What’s on the horizon? How are changes in the business marketplace creating new opportunities for the accounting profession? What are the implications of up-and-coming technologies like blockchain? These, among a host of other emerging trends were discussed recently at the AICPA’s Assurance Services Executive Committee (ASEC) meeting. The committee, composed of the profession’s leaders in assurance and advisory services, engaged in an insightful discussion about issues that are gaining traction internationally and in the United States.
In addition to discussing ideas for potential future projects, the committee also spoke about the projects they have currently underway that facilitate new opportunities for practitioners to provide value-added services to clients. These include five emerging service opportunities:
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In every audit, there are many transactions and accounts that need to be checked, whether they appear especially risky or not. And whether you’re an internal or external auditor, data analytics will help you identify and analyze those audit areas with the same effectiveness as methods auditors have used for decades—maybe even greater effectiveness. Sounds pretty good, right?
So what are the drawbacks preventing further integration of data analytics into the financial statement audit? Most significantly, there’s a need for additional guidance on how to harness the power of audit analytics. Additionally, the profession would benefit from independent research to support the effectiveness of new audit analytics in conducting an audit and meeting audit objectives.
The recently announced Rutgers AICPA Data Analytics Research (RADAR) Initiative seeks to study and find evidence of the effectiveness of automated techniques and data analytics applied in the context of the financial statement audit. This collaborative research effort, which will be hosted by Rutgers University, will explore the application of foundational approaches that can be applied by audit firms of all sizes.
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When I tell people that I work on improving the relevance of corporate reporting, I often get asked about the value of reporting on non-financial information. I remind them that not all aspects of a company’s value can be ascertained from historical financial statements, which is why it’s important to consider a company’s intellectual, human, natural and social and relationship capital in addition to its financial and manufactured capital. In recent years, there has been a shift as investors and other users of corporate reports are beginning to consider more than just financial statements in their evaluations.
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Traditionally, investing and “doing good” have been considered two very different activities. Investing was about making money, while doing good was about giving money away charitably to foster some kind of positive change. However, the two concepts have started to merge and form what is now known as socially responsible investing. It offers a way to achieve both a financial and a social return on an investment and has become a popular idea over the last decade. Sustainable and responsible investment now accounts for more than $3 trillion of the roughly $25 trillion in the U.S. investment marketplace, according to the Forum for Sustainable and Responsible Investment.
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So, have you started doing Service Organization Control engagements at your firm yet? You’ll recall in my last blog post that jumping into this niche area is a great way to engage existing clients and new clients in an emerging market.
The AICPA has been fielding a number of questions regarding performing and reporting on SOC 1SM, SOC 2 SM and SOC 3 SM engagements. Here are four of the key queries and their answers to help you and your firm move forward in starting a SOC practice:
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As with so many issues related to the accounting profession, opportunities to engage new clients or re-engage existing clients abound when standards are updated or changed. Such is the case with Service Organization Control Reports SM. The guidance for service auditors in the old Statement on Auditing Standards No. 70, or SAS 70, as it was known, was replaced effective June 15, 2011, by Statement of Standards for Attestation Engagement No. 16, which can give your firm and its clients a new set of standards to meet user needs.
If you haven’t already looked into this growing market for CPA services, here are some tips on how you can start a SOC practice:
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