march2021 - 22

AICPA NEWS
AICPA News is a round-up of recent
announcements from the American
Institute of CPAs.

Business Execs
More Optimistic
on Economy, But
Inflation Fears Grow
With the promise of expanded pandemic-related relief and an
improving vaccine rollout, U.S. business executives are taking
a more optimistic view of the U.S. economy for the coming
year, according to the first-quarter AICPA Economic Outlook
Survey. The survey polls chief executive officers, chief financial
officers, controllers and other certified public accountants in
U.S. companies who hold executive and senior management
accounting roles.
There's a downside, however, to the prospect of a more
open-throttle economy: a greater risk of inflation. Business
executives' concerns about inflation grew from 24 percent to
44 percent, quarter over quarter, the highest level it's risen to
since the end of 2018.
■ To be sure, the lingering impact of the COVID-19 pandemic
continues to predominate as a concern. While the percentage
of business executives who expressed optimism about the
U.S. economy rose from 37 percent to 47 percent this quarter,
that still means the majority remain pessimistic or neutral.
More than three-quarters (76 percent) of survey takers say the
pandemic has had a negative impact on their organization,
with one-in-five describing that impact as significant. ■

22

MARCH 2021 ■

www.CPAPracticeAdvisor.com

SKILLS FINANCIAL PLANNERS
NEED TO SUCCEED

The pandemic has presented challenges
to planning firms and clients alike. Earlier
this year, thought leaders in the financial
planning space gathered online for the
AICPA's 2021 Personal Financial Planning
(PFP) Summit to discuss best practices for
serving clients, leading firms, and caring
for themselves. The Summit is an annual
event that goes beyond technical planning
sessions to focus on what successful firms
are doing differently.
This year, Summit attendees were
asked to share their experience from
the past year and thoughts on how the
financial and economic uncertainty due
to COVID-19 has impacted the future of
financial planning. Attendees noted that
work-life balance alongside maintaining
and promoting firm culture have been the

two leading challenges for their practices
throughout the pandemic.
And looking to the future, the vast
majority of attendees say it will be more
important for financial planners to manage their clients' emotional state moving
forward than it has been in the past. And
to be successful in the future, the top 3
most cited skills planners will need, in
addition to technical skills, are emotional
intelligence, interpersonal communication,
and adaptability.
■ Core Values and a Core Purpose Are
Essential
■ Support Clients Through Changing Life
Priorities, Not After
■ Client Perspectives & Motivations Help to
Uncover Their Philanthropic Journey ■

Read more at: https://tinyurl.com/5ak27t2m

AICPA Proposes New Auditing
Standard to Enhance Communication
The AICPA Auditing Standards Board
(ASB) has issued the exposure draft
(ED) Proposed Statement on Auditing Standards (SAS) Inquiries of the
Predecessor Auditor Regarding Fraud
and Noncompliance With Laws and
Regulations (NOCLAR) to amend SAS No.
122, as amended, section 210, Terms of
Engagement.
The standard requires immediate
past auditors and presumed successor
auditors, once management consents
to the past auditor responding, to
communicate about potential NOCLAR
situations. Examples of NOCLAR
situations include, but are not limited
to, noncompliance with tax or pension
laws and regulations.
" The Board's overall objective is
to help auditors properly understand

potential issues in determining whether
to accept an engagement, " said Jennifer
Burns, CPA, AICPA Chief Auditor. " The
proposed standard is designed to further
the public interest by enhancing communication between past and potential
new auditors. A refusal to consent by the
client would be a significant red flag that
the auditor would consider in determining whether to accept the engagement. "
The proposed SAS aligns with the
International Ethics Standards Board of
Accountants (IESBA) standards which
became effective on July 15, 2017. It
narrowly amends AU-C section 210 in
AICPA Professional Standards to
require an auditor, once management
approves communication between
auditors, to inquire about suspected
fraud and matters involving NOCLAR. ■
https://www.tinyurl.com/5ak27t2m http://www.CPAPracticeAdvisor.com
march2021

Table of Contents for the Digital Edition of march2021
