On the IRS website, the IRS Commissioner has explained that the IRS anticipates bringing more people back into its campuses and offices to do work that cannot be performed remotely. The first phase, which began June 1, will include employees with nonportable work in Kentucky, Texas, and Utah. In addition, over the next several weeks, the IRS will continue to ask employees whose work is not portable to return to their posts of duty. Business unit leaders are evaluating their needs and will make decisions about how many employees are needed in each location to clear out the backlog of work and safely resume operations.
IFRS Interpretations Committee to discuss supply chain financing, other topics.
At press time, the IFRS Interpretations Committee has yet to determine its next steps about disclosure and presentation reporting issues arising from supply chain financing arrangements—a process that enables buyers and sellers to minimize risk across a supply chain. Committee discussions on supply chain financing started in April following a company’s request to clarify a matter related to the presentation and disclosure of reverse factoring arrangements, according to a board handout published on June 5. The panel has been studying how an entity presents its obligations with regard to reverse factoring arrangements, and what to disclose in its financial statements. Separately, the International Financial Reporting Interpretations Committee (IFRIC) will discuss feedback it received on its published tentative agenda decision in response to a submission on International Accounting Standard (IAS) 12, Income Taxes.
Cities, states get clarifying rules for cloud computing, subscription-based IT arrangements.
The GASB issued new accounting rules on June 5 to clarify how to report cloud computing and other subscription-based forms of software arrangements, the use of which by state and local governments has skyrocketed. Governmental entities have been shifting from traditional information technology (IT) based on a purchasing and perpetual licensing model to cloud computing and similar arrangements. The new rules will bring more uniformity to financial reporting in that area, the statement explains. The standard takes effect for fiscal years beginning after June 15, 2022, one year later than the board originally proposed. The extension was provided in order to give state and local governments more time to deal with circumstances arising from the COVID-19 pandemic, the board said. Early application is encouraged.
Broad support to build on international approach to revise quality control standards.
The PCAOB has received broad support to build upon a proposed approach taken by an international standard-setter to update the board’s audit quality control (QC) standards. A firm’s QC deals with its system of employee training and compliance with professional standards and its standards of quality. The board believes that strong QC is important to audit quality. In the past several years, the board has been researching the standards to determine if they need to be updated as the inspections staff has continued to find deficiencies in audit engagements as well as problems in firms’ QC systems in certain areas. Currently, the PCAOB uses the AICPA’s QC standards, which were issued in 1997 before the board existed. The audit environment has changed dramatically since then, especially with advances in technology. “There is no need to reinvent the wheel; the existing International Auditing and Assurance Standards Board’s [IAASB] standards, when complete, will represent a good starting point for the PCAOB that can be tailored to fit the specific needs of the U.S. market,” wrote Marcie Frost, CEO of California Public Employees’ Retirement System (CalPERS). “Many accounting firms are multinational organizations using worldwide auditing practices and are already familiar with the IAASB standards which will ease the transition.”
