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May 2016  »  Tax & Accounting Update

Tax & Accounting Update

Tax & Accounting Update is provided by Thomson Reuters and based on material published on Checkpoint, its online news and research platform. The Update is a quick-reference guide to the most pressing issues coming down the regulatory and administrative pipeline. Visit https://tax.thomsonreuters.com/checkpoint-news/ for further information and daily updates.

AICPA News

New CPA Exam to launch April 2017.

On April 4, the AICPA announced the newest iteration of the Uniform CPA Examination. The changes include greater emphasis on critical thinking, problem solving, and other high-level cognitive skills, along with more “task-based simulations” meant to test those skills. The AICPA said it based the latest set of changes on the result of a “practice analysis,” a broad effort launched in 2014 to ensure the test stays “current, relevant, reliable, and legally defensible.” Testing on the new exam is slated to begin in April 2017.

The PCAOB appears close to starting disciplinary proceedings against Chinese auditors that have resisted its efforts to review their workpapers.

SEC News

Concept release seeks comments on business and financial disclosure rules.

On April 13, the SEC issued a preliminary rulemaking document to solicit public comments on its plan to update its 30–year-old business and financial disclosure requirements. The goal of the comments is to make the requirements more effective for investors. The document is part of the agency's broad review of its disclosure rules and seeks opinions on the overall disclosure framework, specific line item disclosure requirements, and the presentation and delivery of the information to investors.

FASB News

June release date expected for planned credit loss standard.

After being on the verge of release for close to a year, FASB's planned standard for writing down bad loans and securities is expected to be released as a final set of amendments to U.S. GAAP by the end of June 2016. Before it releases the amendments, however, the board wants to meet again to weigh the upcoming standard's costs and benefits and reconsider the 2019 effective date for public companies it had previously agreed to.

PCAOB News

Proposal offers changes to supervisory responsibilities in multiple-firm audits.

On April 12, the PCAOB issued a proposal to strengthen the rules that apply to audits involving at least one other accounting firm aside from the auditor hired by the client. The PCAOB is asking for comments on its plan to have lead auditors increase their oversight of the secondary firms that work on a client account. “Today's proposal is intended to require conduct by lead auditors that should result in a consistent level of quality assurance regarding other auditors' participation in the audit,” said PCAOB Chairman James R. Doty. Comments are due July 29.

Chinese auditors may face disciplinary actions for noncooperation.

The PCAOB appears close to starting disciplinary proceedings against Chinese auditors that have resisted its efforts to review their workpapers. China does not allow firms to share their workpapers and audit documents with foreign regulators because of fears that state secrets may be revealed to foreign powers. The punishments could be stayed if U.S. and Chinese officials can agree to inspections and the PCAOB is given access to the documents it has sought.

IASB News

Revenue standard clarifications issued to aid implementation.

On April 12, the IASB clarified some of the fundamental requirements in its revenue recognition standard without completely rewriting the standard. One of the amendments explains how to decide whether a company is the provider of either a good, service, or principal or is responsible for arranging the sale and considered an agent. The amendments also provide some relief for companies that, in implementing the standard, are adjusting reported amounts from prior periods using what standards-setters call retrospective application. The amendments have the same effective date as IFRS 15, Revenue from Contracts with Customers, which is January 1, 2018.

Former Mexican regulator joins IFRS Foundation.

The IFRS Foundation, the parent organization of the IASB, has named Guillermo Babatz a foundation trustee. The appointment was announced after it was approved by the IFRS Foundation Monitoring Board, an international panel of financial regulators that includes SEC Chair Mary Jo White. Babatz is a managing partner at Atik Capital, S.C., a Mexican advisory firm, and was formerly the executive chairman of Comisión Nacional Bancaria y de Valores (CNBV), the Mexican banking and securities commission. He has also served in various roles in Mexico's Ministry of Finance. Babatz's three-year term began on April 1.

 
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