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VAT professionals are struggling with the burden of validating transactions and catching fraud, which they say should be the responsibility of governments, reports Euan Healy in International Tax Review. He says the transition to the digital age of VAT reporting and e-invoicing has altered the relationship between tax authorities and businesses. Governments are requesting more data points and information from companies, which are struggling to adapt to quickly changing expectations. Healy adds that tax professionals are increasingly finding that they now carry the burden of finding and validating potentially fraudulent transactions. The rapid rate of change has created an “overburdensome reporting requirement”, said Lisa Dowling, senior global director and head of indirect tax, advisory and compliance at TaxBack International in Ireland. Adam Schaffner, director of indirect tax at Thomson Reuters in Dallas, echoed her concern: “We’re basically becoming employees of the government; we’re becoming free auditors.”

 

International Tax Review

White House officials have stated that the budget deal between President Joe Biden and House Speaker Kevin McCarthy will not affect the short-term abilities of tax collectors. The deal would shift $10bn each in funding away from the Internal Revenue Service in fiscal years 2024 and 2025, but officials believe the IRS can make do in the near term since they were funded over a 10-year period. They may need to seek more funding from Congress for future years.

 

U.S. News

Best Practice Guide: Accounts Payable Payment Methods

Take a deeper look into the business to business (B2B) payment methods your clients are using and the processes (or lack thereof) in place to keep their payments organized, efficient, and adverse to fraud.

In this guide, we’ll share a step-by-step approach and best practices that will help you recommend scalable payment options for your clients, including how to:

• Evaluate your clients’ current payment methods
• Manage vendors and their payment terms 
• Explore various available payment methods
• Determine the right payment method(s) for your client 
• Implement a scalable payments process into their approval workflow

Download eBook

 

The International Federation of Accountants (IFAC) teamed up with Transparency International U.K. and the World Economic Forum's Partnering Against Corruption Initiative on a report examining anti-corruption corporate reporting around the world, and separately released advice for audit committees on sustainability disclosures. It looks at the current state of anti-corruption reporting practices, pointing to the urgent need for greater quality, reliability and comparability in this area. It found that nearly all (95%) of companies reviewed disclose some information about anti-corruption policies, training and/or results. Most of these companies use internationally recognized sustainability standards (61% use GRI and 17% use SASB) to report anti-corruption information.  However, there's little comparability between anti-corruption disclosure. Few companies disclose either corruption incidents (37%) or the costs of corruption (4%). The majority (72%) of companies aren't obtaining assurance on anti-corruption information. "Our findings are mixed — the report reveals both progress and challenges, and significantly different disclosure practices in jurisdictions," said IFAC CEO Kevin Dancey in a statement. "We must collectively address the gaps and differences to ensure anti-corruption reporting achieves the same level of rigor, transparency, and trust as financial reporting."

 

Accounting Today

The Governmental Accounting Standards Board (GASB) is adding a major project on accounting and financial reporting for infrastructure assets to its current technical agenda. The project will consider how infrastructure assets should be recognized and measured on the financial statements of state and local governments and whether the optional use of the modified approach should continue to be allowed to report infrastructure assets. It will also evaluate whether more information related to the maintenance and preservation of infrastructure assets should be presented in financial statements. The project will set standards-setting options to make related information about infrastructure assets more useful for making decisions and assessing government accountability. Another goal is to make such information more comparable across governments and more consistent over time and more relevant to assessments of a government's economic condition.

 

Accounting Today

New figures from AICPA show the number of CPA candidates has fallen to its lowest level in at least 17 years, leading to calls for accounting firms to revamp their business models to attract more entrants.

 

Financial Times

The Massachusetts Society of Certified Public Accountants (MassCPAs) has announced the appointment of 19 members to its board of directors for its 2023-2024 fiscal year, which began May 1st. “This exceptional and diverse group of individuals will have a profound impact on defining the Society’s priorities and propelling the accounting profession forward in Massachusetts,” said Amy Pitter, MassCPAs president and chief executive. “With each member bringing a distinct background and perspective, I am eagerly anticipating the valuable contributions their leadership will bring, benefiting the Society, our community and the profession in the coming year.”

 

CPA Practice Advisor

AuditClub has announced new solutions to help accounting firms succeed in navigating and implementing the AICPA’s new quality management standards. AuditClub Compass is a customized three-phase subscription journey built on a risk-based and scalable approach to quality. AuditClub chief auditors work with the firm using a concierge approach to establish quality objectives, identify and assess quality risks and ultimately design and implement responses. With a new quality management system in place, the firm is then prepared to pivot into an active operational mode. Following implementation, AuditClub can continue assisting the firm with proactive monitoring activities, while also adapting procedures as new regulations arise or new quality risks are identified.

 

CPA Practice Advisor

US President Joe Biden and the Republican speaker of the House, Kevin McCarthy, have agreed in principle to raise the US debt ceiling. If the deal is approved by Congress, a default will be averted. The agreement follows weeks of negotiations between the White House and GOP leaders in the House. The US Treasury earlier warned the country would run out of money to pay its bills on 5 June without a deal. Details of the new deal have not officially been released - but reports state that non-defence government spending would be kept flat for two years and then rise by 1% in 2025. President Biden, in a statement, said that “the agreement represents a compromise, which means not everyone gets what they want.” He urged both chambers to pass the deal, saying it would prevent “what could have been a catastrophic default and would have led to an economic recession, retirement accounts devastated, and millions of jobs lost.” Some conservatives have said that they had wanted more. Rep. Dan Bishop tweeted that House Republicans on the call were “congratulating McCarthy for getting almost zippo” in exchange for what he said was a $4trn raise in the federal borrowing limit. The federal debt limit is currently $31.4trn.

 

New York Times

Wall Street Journal

The trade deficit in goods shot up 17% in April to a six-month high of $96.8bn, reflecting a rebound in imports and a broad decline in American exports. The trade gap in goods rose from $82.7bn in March, the Census Bureau said. Exports dropped 5.5% to $163.3bn. U.S. companies shipped fewer cars, food, consumer goods, oil and other industrial supplies. Imports of goods rose 1.8% to $260bn in April, mostly because of higher oil prices and strong demand among consumers for new cars and trucks.

 

Market Watch

As big data proliferates, companies (and the data scientists they employ) are using predictive analytics technologies to forecast future cash flows, decrease costs, reduce the likelihood of fraud, and even improve employee welfare by eliminating some manual tasks in their organisation. Predictive analytics attempts to forecast future events using techniques that include data mining, statistics, modelling, AI, and machine learning to analyse current and historic data. Models and techniques used by companies include: predictive forecasting, which assesses a company's data and estimates financial outcomes; time series analysis, which analyzes data to predict how variables change over time; classification, which places data into categories based on historical data and is often used where a binary output is required; and an outlier model which examines notable dataset deviations to help detect future fraud. For example, they can link a customer's credit card to a purchase in a city without any previous transaction history there.

 

FM Magazine

A recent study from Windows Report, which analyzed data from the FBI's 2022 Internet Crime Report, found that Nevada is the leading U.S. state for cybercrime. Last year there were 9,090 cybercrime victims in the state, which is around 300 victims per 100,000 people when accounted for population numbers. Total victim losses in 2022 amounted to $127,315,394, a loss of $14,006 per victim on average. In terms of absolute numbers, California was the highest, with a total of 80,766 victims, though the per-100,000 proportion was 204, while Alabama was where individual victims lost the most to cybercrime on average. With a total of $247,930,058 lost to 4,893 victims, each cybercrime victim lost roughly $50,670 on average in 2022.

 

Accounting Today