2023 Accounting and Auditing Standards Update: FASB, SSARS and SAS Developments with COVID-19 and CARES Act Accounting and Financial Reporting Discussion
This 2023 accounting and auditing standards update course informs the reader of the various changes affecting accounting, compilation and review, and auditing engagements as well as a review and recall of existing standards. Topics include a summary of newly issued FASB statements, new statements issued by the Auditing Standards Board, changes in compilation and review, current and pending developments, practice issues, and more. Also included is discussion of accounting and financial reporting in a post-COVID economy, the CARES Act, and PPP loans.
Course No. F060
Instructional Delivery Method: QAS Self-Study
Format: Online pdf (693 pages). Printed book available.
Purchase the optional printed book: Book Only
Prerequisites: Basic understanding of U.S. GAAP, compilation and review, and auditing standards
CPE Credit: 24 Hrs. (16 Hrs. Accounting, 8 Hrs. Auditing)
Field of Study: Accounting/Auditing: Technical
Course expiration: You have one year from date of purchase to complete the course.
Course Revision Date: May 2023
Chapter 1: Implementing the New Lease Standard – ASU 2016-02 Leases (Topic 842) and Other Amendments
After reading the Chapter 1 course material, you will be able to:
- Recognize a key change made to GAAP by the new lease standard
- Identify a type of lease that exists for a lessee under ASU 2016-02
- Recall a type of lease for which the ASU 2016-02 rules do not apply
- Identify some of the types of benefits a lessee can obtain from a leased asset
- Identify a threshold for a lease term to be considered a major part of an asset’s remaining economic life
- Recognize who an entity might not want to use the risk-free rate to compute the present value of lease payments
- Identify how a lessee should account for initial direct costs
- Recognize items that are and are not components of a lease term
- Recall the method a lessee should use to record interest expense on a lease obligation
- Identify some types of leases for a lessor
- Recall how a lessor should initially account for initial direct costs for a lease in certain instances
- Identify how a lessor should account for lease payments received on the income statement for an operating lease
- Recall how a lessor should classify certain cash receipts on the statement of cash flows
- Recognize how certain existing leases are accounted for on the implementation date of ASU 2016-02
- Identify how deferred income taxes will be treated for lessees under ASU 2016-02
- Recall the potential impact that the new lease standard might have on a lessee’s EBITDA and debt-equity ratios, and
- Recall the IRS rules as when an entity should and should not capitalize a lease for tax purposes.
Chapter 2: 2022 Accounting and Financial Reporting in a Post-COVID Economy: Inflation, Supply Chains, Interest Rates, and Recession
After reading the Chapter 2 course material, you will be able to:
- Recognize some types of concentrations that might require disclosure under the risk and uncertainty rules
- Identify the definition of near term
- Recall the frequency in which an entity should test goodwill for impairment
- Recognize some exit and disposal costs
- Recall how to classify business interruption insurance proceeds on the financial statements
- Recognize the relationship a change in interest rates has on real estate values
- Identify methods that can be used to measure variable consideration revenue
- Recognize an example of a construction-type contract
- Identify whether the LIFO IPIC approach is acceptable for GAAP
- Recall the net operating loss rules
Chapter 3: Accounting and Financial Disclosures for the Employee Retention Credit (ERC) and the Pass-Through Entity (PTE) Tax
After reading the Chapter 3 course material, you will be able to:
- Recognize the type of expense that is the basis for measuring the amount of the ERC.
- Identify where to present the ERC in the statement of income using the ASC 958 conditional contribution model.
- Recognize where to present the ERC in the statement of income using the IAS 20 grant model.
- Identify an action step to be taken to correct the previous presentation and disclosure of an ERC in the statement of income.
- Recognize the proper presentation of the ERC in a tax-basis statement of income.
- Recognize a technique that has been attempted to circumvent the SALT deduction limitation.
- Identify how to account for the PTE tax in an entity’s financial statements.
- Recognize the requirements for recording deferred state income taxes with respect to the PTE tax election.
- Identify disclosures that should be made for the PTE tax.
Chapter 4: PPP Loans and Forgiveness: Accounting and Financial Reporting Issues
After reading the Chapter 4 course material, you will be able to:
- Identify some of the eligible expenses related to use of PPP loan proceeds
- Recognize approaches to account for PPP loans under GAAP
- Recall how to present debt issuance costs on the financial statements
- Recognize how to account for PPP loan forgiveness
- Recognize how to present a gain on extinguishment on the statement of cash flows
- Identify how to treat the forgiveness of a PPP loan for tax purposes
- Recognize how the IAS 20 grant approach is used to account for its PPP loan
- Recognize actions that impact a CPA’s independence in a PPP loan assistance engagement, and
- Identify whether an emphasis-of-matter paragraph may be used in an accountant’s report when there is a forgiveness of a PPP loan
Chapter 5: Current Developments: Accounting and Financial Reporting
After reading the Chapter 5 course material, you will be able to:
- Identify the goal of the FASB’s Disaggregation-Income Statement Expenses project
- Recognize one of the characteristics of a multi-employer pension plan
- Recognize the impact that life expectancy has on the amount of a pension liability
- Identify a concentration of risk that might require disclosure
- Identify a particular way in which most marijuana business must operate
- Recognize when a state might be able to charge sales tax under the Wayfair decision
- Recognize the accounting alternative for leases under common control in ASU 2018-17
Chapter 6: ASU 2016-13 Financial Instruments: Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments
After reading the Chapter 6 course material, you will be able to:
- Recognize the model that ASU 2016-13 uses to deal with credit losses
- Identify how credit losses should be recorded under new ASU 2016-13
- Identify some of the disclosures required by ASU 2016-13
Chapter 7: New Auditing Standards: SAS Nos 142-148
After reading the Chapter 7 course material, you will be able to:
- Identify an example of an attribute of information obtained as audit evidence
- Recognize actions an auditor should perform in evaluating information used as audit evidence
- Recognize attributes of information to be used as audit evidence
- Identify an attribute that affects the reliability of information used as audit evidence
- Recall functions on which an auditor can use automated tools and techniques
- Identify an example of an accounting estimate related to classes of transactions, account balances and disclosures identified in SAS No. 143
- Recognize how inherent and control risks should be assessed in accordance with SAS No. 143
- Recognize an example of an inherent riskfactor
- Identify examples of the approaches that can be performed in assessing the risks of material misstatementfrom accounting estimates
- Recall one of the amendments made to AU-C 501 by SAS No. 145 in connection with using the work of an external inventory-taking firm
- Identify some instances in which an auditor may conclude that a specialist’s work is not adequate
- Identify a type of risk assessment procedure that an auditor can use in accordance with SAS No. 145
- Recall examples of risk assessment procedures that an auditor may perform in SAS No. 145
- Recognize how to perform risk assessment procedures when relying on information obtained from previous experience with an entity
- Identify examples of risk assessment procedures to obtain audit evidence in accordance with SAS No. 145
- Recognize a new requirement made by SAS No. 145 in connection with assessing inherent risk and control risk in an audit, and
- Identify how an auditor should respond if the auditor does not plan to test the operating effectiveness of an entity’s controls.
- Recall the date by which an engagement partner must take responsibility for determining that ethical requirements are fulfilled
- Identify certain requirements an engagement partner must satisfy in performing an audit engagement
- Recognize examples of resources assigned or made available by a firm to support performance of an audit engagement
- Identify a type of unconscious bias defined in SAS No. 146
- Recall a possible action that an engagement team may take to mitigate impediments to exercise professional skepticism
- Identify when a successor auditor should request management to authorize a predecessor auditor’s response to the successor auditor’s inquiry
- Recognize one of the new inquiries a successor auditor should make of a predecessor auditor by SAS No. 147
- Recall the extent of a predecessor auditor’s response to a successor auditor’s inquiries when there are certain restrictions on the predecessor auditor.
- Identify an example of a recently issued auditing standard that SAS No. 148 incorporates into amendments to AU-C 935, Compliance Audits.
- Recall examples of inherent risk factors related to identifying and assessing risks of material misstatement in a compliance audit.
Chapter 8: New Auditing Developments
After reading the Chapter 8 course material, you will be able to:
- Identify a scenario in which it would be impracticable for an auditor to attend a physical inventory
- Recognize an advantage of remote auditing
- Recognize a factor to consider in evaluating going concern of an entity
- Identify a term used as a benchmark in considering going concern
- Identify a suggestion for an auditor reducing time and increasing audit efficiency
- Recognize when negative accounts receivable confirmations should not be used
- Recognize a behavioral trait of most occupational fraudsters
Chapter 9: Compilation and Review Update – 2023 – SSARS No. 26: Quality Management for an Engagement Conducted in Accordance with Statements on Standards for Accounting and Review Services
After reading the Chapter 8 course material, you will be able to:
- Identify which party is responsible for determining that engagement team members have appropriate competence and capabilities to perform a SSARS engagement