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

Mary Foelster
Director, Governmental Auditing and Accounting

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Department of Labor Overtime Rule

Article The Department of Labor (DOL) announced its final rule related to overtime pay. Under the new rule, the standard salary threshold will double from $455 per week to $913 per week. This amounts to a change in an annual salary from $23,660 to an annual salary of $47,476. Further, the
Published on June 13, 2017

AICPA Financial CHOICE Act Letter May 1, 2017

Legislative Letters AICPA sent a letter to House Financial Services Committee Chairman, Jeb Hensarling outlining comments on certain provisions of the Financial CHOICE Act.
Published on May 03, 2017

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 April 04, 2017

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 March 23, 2017

Preserving the Cash Basis Method of Accounting for CPA Firms

Overview 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 November 07, 2016

AICPA Letter to Chairman Brady May 20, 2016

Legislative Letters AICPA sent a letter to the House Ways and Means hearing entitle "Perspectives on the Need for Tax Reform." The letter encourages the committee not restrict the use of the cash basis method of accounting for pass-through entities.
Published on November 04, 2016

AICPA Letter of Support H.R. 5813, Overtime Reform and Enhancement Act (OREA) August 18, 2016

Legislative Letters AICPA supports the efforts of Rep. Kurt Schrader to reduce the burden of the Department of Labor overtime rule with H.R. 5813, OREA, which will remove the automatic threshold update and create a gradual onramp to implementation of the current threshold level.
Published on September 19, 2016

AICPA Letter of Support H. Con. Res. 140

Legislative Letters AICPA letter supporting Rep. Renacci legislation related to the federal financial statements, H. Con. Res. 140 on 9.6.16
Published on September 07, 2016

IFRS - GAAP Convergence

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 August 19, 2016

Tax Legislation and Policy

Article The Congressional and Political Affairs Team often assists the Tax Team with tax legislation and policy issues, and advocates about them to Members of Congress and other key policymakers on behalf of the profession.
Published on August 12, 2016

Letter from Senate Democrats to Department of Labor February 2016

Legislative Letters Letter of support from Senate Democrats, encouraging Secretary Lew to work swiftly in implementing the Department of Labor proposed overtime rule on February 29th, 2016.
Published on May 24, 2016

May 2016, Cash Coalition Letter to the Senate Finance Committee

Legislative Letters Cash Coalition letter to Senate Finance Committee on cash basis method of accounting 5-10-2016
Published on May 11, 2016

April 2016, Letter to Senate Finance Committee from the AICPA

Legislative Letters AICPA letter for the record to the Senate Finance Committee on hearing entitled “Navigating Business Tax Reform.” The letter encourages the committee not restrict the use of the cash basis method of accounting for pass-through entities.
Published on May 10, 2016

PPWO Letter of Support S. 2707 4.18.16

Legislative Letters Coalition letter sent in support of Senate bill S. 2707 blocking the proposed Department of Labor Overtime Rule.
Published on April 27, 2016

PPWO Letter of Support H.R. 4773 4-18-16

Legislative Letters Coalition letter sent in support of the House Bill H.R. 4773 blocking the proposed Department of Labor Overtime Rule.
Published on April 27, 2016

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