IAASB New and Revised Auditor Reporting Standards and Related Conforming Amendments

The new and revised Auditor Reporting standards are responsive to calls from investors and other users of audited financial statements for more informative and relevant auditor’s reports based on the audit that was performed. This new and revised Auditor Reporting standards include new ISA 701, Communicating Key Audit Matters in the Independent Auditor’s Report, and a number of revised ISAs, including ISA 700 (Revised), Forming an Opinion and Reporting on Financial Statements, and ISA 570 (Revised), Going Concern. Example reports illustrating various circumstances are included in the new and revised Auditor Reporting standards. The new and revised Auditor Reporting standards will be effective for audits of financial statements for periods ending on or after December 15, 2016.

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New IAASB Standard Changes How Auditors Communicate

New international auditing standards issued Thursday are designed to change how auditors communicate about their work in their reports.

Auditors of listed entities’ financial statements will be required to communicate “key audit matters” in auditor’s reports, according to the standards released by the International Auditing and Assurance Standards Board (IAASB).

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IRS Updates Accounting Method Change Procedures

The IRS issued new procedures taxpayers should use to make accounting method changes. Rev. Proc. 2015-13 contains the rules taxpayers should follow to make non-automatic changes in methods of accounting, which are changes that require the IRS’s consent. It also contains the procedures for applying for automatic changes in accounting method, which do not require the IRS’s consent. Rev. Proc. 2015-14 contains the list of automatic changes in accounting procedure to which the automatic change procedures in Rev. Proc. 2015-13 apply.

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No More Extraordinary Items: FASB Simplifies GAAP

A FASB initiative designed to simplify GAAP has yielded a standard that eliminates the concept of extraordinary items from GAAP.

FASB’s simplification initiative is designed to reduce cost and complexity while maintaining the usefulness of the information provided to users of financial statements.

Accounting Standards Update No. 2015-01, Income Statement-Extraordinary and Unusual Items (Subtopic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items, describes the change. It is the board’s first accounting standards update of 2015.

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Top 10 Technologies to Watch and the Industries That Benefit

Technology: 3-D printing Industries affected: manufacturing, automotive, aerospace, architecture, medical devices, software
Notable players: 3D Systems Corp., Stratasys Inc., Z Corporation

Originally debuting as a technology used only by a few manufacturers and designers to build prototypes, 3-D printing is transforming into a technology that the New York Times says is “spurring a manufacturing revolution.” Big claims aside, 3-D printers and their impressive abilities are making waves in the tech scene.

In fact, over the past five years, 3D Printer Manufacturing industry revenue grew at an average annual rate of 7.1%, which actually masks 13.0% and 20.8% growth in 2010 and 2011, respectively, due to a recessionary decline in 2009. The industry leaped ahead in recent years, driven by rapid technology developments and new applications for 3-D printing. More specifically, 3-D printers are being used in the Medical Device Manufacturing industry, a market where demand is high and stable. Aerospace manufacturers make up another market with strong potential for 3-D printing technology because of its ability to convert designs to 3-D models almost instantly. Although the Aircraft, Engine and Parts Manufacturing Industry is only forecast to grow slowly over the next five years, the industry’s continued desire to reduce the cost of developing models and prototypes will drive future demand for 3-D printed products.

Similarly, companies that provide 3-D printing and rapid prototyping services (OD4581) have expanded significantly. After a recessionary lull, industry revenue jumped 11.6% in 2010 and 18.3% in 2011. Although this particular industry’s consumer market is still in its infancy, it has a tremendous amount of growth potential as 3-D printing and rapid prototyping gain popularity and customers from a wider array of industries learn of their uses and potential. Through 2017, IBISWorld projects that industry revenue will grow at an average annualized rate of 14.0% to $1.3 billion.

Technology: Enterprise software
Industries affected: business analytics and enterprise software publishing
Major players: IBM, Microsoft, SAP AG, Oracle

Until recently, innovation and investment in enterprise software was flat because consumer internet start-ups garnered the largest share of private investment. This trend is changing quickly: According to a quarterly survey by Dow Jones VentureSource, in the first quarter of 2012, venture capitalists invested $2.0 billion in 257 deals with young IT companies. Businesses today have unprecedented amounts of data to manage and need to connect with globally dispersed workforces and customers. The robust internet connections that have made cloud computing possible allow firms to offer scalable, cost-effective software packages that can address businesses’ data and global needs. IBISWorld expects the Business Analytics and Enterprise Software Publishing industry to grow at an annualized rate of 3.8% to $31.5 billion over the five years to 2017.

Lawsuit Claims Life Insurance Payout Denied Due to Height

Amarillo Globe-News – A Lubbock woman is suing a Pennsylvania insurer, alleging the company improperly denied a $200,000 death benefit claim because it said her ex-husband listed the wrong height on his insurance application. The suit was filed Tuesday in Amarillo’s U.S. District Court by Michelle Sanders, who sued on behalf of her daughter, the biological child of Henry Sanders, who was killed in a motor vehicle accident in 2013. Carol Duncan Sanders, the surviving Amarillo spouse of Henry Sanders, also is a plaintiff in the case, which names Life Insurance Co. of North America as the defendant. – Go To Story

Insurance Company Pays $21k Settlement in Loose Change

NBC New York – An unexpected delivery of loose change has a 73-year-old man in California giving his own two cents. Andres Carrasco filed a lawsuit in 2012 against Adriana’s Insurance Service, Inc. alleging he was physically assaulted by one of the company’s employees. After agreeing to a settlement with Andres Carrasco in June, Adriana’s Insurance decided to deliver the funds in the form of a check — and buckets and buckets of quarters, dimes, nickels and pennies. The coins amount to more than $21,000, said Carrasco’s attorney Antonio Gallo.