NEWSLETTERS

Audit & Accounting Alert - January 2023 • Issue 1

The confirmation process has been a staple of the financial audit process for many years. When properly performed, this practice provides one of the best forms of audit evidence. In December 2022, the Public Accounting Oversight Board (PCAOB) proposed a long-awaited update to modernize the standard, known as AS 2310, The Auditorâ€™s Use of Confirmation. This edition of the Audit & Accounting Alert highlights the new proposal.

Audit & Accounting Alert - January 2022 • Issue 1

For years, the government of China has repeatedly thwarted attempts by the Public Company Accounting Oversight Board (PCAOB) to review auditor workpapers from audits of Chinese companies. Once again, the PCAOB has been forced to threaten these companies with delisting or prevention from listing on the financial markets. This issue highlights the latest action recently announced.

Audit & Accounting Alert - December 2021 • Issue 11

A well-run internal audit department can serve as a beneficial complement to the work of the external auditor. With the substantive organizational changes compelled by the pandemic these past two years in corporate operational and accounting processes, both internal and external audit teams have had to adapt their approaches in order to assure desired outcomes. With the new year approaching, technology service providers are looking to what lies ahead for their audit customers. In this issue, the assessments of two of these suppliers are highlighted.

Audit & Accounting Alert - November 2021 • Issue 10

The Integra International Annual World Conference brings together professional accountants from six continents to share common interests arising from the diverse context of their separate homelands. Those having attended these gatherings for the more than 25-year history remark at how much more alike we are as humans and practitioners than we are different. The October 2021 conference hosted in Miami, Florida, by Integra Firm of the Year, KSDT, CPA, was no different, except for the hybrid nature of in person and remote attendance required by the pandemic. This issue of the Audit & Accounting Alert highlights some of the conference sessions.

Audit & Accounting Alert - October 2021 • Issue 9

For more than thirty years COSO, the respected accounting industry backed group, has developed frameworks to assist organizations with managing controls, risk, governance and fraud. In recent years, the guidance has incorporated technology issues into the frameworks. Artificial intelligence is the focus of COSOâ€™s newest publication, addressing the potential as well as the related risks associated with this transformative innovation. This issue highlights the report.

Audit & Accounting Alert - September 2021 • Issue 8

Over five years have passed since the monumental standards on lease accounting were issued by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). Since then, the Boards have issued several updates and responded to hundreds of technical inquiries. Public companies implemented the standard in 2019, while private companies will finally be required to comply beginning in 2022. Through the lens of Journal of Accountancy (JofA) articles published by a team led by Steve Austin from the Integra International member firm Swenson Advisors, this issue tracks the trajectory of the lease standard process since its release.

Audit & Accounting Alert - August 2021 • Issue 7

The June Audit & Accounting Alert featured a report, The Professional Accountantâ€™s Role in Data, published jointly by the International Federation of Accountants (IFAC) and Chartered Professional Accountants of Canada (CPA Canada), demonstrating the uniquely positioned expertise of accountants to participate in the transforming world of mega-data. This issue highlights the Dynamic Audit Solution (DAS), a practical, yet forward-looking resource, addressing the future of auditing for accounting firms of all sizes.

Audit & Accounting Alert - July 2021 • Issue 6

The pandemic provided a new, opportunistic landscape, enticing fraudsters to wreak havoc on unsuspecting organizations. While entities were busy adapting their workplaces to the COVID-19 environment, devious minds were targeting weaknesses in the modified processes. A new report from the Association of Certified Fraud Examiners (ACFE) tracks the increase in fraudulent occurrences during the past year, as well as measures taken to counteract the threats. This issue of the Audit & Accounting Alert highlights the report and related anti-fraud resources available from the ACFE.

Audit & Accounting Alert - June 2021 • Issue 5

The rapidly expanding scope and accessibility of technological advances in all aspects of society continue to spread pervasively. The accounting profession is no exception to the trend. A new report from the International Federation of Accountants (IFAC) and Chartered Professional Accountants of Canada (CPA Canada) explores how the profession is favorably situated to serve in this dynamic arena, provided that essential technical skills keep pace. This issue highlights the report, along with guidance from the AICPA aimed at accounting and auditing of digital assets.

Audit & Accounting Alert - April 2021 • Issue 4

Finding ways to improve audit quality and eradicate fraud are never ending tasks. Continued vigilance is a necessity. British authorities have been studying the issues from several angles over the past two years. The outcomes from three studies have been analyzed and incorporated into a comprehensive set of proposals that address the roles of corporate directors, shareholders, auditors and regulators alike.

Audit & Accounting Alert - March 2021 • Issue 3

ESG Affects CPAs as Well as Their Clients. New reports explore the issues. The last several years appear to have brought more changes in weather, society, and the regulatory atmosphere than I can recall when I began to write the Audit & Accounting Alert nearly ten years ago. There are differing levels of agreement on some of the issues, such as the cause and impact of climate change. Nevertheless, the increased attention during this time frame to the environmental, social and governmental (ESG) aspects of financial reporting should not be a surprise. When first covering the topic in September 2012, the focus was on general concepts and seeking input for developing a framework.

Audit & Accounting Alert - February 2021 • Issue 2

Preparation, examination, and regulation of corporate financial reports proceeds forward in 2021, now with the added layer of complexity brought on by the world-wide pandemic. The United States Securities and Exchange Commission (SEC), the Public Company Accounting Oversight Board (PCAOB), and the Financial Executives International (FEI), all have a role, each from a different vantage point, in maintaining the integrity of the financial reporting system.

Audit & Accounting Alert - January 2021 • Issue 1

For the past quarter century, every two years the Association of Certified Fraud Examiners (ACFE) has issued a comprehensive analysis of the impact of financial fraud. However, with the rise of the coronavirus pandemic this past year, the ACFE has supplemented the biennial report with quarterly updates assessing specifically the impact of COVID-19 on fraud within organizations.

Audit & Accounting Alert - December 2020 • Issue 11

One of the benefits of participation in the Integra International family is collaboration and interaction with practicing accountants from all over the world. Several times a year, Integra’s Audit & Accounting Committee meets via Zoom to discuss and share ideas arising from topics of current interest.

Audit & Accounting Alert - November 2020 • Issue 10

The credibility of the accounting profession continues to be threatened by the fallout from major corporate collapses resulting from fraud. Expectations had been that substantive corrective protections instituted following the 2001 Enron failure would prevent future occurrences. However, recent scandals, like that of Wirecard in Germany, are sobering reminders that much work still needs to be done to resolve the endemic challenges.

Audit & Accounting Alert - October 2020 • Issue 9

The coronavirus pandemic has brought into vivid focus that monetary results reported by companies in their financial statements are not the only factors influencing future value and ongoing success. Nonfinancial environmental, social and governmental (ESG) issues can impact operations in sometimes sudden and unexpected ways. In order to make informed decisions, company executives, investors and regulators need the means to evaluate the potentially significant ramifications from these internal and external forces.

Audit & Accounting Alert - September 2020 • Issue 8

As the coronavirus pandemic continues at varying stages throughout the world, the United States presidential election season has served to politicize this health crisis along with other contentious issues that have polarized the country’s citizens. One of the issues that extends to the accounting profession involves the relationship between the United States and China.

Audit & Accounting Alert - August 2020 • Issue 7

Multiple ongoing efforts to enhance future financial reporting, while holding past shortcomings to account, reflect the vitality of the accounting profession, even amidst the pandemic. Recent issues of the Audit & Accounting Alert have highlighted steps taken to adapt reporting and auditing processes to work with the altered conditions dictated by COVID-19.

Audit & Accounting Alert - July 2020 • Issue 6

The persistence of the COVID-19 pandemic can affect certain aspects of life in a variety of ways. Retirement is one such area. Those in retirement face the uncertainty of whether their funds will run out, while those still working wonder if they will ever be able to accumulate enough to retire.

Audit & Accounting Alert - June 2020 • Issue 5

As the COVID-19 pandemic enters the next phase, profound changes are emerging in the way the people and establishments of the world operate. The accounting profession is no exception to these changes. As the California firm where I spent most of my career carefully reopened, 75% of the personnel preferred to continue working from home.

Audit & Accounting Alert - May 2020 • Issue 4

In the last issue, an article was referenced that used the analogy of a blizzard, a winter and a little ice age, to characterize how the Covid-19 pandemic might impact the new reality. Most places are now past the initial blizzard stage and are somewhere in the midst of the winter stage.

Audit & Accounting Alert - April 2020 • Issue 3

A recent article from Praxis Labs, Leading Beyond the Blizzard: Why Every Organization Is Now a Startup, used the analogy of a blizzard, a winter and a “little ice age” to visualize the world’s current situation in the COVID-19 crisis.

Audit & Accounting Alert - March 2020 • Issue 2

When the United States was beset by the Enron and other accounting scandals at the beginning of the twenty-first century, the resulting Sarbanes-Oxley legislation a year later went a long way to address the shortcomings in the country’s financial accountability controls.

Audit & Accounting Alert - January 2020 • Issue 1

Over the past eight years, the Audit & Accounting Alert has followed the multifaceted efforts surrounding convergence of financial reporting standards, while simultaneously covering the parallel search for effective audit standards by which to evaluate the integrity of the financial reporting results.

Audit & Accounting Alert - November 2019 • Issue 6

New proposals for assessing materiality and estimates in accounting and auditing. Judgment is a critical skill that successful auditors and accountants build on with experience. While automation continues to eliminate human involvement in quantitative functions, the professional’s role in discernment becomes ever more important. With artificial intelligence threatening to take over even some of the judgmental tasks, the future demands that practitioners enhance their proficiency to a higher degree of sophistication.

Audit & Accounting Alert - September 2019 • Issue 5

Change is coming faster than ever in the world today. For the accounting profession, reporting standards and technology are two areas where the pace of development has been swift and relentless. Moreover, the new reporting standards, in both accounting and auditing, are substantial as well. Recognizing the added burden that recent standard revisions have placed, especially on smaller firms, professional bodies are taking steps to address implementation timing and applicability, as highlighted in our first article.

Inside Integra - February 2019 • Issue1

What you will find in this issue:
Read this newsletter to find out what is going on in the world of Integra International. This newsletter contains information about upcoming Conferences, new members, webinars and other important updates regarding Integra International.

Audit & Accounting Alert - January 2019 • Issue 1

The New Year Brings Momentous New Standards for Both Public and Private Companies
A year ago, the January 2018 issue of the Alert summarized the significant financial reporting changes contained in the new lease and revenue accounting standards. At that time, the revenue accounting standard was just going into effect for public companies while the new lease accounting standard was still a year off.

January 2018 • Issue 54

New Revenue Accounting Standard Finally Takes Effect
The far reaching Revenue from Contracts with Customers accounting standard was jointly issued by the International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) in April 2014, after years of deliberation and consultation between the two boards. Now, for public companies, the standard goes into effect for 2018, while private companies have one more year before adoption is mandatory.

November 2017 • Issue 53

New Framework Relates Risk To Strategy and Performance
COSO has been quantifying approaches to internal controls and risk management for twenty-five years, since the initial guidance. Internal Control — Integrated Framework (ICIF), was issued in 1992. The Committee on Sponsoring Organizations of the Treadway Commission (COSO) is an American private sector group providing leadership and guidance to help organizations reduce fraud and operate more efficiently through the issuance of formal frameworks for internal control and risk management. The five members are the AICPA, AAA, FEI, IMA and IIA.

September 2017 • Issue 52

The Current & Future Value of the Audit
While constantly contending with the relentless pace of technological change facing the audit profession, value can be derived from pausing regularly to assess client perceptions of the current and future role of the professional auditor.

July 2017 • Issue 51

Are You Future Ready? AICPA ENGAGE mega conference focuses on rapidly approaching changes
A much anticipated annual spring event that my colleagues and I have looked forward to these past three decades has been the AICPA Practitioners Symposium. After a long, hectic busy season, the conference provides the opportunity to catch up on developments in the profession. Recently, the 2017 event brought the latest iteration which quintupled the size to over three thousand participants for AICPA ENGAGE. The increase was accomplished by combining six of the AICPA’s most popular educational offerings. While the old version provided a broad array of practice management, accounting, tax, technology, advisory and marketing topics, the new rendition drilled down extensively on each of these areas. While crowd control was an issue, the wealth of options for developing skills and knowledge was overwhelming.

May 2017 • Issue 50

A year ago, we reported on the Association of Certified Fraud Examiners’ (ACFE) biennial Report to the Nation on Occupational Fraud and Abuse. That report found that worldwide fraud over the prior twenty-year period accounted for 5% of annual revenue, which equates to several trillion dollars a year. The survey supporting the report indicated that over 80% of the frauds included asset misappropriation, a third included corruption, while 10% revealed financial statement reporting fraud.

March 2017 • Issue 49

American politicians debate whether expansion of manufacturing in the country will bring new jobs or just new opportunities for companies to further embrace the growing attraction of robotic technology. Accountants and auditors need to watch this development closely, and not just to develop methodologies that track the accounting measurement and reporting for their companies and clients. Robots and other forms of artificial intelligence (AI) are rapidly progressing to take over many of the tasks traditionally performed by them.

January 2017 • Issue 48

Cybersecurity Reporting - A proposed standardized framework for assessment of risk
Threats to cybersecurity are pervasive at all levels of society today. Recently, the objectivity of America’s election process was drawn into question by alleged cyberattacks on candidates, if not the actual voting mechanism itself.

December 2016 • Issue 47

Brexit and Financial Reporting - Short and long term implications
An unexpected benefit of the drive my wife and I took across the heart of the United Kingdom this past June was the first-hand opportunity to hear reactions of British citizens before and after the Brexit referendum, the UK’s vote on whether to remain a part of the European Union (EU).

November 2016 • Issue 46

Leases to Take Center Stage on Balance Sheets World-Wide
Well over two years have passed since the monumental revenue accounting standard was jointly issued by the International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) in April 2014. Since then, six amendments have been made to the FASB pronouncement and two to the IASB pronouncement, including deferral by both Boards of the effective date for an additional year to 2018, which provides the better part of four years between issuance and implementation...

October 2016 • Issue 45

Revenue Accounting Standard Progressing Toward Implementation
Well over two years have passed since the monumental revenue accounting standard was jointly issued by the International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) in April 2014. Since then, six amendments have been made to the FASB pronouncement and two to the IASB pronouncement, including deferral by both Boards of the effective date for an additional year to 2018, which provides the better part of four years between issuance and implementation...

September 2016 • Issue 44

Facing the Challenge of Financial Reporting Obsolescence
Over recent years, we have followed the relentless pursuit of global financial reporting standards. From the latest analysis as of July 25, 2016, the International Accounting Standards Board (IASB) reported that just over half of all listed companies worldwide now use International Financial Reporting Standards.

June 2016 • Issue 43

Boosting Profits with Non-GAAP Alternative Financial Reports
We have followed the successes and setbacks in recent years of the efforts to converge international accounting standards, which goal has been to produce uniformity in financial statements that are consistent and comparable throughout the world. The United States has resisted these efforts, preferring to stick with generally accepted accounting principles (US GAAP), instead of the widely adopted International Financial Reporting Standards (IFRS).

May 2016 • Issue 42

Fraud Numbers Hold Steady
The Association of Certified Fraud Examiners (ACFE) was established in 1988 with a mission to “reduce the incidence of fraud and white-collar crime and to assist the Membership in fraud detection and deterrence.” Today the organization boasts over 75,000 members and sets high membership standards through education, examination and ethics requirements.

April 2016 • Issue 41

Audit Quality Survey is New, But the Results Are Not
On March 3, 2016, the International Forum of Independent Audit Regulators (IFIAR) released the results of the fourth annual survey of audit inspection findings, this time for 2015. Sadly, our Audit & Accounting Alert (A&A) article from May, 2015, covering the third annual survey of 2014 results, could be repeated here with only the dates changed, and still be largely accurate. Last year’s A&A article title, “Improved Audit Quality Slow in Coming,” still speaks to the persistence of shortcomings in performance.

March 2016 • Issue 40

New Era Decision Making Requires a More Robust and Nimble Approach
In the December, 2015, Audit & Accounting Alert, we described a vision for new professional accounting services, as put forward in an International Federation of Accountants (IFAC) thought paper: Creating Value with Integrated Thinking. Now a February, 2016 survey, jointly commissioned by the Chartered Institute of Management Accountants (CIMA) and the American Institute of Public Accountants (AICPA), has confirmed that many companies are struggling to adapt decision making processes to a world “characterised by volatility, uncertainty, complexity and ambiguity.” The survey report, Joining the Dots: Decision Making for a New Era, notes that the successful minority are the ones that have embraced integrated thinking.

February 2016 • Issue 39

Seeking a Sound Future for Europe’s Auditors
The Federation of European Accountants (FEE), based in Brussels, Belgium, represents 50 institutes of professional accountants and auditors from 37 European countries. As the mouthpiece of the profession, the FEE is “committed to inform the European public policy debate independently. It offers technical expertise and coordinated views on developments affecting the European economy. FEE’s contributions are based on the practical experience that professional accountants gain daily in all economic sectors and the values underpinning the profession’s practice.”

January 2016 • Issue 38

China: Two Steps Forward, One Step Back
While China is anxious to gain full acceptance into the world economy, the country’s guarded emergence from decades of a tightly controlled system can still present obstacles that are stubbornly resistant to change. The past two months have brought China admirable success with the International Financial Reporting Standards (IFRS) Foundation, while posing a stiff challenge for the Public Company Accounting Oversight Board (PCAOB).

December 2015 • Issue 37

The Path to Future Relevance for Accountants
Over the past year, the Audit & Accounting Alert has addressed various aspects of rapidly changing technology and the need for accountants to pay close attention to those changes, or risk descending into irrelevance. The warnings continue to come, while also offering avenues of support for keeping pace.

November 2015 • Issue 36

Concept of Materiality up for Clarification
When the mood for convergence of accounting standards was going strong, the IASB and FASB were on the way to jointly producing an updated conceptual framework for financial reporting. Alas, the momentum was lost when, in 2010, the project was suspended in deference to more framework had been completed. Included in Chapter 3, Qualitative Characteristics of Useful Financial Information, the following definition of materiality was agreed upon.

October 2015 • Issue 35

The Elusive Goal of Global Accounting Standards
How quickly times change. Several years ago, accountants were asking when, not if, they would need to implement International Financial Reporting Standards (IFRS). Today, the march toward world domination by the International Accounting Standards Board (IASB), the promulgator of IFRS, appears to have slowed to a crawl, if not a complete stall, at least for the foreseeable future in the United States and elsewhere. Yet voices pro and con can still be heard, though the language used by some appears to have changed.

August 2015 • Issue 34

Mixed Signals for Audits in the Future?
Recent papers and discussions continue to call for more changes in financial statement audits, and in some cases for no audits at all in the future. While the British try to get comfortable with assurance reviews as an alternative, Americans seek more relevance and effectiveness in order for audits to remain viable in the long-term.

July 2015 • Issue 33

Integra Meets With European Commission in Brussels!
In conjunction with the Integra International June 2015 Conference in Brussels Belgium, Integra CEO Maria Nazario and Integra Global Board member Steve Austin met with Zbigniew Zach, IFRS Policy Officer, and Christelle Fontbonne Proniewski, Policy Officer, for the Accounting and Financial Reporting Office of the Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) of the European Commission (EC).

June 2015 • Issue 32

Simplification Efforts Continue
Efforts are underway on both sides of the Atlantic towards more practical accounting and reporting standards. The Financial Accounting Standards Board of te US (FASB) is one year into its Simplification Initiative, while the European Union’s Accounting and Transparency Directives, first published in 2013, are now also in place in the UK.

April 2015 • Issue 31

Bitcoin: A Fad or the Future for Business?
The jury is still out on the prospects for bitcoin. Will perceived flaws lead to its ultimate demise, or will the world of commerce be upended in a way not seen in hundreds of years? Three aspects of this phenomenon that accountants will want to consider are: transacting business in bitcoin, accounting treatment, and audit implications.

March 2015 • Issue 30

Is Your Accounting Data Secure?
With almost daily reports of major new internet attacks and identity thefts, we live in a world paranoid as to when, not if, data precious to us will be stolen. Recently on 60 Minutes, a weekly US news program, a segment titled “DARPA: Nobody’s Safe on the Internet,” featured Dan Kaufman, former video game executive, who now heads up the information innovation division at DARPA, the Defense Advanced Research Projects Agency.

February 2015 • Issue 29

Big Data is Transforming the Audit and Accounting World
Will Google eat the accountant’s lunch? From time to time, trends emerge with the potential to transform the accounting profession. When I started out in the sixties, the adding machine had already transformed the work of my predecessors.

January 2015 • Issue 28

IFRS Deployment Expands Globally While SEC Stalls
Number of countries embracing IFRS keep growing. Since the report in the October issue of the Audit & Accounting Alert, the IFRS Foundation has added 41 more countries to the survey of global accounting practices, bringing the total to 122 countries.

December 2014 • Issue 27

Integra Highlights 20th Year Anniversary Conference with Worldwide IFRS Roundup
Variations standout as countries adapt the “universal” standards to local conditions. Showcasing the association’s far reaching impact since its founding in 1994, Integra International members from six continents highlighted the changing role of International Financial Reporting Standards (IFRS) in their ...

November 2014 • Issue 26

When Going Concern Becomes an Issue
Approaches for reporting and disclosure differ across the Atlantic. Assessment of an entity’s ability to continue as a going concern has always been a key requirement for auditors. However, there has been no clear guidance on the reporting and disclosure of the issue in US GAAP, as reflected in the Financial Accounting Standards (FAS).

September 2014 • Issue 25

Revenue Recognition Standard – Early Issues and Resources
After taking fourteen years to reach agreement about revenue accounting, the FASB and IASB anticipated that questions would arise, even allowing for three years prior to implementation.

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