Accounting & Auditing Highlights for the Week Ending July 13, 2018


U.S. Highlights:

Accounting

July 9: General Motors Co., Toyota Motors Corp., and other automakers are counting on billion-dollar tech collaborations to pull off smart-car innovation. But accountants warn such alliances could generate accounting issues that lower the financial returns investors expect. Click here to read the full report. (Subscription required.)

Revenue Recognition

July 12: Investors say a key performance indicator, bad debt, has disappeared from the financial reports of for-profit hospitals as they adopt new accounting standards for revenue recognition. Click here to read the full report. (Subscription required.)

Disclosures

July 13: Accounting rulemakers are searching for ways to make disclosures in footnotes to quarterly financial reports more informative, but are encountering deep divisions over whether and how to revise them. Click here to read the full report. (Subscription required.)

Business of Accounting

July 11: Samantha Bowling saw the money the Big Four firms have been funneling into artificial intelligence and worried it could crush her 15-person CPA firm. So she jumped into AI and now her Maryland firm is among the first small firms to test the technology in audits. Click here to read the full report. (Subscription required.

Auditor Liability

July 10: A federal court decision against PricewaterhouseCoopers LLP will intensify pressure on audit firms to search for and detect financial fraud and possibly drive up the costs that public companies will pay for their audits. Click here to read the full report. (Subscription required.)

Auditor Independence

July 11: Large accounting firms want the Securities and Exchange Commission to relax auditor independence rules that bar them from auditing their consulting clients and affiliates, among other changes. Click here to read the full report. (Subscription required.

GDPR

July 10: For accounting firms, complying with European Union's new data privacy regulations isn’t a quick information technology fix. Firms may need to make system and personnel changes and must assess risk, appoint people, and evaluate vendors to comply. Click here to read more about what accounting firms need to know about GDPR. (Subscription required.)

Supreme Court

July 11: Some of Supreme Court nominee Brett Kavanaugh's securities opinions already hold sway among justices including an influential dissent in a case about the PCAOB. Click here to read the full report. (Subscription required.)

Discrimination

July 11: A former senior tax manager who was fired by Ernst & Young LLP 18 days after the approval of her Family and Medical Leave Act leave request accused the accounting firm of discrimination and retaliation. Click here to read the full report. (Subscription required.)

International Highlights:

U.K.

July 10: Ernst & Young LLP is asking the U.K. government to consider granting emergency waivers of conflict-of-interest restrictions so companies have a wider choice in selecting auditors. Click here to read the full story. (Subscription required.)

July 11: A leading U.K. accounting organization opposes international regulators’ insistence that auditors look for information in financial reports that counters assertions of company management. Instead, the Institute of Chartered Accountants in England and Wales published a report looking at how to make auditors’ skepticism more substantial and constructive, following a wave of audit scandals in recent months. Click here to read the full report. (Subscription required.)

July 13: The inability of large companies such as Vodafone Group Plc or SIG Plc to find an accounting firm capable and eligible to conduct their U.K. audits may well be a myth, a leading U.K. accounting body said. Click here to read the full report. (Subscription required.)

IASB

July 12: International accounting standards setters are investigating ways to make management commentaries in financial reports more representative of companies’ strategies. Click here to read the full report. (Subscription required.)

Business of Accounting

July 13: EU lawmakers should stop relying on policy advice from the world's four largest accounting firms, given their status as “goliaths of the tax planning world,” according to an independent Brussels-based watchdog. Click here to read the full report. (Subscription required.)

GDPR

July 10: For accounting firms, complying with European Union's new data privacy regulations isn’t a quick information technology fix. Firms may need to make system and personnel changes and must assess risk, appoint people, and evaluate vendors to comply. Click here to read more about what accounting firms need to know about GDPR. (Subscription required.)

Steinhoff Scandal

July 11: A company linked to executives of Steinhoff International Holdings NV bought South African forestry plantations in 2001 and then sold them to the retailer three years later for more than five times their original value, documents show. The documents suggest there could be years’ worth of deals that need to be scrutinized, especially for potential conflicts interests, analysts said. Click here to read the full report. (Subscription required.)

Composed and compiled by Amanda Iacone, accounting reporter for Bloomberg Tax.

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