Accounting standards

A roundup of audit & assurance news from the previous month

A new report from the Public Company Accounting Oversight Board found that firms that audit 100 or fewer public companies showed a reduced rate of reported deficiencies in their 2007 through 2010 inspections, but in 2011, the rate of deficiencies showed little sign of declining.

The Financial Accounting Standards Board has voted to extend the comment deadline for a much-debated proposal on credit losses and loan impairments.

Responding to concerns about their allowance model and in an attempt to simplify impairment guidance for financial institutions, the Financial Accounting Standards Board has issued several exposure drafts of proposed models to take into account “expected losses” rather than the current “incurred loss” model.

— The Financial Accounting Standards Board has released a staff document that provides answers to questions about FASB’s recently issued proposal on expected credit losses.

The International Ethics Standards Board for Accountants has released stronger provisions in its Code of Ethics for Professional Accountants to address conflicts of interest and a breach of a requirement of the code.

A trade group representing credit unions is asking the Financial Accounting Standards Board to delay its proposals for changes in the accounting for credit losses and loan impairments.

The trustees of the IFRS Foundation have included the U.S. Financial Accounting Standards Board among the national and regional standard-setters in the new Accounting Standards Advisory Forum, the new group that will advise the International Accounting Standards Board on development of International Financial Reporting Standards.

Fitch Ratings is warning that approval of a Financial Accounting Standards Board proposal on the treatment of credit losses for loans and other financial assets could eventually force U.S. banks to book expected losses early, putting pressure on their reserve levels and reported earnings.

The International Accounting Education Standards Board has issued a set of revised standards for the initial professional development of accountants emphasizing that practical experience plays a key role in developing the competence of fledgling accountants.

The Group of 20 finance ministers, along with the European Commission, are calling for improved accounting standards in the public sector.

The International Accounting Standards Board has published revised proposals for loan loss provisioning as part of the financial instruments project that it has been working to converge with the U.S. Financial Accounting Standards Board, but the two proposals still take different approaches.

The Financial Accounting Standards Board may be changing its rules on business segment reporting or issuing additional guidance in response to questions raised during a post-implementation review of a 16-year-old standard.

Warning: Banks in the U.S. are bigger than they appear.

The Financial Accounting Standards Board has issued a revised set of proposals for the financial instruments accounting standards it has been working to converge with International Financial Reporting Standards.

The U.S. regulator that oversees corporate audits could face automatic spending cuts designed to reduce the federal budget deficit even though it receives no taxpayer funding.

The Private Company Council that will help set accounting standards for privately held businesses has decided to tackle three main projects for its agenda.

A couple of real accounting changes occurred, but world accounting convergence got derailed.

The Financial Accounting Standards Board has issued an updated financial instruments standard clarifying how some fair value requirements do not apply to private companies and not-for-profit organizations.

The International Accounting Standards Board and the International Integrated Reporting Council have signed an agreement to develop an integrated corporate reporting framework that includes financial, governance, management commentary and sustainability reporting.