Accounting and Auditing Standards Update (24 Hrs)

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