Poll Finds Auditors Struggled With Lease Standard in First Year

By:
Chris Gaetano
Published Date:
Jul 28, 2020
A recent poll of accountants conducted by accounting software firm LeaseQuery found that many auditors needed to expend additional efforts in their engagements. The lease standard, formally approved in 2016, moves lease expenses directly onto the balance sheet, with the total lease liability on one end paired with an equivalent "right to use" asset on the other.

The results in the survey are based on the responses of 240 accountants, 100 of whom had completed their first post-transition audit.

In the survey, 21 percent of the responents said that the transition into the new lease standards necessitated "significant additional effort," while a further 38 percent said they expended "reasonable additional effort." Only 4 percent said they expended no additional effort at all.

Many accountants turned to specialized software as they managed the transition, 50 percent, higher than those who came to the engagement armed only with Microsoft Excel, 38 percent.

Finally, the poll found that, as one might expect, balance sheet liabilities greatly expanded post-transition, with an average increase of 1,475 percent, which accounts for all the leases that are now listed.

Click here to see more of the latest news from the NYSSCPA.