
  • The GAAP Simplicity Initiative

    Simplification of Generally Accepted Accounting Principles (GAAP) might sound like an oxymoron, but inroads in this area are being made. The Financial Accounting Standards Board (FASB) has developed an initiative to make narrow-scope simplifications and improvements that maintain usefulness to investors while reducing cost and complexity in financial reporting.
  • AR-C Section 70: Are You Prepared to Prepare?

    For years, clients have wanted to get quick and reasonably priced (read “inexpensive”) financial data at interim and year-end from their CPAs. CPAs may have wanted to deliver, but until Statement on Standards for Accounting and Review 21 and the new preparation service, this could not be done without an accountant’s compilation report.
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