Compliance
The Financial Accounting Standards Board (FASB) agreed at its October 16 meeting to advance a standard update aimed at simplifying credit loss accounting for private companies and not-for-profit organizations, proposing a 'practical expedient' to exempt forward-looking economic forecasting requirements and setting a 45-day comment period. Some board members supported studying the extension of relief to public companies.
A survey released Monday by consulting firm RSM shows that while most mid-sized companies have made progress in ESG regulatory preparation, many are waiting to see the outcome of the U.S. election before deciding their next steps.
EY and PwC recently issued separate statements expressing cautious support for an alternative practice path that allows CPA candidates to substitute professional experience for 30 college credit hours. This move is seen as a convergence of positions among the Big Four accounting firms on this issue, but aside from KPMG, the other three firms have left room for maneuver in their statements.
The U.S. Department of Justice said RTX has agreed to pay over $950 million in fines to settle charges of bribing officials linked to the Qatari royal family and defrauding the U.S. Department of Defense in procurement contracts. The settlement involves legacy conduct by RTX's predecessor Raytheon before 2020, including pricing fraud in federal contracts, violations of export controls, and anti-bribery laws.
The Association of Chartered Certified Accountants (ACCA) released a global survey showing that most accountants believe professional ethics challenges are intensifying with technology-driven business expansion, exposing regional legal and cultural differences. 24% of respondents have faced pressure to engage in unethical behavior, and 55% of finance executives have witnessed unethical conduct in their careers. The survey also found that corporate leadership and cultural weaknesses, sustainability pressures, and AI applications have become major sources of ethical challenges.
Deloitte has expressed support for substituting work experience for the 30 college credits required for a CPA license, becoming the second Big Four firm, after KPMG, to publicly endorse the proposal. The American Institute of Certified Public Accountants (AICPA) shifted last month to support increasing flexibility in licensure pathways.
Hurricanes Helene and Milton have caused severe losses to businesses across multiple U.S. states, making insurance claims a top priority. Experts note that corporate financial officers should, after ensuring personnel safety, immediately notify insurance companies, comprehensively document all types of losses, thoroughly inspect buildings and equipment, record pre- and post-disaster videos, and strive to submit claims within 48 hours to expedite the payout process.
On October 11, the SEC issued an order charging Moog Inc. with violating the Foreign Corrupt Practices Act (FCPA) because its Indian subsidiary, Moog Motion Controls, bribed officials through third-party agents between 2020 and 2022, involving a contract valued at over $1.3 million. Moog agreed to pay a $1.1 million penalty and approximately $600,000 in disgorgement and interest, and has taken remedial measures.
The American Institute of Certified Public Accountants (AICPA) is soliciting public comments on proposed amendments to standards for financial statement preparation, aiming to eliminate uncertainty regarding the applicability of standards when external CPAs prepare financial statements in client advisory services. The draft amendment clarifies that when financial statements are merely a byproduct of client advisory services (such as outsourced CFO services), practitioners are not required to mandatorily apply AR-C Section 70. This move is expected to unify practical operations and reduce additional compliance burdens on practitioners.
The latest report from Alvarez & Marsal shows that CFOs at companies that went public in the past two years earned an average compensation of about $1.2 million, with annual and long-term incentives accounting for 71%; CEOs averaged about $2.6 million, with incentives making up 80%. Meanwhile, EY data indicates that IPO fundraising reached $27.3 billion in the first nine months of this year, up 40% year-over-year, but the market still faces multiple headwinds.