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Current Accounting: Double Entry Bookkeeping has been the gold standard for accounting since the 14 th century. It allowed management to trust books since every transaction would require an entry in one account (like Debits) and the reason in another account (like Credits). But to authenticate company’s financial statements for investors/shareholders, external auditors were required to verify these account entries. Since many of these account entries relate to a company’s interaction with other companies-suppliers, distributors, clients, banks etc, verifying them can be a complex and time consuming process. External Audits also leads to other questions. ...
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In my March 22, 2017 IMA blog -- I mentioned that new legislation was introduced by Conservative Republican Congressman Darrell Issa of California that would continue the build-out of the global XBRL data standard for better financial transparency for government reporting across all federal government departments for financial reporting. Unfortunately, on May 4, 2017 the US House Banking Committee passed legislation in the Dodd-Frank Roll-Back (Choice Act) to take the same XBRL data format -- now proposed for better financial government reporting transparency and remove XBRL for public company financial transparency that the US SEC uses for more than ...
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A collaboration between the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) issued IFRS 15 and ASC 606, Revenue From Contracts With Customers. IFRS 15 and ASC 606 are the same with only minor differences. This collaboration was created because multiple accounting revenue-recognition standards existed, so inconsistencies arose when accounting for contract revenues, and the other reason is to attain high-quality accounting standards globally which is the ultimate goal of ISAB. The standard was issued in May 2014 and it should be implemented beginning in early 2018. Three important differences between IFRS ...
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Great article in Sustainable Brands and the significance of non-financial reporting disclosure  by companies and its direct relationship to investor behavior… According to a recent Ernst & Young survey : Investors are increasingly   using non-financial performance to draw conclusions on value   and to better inform their decisions, since it’s often a sign of operational excellence if a company shows they are handling environmental, social and governance (ESG) issues well. Over the long term, 92% of respondents believe that   ESG issues   — ranging from climate change to diversity to board effectiveness — have real and quantifiable impact. 81% ...
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The European Parliament has voted in favor of new rules that will strengthen shareholder rights and facilitate cross-border voting under the Shareholders Rights Directive as the new Trump Presidential administration moves in the complete opposite direction related to enhanced corporate governance. Under the new changes in the EU Shareholders Rights Directive -- it will make it easier for shareholders residing in another European Union country to the location of the company in which it invests to participate in the general meetings of those companies and to vote on shareholder issues. The new rules require institutional investors and money management ...
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Interesting article Largest democratic country in the world (India) is pushing the largest capital markets country in the world (USA) to have public companies disclose not only financial information but non-financial information to better serve both investors and the public. Including both financial and non-financial information is known as "integrated reporting" by public companies. Currently the US Securities & Exchange Commission isnt even allowing voluntary filing of non-financial data to be included with financial reports by public companies. US GAAP does not include non-financial accounting metrics. Key question in the United States: will ...
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As a member of the IMA Technology Solutions and Practices Committee, I follow technology, cultural, and legislative trends. These are very tightly interrelated. They affect the role of the management accountant. In the January/February issue of GCN Magazine, on page 7, a very small feature called Tech to track in 2017. According to Alan Shark, executive director of the Public Technology Institute, here is what is out and what is in in its place. GCN Magazine provides information on technology, tools and tactics for public sector IT. OUT: Cybersecurity as a concern IN: Cybersecurity as a crisis. Recent hacks and public discussion, ...
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Great article in Fed Scoop about new legislation being introduced in Congress that would take the XBRL global data standard -- created by the accounting profession -- and build-out across all federal financial agencies for better transparency and accountability. Using the machine-readable, human-readable data format -- companies can create one report of information that can be shared across stakeholders including regulators for more effective distribution of critical information driving investment in the capital markets. Congressman Issa issued the following press release about The Financial Transparency Act he and other Congressmen on both sides ...
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Just came back from an accounting conference in London about the United Nations Sustainability Development Goals. Management accountants are going to hear more about this global effort and their involvement as this moves toward global adoption in the capital markets and by governments around the world. First a little history about Sustainability Development Goals and how the UN took this challenge On 19 July 2014, the UN General Assembly 's Open Working Group (OWG) on Sustainable Development Goals (SDGs) forwarded a proposal for the SDGs to the Assembly. The proposal contained 17 goals with 169 targets covering a broad range of sustainable development ...
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GREAT NEWS TODAY... The US Securities and Exchange Commission has voted today to move forward in mandating the use of Inline XBRL for US public company financial statement disclosure. See below story blogged on December 28, 2016 in which we discussed the possibility of the US SEC taking this action and mandating the use of Inline XBRL in the United States. In addition foreign filers have an opportunity to voluntarily file in the IFRS using Inline XBRL: https://www.sec.gov/rules/other/2017/33-10320.pdf First step in move to use IFRS Global accounting standard for US Public Companies? Stay tuned for more details... Bravo to US Securities & Exchange ...
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Great article in CFO Magazine by Russ Banham on the quickly expanding role CFOs and their finance teams are now assuming beyond the management of financial information critical to the operation of the enterprise they pilot. The Finance team is quickly becoming the de facto manager of nonfinancial data analytics critical to the operation of the companies they serve Modified Chief Data Officer As CFO Magazine describes: About three-quarters (76%) of finance teams currently track some nonfinancial metrics, according to a November 2016 survey of about 300 global CFOs by Adaptive Insights. Nearly half (45%) of the respondents say they now act ...
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Machine Learning - 1 st in a Series Since I just got my new Machine Learning for Dummies by John P. Mueller and Luca Massaron, you will be treated to a serial book review as I work my way through each chapter. Why will you be subjected to this regular installment? Machine Learning (ML) is getting increasing amounts of press as Big Data gets bigger and more imaginative applications of Artificial Intelligence (AI) come to fruition. Some are rather dull-sounding (Arent we doing that already?) and others are inching closer to our expectations from watching futuristic movies or reading science fiction. I got this book because I wanted to see what the fuss ...
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For those unfamiliar with blockchain, blockchain is a digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly. Liv Watson and Chris Mishler of IMA's Technology Solutions and Practices Committee wrote a well thought article in a recent issue of Strategic Finance which gives background on blockchain and can be found through the following link: Get Ready for Blockchain The Innovation Enterprise Ltd., a division of Argyle Executive Forum published an article yesterday which ties in nicely with the article written by Liv and Chris written on blockchain. The link for this can be found here: Will ...
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Federal Computer Week published a great story on Congressman Mick Mulvaney (R-S.C.) confirmation hearings as the next OMB Director of the US Government. Congressman Mulvaney (Tea Party Leader in Congress) stressed the importance of getting accurate and useful data in order to inform his and President Donald Trump's decision-making during his confirmation hearings to lead the Office of Management and Budget. "In this age of big data, the government has all this data, but it isn't capable of using it because it can't even talk to itself about the numbers," Mulvaney said at his hearing before the Homeland Security and Government Affairs Committee. ...
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Great article about UKs new narrative reporting framework for listed companies, banks and insurance enterprises with more than 500 employees that went into effect for financial reporting periods on or after January 1, 2017 . Companies, banks and insurance enterprises will be required to report environmental, social and employee-related matters as well as the companies respect for human rights and anti-corruption and bribery matters. This additional non-financial disclosure will help to address material risks associated with these topics that are showing greater and greater interest from the investment/pension community through impact investing/responsible ...
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I attended the Rutgers Business School 38th World Continuous Auditing and Reporting Symposium on November 4 th & 5 th 2016 on the Rutgers campus in Newark, NJ. William Bible, Deloitte partner , presented Blockchain Technology Disrupting the World of Accounting. He describes Blockchain as a fusion of: Peer-to-peer networking Key Cryptography Proof of work William noted that each of the above are computationally taxing and even more so taken together, however, the computational power of current systems make the widespread use of blockchain possible and even routine. He went on to discuss that some key aspects of blockchain are: ...
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The global accounting standards adoption rate has been increasing around the world. Saudi Arabia has decided to adopt IFRS. The date of adoption for publicly traded companies will be on January 1, 2017 and January 1, 2018 for other organizations, but other organizations have the option to adopt IFRS on January 1, 2017. Transferring to IFRS is a complex process and requires thorough planning. The following are three steps to implement for the successful adoption of IFRS. It is necessary to understand how these changes will affect a company. The best way to accomplish this is by forming an initial team. The job of this team includes the ...
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What is IFRS?

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As the date for the adoption of International Financial Reporting Standards (IFRS) in Saudi Arabia is fast approaching, it is important to know as much as possible about these global accounting standards. The date of adoption will be on January 1, 2017. This article will provide an overview of IFRS. "IFRS Standards are a globally recognized set of standards for the preparation of financial statements by business entities," according to Paul A Volcker, an American economist and former chief of the US Federal Reserve. IFRS is developed by the International Accounting Standards Board (IASB). The adoption rate of IFRS is increasing around ...
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Great article on Blockchain technology, cloud shared public ledgers and how it can be used for state, local and federal government to provide new services to the public. Premise: Blockchain technology can be applied using distributed public record technology that can be directed to a wide range of urban applications to assist the public and distribute resources to meet public need using peer-to-peer collaboration. Management accountants can play a role in activating this new technology. The article spotlights an energy startup in Perth, Australia that is doing a trail peer-to-peer technology solution that would allow consumers to offer excess energy, ...
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Make Your Technology Resolutions for 2017 As we ring in 2017 and make our New Years resolutions, be sure to make your technology resolutions because the accounting profession is undergoing transformational changes. The clock is not going to turn back to the future and allow you to do what you did in the past. If you dont become proactive developing your technology skills, you are going to get left behind. While you may think that surfing the internet, using email, and spreadsheet fluency are enough to sustain you, you need to look in to the crystal ball and become skilled in emerging technology trends. Business analytics is the big news. You can keep ...
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