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The Daily


Maya Lindsay
Published Date:
Oct 21, 2016

Accounting and Financial News Stories

Going Broke is Clients’ Biggest Retirement Fear, CPAs Say
Those carpe diem baby boomers who’ve been spending a lot of money on fun stuff through many of their adult years now say running out of money in retirement is their biggest concern, according to a recent survey of CPA financial planners by the American Institute of CPAs (AICPA). We’re not entirely jesting about boomers’ seize-the-day purchasing habits. They generally are widely considered to be big shoppers, as Business Insider reported in 2015. And the oldest boomers, born between 1946 and 1955, spend the most, according to a 2015 Gallup article.

Bank Legal Costs Cited as Drag on Economic Growth
Wall Street Journal
A heightened emphasis by banking regulators and law-enforcement officials on financial misconduct may be constraining global growth, some officials warn. Legal expenses are among the burdens weighing on banks, policy makers say. “The roughly $275 billion in legal costs for global banks since 2008 translates into more than $5 trillion of reduced lending capacity to the real economy,” Minouche Shafik, a deputy governor of the Bank of England, told a New York conference of regulators and bankers Thursday.

The End of Accounting?
Although the title of the new book Baruch Lev has co-authored, “The End of Accounting,” provocatively suggests the finale of financial reporting as we know it, he cautions that he really isn’t calling for its absolute elimination. “We don’t recommend getting rid of financial reports. Financial reports as an historical document will always be important. You need to have some kind of an historical perspective of the business,” Lev, a professor of accounting and finance at New York University’s Stern School of Business, acknowledged in an interview with CFO.

New Ethics Course Expands Options for Indiana CPAs
Call it another "first" for Indiana and the CPA profession. A first-of-its-kind online, competency-based course on ethics is due to be released this week. It coincides with the effective date of a landmark rule change that makes Indiana CPAs the first CPAs in the nation to be able to take competency-based education as one of three options to meet the ethics requirement for CPA license renewal. History was made in July with the adoption of the rule change for CPAs in Indiana that allows for competency-based education to count toward the profession's ethics requirement.

SEC Sharpens Focus on Registered Investment Advisers
Wall Street Journal
The Securities and Exchange Commission is stepping up its scrutiny of a fast-growing class of investment professionals and delegating more of its direct Wall Street oversight, the latest regulatory ripple stemming from last spring’s tightening of retirement savings rules. In response to a boom in the number of so-called registered investment advisers, or RIAs, the SEC has boosted by 20% the number of examiners assigned to monitoring wealth-management firms and investment companies.

IRS Overhauls the Retirement Plan Correction Program
With the looming end of the determination letter program as we know it, the IRS has issued an updated Revenue Procedure for the Employee Plans Compliance Resolutions System (EPCRS). Released on September 29, 2016, Rev. Proc. 2016-51 updates the EPCRS procedures, replaces Rev. Proc. 2013-12 and integrates the changes provided in Rev. Proc. 2015-27 and Rev. Proc. 2015-28. The updated revenue procedure is effective January 1, 2017 and its provisions cannot be used until that date. Rev. Proc. 2013-12, as modified by Rev. Proc. 2015-27 and Rev. Proc. 2015-28, should be used for any corrections under the EPCRS for the remainder of 2016.

IRS Authentication Process Still Prone to Fraudsters
Accounting Today
The Internal Revenue Service still has some work to do to strengthen the controls over its Electronic Authentication Process after criminals gained access to an estimated 724,000 taxpayer accounts through its online Get Transcript application last year, according to a new report. The report, from the Treasury Inspector General for Tax Administration, acknowledged the IRS has taken several steps to improve its systems and provide more secure authentication, including strengthening its application and network controls.

Final and Temporary Debt-Equity Regulations Under Section 385 Implement Highly Favorable Changes
On Oct. 13, 2016, the U.S. Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) issued final and temporary regulations under Section 385 governing the treatment of certain instruments as debt or equity for tax purposes. These regulations reflect major changes to the proposed regulations that were issued in April 2016.

Would Cutting Corporate Tax Rates Really Grow the Economy?
The Atlantic
One of the things Hillary Clinton and Donald Trump disagree most strongly about is how to stimulate the economy. Donald Trump has one idea that conservative economists would probably agree with: He wants lower taxes. “We're going to cut taxes massively. We’ll cut business taxes massively. They’re going to start hiring people. We’re going to bring the $2.5 trillion that's offshore back into the country,”

Accounting in Virtual Reality
Accounting Today
A new virtual reality game takes players inside a nightmarish accounting office. The game, called Accounting, comes from a company called Squanchtendo whose founders include animator Justin Roiland, who created the Adult Swim cartoon series Rick and Morty, and Tanya Watson of Epic Games, along with a game studio known as Crows Crows Crows. The game uses animation to show the antics at a bizarre accounting firm known as Smith & Smitherson. The free game runs on the Steam gaming platform, which allows it to work on a PC, Mac or a mobile device.

Why Battered Bank Stocks Are Blocking The ECB
Wall Street Journal
Bank stock valuations matter and not just for long-suffering investors. In Europe, very low share prices are restricting credit and all the quantitative easing or ultralow rates the European Central Bank can bring aren’t changing that. The ECB insists that poor bank profitability isn’t—entirely—the fault of monetary policy and says banks need to consolidate and cut costs.