US Week in Review - Week ending 15 August 2013
The US Week in Review highlights this week’s developments and emerging issues in the financial reporting world and gives you direct access to relevant technical accounting guidance and thought leadership produced by EY.
Standard Setter updates
Financial Accounting Standards Board (FASB)
Revenue guidance may be delayed
While speaking at a conference last week, FASB member Thomas Linsmeier said the FASB and the IASB will probably issue their joint standard on revenue recognition in the fourth quarter of 2013, rather than the third quarter as planned, according to a press report.
Upcoming meetings and webcasts
No meetings are scheduled for the week of 19 August 2013. For additional details, see the FASB’s calendar.
See the FASB's calendar for upcoming education sessions. No decisions are made at these sessions.
Securities and Exchange Commission (SEC)
Plaintiffs appeal decision to uphold SEC's final rule on conflict minerals
Business groups challenging the SEC's final conflict minerals rule have asked the US Court of Appeals for the District of Columbia Circuit to review a US District Court judge's ruling on 23 July 2013 upholding the rule. Companies should continue preparing to comply with the rule while monitoring the legal challenge.
Public Company Accounting Oversight Board (PCAOB)
Proposal would change the auditor's reporting model
The PCAOB voted unanimously to propose two standards and related amendments that would enhance the auditor's reporting model and the auditor's responsibilities related to information in a company's annual report outside the audited financial statements. The proposal would retain the pass/fail model in the existing auditor's report, but would also require auditors to:
- Include a discussion of "critical audit matters" (CAM)
- Include information on auditor independence, auditor tenure and the auditor's responsibilities to evaluate information outside the financial statements along with the results of that evaluation
- Include information related to the auditor's responsibilities for the financial statement footnotes and the risk of material misstatement due to fraud
The proposal defines CAMs as matters that involved the most difficult, subjective or complex auditor judgments, including areas that posed the most difficulty to the auditor in obtaining sufficient appropriate evidence and/or forming an opinion on the financial statements. For each CAM, the audit report would identify the CAM, describe the considerations that led the auditor to determine that the matter is a CAM and refer to the relevant financial statement accounts and disclosures that relate to the CAM, when applicable.
The proposal also would add procedures for the auditor to perform when evaluating the information in the annual report that is outside of the audited financial statements. The evaluation, which would be based on audit evidence obtained and conclusions reached during the audit, would consider whether the other information contained material inconsistencies with amounts or information, or the manner of their presentation, in those financial statements.
Comments are due by 11 December 2013. The PCAOB may hold a roundtable in 2014 to discuss the proposals. The PCAOB also published a fact sheet on the proposal.
Upcoming Thought Center webcasts and podcasts
EY Q3 2013 financial reporting update
In co-operation with Financial Executives International (FEI)
19 September 2013, 1:00 p.m. Eastern time
CFOs reveal hidden trends from earnings season
30 September 2013, 12:00 p.m. Eastern time