October 2020 Article Archives

Accounting and Financial Controllers Steer the Ship

Published on October 20, 2020

Accounting and financial controllers are some of the hardest-working executives in an organization, but unfortunately, they are often overlooked. There are more than 250,000 controllers in the United States, and 810,000 worldwide, yet CFOs and the C suite seem to get all the media attention. 

Around the world, companies and organizations turn to their controllers for everything from compliance to cash flow, internal controls and closing the books. With nearly a million people with controller job titles worldwide, there are nearly three controllers to every one CFO in the U.S., and more than five-to-one controllers to CFOs worldwide. 

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Risk Alert: COVID-19 and the Return to Work

Published on October 20, 2020

The emergence of the novel coronavirus quickly upended the way businesses, including accounting firms, around the United States operated. Shelter-in-place orders prompted millions to pivot nearly overnight to halt business travel, begin working from home, and use virtual conferencing software to substitute for what previously would be in-person meetings and visits. 

Now some CPA firm leaders may be considering how to phase staff back to the office environment, given that some parts of the country are experiencing lower community transmission rates of the pathogen. 

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IRS Releases Final Rules on Business Meals and Entertainment

Published on October 20, 2020

The IRS issued final regulations (T.D. 9925) implementing provisions of the law known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97, that disallow a business deduction for most entertainment expenses. The regulations also clarify the treatment of business deductions for food and beverages that remain deductible, generally limited to 50% of qualifying expenditures, and how taxpayers may distinguish those expenditures from entertainment. 

The final regulations adopt, with a number of clarifications in response to comments, proposed regulations issued in February 2020 (REG-100814-19; see also “Proposed Regs. Issued on Meal and Entertainment Expense Deductions,” JofA, Feb. 24, 2020). The proposed regulations were based, in turn, on Notice 2018-76, published in October 2018. 

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Let's End the Debate: Automation Will Never Replace Accountants

Published on October 20, 2020

Automation has brought significant changes to the accounting profession over the last decade. While some tools have made accountants’ lives easier, others have chipped away at their roles as startups seek to disrupt a legacy industry. The tech companies that developed these tools have also created and perpetuated a false debate about whether automation will overtake the industry completely and make accountants irrelevant. 

It’s time to end that debate. A valued accountant is a holistic business advisor to clients, solving human problems that technology simply cannot — and will never be able to — solve on its own.

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Continue to Focus on Accounting and Disclosures Related to the Pandemic

Published on October 20, 2020

Entities need to continue to consider the effects of the COVID-19 pandemic and its economic fallout in their accounting and disclosures for the latest period, and their disclosures should evolve as facts and circumstances change. 

As a reminder, that includes considering whether the pandemic-induced recession has triggered asset impairments; whether any accounting estimates, such as the amount of variable consideration an entity expects to be entitled to under contracts with customers, need to be revisited; and what the effect might be on hedging relationships, compensation arrangements and income taxes. 

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