A great deal of talk was heard about preliminary moves to work on starting to think about the potential for possibly considering some kind of effort toward beginning the preliminary steps of a process that might lead, eventually, to tax reform.
The Public Company Accounting Oversight Board proposed for public comment a new auditing standard and related amendments to enhance the auditor's reporting model. The proposed standard would retain the pass/fail model in the existing auditor's report, but would provide additional information to investors and other financial statement users about the audit and the auditor. The PCAOB is also proposing a new related auditing standard on the auditor's responsibilities for other information in an annual report.
President Barack Obama said that he will nominate John Koskinen, former chairman of Freddie Mac, as the next commissioner of the Internal Revenue Service, where he will be tasked with revamping the U.S. tax agency, which has come under intense criticism recently for, well, everything. Obama noted Koskinen's expertise at "turning around institutions in need of reform." If confirmed by the Senate, Koskinen's term would last until November 2017.
The Financial Accounting Standards Board has named former Securities and Exchange Commission Chief Accountant James Kroeker as a member and vice chairman. His term began on September 1 and will last until June 30, 2018, when he will be eligible for appointment to an additional term of five years. He fills a vacancy created by the retirement on June 30 of former FASB Chairman Leslie Seidman. The position of vice chairman was created early in FASB's history, but was later retired. In response to increasing demands on the time of the FASB chairman, the FAF trustees decided to reinstate the position.
FASB and the International Accounting Standards Board said they plan to create a joint group to help companies and their accountants make the transition to the upcoming final converged standard on revenue recognition.The transition group will be responsible for informing FASB and the IASB about interpretive issues that might arise when companies, institutions and other organizations implement the revenue recognition standard. The group will solicit stakeholders, as well as analyze and discuss the issues that apply to common transactions that could reasonably create diversity in practice.
FASB issued a proposal that would define a public business entity and affect which types of businesses might qualify for alternative accounting and reporting guidance as private companies. The purposes of the proposal are to amend the Master Glossary of the FASB Accounting Standards Codification to include one definition of a public business entity for use in U.S. GAAP, and to identify the types of organizations that would be excluded from the scope of FASB's draft Private Company Decision-Making Framework.
The PCAOB found deficiencies in all of the firms it inspected that audit broker-dealers, according to a report released in mid-August, and in 95 percent of the individual audits that the board inspected. The overwhelmingly negative results appeared in the PCAOB's second progress report on its interim inspection program for auditors of brokers and dealers, covering the audit deficiencies and independence findings identified in inspections performed from March 2012 to December 2012. It largely reinforced the results of an earlier report from last August that also identified widespread problems in the audits of broker-dealers.
The board of trustees of the Financial Accounting Foundation, which oversees the Governmental Accounting Standards Board, issued a proposal to alter GASB's consultation process with the trustees. The proposal outlines a revised process under which GASB would consult with the trustees' Standard-Setting Process Oversight Committee to determine whether certain information that the GASB might consider for standard-setting activity is "financial accounting and reporting information" within the scope of GASB's standard-setting mission.
The proposal would clarify the characteristics of the information that GASB could incorporate into the financial accounting and reporting concepts, standards, and guidance that it issues for state and local governments. The new proposal aims to maintain GASB's independence by moving the FAF Oversight Committee's involvement from the agenda-setting process to a pre-agenda consultation.
The FAF said that it plans to start streaming audio from the public sessions of future meetings of its Board of Trustees. The FAF recently redesigned its Web site, www.accountingfoundation.org, to commemorate its 40th anniversary.
HEALTH AND TAXES
The Internal Revenue Service launcheda new Affordable Care Act Tax Provisions site at IRS.gov/aca to educate individuals and businesses on how the health care law might affect them. The home page of the site includes three sections explaining the tax benefits and responsibilities for individuals and families, employers, and other organizations, with links and information for each group. The site also provides information about tax provisions that are in effect now and those that will go into effect in 2014 and beyond.
It also released the final regulations for how it will release tax return information to the Department of Health and Human Services to assess a taxpayer's eligibility for help in buying health insurance coverage under the Affordable Care Act.
Interim IRS leader Danny Werfel told a congressional committee that the IRS opened 1,100 criminal investigations of tax fraud by June 30 of this year, exceeding the 2012 total with three months remaining in the fiscal year. The agency has doubled the number of employees working on tax fraud cases to more than 3,000 and is approaching last year's total of 5 million suspicious tax returns rejected.
The Internal Revenue Service combined parts of several revenue procedures into a new revenue procedure that provides relief to companies that make late elections to become S corporations. Revenue Procedure 2013-30 facilitates the granting of relief to taxpayers who request relief previously provided in numerous other revenue procedures by consolidating provisions from them into a single revenue procedure and extending relief under certain circumstances.
Separately, the agency proposed to extend for up to 10 years the amount of time that taxpayers would have to apply for the "innocent spouse" tax relief program. Reg-132251-11 proposes to expand from two to 10 years the amount of time that taxpayers could apply for innocent spouse relief so they are no longer responsible for the tax debts of estranged spouses.
The new online registration system for financial institutions that need to register with the IRS under the Foreign Account Tax Compliance Act was opened in mid-August, so they can begin the process of registering by creating an account and providing required information.
Separately, the service also released a draft version of a new form for reporting on foreign bank accounts under FATCA.
IN OTHER NEWS
Public and private companies saw an increase in the auditing fees they paid to outside firms, according to a new survey.
The American Institute of CPAs intends to stop testing for knowledge of older auditing standards on its Uniform CPA Examination next year. Beginning in the first quarter of 2014, standards that are older than the clarified U.S. Auditing Standards, also known as the AU-Cs, that were issued by the AICPA's Auditing Standards Board in 2012, will no longer be tested on the AUD section of the CPA Exam.
The Institute of Internal Auditors plans to open a new American Center for Government Auditing in early 2014, and has hired a new director to run it. The ACGA will offer services to meet the needs of public sector internal auditors, and will be led by James Pelletier, city auditor for Palo Alto, Calif. He previously served as chief auditor for the county of San Diego.
The Association for Accounting Marketing announced that it has begun a process to hire its first full-time chief executive officer.
Ernst & Young donated its historical archives dating back to the early 1900s to Case Western Reserve University's Kelvin Smith Library in Cleveland. The archive includes a variety of accounting memorabilia, such as hand-written accounting ledgers detailing firm transactions from the early 1900s, firm advertising from the 1920s, Ernst & Ernst employee and management communications dating back more than 90 years, awards, vintage photos, and Arthur Young's personal cash book.
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