Ed. note: Welcome to the final Friday Footnotes of the decade! We hope you enjoy these weekly wrap-ups of news around the profession we found noteworthy. As always, if you have a suggestion for a story you think we should share with the class, give us a shout. Happy New Year! -AG
BYU is tops in CPA Exam pass rates [Accounting Today] Brigham Young University topped the list of first-time CPA Exam pass rates by large collegiate programs (60 or more candidates), according to the National Association of State Boards of Accountancy’s “Candidate Performance on the Uniform CPA Examination – 2018 Edition.” The Utah university saw 263 candidates sit for 581 total sections, with a total pass rate of 89.2 percent and an average score of 84.6.
U.S. Regulator to Put the Spotlight on Audit Quality in 2020 [The Wall Street Journal] The U.S. Securities and Exchange Commission and its audit-watchdog arm, the Public Company Accounting Oversight Board, have plans in 2020 to further shape the role of auditors of companies publicly listed in the U.S. The PCAOB has been undergoing a strategic makeover in an effort to overhaul its largely outdated quality-control rules and streamline how it conducts inspections of audit firms. The move is part of a five-year plan that the board launched in 2019 and reaffirmed at a meeting last month.
Four Unfinished Dodd-Frank Rules to Watch at SEC in 2020 [Bloomberg Law] The Securities and Exchange Commission still is working on regulations that were part of the post-crisis Dodd-Frank Act—a decade after it became law in 2010. The remaining work includes some of the statute’s thornier provisions, like disclosures on executive compensation and payments for extracting oil and gas. The Republican-leaning SEC is making progress on implementing the Obama-era law, issuing a new proposal on reporting resource extraction payments in December without Democratic support. The commission also finalized some swaps regulation under the statute the same month with no Democratic backing.
California’s bungled $1 billion accounting system [Lake County Record-Bee] In 2005, the State of California began a project called the Financial Information System for California (FI$Cal) that was planned as a single replacement for a multitude of existing budget, accounting, cash management and procurement systems. The cost was estimated in 2012 at $617 million with a completion date of July 2016. Today the cost is estimated at over $1 billion and the “end date” is June 2020. But the problems with FI$Cal are worse than cost overruns and blown deadlines, according to State Auditor Elaine Howle, who recently sent a letter to the governor and legislative leaders raising “urgent concerns.” FI$Cal threatens to endanger the state’s credit rating, Howle said, because many state entities using it are submitting late financial statements, and sometimes only estimated statements, to the State Controller’s Office. This delays the preparation of annual financial statements and risks damaging the state’s credibility among investors. The problem seems to stem from management issues more than technology.
French court clears social media tracking plan in tax crackdown [Reuters] France’s government can pursue plans to trawl social media to detect tax avoidance, its Constitutional Court ruled on Friday, although it introduced limitations on what information can be collected following a privacy outcry.
UK Accounting Giants Reserve $212M For Possible Fines [PYMNTS] KPMG in particular is provisioning millions for possible sanctions related to its work with Carillion before its collapse, while the auditor is also reportedly facing a potential lawsuit from the U.K. Insolvency Service. KPMG is also the subject of government investigations probing its audits of Rolls-Royce and Conviviality, reports said. KPMG has paid out more fines than any of its rivals in the last two years, the publication added.
Top ethics and compliance failures of 2019 [Compliance Week] From antitrust and privacy concerns in the tech world to compliance officer liability in the pharmaceutical industry to unethical practices in the banking and accounting professions, more than a dozen companies made Compliance Week’s list of the biggest compliance fails in 2019.
AICPA issues TQAs related to Sec. 163(j), GASB 84 [Journal of Accountancy] The AICPA issued separate Technical Questions and Answers on Thursday to provide nonauthoritative guidance in response to the amendment of Internal Revenue Code Sec. 163(j) and related to GASB’s fiduciary activities guidance.