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A Better Way to Gauge Profitability

EXECUTIVE SUMMARY Return-on-equity (ROE) is the correct profit metric to evaluate the performance of a business. However, the primary emphasis on financial ratio analysis must be on operating performance. The “advanced” version of the DuPont model remedies the original model’s failure to cleanly separate the effects of operating and financing...

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September 28, 2021

PCAOB moves to strengthen lead auditor’s oversight of other auditors

The PCAOB issued a second supplementary request for comment on a proposal designed to enhance the lead auditor’s role in overseeing other auditors outside the firm that issues the auditor’s report.

September 14, 2021

How climate risks are reflected in current financial statements

The Center for Audit Quality has published a resource that describes management and auditors’ responsibilities related to climate-related risk reporting.

September 2, 2021

EBP audits set for major changes, more transparency

Employee benefit plan audit procedures and reporting will undergo a significant shift as SAS No. 136, as amended, is implemented.

August 23, 2021

PCAOB’s Jurata, Zietsman to resign as transition continues

Rebekah Goshorn Jurata and Megan Zietsman said that they plan to resign from the Public Company Accounting Oversight Board on Oct. 1 or the date of appointment of new board members, whichever comes first.

August 19, 2021

ESG assurance an elusive but promising opportunity for auditors

Although just 31 of the S&P 500 companies use public company auditors for environmental, social and governance assurance, increased regulation and investor focus may lead to more opportunities for practitioners in the future.

August 17, 2021

Updated single audit guidance provided by OMB in 2021 Compliance Supplement

Some requirements for single audits were clarified with the issuance of the 2021 Compliance Supplement by the Office of Management and Budget. Some questions remain, though, and OMB is expected to issue two addenda with additional guidance.

August 12, 2021

Single audits: Using Compliance Supplements for success

Single audits are especially challenging amid a pandemic-related surge in government aid. Understanding how to apply guidance in the Office of Management and Budget’s Compliance Supplements is critical for delivery of a high-quality engagement.

July 28, 2021

Audit evolution in action: Part 2

In part 2 of a series, hear or read more about the role of audit data analytics in the continuing transformation of auditing.

July 23, 2021

Single audit rules clarified for Provider Relief Fund recipients

Over the last several weeks, HHS has established in its PRF FAQs that the reporting in the PRF Reporting Portal will be based on when PRF payments were received.

July 8, 2021

Why single-audit demand is rising; an update on tax preparer legislation

A CPA shares advice for organizations and practitioners on single audits and why more expertise is needed, and an AICPA vice president explains the reasons behind the organization’s support of a bill recently introduced in the House of Representatives.

July 8, 2021

Quality management proposal provides opportunity to consider risks

Proposed quality management standards presented by the AICPA Auditing Standards Board would require audit firms to customize their processes in accordance with their individual risks.

July 1, 2021

Vacation and sick pay accruals resulting from the pandemic

Travel restrictions led to a buildup of compensated absences and a corresponding liability that has implications for financial reporting, auditing, and management.

July 1, 2021

Certified professional employer organizations: The first four years

Learn about the important role some CPAs play in the success of the IRS’s certified professional employer organizations program.

June 30, 2021

ASB addresses agreed-upon procedures for asset-backed securities

The AICPA Auditing Standards Board issued a statement of position Wednesday on performing agreed-upon procedures related to third-party due diligence services on rated Exchange Act asset-backed securities.

June 29, 2021

Audit evolution in action: Part 1

Hear or read the opening of a multipart series on audit transformation. This episode provides an overview of the auditing landscape and more.

June 23, 2021

ESG assurance: An emerging opportunity for CPAs

As momentum grows for environmental, social and governance disclosures, ESG assurance opportunities are expected to present themselves for CPAs, who currently are performing a small fraction of these engagements in the US.

June 14, 2021

AICPA, CAQ support SEC’s exploration of climate change disclosures

The AICPA and the Center for Audit Quality sent letters to the SEC supporting its exploration of disclosures related to climate change and environmental, social and governance issues.

June 14, 2021

Pandemic still complicates going concern disclosures

The businesses the COVID-19 pandemic has pushed to the brink of failure still face some unprecedented challenges regarding compliance with the going concern disclosure guidance.

June 10, 2021

FinREC addresses EBP revenue recognition implementation

Revenue recognition issues for employee benefit plans are addressed in proposed implementation guidance issued by the AICPA Financial Reporting Executive Committee.

June 8, 2021

New standard addresses investments, specialist matters

A new standard issued by the AICPA Auditing Standards Board provides guidance on auditing the fair value of financial instruments, with a focus on the use of pricing services. The ASB also modernized its standards related to the use of specialists by management and auditors.