AICPA News Update Vol. 14 No. 55 

    COSO Releases Proposed Update to Internal Control Framework 
    Published December 23, 2011

    AICPA

    AICPA News Update

    A Weekly Email Newsletter on Issues & Events Surrounding the CPA Profession

    In This Update:

    December 23, 2011 - Volume 14 No. 55

    COSO Releases Proposed Update to Internal Control Framework
    Send FAF a Comment Letter Supporting an Independent Board for Private Company GAAP Modifications
    AICPA Releases Revised Revenue Recognition Project Brief
    Technical Practice Aids Issued on SOC Reports (SSAE No. 16)
    AICPA Submits Comments to IRS Regarding Trust Investment Expenses
    Catch Up on Professional News
    COSO Releases Proposed Update to Internal Control Framework

    The original Internal Control – Integrated Framework was released in 1992 – before the Internet took hold and before the globalization of business. Recognizing technological and business developments along with increased corporate risks, the need to codify existing principles and supporting attributes as well as provide expanded guidance on non-financial reporting, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) on December 19 issued an updated framework for public comment. The framework retains the core definition of internal control and the five components of a system of internal control. Companies that already have an effective system of internal control should not experience additional responsibilities under the clarified framework. The AICPA is developing several resources, including a free webcast on January 31, to help members understand the proposed updated framework. Comments on the COSO exposure draft are due March 31. The AICPA is a member of COSO which provides thought leadership on internal control, enterprise risk management and fraud deterrence. Read this JournalofAccountancy.com article and visit AICPA.org for more information.

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    Send FAF a Comment Letter Supporting an Independent Board for Private Company GAAP Modifications

    The AICPA is urging members to respond to the Financial Accounting Foundation’s (FAF) Plan to Establish the Private Company Standards Reporting Council and express support for the Blue Ribbon Panel on Standard Setting for Private Companies’ recommendation that FAF create an independent board to set exceptions and modifications in U.S. GAAP for private companies. According to FAF’s proposal, decisions of the new council would have to be reviewed and approved by the Financial Accounting Standards Board, which FAF oversees. The AICPA believes that true differential standards for private companies would be better achieved through a board consisting of members with private company constituent experience and having the authority to act on its own. A quick and easy online tool enables you to send a comment letter in just 30 seconds. Use the outreach toolkit to get other private company constituents involved. The public comment period closes Jan. 14. More information is available at aicpa.org/privateGAAP.

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    AICPA Releases Revised Revenue Recognition Project Brief

    The AICPA has published an updated Accounting and Auditing Brief - The FASB/IASB Revenue Recognition Accounting Project to keep members informed about the continuing changes regarding the revenue recognition project, and its impact on members and their clients or employers. Last month the Financial Accounting Standards Board and the International Accounting Standards Board published a revised joint exposure draft, Revenue from Contracts with Customers. The revenue recognition project has the potential to affect every company’s day-to-day accounting and, possibly, the way companies do business through contracts with customers. Comments on the revised ED are due by March 13, 2012, and the boards hope to issue a final standard later in 2012. Download the brief today.

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    Technical Practice Aids Issued on SOC Reports (SSAE No. 16)

    Technical Questions and Answers 9520.12–.26 have been issued to provide nonauthoritative guidance regarding Statement on Standards for Attestation Engagements (SSAE) No. 16, Reporting on Controls at a Service Organization (AICPA, Professional Standards, AT sec. 801). These Technical Practice Aids (TPA) provide guidance for service auditors reporting on controls at a service organization relevant to user entities’ internal control over financial reporting, and also to user auditors who audit the financial statements of entities that use a service organization. SSAE No. 16 supersedes the guidance for service auditors that is in Statement on Auditing Standards No. 70, Service Organizations (AICPA, Professional Standards, AU sec. 324). The guidance for user auditors will remain in the auditing standards. TPAs 9520.01–.11 replace TIS section 9520, Service Organization Standards and Implementation Guidance, in AICPA Technical Practice Aids. The section is now titled SSAE No. 16, Reporting on Controls at a Service Organization.

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    AICPA Submits Comments to IRS Regarding Trust Investment Expenses

    On December 5, the AICPA sent a letter to the Internal Revenue Service requesting changes regarding Section 67 Limitations on Estates and Trusts’ Administrative Costs. The AICPA’s recommendations suggest that the cost of preparing the decedent’s gift tax returns and other individual income tax returns, gift tax returns and tax returns for a sole proprietorship or a retirement plan should also not be on the list of items subject to the two percent floor. Additionally the AICPA suggested the regulations not include an unbundling requirement and ownership costs should be corrected to remove non-miscellaneous itemized deductions. Read the comment letter for more information.

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    Catch Up on Professional News
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