Earlier this month, the Nordic Federation of Accountants (NRF) published a consultation on a new Standard for Audits of Smaller Entities (SASE) that, if finalised, will apply in Norway, Sweden, Iceland, Finland and Denmark. We’re concerned about smaller entity audits Smaller entity audits have been a central ICAEW concern for over a decade. There has been a…
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While enhanced skepticism is a key argument for requiring auditor rotation, a new report suggests that what really happens is the opposite. An intricate experiment reported in a leading accounting journal has cast new light on a contentious issue regarding the auditing of financial statements — namely, whether companies should be required to periodically change…
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Without trust, there can be no growth. Although the auditing profession has played a significant role in establishing trust for centuries, in the wake of the global financial crisis, concerns have been raised about relevance and the value of auditors’ work. While our work allows us to express opinions on the fairness of financial information…
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Inconsistencies in ACT from company to company, and even within companies, cloud net-income reporting, an accounting expert says. Every well-controlled company has an asset capitalization threshold (ACT) that should be consistently applied. The ACT is the dollar value at which an acquired asset is capitalized rather than expensed. Pretty basic, right? However, there is no…
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India is likely to defer the adoption of new accounting standard on revenue recognition (known as Ind AS 115) as more consultation is needed with the industry to clarify the requirements and to give examples to help implementation. Technology and telecom companies are largely going be impacted with this standard. The new accounting standard on…
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A succession of recent announcements by major Japanese companies—notably relatively young firms like Softbank and Rakuten—that they were adopting the International Financial Reporting Standards has generated great interest. The IFRS accounting rules were originally developed to harmonize standards in the European Union and have since been adopted by countries outside the region; they are now…
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The Financial Accounting Standards Board has released two proposed accounting standards updates related to derivatives and hedging. The first proposal involves the effect of derivative contract novations on existing hedge accounting relationships. The second proposal, also issued Thursday, pertains to contingent put and call options in debt instruments. The proposed update on derivative contract novations comes from FASB’s…
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The Financial Accounting Standards Board has issued a three-part accounting standards update for employee benefit plans accounting as part of its efforts to simplify the accounting rules. Earlier standards for defined contribution benefit plans and health and welfare benefit plans required fully benefit-responsive investment contracts to be measured at contract value, along with an adjustment to reconcile…
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Introduction As it is well known, small- and medium-sized entities (SMEs) are a very important player in the global economy. However, in many cases, SMEs’ resource providers say, “I do not trust their financial statement figures”. This is a double-sided problem. First, those who need capital might not gain access to it, or at least…
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The Financial Accounting Standards Boards has finalized its simplification of the accounting requirements around measuring inventory, although the simplification is not as broad-based as originally intended. FASB has approved Accounting Standards Update No. 2015-11 to adjust the requirements in Topic 330 of the Accounting Standards Codification around measuring the value of inventory. The update says when performing…
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