• Enforcement division eyes cybersecurity disclosures

    The SEC’s enforcement arm has yet to bring a case against a public company over cybersecurity disclosures, but that may change, according to Enforcement Division Co-Director Stephanie Avakian. In remarks in Washington, Avakian laid out the vision for the division’s new unit aimed at countering growing cyber threats.
  • ASC 606 Revenue Recognition eBook

    If your organization is in the process of adopting, or still researching, the new revenue recognition accounting standard, then this comprehensive, yet easy-to-read, 60+ page eBook is for you.
  • ICFR for Revenue Recognition

    Understand the nuances of internal controls over financial reporting (ICFR) for ASC 606 (revenue recognition), including transition methods discussed in this Financial Executives International (FEI) presentation.
  • The ASC 606 (revenue recognition) transition: Cost capitalization

    As with revenue recognition itself, the codification has never comprehensively addressed costs in connection with contracts. Often, the guidance has been found within the industry sections, or other disparate sections of the codification. The new standard seeks to comprehensively address the issue.
  • ASC 606 transition: Disclosures

    Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, seeks to change the value of disclosures by requiring robust disclosure for the users of the financial statements.
  • Accounting for leases: Measurement and re-measurement

    So far in this series, we have discussed how to identify a lease in a contract and how to classify a lease (as operating or finance type) based on the terms of the lease contract. In this article, we discuss the initial recognition and measurement of leases and how re-measurement is made when changes occur in the contract during the estimated initial period of the lease.
  • Identifying a lease: Implementing the new leases accounting standard

    The first step in applying ASC 842 is determining whether or not a contract, which is defined as an agreement between two parties which creates enforceable rights and obligations, contains a lease. Basically the contract contains a lease if it conveys the right to control the use of identified property or equipment for a period of time.
  • OCC standards require strict oversight of third-party relationships

    It’s no longer enough for banks and other financial institutions to simply have good working relationships with the third parties that provide IT and other services. New, stricter standards and increased scrutiny by the Office of the Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau (CFPB), as well as the Federal Deposit Insurance Corporation (FDIC) and the Federal Financial Institutions Examination Council (FFIEC), mean financial institutions now have the same responsibilities for in-house and out-of-house services.
  • The FASB has a full plate for 2016

    Actions the FASB takes can have a significant effect on your financial statements and the impression they leave with users of such statements. Here are areas the FASB is likely to focus on in 2016.
  • Cybersecurity Disclosure Act of 2015: What you need to know now

    The proposed Cybersecurity Disclosure Act of 2015 has provoked discussion about the role of the Board of Directors in cybersecurity oversight and board member knowledge and awareness of an organization’s cybersecurity management program. Baker Tilly outlines the potential impacts to boards and what’s important to know now.
  • Top ten tips for board members approaching mergers and acquisitions

    At a recent NACD roundtable discussing emerging trends, key considerations, and hot topics related to mergers and acquisitions (M&A), Baker Tilly CEO and AICPA Chairman Tim Christen facilitated a spirited discussion among corporate board directors. Covering organization targeting, merger strategy, implementation planning, compensation and incentives, deal makers/breakers, and success measures, the diverse group shared insights gleaned from their experiences.
  • NAIC Fall 2015 National Meeting recap

    At the Fall Meeting the NAIC Statutory Accounting Principles (E) Working Group (SAPWG) adopted several nonsubstantive revisions to statutory accounting and exposed various substantive and nonsubstantive revisions.
  • Revenue recognition requirements delayed one year

    On July 9, 2015, the FASB approved its April 2015 proposal to defer the effective date of ASU No. 2014-09, Revenue from Contracts with Customers, for all entities for one year. Entities will, however, be allowed to apply the new standard as of the original effective dates set out in the standard. This article examines the revenue recognition standard and explains why the FASB granted an extension.
  • Fraud prevention: It all adds up

    Learn about preventative and detective controls that companies use to combat misappropriation of assets and accounting financial statement fraud.
  • Transitioning to the 2013 COSO Framework

    Since the Committee of Sponsoring Organizations (COSO) issued its Internal Control — Integrated Framework (2013 Framework) in May 2013, many organizations have implemented the new framework to comply with the initial December 15, 2014 transition deadline. The 2013 Framework requires management to assess whether 17 principles are present and functioning, which is a change from the previous framework. Further, the 2013 Framework includes points of focus, which are important characteristics of the 17 principles and assist management with determining whether controls are properly present and functioning.
  • Baker Tilly Comment Letter to the FAF on the PCC

    We are pleased to have the opportunity to provide feedback to the Financial Accounting Foundation (FAF) with respect to the Private Company Council (PCC). At Baker Tilly Virchow Krause, LLP (Baker Tilly) we have strong support for the PCC and its efforts to date in improving financial reporting for the users of private company financial statements.
  • Banking brief: Vendor risk management increasingly complex

    The heightened complexity of vendor risk management for US banks was evident at a conference sponsored by Marcus Evans in Chicago on June 3-4. Need for resources, maintaining oversight, and how organizations are managing the process internally were all hot topics of conversation.
  • DOL report finds major deficiencies in employee benefit plan audits

    The US Department of Labor (DOL) issued a report on its inspection of 2011 employee benefit plan audits, Assessing the Quality of Employee Benefit Plan Audits. The report is quite troubling as the DOL found a deficiency rate that is too high for such an important element of the system to protect participants in employee benefit plans.
  • Insurance regulators zeroing in on cybersecurity

    Recent activity by regulators shows an increased focus on cybersecurity in the insurance industry. The National Association of Insurance Commissioners (NAIC) has published its Principles for Effective Cybersecurity Insurance Regulatory Guidance. In addition, the New York Department of Financial Services (NY DFS) recently released guidance for New York insurance organizations with their Report on Cybersecurity in the Insurance Sector.
  • What insurance organizations can do now to prepare for state regulatory cybersecurity initiatives

    Within the last several months, two significant insurance organizations have announced greater involvement in initiatives to reduce cybersecurity risk throughout the insurance industry. The New York State Department of Financial Services (NY DFS) released the results of its survey on cybersecurity practices and the National Association of Insurance Commissioners (NAIC) recently adopted a set of cybersecurity regulatory principles.
  • 831(b) captives draw scrutiny from IRS and Congress

    Large companies have been forming captive insurance companies (captives) to self-insure their risks since the 1950’s. In general, these captives were formed to lower insurance costs, provide access to the reinsurance market, and cover exposures where there are gaps in the commercial market. When congress enacted section 831(b) of the Internal Revenue code in 1986, it was intended to extend the benefits of self-insurance, from large publicly traded companies to smaller middle market closely held business entities.
  • Cyber-risk: What audit committees and boards need to know now

    High-profile breaches and their monetary impact have caused boards and audit committees to take notice. The importance of cybersecurity should be communicated to management and staff from the board. They must ensure that management is allocating the necessary resources to implement an effective, enterprise-wide cybersecurity risk-management program.
  • Strengthening collaboration between internal audit and risk management

    To meet OCC requirements and strategically connect the dots on assurance, compliance, and risk management, internal audit functions will need to be part of the risk management ecosystem and provide validation of the execution of risk management responsibilities by frontline units and management. This article outlines what internal audits bring to the table as well as opportunities for driving value through collaboration between risk management and internal audit, using the case example of concern about loan loss reserves.
  • Final Basel III capital rule will affect community banks

    The final rules for the Basel III international capital accord, which will be phased in between the beginning of this year and 2019, include some relief for community banks. There are also some changes that affect the capital standards and reporting for community banks.
  • Understanding your IT risks, security, and vendor management webinar

    Baker Tilly’s financial services specialists examined the increased regulatory scrutiny on evaluation of third party service providers, options available for vendors to provide independent third party assurance reporting, and the tenets of an effective vendor management program including: risk assessment, vendor due diligence, contracting and onboarding, and ongoing monitoring.
  • Recap of the 2014 FASB ASUs

    In 2014, the Financial Accounting Standards Board (FASB) issued eighteen Accounting Standards Updates (ASUs). There are several major areas expected to be updated in 2015, including leases, disclosure framework, and accounting for financial instruments. To help you review the most recent updates, links are provided to the detailed FASB information for each of the 2014 ASUs.
  • AICPA releases new plan advisory on quality auditors

    The Employee Benefit Plan Audit Quality Center has recently released a Plan Advisory (the Advisory) on the importance of hiring a quality auditor in respect to your employee benefit plan; this advisory covers the financial statement audit's significance to users, and the risk a plan sponsor will face if a quality audit is not performed. The Advisory also provides guidance in evaluating auditor qualifications, and includes a complete overview of the proposal process.
  • Implementing an effective cybersecurity management program

    Cybersecurity is one of the most urgent topics in business today. It seems that every week, there is a new story about a company’s data being breached with millions of customer records, payment card data, or lost trade secrets. The best-prepared companies are shifting their cybersecurity strategies from prevention, to implementing techniques that quickly detect breaches and limit the damage once a breach has been confirmed. What are the effective components of a modern cybersecurity management program? We consider five main components to improve cybersecurity effectiveness.
  • AICPA updates standards for accounting and review services

    The American Institute of Certified Public Accountants (AICPA) has rolled out the long-awaited update of its accounting and review standards. Statement on Standards for Accounting and Review Services (SSARS) No. 21, Statements on Standards for Accounting and Review Services: Clarification and Recodification, represents one of the AICPA’s most significant revisions of its nonaudit standards since 1979. Among other things, the guidance creates a bright line between accounting (or preparation) services and reporting (compilation or review) services and lays out distinct requirements for each type of service. This article outlines what the clarified guidance means to those who use CPAs to perform nonaudit services — including reviews, compilations, and financial statement preparations — to report their historical and prospective financial results.
  • Regulatory noncompliance is now a financial matter

    More punitive regulatory approach raises financial statement audit scrutiny: In the aftermath of the Great Recession, regulators have turned dramatically to a far more punitive approach in dealing with actual and alleged instances of noncompliance with laws and regulations by financial institutions. The increased presence of significant financial consequences, brings into greater light a financial statement auditing standard that previously had infrequent application and limited effect on the financial condition and results of reporting companies’ operations.
  • GSEs to loosen lending standards

    At the recent Mortgage Bankers Association annual convention, Federal Housing Finance Agency (FHFA) Director Met Watt and US Secretary of Housing and Urban Development (HUD) Julian Castro announced a relaxation of lending standards for Government-Sponsored Enterprise (GSEs).
  • OCC: You can’t outsource responsibility

    The Office of the Comptroller of the Currency (OCC) recently updated its risk-management guidelines for third-party relationships, and the new guidelines give banks more responsibility than ever. According to the new guidelines, financial institutions have many of the same responsibilities for managing risk from vendors as they do from their own operations.
  • Cybersecurity: Stay ahead of an evolving landscape

    While safeguarding information assets is not a new business objective, cybersecurity has emerged as an area of critical concern for executives and boards of directors. As organizations’ key business operations have become more technology-reliant, they also have become more vulnerable to a cyber-attack.
  • Corporate governance standards are nearing final adoption–Now is the time for insurers to assess their governance structure

    At the November 2014 National Association of Insurance Commissioners (NAIC) meeting, the Executive Committee is expected to formally adopt the Corporate Governance Annual Disclosure Model Act and the Corporate Governance Annual Disclosure Model Regulation (collectively “the Act”). The Act will require insurers of all sizes to make an annual filing with the lead state Insurance Commissioner which discloses the insurer’s corporate governance structure, policies and practices.
  • Going Concern: FASB issues new standard on reporting adverse conditions and events

    FASB has released a new accounting standard that provides much-needed guidance on management’s responsibility in evaluating and disclosing adverse conditions or events that raise substantial doubt about a company’s ability to continue as a “going concern.” The guidance, published in ASU 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, applies to all companies that prepare their financial statements in accordance with US Generally Accepted Accounting Principles (GAAP). This article details the new guidance.
  • Accounting update from the NAIC Summer 2014 meeting

    The National Association of Insurance Commissioners (NAIC) 2014 Summer National Meeting was held in Louisville, KY. A number of issues and statutory accounting changes were addressed over the course of the meeting. Highlights from some of the working group meetings are summarized below.
  • Form 990: Top ten areas of focus for board members

    With the proliferation of nonprofit organizations comes the need for more individuals willing to step into the important role of a board director. A board director serves to shepherd the organization to long-term sustainability. The board director role carries risk if individuals are not aware of their obligations related to the issues and concerns that the Internal Revenue Service (IRS) has attempted to address in the newly designed information reporting form, the Form 990.
  • Preventing and detecting fraud

    Governing boards, usually via an audit committee, should take an active role in monitoring the risk and mitigation of fraud, as well as in overseeing an effective ethics and compliance program.
  • Footnotes tell a story

    When reviewing financial statements, not-for-profit board members and managers sometimes make the mistake of focusing solely on bottom-line figures, but these statements also may include a wealth of information in their disclosures. Savvy constituents and potential supporters know this, so not-for-profit executives need to be familiar with the common types of disclosures and the information they make available for scrutiny.
  • Risk governance: What to expect

    For years, risk governance meant risk management, with a relatively narrow focus on specific areas: loans, legal, and possibly IT. Then, everything went sideways in 2008-2009, and regulators saw the need for a more proactive, comprehensive risk governance strategy. Within the past five years, new rules and guidelines have begun changing the flaws regulators could see boards of directors were not engaged at the right level; board members and executives weren’t getting the right information to make informed decisions; and management didn’t have tools in place to facilitate a timely and comprehensive analysis of overall risk.
  • New recommendations for bank audits

    External bank auditors have new guidance from the Basel Committee on Banking Supervision as of March 31, and banks should understand the updated guidelines before their next audit. The new guidelines, 46 pages in all, replace The Relationship Between Banking Supervisors and Banks' External Auditors, published in 2002, and External Audit Quality and Banking Supervision, from 2008.
  • Considering establishing an audit committee?

    A government is accountable for the services provided to taxpayers and for the way that it uses its resources to provide those services. One way to enhance accountability is to form an audit committee.
  • The truth is in the (XBRL) tagging

    All too often you hear about the cost of doing business and the mountain of compliance exercises that must be undertaken for the privilege of being listed on a public stock exchange. With the seemingly endless array of documents, disclosures, and deadlines by which a public company must abide, it is no surprise that many CFOs feel the same way about the Securities and Exchange Commissions’ electronic data mandate: it is just another compliance exercise that creates no value for the company.
  • A useful resource - Auditee Resource Center

    Baker Tilly is committed to achieving the highest quality audits. As you may already know, our firm is a member of the AICPA’s Governmental Audit Quality Center (GAQC), which entitles us access to key information and comprehensive resources that we use to help ensure our compliance with appropriate professional standards and laws and regulations that affect our audits. Through our membership in the GAQC, we also adhere to membership requirements designed to enhance the quality of our audit practice. We are pleased to inform you that the GAQC has recently launched a new Auditee Resource Center, which is intended to assist procurers of audit services (i.e., auditees). We hope that as an auditee, your organization will take advantage of this great resource.