|Dear Center Members:
|This GAQC Alert provides the following important information for our members:
- Registration information for a March 12th GAQC Web event addressing GASB's leases standard that we encourage you to invite your clients to attend;
- A reminder to register for our February 21st GAQC Web event on independence considerations under the 2018 edition of Government Auditing Standards (the Yellow Book);
- The issuance of an AICPA Exposure Draft (ED) addressing auditor independence in a state and local government (SLG) financial statement engagement; and
- A reminder to comment on several recent GASB proposals relating to the governmental financial reporting model and fiduciary activities, both of which have February comment deadlines.
|Lease Event Registration
This GAQC Web event, GASB Leases: What Preparers & Auditors Need to Know to be Ready for Implementation, will be held on Tuesday, March 12, 2019, from 1:00 PM – 3:00 PM (Eastern Time). Because this topic should also be of interest to SLGs, we encourage you to invite your clients to attend using the non-GAQC member registration link below.
While GASB Statement No. 87, Leases, is not effective until periods ending in December 2020, there is much work to do ahead of time to be ready. This standard will greatly affect lessee accounting but likewise impact lessors and both perspectives will be covered in this event.
The event will:
The presenters for this event are: Stephen Blann, CPA, Rehmann; and Chris Pembrook, CPA, Crawford & Associates, P.C.
- Discuss an overview of the single model for recording leases (i.e., capitalization);
- Discuss lessor considerations;
- Analyze the importance of creating a lease inventory;
- Identify issues related to defining leases, including separation components (e.g., maintenance and the asset); and
- Analyze early auditor considerations.
GAQC Member Registration: GAQC members can register now using the CPE or no-CPE options.
Non-GAQC Member Registration: Invite your clients to register now using the public CPE option.
To ensure you receive CPE for this Web event, please complete your online registration by noon on Tuesday, March 12, 2019. If you are interested in registering a group, the above Web event registration page provides you with "how to" and pricing information. A "Webcast Group Viewing" document also provides additional instructions.
Yellow Book Independence Event
As further described in GAQC Alert #375, the GAQC will hold an event, Understanding the Changes to Yellow Book Independence, on Thursday, February 21, 2019, at 1:00 PM – 3:00 PM (Eastern Time). Register now.
SLG Auditor Independence ED
The AICPA Professional Ethics Division recently issued an ED, State and Local Government Client Affiliates, proposing changes to the existing interpretation, State and Local Governmental Entities (ET sec. 1.224.020). Members with SLG clients are encouraged to read the ED and comment on the questions posed by March 11, 2019.
This ED is a follow up to an initial ED issued in July 2017, which received many requests for clarification. Read GAQC Alert #339 for more information about the initial ED. The new proposal presents three substantive revisions:
The interpretation is proposed to be effective one year after adoption, with early implementation allowed.
- Replaces the requirement to apply the "Conceptual Framework for Independence" to upstream entities with examples of relationships or circumstances that members may have with upstream entities that could result in the member consulting the "Conceptual Framework for Independence."
- Expands the provision to expend best efforts to obtain information to identify investments held by a client to all affiliates for consistency with the "Client Affiliates" interpretation (ET sec. 1.224.010).
- States that the member presumes only that the financial statement attest client has more than minimal influence over funds and blended component units which is narrowed from a more expansive requirement in the initial ED.
Comment Reminder on Recent GASB EDs
The GASB issued an ED of a proposed Implementation Guide addressing GASB Statement No. 84, Fiduciary Activities, that contains dozens of questions and answers on accounting and financial reporting for fiduciary activities. Members with SLG clients are encouraged to read the ED and comment by February 28, 2019. Remember that while the notion of a fiduciary activity on the surface seems straightforward (i.e., holding another entity's money), application of the standard requires an early individual analysis of various activities to determine the proper reporting under GASB Statement No. 84. See GAQC Alert No. 373 for additional discussion and resources related to this new standard, including an archived GAQC no-CPE Web event.
Members are also reminded that the GASB is re-looking at the governmental financial reporting model and has issued two Preliminary Views (PV) documents that include proposed improvements to key components of the financial reporting model, as well as new concepts intended to guide the Board in developing standards on recognition in financial statements. Members that audit SLGs are encouraged to consider and comment on the PV documents by February 15, 2019. See GAQC Alert No. 373 for additional discussion and resources related to this project.
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AICPA Governmental Audit Quality Center
|In This Alert
|Archived Event Available
|The archive of the GAQC Web event, Navigating Indirect Costs in Your Single Audit, is now available. Access archived event.
|We welcome any suggestions or questions - please send them by e-mail at GAQC@aicpa.org.
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