November 24: With few days left until the new revenue recognition standard comes into effect, many accounting and finance professionals are scrambling to prepare. With time to implement the standard quickly running out, accounting and finance teams should be actively evaluating the challenges and impact that the regulation poses. Click here to see the full story (Subscription required).
Pension Benefit Guaranty Corporation
November 24: The Pension Benefit Guaranty Corporation's insurance program for unionized workers saw a large increase in its deficit over the last year and is likely to be insolvent by 2025 or earlier. According to the PBGC's 2017 annual report, the deficit for the agency's multiemployer pension plan program rose about $6.3 billion to $65.1 billion in fiscal year 2017. Click here to see the full story (Subscription required).
November 24: Federal lawmakers are once again trying to come up with a way to protect the pensions of more than one million unionized workers. Senator Sherrod Brown (D-Ohio) and Rep. Richard Neal (D-Mass.) introduced legislation in both houses that they say will keep the multiemployer system afloat. Click here to see the full story (Subscription required).
Securities and Exchange Commission
November 27: The hack of the Securities and Exchange Commission's corporate-filing database likely involved Eastern European criminals who may have been perusing market-moving information stored in the regulator's network for months, according to people with knowledge of the matter. The theft of corporate data may have led to illegal trades. Click here to see the full story (Subscription required).
November 29: Internal controls over financial reporting (ICFR) will be a major help in reducing fraud risks when applying new accounting rules, SEC deputy chief accountant Marc Panucci told an audit conference in New York. Panucci urged companies to “define your policies, processes and controls upfront. The more you do that, you'll have a consistent approach and so you trust the results at that point in time.” Click here to see the full story (Subscription required).
November 30: Companies adopting new lease accounting rules will likely get some relief from costs when shifting to the rules. The Financial Accounting Standards Board amended transition requirements under new leases rules, which will enable companies to opt out of having to restate the effects of the new standard as if they were applied to earlier reporting periods. Click here to see the full story (Subscription required).
November 30: Equifax Inc. investors are pushing its board to adopt a stronger clawback policy to cover misconduct that causes significant financial and reputational harm and stop using adjusted financial results to calculate executive bonuses, months after a data breach exposed personal information on almost half of the U.S. population. Click here to see the full story (Subscription required).
November 27: The auditing profession is using artificial Intelligence, machines, big data, drones, and robotics to solve a complex set of auditing issues involving new, far-reaching accounting rules. The new revenue recognition and lease accounting standards are extensive and require a tremendous amount of judgment to implement. How should auditors audit these standards? Click here to see the full story (Subscription required).
November 29: It's still too early for the Public Company Accounting Oversight Board to begin setting standards for use of data analytics and similar high-tech automated tools in audits. “We have a lot of questions about these advanced techniques,” said Patrick McNamee, deputy chief auditor in the board's Office of the Chief Auditor. “At this point, we're looking for answers.” Click here to see the full story (Subscription required).
Critical Audit Matters
November 29: A public company's independent auditor and its audit committee should begin discussions soon of “critical audit matters” (CAM) that must be included in an expanded report recently approved by the SEC, an audit regulator urged. Click here to see the full story (Subscription required).
November 30: The PCAOB plans to take an enforcement tack that targets more serious violations of new auditor requirements, rather than mere negligence. The new requirements go beyond the traditional pass/fail audit opinion to highlight difficult issues that arise in an audit. Click here to see the full story (Subscription required).
November 30: The American Institute of CPAs proposed audit standard changes to enhance disclosures, provide greater audit-practice consistency, and align its standards with PCAOB rules. The disclosures proposal would bring AICPA audit standards in line with International Auditing and Assurance Standards Board standards. Click here to see the full story (Subscription required).
International Accounting Highlights
November 27: U.K. investors believe companies have strengthened their risk reporting since the 2008 financial crisis, but they want better information on uncertainty and company viability, a new analysis says. The U.K. Financial Reporting Council said in “Risk and Viability Reporting” that investors generally think companies have bolstered their risk-management systems and do a better job of disclosing major threats. Click here to see the full story (Subscription required).
November 28: The U.K. Treasury is seeking public input on 11 measures for large corporations, including a levy on earnings sent to tax havens that are linked to U.K. customers. In addition, the Treasury has also asked for feedback on the taxation of internet-based companies. Click here to see the full story (Subscription required).
November 28: The U.K. research and development tax credit will be set at 12 percent, a one percentage point increase, beginning in 2018. The rate hike is part of the government's broader commitment to support innovation and investment in R&D. Click here to see the full story (Subscription required).
November 27: Banks in the European Union may be forced to show how much more their top executives earn than rank-and-file employees, under draft disclosure rules similar to those in the U.S. The goal is to bring board members’ pay to a “more appropriate level,” according to a Peter Simon, a German lawmaker in the European Parliament. Click here to see the full story (Subscription required).
November 27: Tobam, a Paris-based fund manager, has set up what it says is the first mutual fund in Europe to track the value of bitcoin investments, in the latest sign that the cryptocurrency is overcoming industry reservations. The fund will be available to investors worldwide on a private-placement basis. Click here to see the full story (Subscription required).
November 28: For years, Chinese executives pulled off multibillion-dollar buyouts of their public companies with little pushback from investors. Now, they are facing a backlash from hedge funds demanding better payouts. Click here to see the full story (Subscription required).
November 28: Trade and industry groups are preparing comments and suggestions for India's tax administration to consider while drafting the 2018-2019 budget, which practitioners say will be a pivotal moment for the current administration to prove that it is business friendly. Click here to see the full story (Subscription required).
Global Tax Reports
November 30: Countries are pushing back the deadline for multinational companies to submit their first global tax reports in a sign that governments may be struggling to implement the required filing systems. Known as country-by-country reporting, the filings are the most widely adopted policy from the Organization for Economic Cooperation and Development's project to curb tax avoidance from multinationals. Click here to see the full story (Subscription required).
International Auditing Highlights
November 29: Canada's audit regulator plans to look more closely at major accounting firms’ overall culture in the wake of continued errors in basic audit procedures. The Canadian Public Accountability Board says it will expand its reviews of audits by the “Big Four” accounting firms to consider firm structure, accountability, quality processes, and culture. Click here to see the full story (Subscription required).
Composed and Compiled by Gery Brownholtz, Accounting Editor, Bloomberg BNA
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