Accounting and Financial Reporting Feed

financial reporting

The AICPA works closely with the Financial Accounting Standards Board and other accounting regulators for the mutual goal of improving financial reporting. The AICPA provides accounting guidance via audit and accounting guides and issues papers, recommends to Financial Accounting Standards Board topics worthy of standard setting, and advocates its beliefs on needed outcomes on proposed accounting standards.

 

 

 

 

 

 

 


 

Your five-step guide for using data analytics in an audit

Data analyticsYour clients have a lot of information. And you, being the forward-thinking CPA that you are, want to use new technologies and techniques to get the most out of that data. So where do you begin?

Audit data analytics (ADAs) is a great place to start. Using tools you already have – Excel, for example – you can analyze entire populations, find anomalies and identify patterns. To help you on your way, we’ve outlined five basic steps for planning, performing and evaluating the results of an ADA used to perform an audit procedure.

  1. Plan the ADA.

The first step is to develop a solid plan. Figure out what information you’ll be reviewing and what you want to get out of it. Are you performing a risk assessment procedure, substantive analytical procedure, or test of details? Or are you seeking to form an overall conclusion from the audit? Once you know your objective, then think about the population of data you have available. Give preliminary consideration to how available, relevant and reliable it is (you’ll consider this in more detail in step 3). Finally, identify which specific ADA procedures, techniques and tools you’ll use.

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Credit losses: A new scope

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If you have put off reviewing the Financial Accounting Standards Board’s (FASB) new Credit Loss standard since its effective date is “in a galaxy far, far away,” you are not alone.

This is the largest accounting standard change affecting depository institutions (and other industries) within the last 40 years, so it can be intimidating for management to get started. Plus, the amount of flexibility and professional judgement allowed within the standard itself has caused confusion and fear, making it hard even to begin.

Do not give into your fear. “Fear is the path to the Dark Side.” Instead, read below to digest the new standard piecemeal, and to understand what it does and doesn’t say. Then you will have the tools needed to take the steps to implement it. 

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7 key steps to master revenue recognition implementation

Deadline loomingStandard setters have made game-changing revisions to revenue recognition standards, and the effective date for implementation is fast-approaching. The new standard replaces the existing transaction- and industry-specific revenue approach with a principles-based approach. Is your organization ready for this shift?

The new standard was originally issued by the Financial Accounting Standards Board as Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (the International Accounting Standards Board has also issued guidance with the same name), and several clarifying amendments have since been issued. The guidance affects all entities—public, private and not-for-profit—that have contracts with customers. The standard’s original effective date was postponed because of the complexity involved.

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Tips on Tackling Revenue Recognition Implementation

Shutterstock_112806709“It has been a massive undertaking.”

“There are seven major differences between the old and new guidance.”

“The standard changed the accounting answer for us in a few areas.”

Those are just a few observations from leaders at Oracle regarding their experience implementing the Financial Accounting Standards Board’s landmark accounting standard, Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The new guidance supersedes the current guidance in Accounting Standards Update 605, Revenue Recognition. The standard’s initial effective date was deferred, but now it’s almost here. Organizations that haven’t done so already definitely need to take the necessary steps toward compliance ASAP, and firms should advise their clients, too.

To learn more about Oracle’s successful approach to revenue recognition implementation, AICPA Chairman Kimberly Ellison-Taylor, CPA, CGMA, Global Accounting Strategy Director for the Financial and Professional Services Industries for Oracle America, sat down with two colleagues to discuss the company’s experiences preparing to put the standard to work.    

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Find Answers to Your Cash and Tax Basis Questions

Shutterstock_123504565Why do cats purr? Why are pizza boxes square when the pizza is round? Sometimes it’s hard to find a single answer – let alone the right answer - to your questions. Do you know where to turn to when you have a question about the income tax basis or cash basis of accounting? Practitioners frequently ask questions about how to account for transactions using these special purpose frameworks. What they quickly find is a lack of authoritative guidance. Searching and googling can give you umpteen answers. But you need the right one.

The Center for Plain English Accounting, AICPA’s national accounting and auditing (A&A) resource center, often answers questions about the tax and cash bases of accounting. For example, the following two questions were recently posed by members:

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