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Archive for the ‘CalCPA Buzz’ Category

CAMICO Tip of the Month: Trustee or Executor Engagements

February 17th, 2015

Before accepting a trustee or executor engagement, consider consulting with an attorney or risk adviser. Trust documents should be examined thoroughly before accepting any trusteeship, as crucial legal points may significantly affect the risks to the trustee. It’s also important to become informed and competent in the skills needed to render trustee services before accepting these engagements.

If any of your firm’s CPAs are serving as executor or trustee, there should be procedures in place for monitoring and accepting such engagements. CPAs who act as executors or trustees may have signatory authority over client or trust funds—a risk exposure that calls for the firm’s internal controls to be strong enough to prevent the misuse of funds. The most significant internal control over CPA executor/trustee activities is oversight by the partner group, managing partner or senior member of the firm, but there are several other additional controls that can be established.

For more information about CPA firm insurance issues, call (800) 652-1772 or go online.

Deadline Approaching for Service Award Nominations

February 17th, 2015

The nomination period for CalCPA’s annual service awards is open through March 31. You can download forms to nominate an outstanding member or firm for the:

  • Public Service Award, which is given to a CPA who has been especially active in service to the profession and community.
  • Public Service Award for Firms, which aims to recognize firms for their public service contributions on the local, state or national level.
  • Distinguished Service Award, which is granted either on the basis of long and distinguished service or for some singular act resulting in extraordinary contribution to the profession, CalCPA and/or the community.

The AICPA also recognizes our winners, who automatically become eligible for consideration for the AICPA Public Service Award.

What’s New for Filing 2014 Tax Returns

February 17th, 2015

The FTB published a list of what’s new for filing 2014 tax returns. Some highlights:

  • Standard deductions: The standard deduction amount for single or separate taxpayers increased from $3,906 to $3,992 for tax year 2014. For joint, surviving spouse, or head of household taxpayers, the standard deduction increased from $7,812 to $7,984 for tax year 2014.
  • Personal exemptions: The personal exemption amount for single, separate, and head of household taxpayers increased from $106 to $108 for the 2014 tax year. For joint or surviving spouse, the personal exemption credit increased from $212 to $216.
  • Dependent exemptions: The dependent exemption credit increased from $326 per dependent claimed in the 2013 tax year to $333 each for 2014.
  • Voluntary contributions: Personal income taxpayers may now contribute to the California Senior Legislature Fund, the Habitat for Humanity Fund and the California Sexual Violence Victim Services Fund.

IRS Simplifies the Application of Repair Regulations

February 17th, 2015

The IRS has simplified the process for small-business owners to comply with the final tangible property regulations. Requested by many small businesses and tax professionals, the simplified procedure is available beginning with the 2014 return taxpayers are filling out this tax season. The new procedure allows small businesses to change a method of accounting under the final tangible property regulations on a prospective basis for the first taxable year beginning on or after Jan. 1, 2014.

Audit Committees’ Concerns for 2015

February 17th, 2015

KPMG’s 2015 Global Audit Committee Survey shows four key concerns carried over from last year: economic and political uncertainty and volatility; regulation and the impact of public policy initiatives; operational risk; and cybersecurity. The report states that a slowing global economy, flare-up of geopolitical hotspots, and the proliferation of major cyber breeches have intensified the spotlight on these issues. In the year ahead, audit committees say cybersecurity and oversight of risk will require even more attention. But, for many audit committees, these risks also are driving a slower-moving trend potentially impacting the audit committee’s effectiveness: agenda overload.

CalCPA and Education Foundation Nomination Slates Released

February 3rd, 2015

The CalCPA Nominations Committee met Friday, Jan. 23, and submitted the following nomination slate:

Officers nominated to a one-year term (2015-16):
: Jennifer E. Ziegler (Los Angeles Chapter)
First Vice Chair: Andrew M. Mintzer (Los Angeles Chapter)
Secretary/Treasurer: Kathryn A. Johnson (Inland Empire Chapter)

Vice chairs nominated to a two-year term (2015-17):
AJ Major III (East Bay Chapter)
Lewis Sharpstone (Los Angeles Chapter)

Council Members at Large nominated to a two-year term (2015-17):
Ashley Casey (San Joaquin Chapter)
Minel Diaz (Peninsula/Silicon Valley Chapter)
David J. Neighbors (Silicon Valley/San Jose Chapter)

AICPA Council Members nominated for a three-year term (2015-18):
Jeremy Dillard (Los Angeles Chapter)
Timothy J. Good (Los Angeles Chapter)
Kathryn A. Johnson (Inland Empire Chapter)
Okorie L. Ramsey (East Bay Chapter)

The Education Foundation Nominations Committee met Friday, Jan. 16, and submitted the following nomination slate:

Officers nominated to a one-year term (2015-16):
President: Gregory M. Burke (Sacramento Chapter)
First Vice President: Charles T. Osaki (Los Angeles Chapter)
Secretary/Treasurer: Okorie L. Ramsey (East Bay Chapter)
Vice President: Amber P. Setter (San Diego Chapter)
Past President: Peter J. Iannone (Channel Counties Chapter)

Trustees nominated to a two-year term (2015-17):
Brewster (Bruce) Gray (Inland Empire Chapter)
Chrislynn Freed (Los Angeles Chapter)
Kelly Wallace (San Diego Chapter)
Thomas (Thom) Gilbert (Sacramento Chapter)

CBA Approves Study of State’s Attest Requirement

February 3rd, 2015

The California Board of Accountancy unanimously voted to move forward with a study of California’s 500-hour attest experience requirement. The study is being developed to assist the CBA in determining whether the current attest experience requirement is necessary and sufficient in supporting the CBA’s mission to protect consumers.

The attest experience study will involve surveying a wide range of groups in California—including consumers, applicants, new and experienced licensees, hiring managers, licensees who supervise and sign-off on attest experience, as well as accounting department faculty at various colleges and universities. Results of a national survey also will be included as part of the CBA’s final report on the attest experience requirement. The CBA anticipates releasing the survey in late April or early May.

Deficiencies in Broker-dealer Audits under PCAOB Standards

February 3rd, 2015

According to the PCAOB, the first five inspections of broker-dealer audit and new attestation engagements subject to PCAOB standards show deficiencies in the auditors’ application of these standards. The requirement to follow PCAOB standards became effective for broker-dealer annual reports with fiscal years that ended on or after June 1, 2014, pursuant to an amendment to SEC Exchange Act Rule 17a-5.

In a brief summary inspection report covering five broker-dealer audit and attestation engagements conducted by five auditors in 2014, the PCAOB described deficiencies—relative to the new requirements—observed in the five audits and four of the five related attestation engagements.

Auditors who seek clarification of the standards may review the PCAOB Staff Guidance for Auditors of SEC-Registered Brokers and Dealers.

Proposed International Standards on Auditing

February 3rd, 2015

An exposure draft has been released on two proposed international auditing standards. The draft seeks views from stakeholders in relation to the IAASB’s proposed amendments to consider how the enhancements to auditor reporting resulting from its new and revised auditor reporting standards should affect:

  • ISA 800, Special Considerations—Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks, which deals with special considerations in the application of the ISAs to an audit of financial statements that are prepared in accordance with a special purpose framework.
  • ISA 805, Special Considerations—Audits of Single Financial Statements and Specific Elements, Accounts or Items of a Financial Statement, which deals with special considerations in the application of the ISAs to an audit of a financial statement or a specific element, account or item of a financial statement.

Comments are requested by April 22.

Contract Voidability Now Applies to All Nonqualified/Nonregistered Foreign LLCs

February 3rd, 2015

Contract voidability now applies to any foreign nonregistered LLCs. This change is specifically operative for contracts entered into during the period beginning on the later of Jan. 1, 2014, or the first day of the taxable year for which the taxpayer has failed to file a tax return.

Foreign unregistered LLCs without an FTB-assigned account number that fail to file a required tax return are subject to contract voidability during the period beginning on the later of the first day of the taxable year for which the LLC failed to file a required tax return, or Jan. 1, 2014, and ending when the LLC registered with the Secretary of State or obtains an FTB account number.

Foreign unregistered LLCs with an FTB-assigned account number that fail to file a tax return or fail to pay delinquent taxes, penalties, fees or interest within 60 days of the FTB mailing a final notice would be subject to contract voidability during the period beginning with the end of the 60-day demand notice and ending on the earlier of either:

  1. The date relief from contract voidability is granted; or
  2. The date the LLC registers with the Secretary of State.

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