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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    Interstate Taxation/Mobile Workforce Bill

    Article The AICPA is supporting legislation that would reduce the tax burden and compliance requirements related to nonresident state income tax withholding laws.
    Published on May 13, 2015

    Section 404(b) of Sarbanes-Oxley Act of 2002

    Article The Sarbanes Oxley Act requires that the management of public companies assess the effectiveness of the internal control of issuers for financial reporting.  Section 404(b) requires a publicly-held company’s auditor to attest to, and report on, management’s assessment of its internal controls. AICPA believes that all investors in public companies
    Published on May 13, 2015

    Accounting Partnership Retirement Practices

    Article In recent years, Equal Employment Opportunity Commission (EEOC) staff have been investigating and considering litigation against accounting firms organized as partnerships with a goal of requiring firm partners to be treated as “employees” for purposes of the Age Discrimination in Employment Act (ADEA). The AICPA has written the EEOC asking
    Published on May 13, 2015

    Dodd-Frank Whistleblower Rules

    Article Dodd-Frank Act Sections 922 and 748 require the Securities and Exchange Commission and Commodities Futures Trading Commission to implement rules to pay cash awards of up to 30% in settlements over $1 million to whistleblowers who voluntarily provide original information about violations of the Securities laws and Commodity Exchange Act,
    Published on May 13, 2015

    FASB Independence and Fair Value Accounting

    Article The AICPA strongly and unequivocally supports independence of the U.S. and international accounting standard setting bodies, the Financial Accounting Standards Board (FASB) in Norwalk, Connecticut, and the International Accounting Standards Board (IASB) in London.
    Published on May 01, 2015

    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 May 01, 2015

    March 15, 2015 AICPA Letter to Senate Finance Committee Business Income Tax Reform Working Group

    Legislative Letters March 15, 2015 AICPA Letter to Senate Finance Committee Business Income Tax Reform Working Group
    Published on April 22, 2015

    Coalition Letter to SFC Business Tax Reform Working Group

    Legislative Letters In April 2015, the AICPA joined a coalition including the American Council of Engineering Companies, American Farm Bureau Federation, American Institute of Architects, American for Tax Reform, Farmers for Tax Fairness, Investment Adviser Association, and multiple law firms and bar associations in writing a letter to the Senate Finance Committee’s
    Published on April 15, 2015

    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 March 20, 2015

    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 March 12, 2015

    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 February 05, 2015


    Overview 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 December 15, 2014

    AICPA Letter to House Oversight and Government Reform Committee re DATA Act Implementation Hearing

    Legislative Letters The AICPA wrote to the House Oversight and Government Reform Committee regarding the Committee's hearing entitled "Transforming Federal Spending: Implementing the Digital Accountability and Transparency Act."
    Published on December 15, 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

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