AICPA speaks out on proposed tax rules.
The AICPA made its recommendations in a comment letter to the Treasury Department regarding administrative tax provisions in the Obama administration's fiscal year 2010 budget.
In its other comments, the AICPA noted that while it believed abusive transactions should be eradicated, it could not support the administration's fiscal 2010 budget proposal to codify the economic substance doctrine because of "the immense difficulty in crafting workable statutory language that adequately delineates economic substance." And while the Institute favored an increase in the threshold amount for information reporting penalties, it cautioned against a hike in the calendar year maximum for small filers, as this could cause them cash flow problems, especially in a tough economy. The AICPA also generally supported a proposed extension of the electronic filing requirement to all corporations and partnerships required to file Schedule M-3 and a proposed revision in offer-in-compromise application rules.
The administration proposes to expand electronic filing by amending section 6011(e) of the Internal Revenue Code. First, the proposal would permit the IRS to issue regulations which require tax return preparers to electronically file tax returns if they file more than 100 tax returns in a calendar year; in contrast to the statutory threshold of 250, which would remain unchanged. Second, the proposal would permit the IRS to issue regulations requiring tax return preparers who file more than 100 returns to electronically file individual, estate and trust tax returns. With respect to the proposed preparer mandate, the AICPA recommended inclusion of a taxpayer "opt-out" and for the mandate to be phased-in over several filing seasons.
Auditing Standards Board Issues Third Final Clarified SAS Resulting from Clarity Project
As part of its Clarity, the Auditing Standards Board has issued its third final SAS, Preface to Codification of Statements on Auditing Standards, Principles Underlying an Audit Conducted in Accordance With Generally Accepted Auditing Standards, and Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance With Generally Accepted Auditing Standards.
The preface contains the principles underlying an audit conducted in accordance with generally accepted auditing standards. These principles are not requirements and do not carry any authority. The ASB has developed the principles to provide a framework that is helpful in understanding and explaining an audit. The principles are organized to provide a structure for the Codification of Statements on Auditing Standards. This structure addresses the purpose of an audit (purpose), personal responsibilities of the auditor (responsibilities), auditor actions in performing the audit (performance), and reporting (reporting).
The SAS addresses the independent auditor's overall responsibilities when conducting an audit of financial statements in accordance with U.S. generally accepted auditing standards. Specifically, it sets out the overall objectives of the independent auditor (the auditor) and explains the nature and scope of an audit designed to enable the independent auditor to meet those objectives. It also explains the scope, authority and structure of GAAS and includes requirements establishing the general responsibilities of the independent auditor applicable in all audits, including the obligation to comply with GAAS.
This SAS is effective for audits of financial statements for periods beginning on or after Dec. 15, 2010. The effective date is provisional but will not be earlier.
Auditing Standards Board Issues Additional Exposure Drafts Resulting from Clarity Project
The Auditing Standards Board has issued the following proposed Statements on Auditing Standards resulting from its Clarity Project:
* Written Representations and Terms of Engagement
* Written Representations: Comment period ends Jan. 15, 2010. Supersedes AU section 333, Written Representations, in AICPA Professional Standard
* Terms of Engagement: Comment period ends Jan. 15, 2010. No comparable existing SAS to the proposed SAS in its entirety exists. Supersedes paragraphs .03-. 10 of AU section 315, Communications Between Predecessor and Successor Auditors, in AICPA Professional Standards. Additionally, some of the content in the proposed SAS is contained in paragraphs .08-.10 of AU section 311, Planning and Supervision, in AICPA Professional Standards. AU section 311 would be superseded in its entirety by the proposed SAS, Planning an Audit.
Read a brief summary of the proposed SASs.
* Auditor's Reports
* Forming an Opinion and Reporting on Financial Statements, Modifications to the Opinion in the Independent Auditor's Report, and Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor's Report:
Comment period ends Dec. 31, 2009. Supersedes AU sections 410, Adherence to Generally Accepted Accounting Principles, 431, Adequacy of Disclosure in Financial Statements, 508, Reports on Audited Financial Statements, and 532, Restricting the Use of an Auditor's Report, in AICPA Professional Standards.
Read a brief summary of the proposed SAS.
* Reporting on Compliance With Aspects of Contractual Agreements or Regulatory Requirements in Connection With Audited Financial Statements (Redrafted):Comment period ends Dec. 31, 2009. Supersedes paragraphs 19-21 of AU section 623, Special Reports, in AICPA Professional Standards. The proposed SAS does not change or expand paragraphs 19-21 of SAS No. 62 (AU section 623) in any significant respect.
* Special Reports
* Special Considerations--Audits of Financial Statements Prepared in Accordance With Special Purpose Frameworks, and Special Considerations--Audits of Single Financial Statements and Specific Elements, Accounts, or Items of a Financial Statement. Comment period ends Dec. 31, 2009. Supersedes AU sections 544, Lack of Conformity With Generally Accepted Accounting Principles, and 623 (except paragraphs .19-.21). Read how the proposed SAS differs from the existing standards.
* Engagements to Report on Summary Financial Statements: Comment period ends Dec. 31, 2009. Supersedes AU section 552, Reporting on Condensed Financial Statements and Selected Financial Data, in AICPA Professional Standards. Read how the proposed SAS differs from the existing standard.
* Reporting on Financial Statements Prepared in Accordance With a Financial Reporting Framework Generally Accepted in Another Country. Comment period ends Dec. 31, 2009. Supersedes AU section 534, Reporting on Financial Statements Prepared for Use in Other Countries, in AICPA Professional Standards. Read how the proposed SAS differs from the existing standard.
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|Date:||Nov 1, 2009|
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