CPA Practice Advisor - 46
AICPA NEWS
Global Coalition Issues
Guidance on Adopting
a Long-Term Value
Creation Agenda
To support businesses in this uncertain environment, the
International Federation of Accountants (IFAC), International
Integrated Reporting Council (IIRC), the Association of
International Certified Professional Accountants (AICPA) and the
Chartered Institute of Management Accountants (CIMA) have
released new guidance for Chief Financial Officers (CFOs) and
finance teams to navigate their organizations toward long-term
value creation.
The report contains actionable insights for CFOs, finance
teams, and other business leaders to sharpen their perspective
on value creation beyond the financials, including how to:
■ Understand the value creation process
■ Identify principal opportunities and risks related to the
organization's strategy and business model
■ Develop an integrated view of performance and value,
incorporating balance sheet, business, and societal perspectives;
and
■ Drive priorities for value creation into decision making and
reporting.
■ The approach outlined in this report helps CFOs and
finance teams to think about how to ensure that all relevant
information around performance, opportunities, risks, and
trade-offs are available to internal decision-makers, investors,
and other capital providers. ■
Updated Standard on Accounting
Estimates and Disclosures for Auditors
The AICPA Auditing Standards Board (ASB) has issued Statement
on Auditing Standards No. 143, Auditing Accounting Estimates
and Related Disclosures, to supersede SAS No. 122 section 540,
Auditing Accounting Estimates, Including Fair Value Accounting
Estimates, and Related Disclosures, and amend various other
AU-C sections in AICPA Professional Standards.
SAS No. 143 is one piece of a larger project to enhance
audit quality (see the AICPA's Enhancing Audit Quality Initiative
at www.AICPA.org/eaq.html). It enables auditors to address
today's new accounting standards and to enhance the auditor's
focus on factors driving estimation uncertainty and potential
management bias.
SAS No. 143 becomes effective for audits of financial
statements for periods ending on or after December 15, 2023.
46
AUGUST 2020 ■
www.CPAPracticeAdvisor.com
CORONAVIRUS DROPS AMERICANS'
FINANCIAL SATISFACTION
As Americans continue to endure the economic impact of the COVID-19 pandemic,
financial satisfaction continues to fall from
its recent all-time high. The AICPA's Q2
2020 Personal Financial Satisfaction index
(PFSi) measures 15.2, a 55 percent (18.5
point) decrease from the Q1. This is the
PFSi's largest quarterly drop in the history
of the index. The previous record decline
was a 16.3-point drop in Q4 2007. The
average Americans financial satisfaction
is now similar to levels seen in early 2015.
The primary factor driving the
quarter-over-quarter PFSi decline was a
246 percent (75 point) increase in underemployment. Rising underemployment
hurts overall financial satisfaction. This
factor more than doubled from the prior
quarter, surpassing its former peak set in
Q4 2009 to reach a new record high. The
Q2 level reflects data measured through
the middle of June.
The second largest contributor to the
PFSi decline from the previous quarter
was the AICPA's CPA Outlook Index, which
experienced a 68 percent (35 point) drop.
The CPA Outlook Index captures the
expectations of CPA executives in the year
ahead for their companies and the U.S.
economy. It is the only index factor that
is calculated from sentiment, which was
captured in a survey conducted from May
5 to 27. Its decrease was primarily driven
by a steep decline in optimism about the
U.S. economy's outlook over the next 12
months. Also contributing to the PFSi
decline was a 32 percent (25 point) drop
in job openings.
"Finding yourself unemployed or experiencing a sudden loss of income from your
business warrants revisiting your financial
plan immediately and updating your
monthly budget," said Dave Stolz, CPA/
PFS chair of the AICPAs' PFS Credential
Committee. "It is essential to understand
the available COVID-related government
assistance such as business loans from
the Paycheck Protection Program and
federal unemployment benefits and
incorporate them into a revised financial
plan."
In a separate survey of AICPA members- CPA financial planners have been
busy helping clients make sense of the
newly-passed Coronavirus Aid, Relief and
Economic Security (CARES) Act. The vast
majority of financial planners (90 percent)
advised clients on Paycheck Protection
Program (PPP) loans, and nearly eightin-ten (79 percent) advised their clients
on Economic Impact Payments - also
known as "stimulus checks." And half of
all respondents (50 percent) indicated that
they had helped clients file for Federal
Pandemic Unemployment Compensation.
Going into 2020, Americans were seeing record high levels of personal financial
satisfaction. Though the PFSi has experienced a record decline, its current value
of 15.2 is still 55.5 points above its all-time
low of -40.3 set in Q3 2011. Back then,
Americans were still emerging from the
lingering impact of the Great Recession.
In Q2, the PFS 750 Market index, an
AICPA stock index comprised of the 750
largest companies on the US Market,
bounced back from its depressed Q1
reading. The Market index increased 21
percent (16.8 points) above the prior quarter, regaining almost all the prior quarter's
lost gains. It is now just shy of its recent
all-time high set in Q4 2019.
"The stock market's recent rebound
is a good reminder why it's important to
resist the urge to time the market and
instead remain focused on the long-term
goals of your financial plan," added Stolz.
"If you had exited the stock market after
its Q1 decline, you would have missed out
on all of Q2's big gains. The recent market
fluctuation was a good gut check for risk
tolerance and an opportunity for Americans to revisit their asset allocation." ■
http://www.AICPA.org/eaq.html
http://www.CPAPracticeAdvisor.com
CPA Practice Advisor
Table of Contents for the Digital Edition of CPA Practice Advisor
From the Editor: NASBA: Is it Time for a COVID-19 CPE Break?
Who Really Won the SCOTUS Ruling on Trump's Taxes?
From the Trenches: Do You Have a Clear Vision for Tax Document Automation?
Innovation Awards Announced
Multi-State Taxation: As States Look to Bounce Back, Tax Leaders Need to Engage with Lawmakers
2020 Product Review: Tax Document Automation
The Leadership Advisor: Communication Methods in Our New Work Environment
2020 Product Review: Fixed Asset Management
Health-Related Benefits Under the CARES Act
2020 Accountants Product & Service Guide
State Income Tax Complexity
What is a Series LLC and Why Your Clients Should Care
Apps We Love: At-Home Education Apps
The Millennial Advisor: Office Space: You're Not Home Alone
The ProAdvisor Spotlight: Streamlined Invoicing and Tasks Among New Features in QuickBooks Online Advanced
Marketing Your Firm: SEO Keyword Tips to Boost Your Firm's Google Ranking
Year in the Life of a Payroll Accountant: A Primer on IRS Continuous Wage Garnishments
The Labor Law Advisor: Age and Other Post-Pandemic Discrimination Claims
How to Modernize Your Firm
CARES Act Causing Business Valuation Concerns
How to Conduct a Business Insight Review
AICPA News
Bridging the Gap: Creating a Data Culture
CPA Practice Advisor - 1
CPA Practice Advisor - 2
CPA Practice Advisor - 3
CPA Practice Advisor - From the Editor: NASBA: Is it Time for a COVID-19 CPE Break?
CPA Practice Advisor - Who Really Won the SCOTUS Ruling on Trump's Taxes?
CPA Practice Advisor - From the Trenches: Do You Have a Clear Vision for Tax Document Automation?
CPA Practice Advisor - 7
CPA Practice Advisor - Innovation Awards Announced
CPA Practice Advisor - 9
CPA Practice Advisor - 10
CPA Practice Advisor - 11
CPA Practice Advisor - 12
CPA Practice Advisor - 13
CPA Practice Advisor - 14
CPA Practice Advisor - 15
CPA Practice Advisor - 16
CPA Practice Advisor - 17
CPA Practice Advisor - 18
CPA Practice Advisor - Multi-State Taxation: As States Look to Bounce Back, Tax Leaders Need to Engage with Lawmakers
CPA Practice Advisor - 2020 Product Review: Tax Document Automation
CPA Practice Advisor - 21
CPA Practice Advisor - 22
CPA Practice Advisor - The Leadership Advisor: Communication Methods in Our New Work Environment
CPA Practice Advisor - 2020 Product Review: Fixed Asset Management
CPA Practice Advisor - 25
CPA Practice Advisor - 26
CPA Practice Advisor - Health-Related Benefits Under the CARES Act
CPA Practice Advisor - 2020 Accountants Product & Service Guide
CPA Practice Advisor - 29
CPA Practice Advisor - State Income Tax Complexity
CPA Practice Advisor - What is a Series LLC and Why Your Clients Should Care
CPA Practice Advisor - Apps We Love: At-Home Education Apps
CPA Practice Advisor - The Millennial Advisor: Office Space: You're Not Home Alone
CPA Practice Advisor - The ProAdvisor Spotlight: Streamlined Invoicing and Tasks Among New Features in QuickBooks Online Advanced
CPA Practice Advisor - Marketing Your Firm: SEO Keyword Tips to Boost Your Firm's Google Ranking
CPA Practice Advisor - Year in the Life of a Payroll Accountant: A Primer on IRS Continuous Wage Garnishments
CPA Practice Advisor - 37
CPA Practice Advisor - The Labor Law Advisor: Age and Other Post-Pandemic Discrimination Claims
CPA Practice Advisor - How to Modernize Your Firm
CPA Practice Advisor - 40
CPA Practice Advisor - 41
CPA Practice Advisor - CARES Act Causing Business Valuation Concerns
CPA Practice Advisor - 43
CPA Practice Advisor - How to Conduct a Business Insight Review
CPA Practice Advisor - 45
CPA Practice Advisor - AICPA News
CPA Practice Advisor - Bridging the Gap: Creating a Data Culture
CPA Practice Advisor - 48
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