Friday Footnotes: CPAs To the Rona Rescue; ¡Escandalo!; Someone Think of the Students | 4.10.20

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COVID-19 Turns CPAs into Emergency Workers [CPA Trendlines] Donny Shimamoto writes: “The impact of COVID-19 on many of our lives will be told for years or decades to come. Through social media, I saw a lot of accountants (because I’m friends with so many of them) express concern for their clients and communities as well. I saw accountants trying to combat hysteria, sharing information about what Congress was doing and the implications to taxpayers, and also working creatively with small business clients to figure out how to make it through the crisis. Yes, many accountants looked beyond themselves and beyond their firms (which were also at risk) to help others who were in emergency situations and needed help navigating this confusing and complex crisis.”

Two Accounting Scandals in China in One Week Burn Investors [Bloomberg] China’s second accounting scandal in less than a week is underscoring concern over lax corporate governance at some of the country’s fastest-growing companies. TAL Education Group, a tutoring business whose success turned founder Zhang Bangxin into one of China’s richest people, delivered the latest bombshell on Tuesday after saying a routine internal audit found an employee had inflated sales by forging contracts. The company’s American depositary receipts sank as much as 18% in late U.S. trading. The sell-off follows the 83% slump in Nasdaq-listed Luckin Coffee Inc. since the company announced that its chief operating officer and some underlings may have fabricated billions of yuan in sales for 2019. Accounting firm Ernst & Young later said it discovered the fabrications when it audited the firm’s financial statements.

FASB issues Q&As to clarify pandemic lease accounting issues [Journal of Accountancy] FASB posted a staff Q&A document to its website Friday that is designed to clarify pandemic-related questions about lease accounting. As a result of economic disruptions caused by the pandemic, many lessors will provide lease concessions to tenants. The Q&A states that for concessions related to the effects of the coronavirus pandemic, an entity will not have to analyze each contract to determine whether enforceable rights and obligations for concessions exist in the contract. The entity can elect to apply or not apply the lease modification guidance in FASB Accounting Standards Codification Topic 842, Leases, or Topic 840, Leases, to those contracts, according to the Q&A.

Coronavirus outbreak impacts career plans for accounting graduate students [The Auburn Plainsman] Three Auburn University MAcc students discuss how the ‘Rona is affecting their futures.

CPAs Mobilize to Save Small Clients, Protect Their Firms [Bloomberg Tax] The vast majority of CPA firms are small businesses too, and their own future depends heavily on the financial health of their client base. Right now, small businesses in survival mode are turning to their accountants to make critical decisions, said Erik Asgeirsson, president and CEO of CPA.com, the technology arm of the American Institute of CPAs. The AICPA last week called on all 44,000 public accounting firms in the U.S. to support their clients as they seek the much-needed cash relief—a life line Congress provided in the legislation known as the CARES Act. The organization has worked with banks and paycheck-processing companies to ensure consistency in the loan applications over important details, like how to calculate the payroll and the time-frame the calculation should cover. CPAs can offer trusted guidance, help clients apply for the relief, and make sure that the loan will qualify to be forgiven, Asgeirsson said.

Traders Accused of Profiting From Hack Agree to Settle With SEC [WSJ] Two men accused of participating in an international trading ring that used stolen corporate earnings releases have agreed to settle fraud claims, regulators said Thursday.

Fraud: An Inevitable Symptom Of COVID-19 [Forbes] Prepare your buttonholes, it’s going to be an interesting couple years ahead.

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