Of interest to members

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Proposed Changes to Peer Review

October 15, 2021

The AICPA has issued a proposal to make updates to the Peer Review standards. The changes are primarily formatting to make the standards more user friendly. There are a handful of substantive changes as well. Comments are due by December 15, 2021.

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Q3 2021 In Review

October 7, 2021

This week's GLS blog addresses the final standards that were issued by the AICPA, FASB and GASB in the third quarter of 2021. While it was a light quarter from a standard setting perspective, some of the issued standards address implementation issues which are always helpful. As we expect some big standards to issue in Q4, a light quarter is likely a good thing as all standard setters have big projects on their plate as well!

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Ethics Revised Exposure draft: Unpaid Fees

September 30, 2021

The AICPA's Professional Ethics Executive Committee (PEEC) has issued a proposal to revise the rules around unpaid fees. The current rules use a one year period with no considerations of materiality. The proposal would move to a principles based approach with a threats and safeguards application. Comments are due December 20, 2021 https://www.aicpa.org/content/dam/aicpa/interestareas/professionalethics/community/exposuredrafts/downloadabledocuments/2021/2021-September-unpaid-fees.pdf

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Ethics Exposure Draft: Accounting Standards Implementation Services

September 28, 2021

The AICPA has issued a proposed ethics interpretation to help CPAs understand to what extent they can assist clients with implementing new accounting standards. The proposal identifies certain items as being nonattest services for which the normal rules for nonattest services would apply - management having SKE, management accepting responsibility etc. On the other hand, it also identifies prohibited nonattest services the CPA can not perform without impairing independence. Comments are due December 20, 2021.

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IFR4NPO Consultation Paper – Part 2

September 28, 2021

This week's blog addresses part 2 of the IFR4NPO Consultation Paper. The second part of the paper focuses on NFP Specific Financial Reporting Issues. The project is looking for feedback on a variety of nonprofit specific financial reporting considerations. If you have a background in nonprofits, we encourage you to respond to Part 2 of the consultation paper by September 24th, 2021.

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Third Party Assessments

March 23, 2021

The AICPA has issued a Technical Q&A to address common questions regarding what qualifies as a third party assessment and which standards including independence should be applied by the third party. The TQA provides guidance on what qualifies at a TQA, which independence rules apply and which standards can be used by CPAs.

Call to Action: Which standards do you use when performing or requesting a third party assessment?

Link: https://www.aicpa.org/content/dam/aicpa/interestareas/frc/downloadabledocuments/tqa-sections/tqa-section-9550-01-02.pdf

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Proposed NOCLAR Ethics Interpretation

March 17, 2021

The AICPA's Professional Ethics Executive Committee (PEEC) has issued an updated proposal around reporting noncompliance with laws and regulations (NOCLAR). Originally issued in 2017, PEEC has been trying to converge with the international standards while addressing unique US issues. The proposal includes separating the requirements for those in public practice between those providing attest services and those providing services that are not attest services. It also provides other clarifications in response to the comment letters received in the first proposal. Comments are due June 30.

Call to Action: Do you agree with the proposed changes to the ethics code?

Link: https://www.aicpa.org/content/dam/aicpa/interestareas/professionalethics/community/exposuredrafts/downloadabledocuments/2021/2021-Feb-NOCLAR-ED.pdf

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March 5, 2021

The AICPA has issued a very narrow proposal to add a new requirement for successor auditors to discuss suspected fraud and NOCLAR with predecessor auditors if granted permission by management as part of the client acceptance process. This is the first of two blogs addressing new requirements regarding NOCLAR.

Call to Action: How would this proposal impact your client acceptance process?

Link: https://www.aicpa.org/content/dam/aicpa/research/exposuredrafts/accountingandauditing/downloadabledocuments/20210225a/20210225a-noclar-ed.pdf

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Quality Management Proposal: Part 2

February 26, 2021

This week's blog continues with the discussion of the AICPA's proposed changes to Quality Management. SQMS 2 addresses the role and responsibilities of the engagement quality reviewer. We'll look at the proposal including the proposed cooling off period and qualifications to give you an overview of the proposed standard.

Call to Action: What impact will this proposal have on your current system of quality?

Link: https://www.aicpa.org/content/dam/aicpa/research/exposuredrafts/accountingandauditing/downloadabledocuments/20210204a/20210204a-quality-mgmt-ed.pdf

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Quality Management Proposal: Part 3

February 26, 2021

The final blog in our QM series addresses the proposed audit standard. The audit standard assists the engagement team to understand their responsibilities on applying the system of quality management to an individual audit engagement. Comments are due June 11, 2021.

Call to Action: Are you planning to respond to this important proposal?

Link: https://www.aicpa.org/content/dam/aicpa/research/exposuredrafts/accountingandauditing/downloadabledocuments/20210204a/20210204a-quality-mgmt-ed.pdf

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Quality Management Proposal: Part 1

February 23, 2021

The AICPA has issued three new proposals related to quality management. The new SQM Standards will replace the extant quality control (SQCS) and provide a more scalable and risk-based QM methodology. This is the first of three blogs that will dive into the details of each proposal. This blog addresses A Firm’s System of Quality Management and the components of a system of quality management.

Call to Action: What impact will this change to adopt these quality management standards have on your firm?


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