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In this Issue : February 2018

February 2018

The big three accounting standards—revenue recognition, leases, and financial instruments—represent the profession's attempt to strengthen the fundamentals of financial reporting and make financial statements more relevant to users. This month's cover story is a roundtable discussion featuring four CPAs from all corners of practice. They share their experiences with the implementation of recent standards and describe their views on whether financial reporting is improving the ability of users to make informed decisions. Critical questions raised include whether increased disclosure requirements miss the bigger picture of an entity's long-term sustainability and whether the profession's leaders can craft a better reporting model.

Big changes are also coming to auditing standards. The auditor's report, which has not significantly altered its basic pass/fail format in decades, may now also include more subjective content in the form of “critical audit matters.” The PCAOB has issued guidance on what constitutes a CAM, and there is comparable international guidance, but the determination is largely a matter of professional judgment. Auditors should begin preparing now, familiarizing themselves with the international experience, and communicating with clients that will be affected.

Also appearing in this issue is a new series within our New & Views section that looks at the Tax Cuts & Jobs Act and analyzes its impact on different kinds of taxpayers. Included this month are articles examining the TCJA's impact on businesses, on investors, on estates and trusts, and on state and local taxation. This series will continue in the coming months and continue to provide analysis and practical guidance. And for those that missed it, the January issue already featured looks at the TCJA's impact on individuals and closely held business.

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