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.
Why 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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As auditors and management begin to prepare for June 30 year-end audits, it’s a good time to share some of the top concerns for not-for-profits this year. How can not-for-profits reassure donors that their contributions are in safe hands? What key implementation issues on new accounting standards updates are not-for-profits grappling with? Outlined below are four topics that should not be overlooked.
In addition to common hacking risks, not-for-profits that accept electronic contributions are targets for credit card fraud. While retailers collect certain personal information to set up customer accounts and ship goods, not-for-profits often forgo requiring that level of detail to make donating simple. Unfortunately, this makes not-for-profits an easier testing ground for stolen credit card data. Not-for-profit entities with real-time credit card authorization and settlement are even more likely to fall victim because real-time verification makes the stolen data more valuable. These organizations then bear the burden of repaying fraudulent donations in addition to paying fees related to the refunds. Organizations that use electronic methods to accept contributions should consider adopting appropriate controls to ensure revenues are properly recognized and that cash receipts are safeguarded.
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Wrapping your head around the accounting standards changes on the horizon is no easy task—let alone figuring out which ones deserve the most attention. To help with this, I have highlighted five Financial Accounting Standards Board (FASB) Accounting Standards Updates (ASUs) that not-for-profit accounting professionals should consider prioritizing this year. The following updates have fast-approaching effective dates, so it is important to familiarize yourself with these standards now.
Going Concern Requirements
For the first time in history, U.S. GAAP addresses management's responsibility to evaluate and disclose whether there is substantial doubt about an entity's ability to continue as a going concern. This change is significant because it shifts primary responsibility for the entity’s going concern assessments from auditor to management. Auditors should also be aware that FASB’s issuance of ASU No. 2014-15 prompted a change in the related auditing standards. The AICPA Auditing Standards Board (ASB) issued its going concern standard (SAS No. 132) in February 2017. SAS No. 132 has key changes that auditors will want to pay close attention to, including the required timeframe for considering going concern issues.
Continue reading "5 Upcoming GAAP Changes Not-for-Profits Should Know" »
The end of March is here, which means that the end of busy season is just a few weeks away. Congratulations! You have accomplished a great deal so far. I know it is easy to get discouraged at this point. You are likely feeling sleep-deprived and stressed about your looming deadlines. How will you ensure that you will finish this season strong? Maybe you stay motivated by thinking about the time you will have to catch up on your favorite shows, work out at the gym, or relax with family and friends once April 18 rolls around. Or maybe you push through to the end by turning up the music.
Whether you look for tunes with inspirational lyrics and catchy beats or songs that promote focus, there are numerous options out there, so why not create a motivational playlist?
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The parallels between sailing and audit quality came to mind recently when I was speaking with a practitioner who is passionate about sailing. His comments about his enthusiasm for sailing reminded me of the profession’s passion and ongoing commitment to quality.
When sailors go to sea, they depend on their ships to get them to their destinations quickly and safely, conquering instability, uncertain weather conditions and unexpected obstacles along the way. In many ways, they place the same faith in their vessels as CPAs place in their firms. CPAs rely on the firms they’ve built to achieve their goals – to help them serve their clients and business communities, uphold the public interest and create thriving workplaces – as they navigate the many challenges of a fast-changing and increasingly complex environment. In both cases, a strong discipline and commitment to quality is critical to success.
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