Federal Issues

    Audits of FHA-Approved Participants and Related HUD Requirements 

    In 2009, the Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA),  which provide insurance on mortgages on single family and multi-family homes, announced credit policy changes requiring mortgage bankers to submit audited annual financial statements to FHA and to undergo an audit of their compliance with HUD requirements.  Separately, HUD announced that the FHA was proposing a new rule to strengthen risk management.  The proposed rule would no longer require FHA to approve loan correspondents (mortgage brokers) participating in the FHA program, nor would HUD require them to submit audited financial statements or audits of their compliance with HUD requirements.  Instead, the proposal would shift accountability for the underwriting of FHA-insured loans to the mortgage banks.

    The AICPA did not take a position regarding the annual audits of mortgage banks.  However, the AICPA issued a comment letter on the FHA proposed rule on December 23, 2009 asking for clarification on whether mortgage brokers will continue to be required to provide for audits of their annual financial statements and undergo the annual compliance audit.  The AICPA believes that if the FHA’s intent was to eliminate the audit requirements for mortgage brokers and shift the responsibility to mortgage bankers, additional guidance is needed for banks in their new role of assuming responsibility for brokers. CPAs can play an important role in assisting mortgage bankers in this regard and the AICPA stands ready to work with the FHA and mortgage bankers to explore CPA services that can and should be provided.

    The FHA issued final guidance in April 2010 eliminating the audit requirements for loan correspondents, including audits of December 31, 2009 financial statements.

    Throughout fall and winter of 2010-11, the Government Audit Quality Center (GAQC) has been actively involved in working with several federal agencies that are establishing financial statement and compliance auditing requirements for for-profit organizations.  HUD’s new audit rules affect both supervised and non-supervised mortgagees, and require a financial statement audit performed under the Government Auditing Standards (also referred to as the Yellow Book) and a compliance audit under the Consolidated Audit Guide for Audits of HUD Programs (the HUD Guide).  Depository institutions with fiscal years ending on or after January 1, 2010, are required to comply and submit their financial information and related audit results within 90 days of the institution's fiscal year-end.  The GAQC has provided members with guidance on the AICPA’s Government Audit Quality webpage, and a October 2010, Journal of Accountancy article titled, AICPA Seeks Further Guidance From Regulators on New FHA Program Requirement, provides a good summary of previous activities regarding these new rules and related auditor concerns and questions that were raised at that time.

    The AICPA provides guidance for its members who audit all federal programs, including HUD programs, on the AICPA’s Governmental Audit Quality Center.

    AICPA Letter


    December 23, 2009 - Comment Letter on FHA Proposal Affecting Loan Correspondents

    Links to Regulatory Proposals and Documents

    November 30, 2009 Proposed Rule, Federal Housing Administration (FHA):  Continuation of FHA Reform—Strengthening Risk Management Through Responsible FHA-Approved Lenders

    November 30, 2009 HUD Press Release No. 09-216, FHA Proposes New Rules to Strengthen Risk Management

    September 18, 2009, HUD Mortgagee 2009-31, Strengthening Counterparty Risk Management (click here to view all HUD Mortgagee letters, including 2009-31)

    Staff Contacts

    Diana Huntress Deem
    Senior Manager, Congressional and Political Affairs
    ddeem@aicpa.org
    202.434.9276

    Mary Foelster
    Director, Governmental Auditing and Accounting
    mfoelster@aicpa.org
    202.434.9259

     

     

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    Congressional and Political Affairs Advocacy

    Overview The AICPA monitors and advocates on legislative and other matters that affect the accounting profession. Working with state CPA societies and other professional organizations, the AICPA provides information to and educates federal, state and local policymakers regarding key issues.
    Published on November 03, 2014

    Federal Legislative and Regulatory Issues

    Federal Law This page highlights the advocacy issues in which the Congressional & Political Affairs Team is advocating on behalf of the profession, and also those issues that the team has recently followed.
    Published on October 28, 2014

    Accounting Partnership Retirement Practices

    Article In letters to members of the Equal Employment Opportunity Commission (EEOC), the American Institute of CPAs (AICPA) has asked commissioners to reject staff appeals to investigate and litigate against accounting firms regarding partner retirement provisions
    Published on October 21, 2014

    Preserving the Cash Basis Method of Accounting for CPA Firms

    Article The AICPA is opposed to certain provisions included in tax reform proposals that would limit the availability of the cash basis method of accounting.
    Published on September 29, 2014

    Cash Accounting Bipartisan Letter to the House of Representatives

    Legislative Letters
    Published on September 11, 2014

    Cash Accounting Senate Letter

    Legislative Letters
    Published on August 07, 2014

    XBRL

    Article Extensible Business Reporting Language (XBRL) used in financial and other reporting allows for easier access to more transparent information.  AICPA supports legislative proposals to utilize XBRL by companies, Federal agencies and recipients of Federal funds.
    Published on May 20, 2014

    Camp Letter On Cash Basis April 25, 2014

    Legislative Letters The American Institute of CPAs (AICPA) voices strong opposition to draft legislation that would limit the use of the cash method of accounting for pass-through entities and personal service corporations.
    Published on May 08, 2014

    Convergence of International and US Accounting Principles and IFRS

    Article International Financial Reporting Standards (IFRS) set by the International Accounting Standards Board (IASB) in London is a response to worldwide demand from regulators, investors, businesses, and auditing firms for a single set of high-quality, globally-accepted accounting standards.
    Published on April 17, 2014

    AICPA Letter to SEC on Proposed Regulation Crowdfunding

    Comment Letter AICPA comments on the SEC's proposed new Regulation Crowdfunding under the Securities Act of 1933 and the Securities Exchange Act of 1934 to implement the requirements of Title III of the JOBS Act as published in SEC File No. S7-09-13.
    Published on February 06, 2014

    Jan 2014 - AICPA Statement for the Record regarding Conferences and Travel

    Article AICPA provided a Statement for the Record to the Senate Homeland Security and Government Affairs Committee in  response  to the hearing held on January 14, 2014 entitled, "Examining Conference and Travel Spending Across the Federal Government."
    Published on January 28, 2014

    Cash Basis Letter to Senate Finance Committee from Associations-Jan7-2014

    Legislative Letters Cash Basis Letter to Senate Finance Committee dated Jaunary 7, 2014 from American Council of Engineering Companies, American Dental Association, American Farm Bureau Federation, American Institute of Architects, American Institute of CPAs and S Corporation Association.
    Published on January 22, 2014

    Municipal Advisors

    Issue Brief The AICPA generally supports the SEC’s proposed rules as a means to strengthen investor protections in the municipal securities market.  The AICPA is concerned, however, because the proposed rule would require that accountants performing customary and usual accounting services would be required to register as municipal advisors.
    Published on January 07, 2014

    ERISA Fiduciary Definition - Appraisers of Employee Stock Ownership Plans

    Article The AICPA believes that the U.S. DOL should implement rules that would require appraisers of ESOPs to meet minimum qualification requirements, including holding relevant credentials and training, and comply with applicable professional valuation standards.
    Published on December 30, 2013

    Take Action Legislation Affecting ESOP Appraisers

    Article The AICPA urges FVS section members to seek congressional support of legislation to fix DOL fiduciary proposal on ESOP appraisers S. 273/HR 2041.
    Published on September 18, 2013

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