NEWS HIGHLIGHTS FOR WEDNESDAY - 9.14.16

By:
Maya Lindsay
Published Date:
Sep 14, 2016

Accounting and Financial News Stories

Accounting News Roundup: Lousy Clients and The Non-GAAP Playground | 09.13.16
Going Concern
Life after Big 4 - Here's a Bloomberg article about Charles Chao, the CEO of Chinese internet company Sina Corp. Chao is a former PwC manager and his career has gotten pret-tay, pret-tay, pret-tay interesting in the last few weeks. The former audit manager at PricewaterhouseCoopers LLP is sitting on gains of about $423 million after he made a personal bet worth $456 million on Sina shares last November -- paying for more than half the purchase with borrowed money, according to data compiled by Bloomberg.

6 Steps for Finding the Right Technology Fit
Accounting Today
In a recent column, I explored how to find your practice’s niche. With 35 percent of buyers ranking specialized expertise as their top decision-making factor when choosing an accounting or professional services firm, there are real business advantages for developing a firm specialty. Once you know where you will be focusing, you’ll need to go through the process of selecting the right supporting technology to turn your vision into a reality.

New York Proposes Cybersecurity Regulations for Banks
Wall Street Journal
New York Gov. Andrew Cuomo and the state’s top banking regulator proposed regulations Tuesday that would be among the first in the U.S. to require banks to establish cybersecurity programs. If implemented, the regulations would increase the onus on some of the world’s largest banks to invest in cyber protections that could cost them and insurers millions of dollars, according to experts. Banks would be required to hire a chief information security officer and implement measures that detect and deter cyber intrusions and protect consumer data.

What the New FASB Accounting Standards Will Mean for Your Nonprofit
Nonprofit Quarterly
The Financial Accounting Standards Board (FASB) issued a new accounting standard for nonprofits in mid-August that’s meant to help nonprofits to tell their story more transparently through their financials. FASB’s guidance has informed the way nonprofit financial statements have been organized since 1993; in the more than 22 years since, many practitioners have expressed frustration with the oddness of the picture presented to the outside world.

The Future of Accounting is Not Defined by Technology
AccountingWEB
The fact about technology today as it relates to accounting is that it is just the tool, the medium to give shape to what the fundamental purpose of accounting is and nothing more. Ask yourself, “What does the client do after you deliver accounting work?” Better yet, imagine that you are the client and that some other accountant does your accounting.

International Accounting Board Amends Insurance Standard
Bloomberg BNA
New amendments to international insurance contract accounting standards can help ease the temporary volatility in financial reporting that companies can encounter when applying two separate international financial reporting standards. The International Accounting Standards Board’s Sept. 12 issued amendments to IFRS 4: Insurance Contracts, which intend to reconcile the requirements of IFRS 4 with those of the board’s new financial-instruments standard, IFRS 9.

IRS Needs to Define Field Program Objectives and Assess Risks in Case Selection
U.S. Government Accountability Office
The Internal Revenue Service (IRS) uses automated processes to prioritize cases to be potentially selected for in-person contact to resolve a tax collection issue (see figure), but group managers in the Field Collection program manually select the cases to assign to revenue officers. For example, when reviewing cases, group managers consider characteristics of the revenue officer available—such as current workload—and case characteristics—such as potential collectability—when deciding whether to assign a case.

Household Incomes Leapt 5.2% in 2015; Poverty Rate Drops
Nasdaq
 A surge in U.S. incomes last year delivered the first significant raise for the typical family after eight years of stagnant and declining earnings, the result of sustained job growth finally lifting a broad swath of American households. The median household income—the level at which half are above and half are below—rose 5.2%, or $2,798, to $56,516, from a year earlier, after adjusting for inflation, the Census Bureau said Tuesday.

IRS Considers Online Filing Of Offers In Compromise
Tax-News
The Treasury Inspector General for Tax Administration (TIGTA), in a recently released report, has disclosed that the US Internal Revenue Service (IRS) has agreed to consider "alternative and cost-effective delivery methods that would provide electronic access to Offer in Compromise (OIC) files." The US tax code requires the IRS to provide public access to information about accepted OICs. TIGTA noted that, although the IRS now accepts 20 times more OICs than it did when the offers first became subject to public inspection in the 1950s, the program continues to rely on labor-intensive procedures to store the files in a decentralized, paper-based system.

Marijuana Dispensary Takes on IRS in Tax Court
Accounting Today
In probably the biggest case in the marijuana industry since Californians Helping to Alleviate Medical Problems Inc. v. Commissioner, Harborside Healthcare Center is taking on the IRS in Tax Court. What is at stake is Section 280E of the Tax Code, which stemmed from a 1981 Tax Court decision. According to that section of the Tax Code, “No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business consists of trafficking in controlled substances which is prohibited by Federal law or the law of any State in which such trade or business is conducted.”

DirectPath and Sovos Partner for ACA Reporting
CPA Practice Advisor
DirectPath and Sovos Compliance have partnered to provide large employers with a comprehensive, end-to-end Affordable Care Act IRS reporting solution for the 2016 tax year. Sovos is a provider of employee health care engagement and compliance, and DirectPath is a one-stop-shop for employers looking to easily and efficiently provide employees and the Internal Revenue Service with the necessary documentation required by the new ACA regulation.

Audit Sampling in Forensic Accounting – Could Something be Missed?
JD Supra Business Advisor
Audit sampling techniques may permit errors or dishonesty to go undetected. Audit sampling occurs when a review of less than 100% of a population occurs. Determining how the size of a population is used in an audit sample is a function of “sampling risk”, which is defined as the probability that a sample will not accurately represent an entire population.

How to Build a Strong Culture in Your Firm
CPA Practice Advisor
I was recently asked:  What ONE change do you recommend that firms undertake to make their firm culture more engaging and attractive to the next generation leader? My suggestion: Get everyone on the same page.  Align the firm with partners AND staff who have similar values.  Related to this, align the firm’s CLIENTS that allow firm personnel to do the kind of work that is most satisfying and enjoyable to them instead of the usual helter-skelter amalgamation of “good” and “bad” clients.

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