Accounting News Roundup: AICPA Disappointed That CPAs Are Left Out of the Tax Cut Party | 12.21.17

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AICPA Reacts to Congressional Passage of Tax Legislation [AICPA]
It sounds like AICPA President, CEO and porg rancher Barry Melancon is none too pleased about CPA firms being left out of the tax cut party.

[T]he AICPA is very disappointed by lawmakers’ decision to exclude CPAs from the measure’s treatment of pass-through entities. Congress should have provided parity for pass-throughs, regardless of their line of business, in order to achieve a fairer, simpler, and more competitive tax code. The AICPA pointedly and repeatedly made the case that all professional service firms – including accounting firms – should have received the new deduction. The professional services sector, a critical element of America’s economic success, has been ignored. Accounting firms play an important role in the nation’s growth and job creation and legislators erred in excluding them. Those who suggest that CPA firms can adjust to the change by reforming as C corporations do not understand that the nature of state licensing regulations make such a transition impractical, if not impossible.

The bill itself will keep CPAs working for years to come, so I suppose that’s some consolation.

ElsewhereSweeping Tax Bill Heads to Trump But Uncertain When He Will Sign

How Sarbanes-Oxley led to pricier audits for everyone [CBR]
Researchers from the University of Chicago and MIT found that private companies used audit services less and fees for nonprofits went up considerably in the wake of SOX’s passage.

Bankrate’s ex-CFO faces criminal accounting fraud charges [Reuters]
File to Accountants Behaving Badly: cookie jar reserves. Edward DiMaria allegedly “carried out a complex scheme to mislead outside auditors, shareholders and regulators about Bankrate’s financial condition.” This included accruing unsubstantiated expenses that were reversed in later periods.

Previously, on Going Concern…

I wrote about Grant Thornton’s run-in with the PCAOB; among other things, the firm gave more work to a couple of partners with a history audit quality issues.

In Open Items, a second-year Big 4 auditor wonders if looking for exit opportunities this spring is too soon.

From the holiday archives: How Kris Kringle Lost His CPA License

In other news:

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