Beyond GAAP, which standards must CPAs follow? | Labor Department postpones release of fiduciary rule | AICPA's Framework for SMEs gives private companies alternative in non-GAAP reporting
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September 17, 2013
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Beyond GAAP, which standards must CPAs follow?
Eddy Parker, CPA, CGMA, AICPA's senior technical manager for Forensic and Valuation Services, notes that there is confusion among CPAs about which standards, outside of generally accepted accounting principles, are mandatory, as opposed to suggested guidance. The answer? All of them, Parker writes, or accounting professionals risk disciplinary action. The article discusses forensic and valuation contexts in which CPAs must apply AICPA standards covering audit and attest, consulting services, business valuation, professional conduct, financial planning, tax and peer review. Forensic & Valuaton Services Insider (8/21)
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Forensics/Fraud and Financial Litigation Support are hot niche practice areas for the profession. To help CPAs build expertise in this area, the AICPA has developed a new online Certificate Program that provides a broad understanding of financial forensics. > Enroll Today
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Valuation Corner
Labor Department postpones release of fiduciary rule
Assistant Labor Secretary Phyllis Borzi has announced that the agency has not finished writing a rule that would eliminate conflicts of interest for investment advisers who work with retirement plans. The proposed fiduciary rule was due to be released in October but is being delayed for several months. The Hill/RegWatch blog (9/11), InvestmentNews (free registration) (9/10)
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AICPA's Framework for SMEs gives private companies alternative in non-GAAP reporting
The AICPA has created the Financial Reporting Framework for Small- and Medium-Sized Entities to offer an alternative in non-GAAP reporting for small-business owners. The framework is designed to help owner-managed small businesses prepare cost-effective financial statements that meet the needs of financial-statement users. Free educational tool kits on the FRF for SMEs for CPAs, small businesses and financial-statement users are available at AICPA.org/FRF-SMEs. Journal of Accountancy print issue (9/2013)
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Brand spinoffs: What to consider in consumer-product divestitures
Consumer-product companies are increasingly looking to divest noncore brands or business units, particularly in the food and beverage sector. This insight from Deloitte discusses five factors companies should consider when spinning off a brand, including separating integrated businesses, avoiding stranded or unnecessary costs and providing post-transaction support. Deloitte (9/3)
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Do investors have a greater appetite for risk post-crisis?
This article looks at how post-recession investor risk taking has risen to the top of the historical range compared with previous economic cycles. The author considers the price of risk -- i.e., what return investors require to take on a given risk -- and factors behind the change in investor risk aversion during the recovery. The article discusses three characteristics of the current recovery that might have affected investor risk appetite and the price of risk: an emergent economy, slow economic growth and strong corporate balance sheets. Federal Reserve Bank of San Francisco (8/19)
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Del. court leaves common stockholders with nothing
A shareholder of a company filed suit after the sale of the business benefited preferred stockholders and management, leaving nothing for common stockholders. The Delaware Chancery Court found that because the common stock had no economic value before the merger, common stockholders received their substantial equivalent in the sale: nothing. Therefore, the transaction was fair and directors did not breach their fiduciary duty in failing to create a special committee in connection with liquidation. The National Law Review (9/6)
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Fed's Beige Book tells tale of moderate growth
The latest issue of the Federal Reserve's Beige Book describes "modest to moderate" growth in the economy and an increase in consumer spending, but weakening lending activity. It also says hiring has held steady in most industries and occupations nationwide. The article reproduces the Beige Book findings. Business Insider (9/4)
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Forensic Corner
Identifying red flags of white-collar crime
In a college bookkeeping job for a leather-goods company, this author observed that sales data weren't reconciling with the rising cost of goods sold. That discovery helped nail the vice president, who was running an illegitimate business from the factory floor, stealing materials and selling finished goods. A new DeLorean and a fancy watch were red flags that the vice president was living suspiciously beyond his means. This article discusses how forensic accountants can recognize red flags of white-collar crime by practicing professional skepticism and looks at the psychology of criminals to identity their opportunity and motive. It also offers five steps to designing fraud deterrence. AccountingWEB (8/19)
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How social media can affect a client's divorce
Social media has added another dimension to asset searches and other elements of modern divorce. The article discusses ways social media usage can factor into divorce proceedings, including providing clues for hidden assets. The author cautions that social media works both ways, so professionals should caution clients on monitoring their usage, as well as their spouse's. Forbes (8/20)
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Forensic experts talk about the state of global anti-corruption compliance
In this interview with Rocco deGrasse, Esq., principal in KPMG's Forensic Practice, and Jonathan Zdimal, CPA, director in KPMG's Forensic Practice, the forensic experts talk about Foreign Corrupt Practices Act issues and compliance strategies. They discuss the impact of global regulatory coordination among governments, weaknesses in compliance plans, the role of data analytics and industry-specific regulatory risks, among other issues. MetroCorpCounsel.com (8/22)
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Former FBI chief suspects corruption in BP claims process
There's something rotten in New Orleans, says Louis Freeh, the former FBI director who headed an investigation of a settlement program compensating victims of BP's massive 2010 oil spill in the Gulf of Mexico. Freeh has recommended that the Justice Department investigate possible fraudulent activity by staff lawyers participating in the claims process. The investigation did not find wrongdoing by the fund's court-appointed administrator, and Freeh has not recommended discontinuing already-authorized payments to victims. Yahoo/The Associated Press (9/7)
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The value of forensic-accounting services
This article describes services that small-firm forensic accountants can offer to clients and how obtaining specialized credentials, such as the Certified in Financial Forensics or Accredited in Business Valuation credential, can boost your business. It also recommends methods to create more business, such as cross-selling, making connections with law firms and balancing engagements. AzCentral.com (Phoenix)/Demand Media (9/1)
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Despite constitutional arguments, Chapter 9 likely will roll on in Detroit
The largest municipal bankruptcy filing in U.S. history faces outsized challenges to its validity, including claims that Detroit's emergency manager failed to negotiate in good faith with municipal unions and that the filing violates state constitutional protection for workers and retirees. Unions are even arguing that Chapter 9 of the federal bankruptcy code is unconstitutional. These arguments will be heard in bankruptcy court in October, but experts say they are unlikely to prevail. Reuters (8/20)
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AICPA FVS News
Member-benefit spotlight: FVS Online Professional Library
Members only
FVS/CFF/ABV members receive free access to the FVS Online Professional Library, which includes recently published practice aids: Introduction to Civil Litigation, 2nd Edition; A CPA's Guide to Family Law Services, 2nd Edition; Mergers and Acquisitions Disputes Practice Aid; Calculating Intellectual Property Infringement Damages Practice Aid; Discount Rates, Risk, and Uncertainty in Economic Damages Calculations Practice Aid; and much more. Not an FVS member? Join the FVS Section and save $50 on your first year of membership when you enter promo code FVE12 at checkout.
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AICPA FVS Events
Virtual-attendance option is available for 2013 AICPA Forensic & Valuation Services Conference
The AICPA Forensic & Valuation Services Conference, scheduled Nov. 10 to 12 in Las Vegas, has an online option, which allows you to attend the conference remotely, in real time. It's a great way to save on travel expenses by streaming sessions to your computer at your home or office. You have the option to register for all of the main conference sessions, or you can select any seven conference sessions. Register to attend in person or online by Sept. 26 for early-bird savings. FVS/CFF/ABV members save $100. Not an FVS Section member? Join the FVS Section and save $50 on your first year of membership when you enter promo code FVE12 at checkout.
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Attend these FVS webcasts and earn CPE
Join us for these webcasts, or visit FVS CPE & Events to find other opportunities.
"The Valuation of Customer-Related Intangible Assets": 3 to 5 p.m. ET on Thursday
"Technology-Related Intangible Asset Valuation": 3 to 5 p.m. ET on Oct. 1
"Marketing-Related Intangible Asset Valuation": 3 to 5 p.m. ET on Oct. 17
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SmartQuote
Our opinion of people depends less upon what we see in them than upon what they make us see in ourselves."
-- Sarah Grand,
British writer and women's rights activist
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Learn more about FVS ->Join FVS Section | Become a CFF | Become an ABV
About the Forensic and Valuation Services Section
The Forensic and Valuation Services Section is designed to provide CPAs with a vast array of resources, tools and information about forensic and valuation services. The FVS Section serves CPAs who hold the Accredited in Business Valuation and Certified in Financial Forensics specialty credentials, members of the FVS Section, AICPA members and others.

About the Accredited in Business Valuation Credential:
The Accredited in Business Valuation program provides specialized access to information, education, tools and support that enhance credential holders' ability to make a genuine difference for their clients and employers. ABV credential holders may brand or position themselves as premier business valuation service providers who differentiate themselves by going beyond the core service of reaching a conclusion of value and creating value for clients through the strategic application of this analysis.

About the Certified in Financial Forensics Credential:
The Certified in Financial Forensics credential combines specialized forensic accounting expertise with the core knowledge and skills that make CPAs among the most trusted experts. The CFF credential encompasses fundamental and specialized forensic accounting skills that CPA practitioners apply in a variety of service areas, including: bankruptcy and insolvency; computer forensics; economic damages; family law; fraud investigations; litigation support; stakeholder disputes and valuations. To qualify, a CPA must be an AICPA member in good standing, have at least five years of experience in practicing accounting, and meet minimum requirements in relevant business experience and continuing professional education.
AICPA FVS Section Resources
 
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