Financial Training: Audit and Accounting Resources for Your A&A Update
Financial Training: Audit and Accounting Resources for Your A&A Update

Financial Training: Audit and Accounting Resources for Your A&A Update

If you have ever developed financial training, or any training for that matter, you know that it takes A LOT of time. How much? Industry studies approximate a development ratio of 43:1, meaning it takes 43 hours to develop all the training materials necessary for 1 hour of instructor-led training. Part of this time is spent researching, accumulating and digesting the source materials needed before development can begin. If you are responsible for developing the annual Accounting & Auditing Update course (A&A Update) for your regional accounting firm, we’ve tried to help you out by pulling together the audit and accounting resources that we used for our 2015 A&A Update course. You’re welcome!

Attending update courses is an annual ritual for CPAs. GAAP Dynamics’ update courses are interactive and application-based, focusing on recent pronouncements and hot topics applicable to participants. For CPAs working in regional accounting firms, our A&A Update course includes the following sections:

  • Introduction and refresher
  • Accounting update
  • AICPA update and hot topics
  • PCAOB update and hot topics

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Some update courses jump right in with the first new pronouncement right after introductions and a quick review of the agenda. We believe that this approach misses the mark, as it does not provide an opportunity for participants to get “warmed up.” We like to start with recent articles from The Wall Street Journal, Financial Times, or other business publications dealing with topics that we’ll cover later in the course. These articles provide participants with a WIIFM (What’s In It For Me) as the articles cover topics that are relevant to participants and their clients. They also serve to increase their business acumen, which is “all the rage” for auditors these days.

The section continues with a series of refresher questions — mini-cases focusing on current accounting and auditing issues. The topics might include pronouncements or auditing standards that were covered in the prior year’s update course, such as PCAOB Auditing Standard No. 18 Related Parties, or hot topics identified by regulators, such as those covered in the AICPA National Conference on Current SEC and PCAOB Developments. All the Big 4 accounting firms provide summaries of this annual conference. For example, view EY’s summary of the 2014 conference here.

Participants work in groups to answer the questions and the facilitator draws the correct answer out of participants through group discussions. Our class discussion questions tend to be multi-faceted where different scenarios could affect the answer, and nuanced where participants must use judgment to defend their position. This leads to engagement, which in turn leads to knowledge retention.

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Prior to development, we always check out the latest Accounting Standards Updates (ASUs) issued by the Financial Accounting Standards Board (FASB). We review the listing to determine if they are widely applicable and, if so, when they are effective. We do not try to cover every pronouncement issued, nor do we cover each ASU in equal depth. We spend more time on topics most relevant to the participants, with little or no time spent on ASUs that have limited applicability. This is an A&A Update course, not a CYA exercise!

Although not effective for public business entities or certain not-for-profit entities and employee benefit plans until fiscal years beginning on our after December 15, 2017 (effective one year later for all other entities), every update course this year should include a substantial section on ASC Topic 606 Revenue from Contracts with Customers as we expect it to have widespread applicability to many companies in various industries. As such, companies should be starting their transition efforts NOW. Not yet familiar with ASC Topic 606? No worries! Get an overview with our free eLearning module.

Obviously, developers and facilitators need to read and be intimately familiar with the actual pronouncements. However, we also like to review summaries of the new standards such as those prepared by KPMG in their Defining Issues publications.

Private companies now have any option for “GAAP Lite.” As such, our A&A Update course also includes the recent activities and pronouncements of the Private Company Council (PCC). Get an overview of their activities in this blog post.

We conclude this section with an overview of the FASB’s technical agenda, touching on those projects expected to have widespread applicability when released, such as those related to financial instruments and leasing. We discuss the latest development with respect to the financial instruments project in this blog post.

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This section includes the latest developments with respect to the Statements on Auditing Standards (SASs) and the Statements on Standards for Attestation Engagements (SSAEs) issued by the AICPA’s Auditing Standards Board (ASB), as well the Statements on Standards for Accounting and Review Services (SSARSs) issued by the AICPA’s Accounting and Review Services Committee (ARSC).

Be sure to include a discussion on SSARS No. 21 Statements on Standards for Accounting and Review Services: Clarification and Recodification. Applicable for periods ending on or after December 15, 2015, it revises the guidance for reviews, compilations and engagements to prepare financial statements. The Journal of Accountancy provides an overview of SSARS No. 21 here.

This section concludes with “hot topics” noted by regulators and discussion with our audit firm clients. Through mini-cases and class discussion, we remind auditors of those areas where the profession has room for improvement. This year we’ve included the following topics:

  • Assessing and responding to audit risk in a financial statement audit
  • Providing reminders of independence requirements

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This section begins with the recently issued Standards and Practice Alerts issued by the Public Company Accounting Oversight Board (PCAOB). This year there are no new standards. However, the PCAOB issued the following Practice Alerts in 2014, and these alerts are applicable in the current year:

  • Practice Alert No. 12 Matters Related to Auditing Revenue in an Audit of Financial Statements
  • Practice Alert No. 13 Matters Related to the Auditor’s Consideration of a Company’s Ability to Continue as a Going Concern

Our A&A Update course also covers audit deficiencies noted in PCAOB inspection reports and reminds auditors of their duties under PCAOB auditing standards. The most common deficiency noted in PCAOB inspections relates to audits of internal control over financial reporting (ICFR). For further information about the problems in this area, check out this recent speech by Helen Munter, Director, Division of Registration and Inspections with the PCAOB.

Our update course also includes “hot topics” noted by regulators and other organizations, such as The Center for Audit Quality (CAQ). Be sure to check out the CAQ Alerts, which inform members about regulator developments and other matters affecting the public company auditing profession.

The section concludes with the current activities and standard-setting agenda of the PCAOB.

We hope this blog helps you determine the topics to include in your firm’s A&A Update course, along with the related audit and accounting resources to jump-start the development process. Of course, you’ve still got to develop the course materials, but that shouldn’t be a problem with all that free time you have!

accounting and auditing update

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