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News Digest (May 2017): Month-end Close, Internal Control, and Fake Financial News

News Digest

News Digest (May 2017): Month-end Close, Internal Control, and Fake Financial News

1. Overtime During Month-End Close Rise Stress Level – Two recent surveys suggested that overtime during month-end close rise finance professional’s stress Level. And, this happens cyclically 12 times a year. According to a survey by Adra, a software provider, 87% respondent said they worked overtime during the financial close process. And, 60% said stress levels rise during the month-end close, according to a survey by FloQast. Various obstacles that are suspected as the source of the stress relate to month-end close including:

  • Coordinating and getting information from other departments (54%).
  • Reconciling across multiple systems (44%).
  • Disparate, nonstandardized processes (44%).
  • Coordinating across multiple departments (38%).
  • Not enough resources to manage workload (31%).

(Read more)

2. AICPA Issued New Technical Questions and Answers (TQAs) in the Area of Internal Control – The TQAs addressed questions received from auditors and other members about what is meant by controls relevant to the audit and control activities relevant to the audit in AU-C Section 315. The first auditor asked “AU-C section 315 states that the auditor should obtain an understanding of internal control relevant to the audit. Does this understanding of internal control relevant to the audit encompass more than control activities?” AICPA answered “Yes.” The auditor is required to obtain an understanding of each component of internal control, as follows:

  • Control environment
  • The entity’s risk assessment process
  • The information system, including the related business processes relevant to financial reporting and communication
  • Control activities relevant to the audit
  • Monitoring of controls

(Read more)

3. Fake Financial News Threatens Americans’ Ability to Make Sound Financial Decisions – According to AICPA’s recent surveys, 58% of respondents said that fake financial news is a serious threat to their financial decision-making. And, 33% respondents classified the threat as “very serious.” Consumers feel pressured to act quickly when faced with breaking financial news, which may make them less likely to carefully evaluate the news they receive. While about 77% of the survey respondents said it’s important to make financial decisions quickly when new financial news becomes available. The AICPA poll showed 63% of Americans believe the spread of fake news makes it more difficult to make financial decisions, and more specifically, the following types of financial decisions:

  • Health care decisions (44%)
  • Investing in the stock market (40%)
  • Retiring (36%)
  • Buying or selling a house (35%)
  • Starting a business (35%)
  • Changing jobs (29%)

(Read more here)

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