US Week in Review - Week ending 12 December 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.
What’s new from EY
Several new accounting pronouncements are effective for 2013 interim or annual periods for calendar-year entities. We have listed those pronouncements, along with descriptions of related EY publications. All entities should carefully evaluate which accounting requirements apply to them for the first time in 2013.
New leadership at the US Securities and Exchange Commission often leads some EY clients to wonder (and ask EY) what it means for the agency's future and direction. SEC Chair Mary Jo White recently outlined her vision and priorities in a series of public speeches. A new EY report summarizes those perspectives.
Standard Setter updates
Financial Accounting Standards Board (FASB)
11 December 2013 FASB meeting
The FASB discussed its project on Consolidation: principal versus agent analysis.
The Board also ratified four consensuses and a consensus-for-exposure reached at the 14 November 2013 Emerging Issues Task Force (EITF) meeting. In addition, the Board requested that the staff perform pre-agenda research on whether Issue No. 13-B should be extended to other types of tax credit investments.
For additional details, see the FASB's Summary of Board Decisions.
Upcoming meetings and webcasts
18 December 2013 FASB meeting
The FASB is scheduled to discuss its projects on:
- Not-for-profit financial reporting: financial statements
- Transfers and servicing: repurchase agreements and similar transactions
- Accounting for financial instruments: classification and measurement
- Accounting for financial instruments: impairment
For additional details, see the FASB's calendar.
See the FASB's calendar for upcoming education sessions. No decisions are made at these sessions.
Public Company Accounting Oversight Board (PCAOB)
Report on implementation of engagement quality review standard
In a new report on audit firms' implementation of and compliance with Auditing Standard No. 7, Engagement Quality Review (EQR), the PCAOB said that firm methodologies were generally consistent with the standard but they did not always result in the firms appropriately executing EQRs.
According to the report (known as a 4010 report), the PCAOB said the engagement quality reviewer should have identified audit deficiencies in approximately 39% of the 111 audits by seven large US firms in which the PCAOB said the audit opinion was insufficiently supported. The report was based on the PCAOB's 2011 inspections of 213 registered audit firms. The PCAOB said audit deficiencies in this area continued to be high in its 2012 inspections.
The PCAOB said audit firms should put in place additional measures to ensure that EQRs are performed properly and in a timely manner. The PCAOB also suggested that audit committee members ask the independent auditor about the EQR process.
International integrated reporting framework
The International Integrated Reporting Council (IIRC) released this week the International Integrated Reporting Framework, following a three-month global consultation earlier this year. Integrated reporting is a process founded on integrated thinking that results in periodic integrated reports by a company about value creation over time and related communications regarding aspects of value creation. The Framework provides guiding principles and content elements that govern the overall content of an integrated report. It also identifies six "capitals" to encourage a company to think more broadly and to consider all potential sources of value in the course of explaining how it is creating value over the short, medium and long term. The IIRC believes it is the right time for companies to participate in the journey toward a better, more cohesive reporting landscape that makes sense both to companies and to the decisions of providers of financial capital in this interconnected, complex and resource-constrained world.
Upcoming Thought Center webcasts and podcasts
EY Q4 2013 financial reporting update
In co-operation with Financial Executives International (FEI)
19 December 2013, 1:00 p.m. Eastern time
Let's talk: sustainability
A new point of view for business leaders
16 January 2014, 12:00 p.m. Eastern time