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.
Many nonpublic companies have looked to the Financial Accounting Standards Board – through the creation of the Private Company Council – to examine the existing accounting standards and make recommendations for alternative approaches to financial reporting.
Based on the PCC recommendations, the FASB has now issued two Accounting Standards Updates, one standard provides simplified accounting alternatives for accounting for goodwill, the other for applying hedge accounting to certain plain vanilla interest rate swaps (which is explicitly not available to financial institutions) and have others in the pipeline for release. Financial institutions may want to proceed cautiously before moving forward with adoption of any of the PCC alternatives.
Continue reading "Is Your Nonpublic Bank (or Credit Union) Considered a Public Entity?" »
Since Statement on Standards for Valuation Services No.1 was released in June of 2007, I have received numerous questions about when SSVS No. 1 applies. It is important to note that all AICPA members are required to follow all AICPA standards, and many state boards of accountancy require CPAs to follow AICPA standards as well.
SSVS No. 1 was promulgated for one reason: To protect the public and the reputation of CPAs. Before SSVS No. 1, both CPAs and non-CPAs would tell their clients the value of their business based on what amounted to a rule of thumb measurement. The client would then rely on that number for tax returns, transactions, employee stock ownership plans and many other purposes, sometimes with negative consequences for their own clients.
Continue reading "No Matter What You Call It, Valuation Standards Apply" »
Have you read about conflict minerals in the news? Apple Inc. recently stated in its supplier responsibility report that the company’s entire supply of tantalum used in its products was verified as conflict free, as reported by the Los Angeles Times. The report also noted that “we’re pushing our suppliers of tin, tungsten, and gold just as hard to use verified sources.”
This news relates to the U.S. Securities and Exchange Commission’s final rule issued in August 2012 which required public companies to disclose their use of “conflict minerals” in their manufacturing processes and supply chains. The term “conflict minerals” describes certain minerals—tantalum, tungsten, tin and gold—that are mined in the Democratic Republic of the Congo and its surrounding areas. Public companies might be required to file a Conflict Minerals Report, which may also be subject to an Independent Private Sector Audit. As a CPA, you are the premier provider of such an audit and the AICPA provides resources to help with inquiries you may be receiving from your clients.
Continue reading "A Golden Opportunity: Performing IPSAs of Conflict Minerals Reports" »
The firm I work for, RubinBrown, prides itself on supporting small business. Our three offices are in America’s heartland – St. Louis, Kansas City and Denver. As an accountant, auditor and adviser for Main Street, private company financial reporting has always been an important issue to us. So, of course, last June we were excited to see the AICPA release its Financial Reporting Framework for Small- and Medium-Sized Entities. We quickly put in place a strategy to offer FRF for SMEsTM-based financial statement preparation to our clients who do not need GAAP-based financial statements.
For me, seeing what works for others and how they accomplish their goals helps me figure out an efficient and effective path for my own initiatives. If you are interested in expanding your firm’s services and serving your clients by using the FRF for SMEs, you may find our firm’s approach and experiences informative.
Continue reading "A Firm’s Strategy for Offering the FRF for SMEs Framework to Clients" »
Back in March, AICPA Senior Vice President Susan Coffey wrote about the dangers of providing client comfort letters. Since then, we’ve been hearing from more and more members that they are seeing a rise in requests from third parties for some sort of assurance on client accounting and tax information, or financial condition. I think Edward Karl said it best in CPAs and Comfort Letters: The New Chocolate (from the July edition/DC Currents column of The Tax Adviser) when he described them as requests for “verification, confirmation, certification, corroboration, authentication or substantiation of their clients’ financial information.” You name it, we’ve been asked to validate it. On the bright side, an increase in these requests confirms the faith, confidence and trust that business owners, decision makers and the public have in CPAs.
Continue reading "Trust But Verify – Another Perspective on Comfort Letters" »