Want to save this page for later?

News

The Daily

NEWS HIGHLIGHTS FOR TUESDAY - 2.23.16

By:
Maya Lindsay
Published Date:
Feb 23, 2016

The Great Tech Crash of 2016

CPA Practice Advisor

Everyone loves a good disaster story. From shifting tectonic plates to the zombie apocalypse, it is great fun to spin a story of impending disaster, including the impending crash of the technology sector and its stocks. I’ve written that story myself, in various accounting blogs since the crash of 2000. The case for an impending tech crash was laid out in USA Today on February 5, based mostly on the Linked-In’s 44 percent value loss on that date. The loss is somewhat confusing, because the truth is that Linked-In has had a good quarter, and has some substantial victories in the social media space.


IRS Audits Increased Focus on High Earners in Fiscal 2015

Wall Street Journal

The Internal Revenue Service continued to ramp up its focus on high earners in the 2015 fiscal year, according to data released by the agency Monday. The IRS audited nearly 10% of returns with income of more than $1 million, compared with 7.5% the year before in the fiscal year ended which ended Sept. 30. Overall, the agency audited less than 1% of nearly 147 million individual returns in 2015, the lowest rate in a decade. The agency collected $54.2 billion in revenue from audits and related enforcement efforts for the year, down from about $57 billion the year before. IRS Commissioner John Koskinen has attributed the lower revenue collections to budget cuts.


Accounting News Roundup: PCAOB Chair; Offbeat Tax Prep; Trump's Tax Returns | 02.22.16

GoingConcern.com

Late on Friday, I mentioned the news that SEC chair Mary Jo White announced that no decision would be made on the next leader of the PCAOB until the Commission was back to full strength with five commissioners. The drawback being, it might take a while for that to happen because the US Senate, not know for prolificity, have to approve President Obama's nominees. This Wall Street Journal article has a bit more on that: It’s unclear when the SEC will be back to its full strength. President Barack Obama nominated two individuals to fill the agency’s vacancies in November—former Republican Senate aide Hester Pierce and law professor Lisa Fairfax, a Democrat—but the Senate Banking Committee has yet to take up the nominations.


AICPA Releases Guidance on Financial Statement Reviews

Accounting Today

The American Institute of CPAs’ Accounting and Review Services Committee has issued an interpretation on reviews of financial statements. Accounting and Review Services Interpretation No. 1 to AR-C section 90, Review of Financial Statements (AICPA, Professional Standards), states that although AR-C section 90 requires that the written review report include a statement that the accountant’s responsibility is to conduct the review engagement in accordance with the AICPA’s Statements on Standards for Accounting and Review Services, a practitioner can also indicate that the review was conducted in accordance with another set of review standards—such as International Standard on Review Engagements 2400 (Revised), Engagements to Review Historical Financial Statements—provided that the review was conducted in accordance with both sets of standards in their entirety.


Making Yourself Indispensable to Your Most Entrepreneurial Clients

Financial Planning

Want to grab the attention — and loyalty — of your most entrepreneurial clients? Take every chance to show that you’re up to date with high-tech advancements. Becoming known as a resource for the latest-and-greatest digital innovations helps advisors solidify their ties to small-business owners and even other potential clients.  Of course, not all developments are equal. Some new products look glitzy but soon fizzle. Others aren’t really applicable to small-business owners. But it’s worth it to stay abreast. After all, advisors can help clients while also uncovering solutions for operating their own firms, which, of course, are entrepreneurial too.


IRS Two Steps Closer to Regulating Tax Preparers

CPA Practice Advisor

The IRS strategy to require independent, non-credentialed tax preparers took two steps forward in February. Both steps are designed to establish required education and licensing for the estimated 111,000 independent tax preparers in the US. The first step was contained in the FY2017 Budget proposed by President Obama. The proposal is for a $4.1 trillion spending plan, complete with a massive $2.8 trillion tax hike. Among the sweeping tax changes proposed are higher tax rates on top earners and a 24-cents-per-gallon tax increase on each gallon of gasoline. One of the other proposals would remedy the issue that the IRS encountered when it attempted to regulate tax preparers beginning in 2011 – the lack of statutory authority to do so.


Is Your CPA Firm Partnership Model Broken?

CPA Practice Advisor

At the recent CPA Practice Advisor Thought Leader Symposium, I mentioned during our annual round table discussion that the partnership model is probably one of the biggest sources of problems for CPA firms. The most tragic loss is one you might not have connected with the partnership model yet: the too-slow adoption of CPAs as true business advisors to their clients (vs. compliance workers). Here’s why I said that and what you can do about it, short of changing your form of entity. Certainly, most partnerships have a managing partner. Look at a typical corporation: at the C-leveL, there are COOs, CEOs, CFOs, CIOs, Sales and Marketing VPs, HR VPs, and Operations VPs, to name a few.


Audit Execs Worried about Data Accuracy

Accounting Today

Chief audit executives are not so confident about the accuracy of the data their companies rely on to make decisions. A survey by the Institute of Internal Auditors found that less than one out of three audit chiefs are confident about the strategic decisions they make based on data analytics. Only 29 percent of chief audit executives polled by the IIA’s Audit Executive Center said they are very or extremely confident in decisions made based on the data their organizations collect and analyze. Nearly as many, 23 percent, hold the opposite view, describing themselves as “slightly or not at all confident” about data-driven decisions, according to the 2016 North American Pulse of Internal Audit. The 48 percent remainder of those surveyed indicated they had only moderate confidence in such decisions.


SEC Nods to Multinationals

Wall Street Journal

The Securities and Exchange Commission is trying to strike a delicate balance: advancing its plans to simplify financial-reporting requirements without making them any less stringent. The agency, which is operating with just three of its full complement of five commissioners, including Chairwoman Mary Jo White, laid out several projects and priorities for 2016 at an annual conference last week in Washington. The efforts include making it easier for public companies with operations abroad to report pertinent financial information, beefing up disclosure requirements, and clearing the way for progress toward a single global financial-reporting standard.


A New Breed of Trader on Wall Street: Coders With a Ph.D.

New York Times

The mood in the markets may be getting grimmer, but in the booming world of exchange-traded funds, people just want to party. And so it was last month at the $2.8 trillion industry’s annual jamboree in South Florida, where 2,200 investment advisers and fund salesmen came together for three days of hard drinking and product pitching. Against a backdrop of New Orleans jazz bands and poolside schmooze-fests — some call it spring break for the E.T.F. crowd — one event stood out, though. It was an invitation-only party (crabs, cocktails and a D.J. on a moonlit dock) thrown by Jane Street, a secretive E.T.F. trading firm that, after years of minting money in the shadows of Wall Street, is now pitching itself to some of the largest institutional investors in the world.


JPMorgan Quietly Tests ‘Blockchain’ With 2,200 Clients

Wall Street Journal

J.P. Morgan Chase & Co. is quietly testing technology that underpins the digital currency bitcoin on U.S. dollar transfers between London and Tokyo, part of an effort to boost its spending to deal with emerging threats from Silicon Valley. The nation’s largest bank has been testing the program in recent months to move U.S. dollars for about 2,200 clients between the two financial centers using a version of the “blockchain” technology that underpins bitcoin, said Daniel Pinto, head of J.P. Morgan’s corporate and investment bank. The bank wants to see whether the blockchain technology, known as the “distributed ledger,” can be repurposed for currency clearing and settlement to give clients faster turnaround times and reduce the bank’s risk. It may start using blockchain for live transactions later this year.


Attention, business owners: Some relief on filing taxes

Crain’s New York Business

Attention, New York City business owners: You can get a six-month extension on your 2015 tax return because local finance officials are unable to provide the requisite forms on time. The city's businesses were supposed to have new forms for taxes due this coming March 15. But the new forms aren't ready yet, according to the city's Department of Finance. They've been in the works since 2014, when the state enacted a series of changes in corporate tax law. The Finance Department said changing tax-filing requirements has proved to be "an enormous undertaking." Finance Commissioner Jacques Jiha said that although most new tax forms should be ready for electronic filing next month, the city is encouraging companies to file for an extension in order to prevent any glitches.