• Advisory Committee on Small and Emerging Companies to discuss internal control audits

    The SEC’s Advisory Committee on Small and Emerging Companies is scheduled to discuss the requirement for auditors to verify management’s internal controls over financial reporting at its upcoming meeting. The advisory panel previously said smaller companies find the requirement costly, and its members support widening the scope of the exemptions to the rule.
  • COSO updates enterprise risk framework to highlight strategic planning

    The Committee of Sponsoring Organizations of the Treadway Commission (COSO) updated its Enterprise Risk Management—Integrated Framework to reflect the connection between an organization’s risk management and its strategy and performance. The updated Framework discusses enterprise risk management relative to the changes in business arising from developments in the financial markets, the emergence of new technologies and demographic changes.
  • Investor advocate’s office weighs in on FASB’s materiality debate

    Some SEC officials believe the FASB’s best course for clearing up the contentious debate about U.S. GAAP’s definition of materiality is to return to the established guidance from the accounting board and the market regulator. The board’s effort to update its definition has been embroiled in controversy since the board proposed making a change in 2015.
  • Update aims to simplify, expand hedge accounting

    The FASB issued an update to U.S. GAAP that aims to simplify hedge accounting, one of the most complicated areas of accounting. The update allows hedge accounting to be used for a broader range of risk management strategies.
  • Report: Revenue changes for software industry may be significant

    The FASB’s sweeping new revenue recognition rules go into effect in 2018 and will require a major change in the way companies calculate the top line in their income statements. The actual impact to the revenue figure reported, however, will vary from company to company, and most experts believe the software industry will see a significant impact.
  • International standard-setters outline ways to enhance auditor’s professional skepticism

    The International Auditing and Assurance Standards Board (IAASB), the International Ethics Standards Board for Accountants (IESBA), and the International Accounting Education Standards Board (IAESB) published a joint report that outlines potential ways to promote professional skepticism in auditing. The three international standard-setters said increasing complexity of business and financial reporting underscores the importance of professional skepticism.
  • Webcast to explain proposed guidance for grants, contributions to not-for-profit groups

    The FASB plans to hold a webcast to explain an August proposal to help not-for-profit groups and some business enterprises determine how to record grants and other funds from foundations and government bodies. The proposal clarifies the difference between restrictions and donor-imposed conditions on a gift or grant and attempts to explain which arrangements qualify as exchanges.
  • Cybersecurity Audit and Accounting Guide is released

    The AICPA said the Audit and Accounting Guide (AAG) AAG: Reporting on an Entity’s Cybersecurity Risk Management Program and Controls (aag-cyb) provides a framework for managing cybersecurity risks. The guide explains how to implement the framework and report on an organization’s program for managing technology risks on a company-wide basis.
  • ASC 606 Revenue Recognition eBook

    If your organization is in the process of adopting, or still researching, the new revenue recognition accounting standard, then this comprehensive, yet easy-to-read, 60+ page eBook is for you.
  • ASC 606 update: Insurance revenue streams affected

    Insurance organizations thought ASC 606 would have minimal impact on the industry because insurance contracts were out of scope, but as companies and accounting specialists delved into the standard, they discovered many insurance organizations have revenue streams that fall under the scope of ASC 606.
  • ICFR for Revenue Recognition

    Understand the nuances of internal controls over financial reporting (ICFR) for ASC 606 (revenue recognition), including transition methods discussed in this Financial Executives International (FEI) presentation.
  • Year-end insurance accounting update 2015

    Baker Tilly’s insurance professionals provided an update on recent NAIC statutory and GAAP changes affecting insurance organizations and shared insights into complex accounting standards.
  • Revenue recognition requirements delayed one year

    On July 9, 2015, the FASB approved its April 2015 proposal to defer the effective date of ASU No. 2014-09, Revenue from Contracts with Customers, for all entities for one year. Entities will, however, be allowed to apply the new standard as of the original effective dates set out in the standard. This article examines the revenue recognition standard and explains why the FASB granted an extension.
  • Update from REITWise 2015

    The National Association of Real Estate Investment Trusts (NAREIT) held their annual REITWise conference in Phoenix, Ariz. The latest accounting, tax, and economic issues impacting real estate investment trusts (REITs) were addressed over the course of the conference. Highlights from some of the committee meetings and sessions are summarized.
  • Recap of the 2014 FASB ASUs

    In 2014, the Financial Accounting Standards Board (FASB) issued eighteen Accounting Standards Updates (ASUs). There are several major areas expected to be updated in 2015, including leases, disclosure framework, and accounting for financial instruments. To help you review the most recent updates, links are provided to the detailed FASB information for each of the 2014 ASUs.
  • Implementing an effective cybersecurity management program

    Cybersecurity is one of the most urgent topics in business today. It seems that every week, there is a new story about a company’s data being breached with millions of customer records, payment card data, or lost trade secrets. The best-prepared companies are shifting their cybersecurity strategies from prevention, to implementing techniques that quickly detect breaches and limit the damage once a breach has been confirmed. What are the effective components of a modern cybersecurity management program? We consider five main components to improve cybersecurity effectiveness.
  • AICPA updates standards for accounting and review services

    The American Institute of Certified Public Accountants (AICPA) has rolled out the long-awaited update of its accounting and review standards. Statement on Standards for Accounting and Review Services (SSARS) No. 21, Statements on Standards for Accounting and Review Services: Clarification and Recodification, represents one of the AICPA’s most significant revisions of its nonaudit standards since 1979. Among other things, the guidance creates a bright line between accounting (or preparation) services and reporting (compilation or review) services and lays out distinct requirements for each type of service. This article outlines what the clarified guidance means to those who use CPAs to perform nonaudit services — including reviews, compilations, and financial statement preparations — to report their historical and prospective financial results.
  • Baker Tilly Comment Letter to the AICPA on the Enhancing Audit Quality Initiative

    We welcome the opportunity to provide feedback to the American Institute of Certified Public Accountants (AICPA) in connection with the Enhancing Audit Quality Initiative (EAQI). Baker Tilly Virchow Krause (Baker Tilly) is committed to audit quality and believes the delivery of high quality audits not only serves the public trust but enhances the value that we provide to our clients.
  • Regulatory noncompliance is now a financial matter

    More punitive regulatory approach raises financial statement audit scrutiny: In the aftermath of the Great Recession, regulators have turned dramatically to a far more punitive approach in dealing with actual and alleged instances of noncompliance with laws and regulations by financial institutions. The increased presence of significant financial consequences, brings into greater light a financial statement auditing standard that previously had infrequent application and limited effect on the financial condition and results of reporting companies’ operations.
  • Progress report: International convergence of accounting standards

    In 2002, FASB and the IASB agreed to work together to develop high-quality, compatible accounting standards that could be used for both domestic and cross-border financial reporting. Since then, the bodies’ efforts to achieve the so-called “convergence” of US GAAP and IFRS have had their ups and downs. Going forward, US standard setters propose an informal, collaborative model that will minimize differences in financial reporting, in lieu of the IASB’s one-size-fits-all approach. This article looks back at what’s happened with convergence to date and examines the future direction of financial reporting in a global marketplace.
  • Going Concern: FASB issues new standard on reporting adverse conditions and events

    FASB has released a new accounting standard that provides much-needed guidance on management’s responsibility in evaluating and disclosing adverse conditions or events that raise substantial doubt about a company’s ability to continue as a “going concern.” The guidance, published in ASU 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, applies to all companies that prepare their financial statements in accordance with US Generally Accepted Accounting Principles (GAAP). This article details the new guidance.
  • Public business entity definition

    In December 2013, the Financial Accounting Standards Board added a new definition to its master glossary with the issuance of Accounting Standards Update 2013-12, Definition of a Public Business Entity. The public business entity (PBE) definition will be used to determine which entities may apply the private company accounting and reporting alternatives within US generally accepted accounting principles (US GAAP) on a going-forward basis.
  • Understanding the COSO Internal Control-Integrated Framework

    COSO’s Internal Control-Integrated Framework makes it easier to design and evaluate the effectiveness of internal controls. The framework is also used by public companies to assess effectiveness of internal control over external financial reporting (ICEFR) under Sarbanes-Oxley (SOX) section 404.
  • FASB accounting standards offer GAAP relief for private companies

    Since May 2012, the Financial Accounting Standards Board (FASB) has been working with the Private Company Council (PCC) to determine whether alternatives to existing US Generally Accepted Accounting Principles (GAAP) standards are appropriate for private company financial statements. Two new accounting standard updates mark the first concrete steps toward providing relief from burdensome and costly requirements for private companies that need or are required to have financial statements prepared in accordance with GAAP.
  • FASB issues ASU 2013-12, Definition of a Public Business Entity

    The Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2013-12, Definition of a Public Business Entity (ASU 2013-12) in December 2013. This update provides a single definition of public business entity for use in future financial accounting and reporting guidance. Distinctions about which not-for-profit entities (NFPs) would receive financial accounting and reporting alternatives within US GAAP typically have been made on the basis of whether an NFP has public debt securities, including conduit debt.
  • SEC proposes rules to increase access to capital for smaller companies

    On December 18, 2013, the Securities and Exchange Commission voted to propose rules intended to increase access to capital for smaller companies. The SEC’s proposal would build upon Regulation A, which is an existing exemption from registration for small offerings of securities up to $5 million within a 12-month period.
  • PCAOB proposed auditing standard – related parties

    Proposed amendments to certain PCAOB auditing standards regarding significant unusual transactions and other proposed amendments to PCAOB auditing standards. On May 7, 2013 the Public Company Accounting Oversight Board (PCAOB) reproposed the Proposed Auditing Standard – Related Parties; Proposed Amendments to Certain PCAOB Auditing Standards Regarding Significant Unusual Transactions; and Other Proposed Amendments to PCAOB Auditing Standards.
  • FASB proposes ASU to define public business entity

    Based on inquiries to the Financial Accounting Standards Board (FASB) on which entities will be within the scope of the draft Private Company Decision-Making Framework: A Guide for Evaluating Financial Accounting and Reporting for Private Companies (the “Guide”), FASB has issued proposed guidance on the definition of public business entities.
  • The truth is in the (XBRL) tagging

    All too often you hear about the cost of doing business and the mountain of compliance exercises that must be undertaken for the privilege of being listed on a public stock exchange. With the seemingly endless array of documents, disclosures, and deadlines by which a public company must abide, it is no surprise that many CFOs feel the same way about the Securities and Exchange Commissions’ electronic data mandate: it is just another compliance exercise that creates no value for the company.
  • Conflict minerals compliance Section 1502 of the Dodd-Frank Act

    Companies that meet the criteria must perform a Reasonable Country of Origin Inquiry (RCOI). This can be an onerous and expensive requirement, as manufacturers must trace their supply chain all the way back to the source to determine if any component contains minerals coming from the DRC Conflict Region. The first SEC report filing is due by May 31, 2014, with annual filings to follow.