Business Frame Weekly - Financial Acct’g Foundation Appoints New Member / Salary Transparency Laws Challenge Small Businesses / Audit Deficiencies to Increase 25% YoY

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The Board of Trustees of the Financial Accounting Foundation (FAF) is appointing Katherine (Katina) Curtis to the Private Company Council (PCC) for a three-year term effective on January 1, 2023. The PCC advises the FASB on the accounting treatment for private companies.

For small businesses, salary transparency laws could stunt the retention and recruitment of talented workers. According to chief research officer at Vistage, Joe Galvin, “Transparency laws that come into play are directly a challenge for small and midsize businesses because they [depend] much more on competing and retaining talent."

The latest PCAOB inspection showed that the percentage of audits found to have deficiencies is expected to increase approximately 25% year-over-year. In 2021, the organization expects about 55% of 690 engagements reviewed to have one or more deficiencies.

In this newsletter:

• PCAOB Report Analyzes Impact of Estimates and Specialists Requirements
• PCAOB Report: Audit Deficiencies Increase in 2021
• Intuit QuickBooks Unveils New Innovations that Support Accountants and Drive Business Success at QuickBooks Connect
• Financial Accounting Foundation Appoints New Member to the Private Company Council
• Compared to Workers in Other Fields, Accountants are Pretty Happy with Their Pay
• Salary Transparency Laws Create Unexpected Challenges for Small Businesses

December 13, 2022

PCAOB Report Analyzes Impact of Estimates and Specialists Requirements

The PCAOB released a report Thursday addressing the impact of 2018 standards related to auditing accounting estimates and the auditor's use of the work of specialists. The interim analysis report looked at the impact of AS 2501, a standard adopted in 2018, and three standards updated in 2018 (AS 1210, AS 1105, and AS 1201). In addition, the PCAOB released two related staff white papers: Stakeholder Outreach on the Initial Implementation of Estimates and Specialists Audit Requirements and Econometric Analysis on the Initial Implementation of the New Specialists Requirements.

PCAOB Report: Audit Deficiencies Increase in 2021

The percentage of audits found to have deficiencies during PCAOB inspections is expected to increase approximately 25% year-over-year, according to a board staff report released Thursday. The report said the PCAOB expects about 55% of 690 engagements reviewed for 2021 to have one or more Part I.A or Part I.B deficiencies, a notable increase from 44% in 2020 audits. "Higher deficiency rates in 2021, coupled with the fact that the PCAOB is also seeing an increase in comment forms for 2022, are a warning signal that the audit profession needs to sharpen its focus on improving audit quality and protecting investors," PCAOB chair Erica Y. Williams said in a news release.

Intuit QuickBooks Unveils New Innovations that Support Accountants and Drive Business Success at QuickBooks Connect

Intuit announced new innovations designed to drive accountant and small business success at its ninth annual QuickBooks Connect conference in Las Vegas. In-person for the first time since 2019, more than 3,000 accountants, bookkeepers, and developers joined the company at sold-out QuickBooks Connect to build relationships, be inspired, and learn about the latest offerings from Intuit QuickBooks. New innovations highlighted at QuickBooks Connect include: QuickBooks Commerce Accounting, Mid-Market Solutions, QuickBooks Workforce Solutions, Simplified Employee Onboarding, Improved Document Management, Enhanced QuickBooks Time Integrations, and QuickBooks Online Accountant.

Financial Accounting Foundation Appoints New Member to the Private Company Council

The Board of Trustees of the Financial Accounting Foundation (FAF) announced the appointment of Katherine (Katina) Curtis to the Private Company Council (PCC) for a three-year term effective on January 1, 2023. The PCC is the primary advisory body to the Financial Accounting Standards Board (FASB) on private company matters. Its members are financial statement users, preparers, and practitioners who advise the FASB on the accounting treatment for private companies for items under active consideration on the FASB’s agenda. The PCC also advises the FASB on possible alternatives within Generally Accepted Accounting Principles (GAAP) to address the needs of users of private company financial statements.

Compared to Workers in Other Fields, Accountants are Pretty Happy with Their Pay

Accountants might be burned out but they feel much better about the career they chose on the 15th and the last day of every month. That’s because more than half of accounting professionals who participated in LinkedIn’s most recent Workforce Confidence Index Survey say they are well-compensated for the job they do. The workers who are the most unhappy about their pay are educators (39%), entrepreneurs (41%), and social service workers (43%). Only about 29% of the 32,162 American professionals surveyed plan to ask their bosses for a pay bump in the coming months, LinkedIn said.

Salary Transparency Laws Create Unexpected Challenges for Small Businesses

For the most part, salary transparency laws have become a beacon of hope for pay equity. But for small businesses, it's a double-edged sword that may stunt the retention and recruitment of talented workers. Currently, 16% of small businesses are already being impacted by the new legislation, according to recent findings from executive coaching organization Vistage. "The same rules apply for both [large and small companies]," says Joe Galvin, chief research officer at Vistage. "But the transparency laws that come into play are directly a challenge for small and midsize businesses because they [depend] much more on competing and retaining talent."

Random Ramblings

• 10 steps to a successful Year-End Closing.
• The trends that will affect CPAs in 2023.
• 5 things to do now to propel your business in 2023.
• Perceptions of the graduate accounting student mindset.
• Are there more audits on the horizon?