The Financial Accounting Resource Center™ is a comprehensive research service that provides the full text of standards, the latest news from the Accounting Policy & Practice Report ®,...
By Joe Bailey
Issues around credit losses, leasing, and business risks highlight some of the challenges facing the auditing profession in a period of increasing financial reporting change, Christopher Rickli, PricewaterhouseCoopers LLP partner, told Bloomberg Tax.
There are “issues around estimating expected credit losses using forward looking information. That is new for people, so thinking about how to build those modeling systems have been a big topic of conversation recently” Rickli said in an interview videotaped Dec. 6 at the American Institute of CPAs conference on Securities and Exchange Commission and Public Company Oversight Board developments.
View video here: https://www.bna.com/during-change-pace-m73014474523/
“There are a lot of questions around the leasing standard, and identification of embedded leases.” Rickli said.
Asked what industries are the most affected by the credit impairment standard, Rickli said, “the short answer is everyone,” but “from a financial institution perspective, the credit impairment standard will be a significant change to financial institutions that have large loans, and held to maturity security portfolios.”
Non-financial service corporations also must heed the credit impairment rule. “Things as simple as trade receivables and how the reserving methodologies will change for trade receivables going forward is something that our non-financial services clients are focused on” Rickli said.
The business risks that companies must closely watch include cybersecurity, information technology (IT), and big data. Audit professionals will have to “up their game” with respect to “IT security, among other things, to be as relevant as [they] can as a profession going forward.”
“Audits are much more focused now on how to use big data, and audit in a more efficient and effective way,” Rickli said. “Folks with skillsets in data mining will be of significant value to the audit profession,” one that is “extremely bright, but very different” in the future.
Copyright © 2018 Tax Management Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)