Ed. note: welcome to a special Black Friday edition of Friday Footnotes. Special because ain’t shit going on so this will be short. We’ll be back to your regularly-scheduled programming come Monday. From me, Bramwell, the silent TPTB and everyone else at the Going Concern team, Happy Thanksgiving! -AG
FASB proposes changes aimed at improving codification [Journal of Accountancy] FASB proposed numerous changes Tuesday as part of its annual project to address minor problems with its Accounting Standards Codification. Each year, FASB makes changes to clarify the codification or correct unintended application of guidance. The changes are not expected to have a significant effect on current accounting practice or create a significant administrative cost for most organizations that use U.S. GAAP to prepare their financial statements.
IRS New Hire Numbers Are Going Up [Forbes] Hear that noise? It’s the collective sighs of tax professionals around the country upon learning that the Internal Revenue Service (IRS) is in the midst of a hiring spree. According to IRS Commissioner Charles Rettig, the IRS is hiring thousands of new employees—the most in almost a decade. Rettig says that the IRS hired nearly 10,000 people during the 2019 fiscal year and plans to hire more than 5,000 additional workers.
Audits Are Broken. Here’s a Radical Way to Fix Them. [CFO Magazine] TL;DR here’s the radical idea proposed in the article: “kill the practice of supposedly independent auditors examining and certifying the books of public companies and give that job to the Public Company Accounting Oversight Board (PCAOB).”
The failure of audit leadership [Accounting Today] The current state of the audit is in jeopardy, and our profession has had a big stake in putting it there. As audit becomes more of a commodity, our fees are being driven down. Our clients can’t tell the difference between the audit we do and one done by the firm down the street because none of them provide relevant information. There’s not a client in the world that pays attention to what a firm says on their website about how that firm adds value to the audit.
KPMG South Africa Makes Headway Rebuilding Image After Scandals [Bloomberg] “The market is beginning to acknowledge and accept the changes that we have made,” Chief Executive Officer Ignatius Sehoole said in an interview at KPMG’s Johannesburg office. More companies no longer fear they are “taking a risky bet by doing business with us. Everyone is also concerned about their own reputation.”
PwC Probe Finds Certain Executives at South Africa’s Tongaat Overstated Profits, Assets [Reuters] South Africa’s Tongaat Hulett said on Friday a PwC probe found that certain senior executives had overstated profits and certain assets by using “undesirable accounting practices”.
The Tax Code Can’t Handle Negative Rates [WSJ] While recent comments by Federal Reserve Chairman Jerome Powell indicate that the Fed hopes to avoid resorting to negative interest rates during the next recession, without them the central bank’s ability to stimulate growth may be limited. Should negative interest rates one day become a reality in the U.S., the tax code will need to be amended.
The Securities and Exchange Commission warned investors about the risk of fraud, accounting problems and other abuses at companies that obtain stock listings through so-called reverse mergers. 