Close
Close

On The Horizon: FASB webcast for private companies and not-for-profits scheduled

RFP
Contents FASB       Webcast for private companies and not-for-profits scheduled
      FAF issues annual report

AICPA       SSARS 24 Omnibus 2018 Standard issued
      GAQC issues a new tool to use with 2018 Compliance Supplement

GASB publishes new implementation guide OMB issues 2018 Compliance Supplement CAQ releases audit planning alert for auditors of broker-dealers IASB issues update on May meetings International Federation of Accountants       IPSASB issues staff questions and answers on state-owned enterprises 4
      IESBA issues publication on professional skepticism



FASB Webcast for private companies and not-for-profits scheduled The FASB will host its semiannual webcast, “IN FOCUS: FASB Update for Private Companies and Not-for-Profit Organizations,” on June 15 to provide an update on the Board’s standard-setting activities for these entities.

Registration and other information is available on the FASB website.

FAF issues annual report The Financial Accounting Foundation (FAF) recently issued its 2017 Annual Report, “Standards That Work.” The report focuses on how its standard-setting boards, the FASB and the GASB, ensure that standards work for all stakeholders and also discusses the FAF’s actions to support these efforts.



AICPA SSARS 24 Omnibus 2018 Standard issued The AICPA issued Statement on Standards for Accounting and Review Services (SSARSs) 24, Omnibus Statement on Standards for Accounting and Review Services – 2018. SSARS 24 adds AR-C Section 100, amends AR-C Sections 60 and 90, and adopts conforming amendments to other sections.

AR-C Section 100, “Special Considerations – International Reporting Issues,” provides guidance and requirements for compilation or review engagements where either of the following conditions exists:

  • The financial statements have been prepared in accordance with a financial reporting framework generally accepted in another country but not adopted by a body designated by the Council of the AICPA to establish generally accepted accounting principles.
  • The engagement is to be performed in accordance with SSARS and another set of compilation and review standards.

Reporting guidance and illustrations of compilation and review reports are also included.

Amendments made to AR-C Section 60, “General Principles for Engagements Performed in Accordance with Statements on Standards for Accounting and Review Services,” include providing new and revised definitions, as well as clarifying independence-related language that precludes an accountant from performing a review of the financial statements when the accountant accepts responsibility for the design, implementation, and maintenance of internal control.

Amendments made to AR-C Section 90, “Review of Financial Statements,” include updated language to Section 90, Paragraph .39, to conform the requirements with respect to the contents of the accountant’s review report to the illustrative examples in that section.

AR-C Section 100 and most other amendments in this Omnibus are effective for compilations and reviews of financial statements for periods ending on or after June 15, 2019, with early adoption permitted. The amendment to AR-C Section 90, Paragraph .39, is effective upon issuance of the SSARS.

GAQC issues a new tool to use with 2018 Compliance Supplement The Governmental Audit Quality Center (GAQC) has issued a new tool, GAQC 2018 Supplement Access Tool, to assist auditors in using the 2018 and 2017 Compliance Supplements together (see article below). The tool compares the Compliance Supplements by section, highlighting which sections are superseded or continue to remain relevant.



GASB publishes new implementation guide The GASB published Implementation Guidance Update – 2018, which contains questions and answers intended to clarify, explain, or elaborate on recent GASB standards.

The guide addresses questions raised about the application of the Board’s standards on pensions, other postemployment benefits, the statistical section of the annual financial report, regulatory reporting, and tax-abatement disclosures. The guide also includes amendments to previously issued implementation guidance.

The requirements of the new guide are effective for reporting periods beginning after June 15, 2018.



OMB releases 2018 Compliance Supplement The Office of Management and Budget (OMB) released the 2018 2 CFR Part 200, Appendix XI Compliance Supplement for single audit engagements. New this year, the 2018 Compliance Supplement must be used together with the 2017 Compliance Supplement, dated April 2017, because the 2018 Compliance Supplement only provides significant changes and updates from the 2017 Supplement. Therefore, portions of the 2017 Compliance Supplement that were not superseded continue to be effective. The 2018 Compliance Supplement includes new guidance, as well as standard changes made by the OMB, such as the addition, deletion, and modification of various federal programs. It is effective for audits of fiscal years beginning after June 30, 2017.

Appendix V, “List of Changes for the 2018 Compliance Supplement,” details the changes contained in the 2018 Compliance Supplement, including

  • One new cluster was added.
  • Two programs were deleted and one program was added.
  • “Part 1 – Background, Purpose, and Applicability” includes an explanation on how auditors must use the 2018 Compliance Supplement and the 2017 Compliance Supplement together.
  • “Part 2 – Matrix of Compliance Requirements” is not included in the 2018 Compliance Supplement. Auditors should refer to the individual program matrices in Parts 4 and 5 for programs included in the 2018 Compliance Supplement, or refer back to the 2017 Compliance Supplement for programs that were not superseded.
  • “Part 3 – Compliance Requirements” updates Part 3.2-I, “Procurement and Suspension and Debarment,” to provide information on the impact of the National Defense Authorization Acts (NDAA) of 2017 and 2018 regarding simplified acquisition and micro-purchase thresholds. Additional information on the NDAA is provided in Appendix VII-A, “Other Audit Advisories – Hurricane and NDAA Addendum.”



CAQ releases audit planning alert for auditors of broker-dealers The Center for Audit Quality (CAQ) released an alert, “Audit Planning Alert for Auditors of Brokers and Dealers,” to assist auditors in planning audit and attestation engagements. The alert focuses on five areas that are typically more complex or that require significant auditor judgment:

  • Auditing revenue
  • Auditing related-party transitions
  • Auditing supplemental information
  • Performing examination engagements
  • Performing review engagements

Each section includes questions for the auditor to consider in assessing risk, as well as examples of audit deficiencies identified in the PCAOB’s most recently published inspection report.



IASB issues update on May meetings All decisions reached at IASB meetings are tentative and may be changed or modified at future meetings. Board decisions become final only after completion of a formal ballot to issue a new Standard or Interpretation or to publish an Exposure Draft.

The IASB has issued the May 2018 update summarizing the tentative decisions reached during its May public meetings. The Board discussed the following topics during those meetings:

  • Primary financial statements
  • Business combinations under common control
  • Targeted standard-level review of disclosures
  • Goodwill and impairment
  • Implementation issues in IFRS Standards
  • Insurance contracts
  • Rate-regulated activities



International Federation of Accountants IPSASB issues staff questions and answers on state-owned enterprises The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has issued a document featuring questions and answers developed by the staff titled “State Owned Enterprises and IPSAS-based Consolidated Financial Statements.”

The publication addresses questions about whether International Public Sector Accounting Standards (IPSAS) are compatible with accounting frameworks based directly or indirectly on International Financial Reporting Standards (IFRS), or on national financial reporting standards that very closely approximate IFRS, when consolidating state-owned enterprises (SOEs). It also discusses what controlling entities can do to make the consolidation of SOEs as straightforward and efficient as possible. SOEs are described in the publication as public sector entities of a commercial nature with profit-seeking objectives.

The IPSASB staff concludes that the use of IPSAS for nonprofit-seeking entities should not give rise to significant compatibility issues when these entities consolidate SOEs reporting under IFRS or a similar national framework into a government’s financial statement.

The publication is neither an authoritative pronouncement nor an interpretation of one or more authoritative pronouncements of the IPSASB. It does not amend or override the requirements of existing IPSAS or provide further implementation guidance.

IESBA issues publication on professional skepticism The International Ethics Standards Board of Accountants (IESBA) of the International Federation of Accountants has issued the Consultation Paper, “Professional Skepticism – Meeting Public Expectations,” in response to regulatory and other stakeholder feedback on a 2017 Joint Professional Skepticism Working Group publication, “Toward Enhanced Professional Skepticism.”

The issues discussed in the Consultation Paper include

  • The behavioral characteristics encompassed in professional skepticism
  • Whether these behavioral characteristics should apply to all professional accountants
  • Whether the International Code of Ethics for Professional Accountants (including International Independence Standards) should be further developed to address behaviors associated with exercising appropriate professional skepticism

The Consultation Paper will be the basis for a series of stakeholder roundtable discussions in Washington, D.C. (June 11), Paris (June 15), and Tokyo (July 12).

Comments are due by August 15.



© 2018 Grant Thornton LLP, U.S. member firm of Grant Thornton International Ltd. All rights reserved. This Grant Thornton LLP On the Horizon provides information and comments on current accounting and SEC reporting issues and developments. It is not a comprehensive analysis of the subject matter covered and is not intended to provide accounting or other advice or guidance with respect to the matters addressed in this publication. All relevant facts and circumstances, including the pertinent authoritative literature, need to be considered to arrive at conclusions that comply with matters addressed in this publication. For additional information on topics covered in this publication, contact a Grant Thornton client-service partner.