UL MBA students who complete all required courses and pass the required Chartered Institute of Management Accountant (CIMA) CGMA exam, will be able to obtain the Diploma in Management Accounting, which is an official route to completing CIMA’s CGMA Professional Qualification and becoming a Chartered Global Management Accountant (CGMA).

Find out more about AICPA & CIMA’s CGMA University Program in Poland and how the CGMA designation is empowering finance professionals.

AICPA Comments on Interaction between Section 266 and Section 163(j)

Recently, the American Institute of CPAs (AICPA) sent a letter to the Department of the Treasury and the Internal Revenue Service (IRS) requesting guidance to clarify that section 266 of the Internal Revenue Code (IRC) should apply before section 163(j) or after a taxpayer elects to capitalize interest expense under any provision that allows elective capitalization of interest expense. The legislative history describes Congress’ intent regarding ordering rules for the operation of the new provision but is not explicitly stated in the regulations.

Section 266 specifies that interest subject to a valid election must be treated as charged to a capital account and may not be deducted. As a limitation on the deduction of interest expense, section 266 takes precedence over section 163(j) under the ordering principles of the two sections.

The Tax Cuts and Jobs Act (TCJA) rewrote section 163(j) to enact significant new limitations on the deduction of “business interest expense.” There is a clear indication that Congress intended to apply interest capitalization provisions, whether mandatory or elective, before the business interest expense limitations of section 163(j).

Inflation Worries Ease, But Business Executives Grow More Pessimistic About U.S. Economy, AICPA & CIMA Survey Finds

For the past year, business executives listed inflation as their top concern. Yet even with inflation easing, their concerns have not lessened, with only a quarter of respondents expressing optimism about prospects for the U.S. economy over the next 12 months, down from more than a third last quarter, according to the AICPA & CIMA Economic Outlook Survey.

The quarterly survey polls chief executive officers, chief financial officers, controllers, and other certified public accountants in U.S. companies who hold executive and senior management accounting roles.

Some 26% of business executives said they were optimistic about the economy’s prospects over the next 12 months, down from 35% last quarter and 29% a year ago. Those expressing optimism about the global economy also fell slightly from 22% to 19%, quarter over quarter.

Some 57% of business executives said they were worried about inflation over the next six months, down sharply from 75% last quarter. Inflation, the top concern listed within the survey over the past three quarters, fell to No. 2 this quarter behind employee and benefit costs.

Other key findings of the survey:

• Revenue and profit expectations for the next 12 months both fell. Revenue growth is now expected to be 1.9%, down from a 2.9% projection last quarter. Profit projections fell from 1.5% last quarter to 0.2%.
• Business executives who said they were optimistic about their own organization’s outlook over the next 12 months fell from 48% to 41%, quarter over quarter.
• Only 44% of survey respondents expect their businesses to expand over the next 12 months, down from 53% last quarter. The percentage of those who foresee a contraction rose seven points to 27%.
• Sixty-nine percent of business executives said an anticipated interest rate cut would have at least a moderately favorable impact on their business, with almost 1-in-5 saying it would be very favorable. The downside: it could impact investment portfolios.
• Fifty-four percent of respondents said the election uncertainty has had limited or no impact on their business forecasting. Twelve percent said it had had a significant impact on forecasting, and 34% said it had a moderate impact. Revenue projection was most likely to be impacted.
• Some 13% of business executives said they had too many employees, up two percentage points from last quarter. Those who said they had too few employees remained steady at 29%, but the percentage of those who were hesitant to hire despite being shorthanded rose from 13% to 15%, quarter over quarter.

AICPA and NASBA Seek Input on Proposed Additional Pathway to CPA Licensure

In a joint effort to support the next generation of accountants while maintaining accounting’s rigorous public protection mandate, the American Institute of CPAs (AICPA) and the National Association of State Boards of Accountancy (NASBA) have proposed an initiative aimed at helping Certified Public Accountant (CPA) candidates meet initial licensure requirements. The CPA Competency-Based Experience Pathway would provide an additional option for candidates to demonstrate their professional and technical skills after earning a bachelor’s degree and meeting their state’s requirements for accounting and business courses.

Designed to increase flexibility for candidates, respond to market conditions, and protect the public, the pathway allows candidates to meet the final stretch of licensure requirements by exhibiting competencies according to a model framework that has been developed by AICPA and NASBA. The framework was developed with significant input and advice from a diverse cross-section of the profession, including members of an AICPA and NASBA working group made up of practitioners, regulators, academics, and state society leaders.

Attaining the competencies is expected to take most candidates a year but there is flexibility in the timing for completion. Candidates pursuing this additional pathway would also be required to complete a separate year of general experience and pass the CPA Exam. Competencies would be verified in the workplace by licensed CPAs.

Public input on the proposed model competency framework and other aspects of the potential additional pathway can be submitted through December 6.

The competency framework at the heart of the proposal includes seven professional and three technical competencies. Candidates would be required to exhibit all professional competencies and at least one of the three technical competencies, which would be verified by one or more evaluators in their organization.

Professional competencies are spelled out in areas such as ethical behavior, critical thinking, and communication. Technical skills are in audit and assurance, tax, and financial reporting.

AICPA to Clarify Applicability of Standards to Financial Statements Prepared as Part of a CAS Engagement

The American Institute of CPAs (AICPA) is seeking comments on a new exposure draft that aims to amend the standard related to financial statement preparation. The amendment will clarify that a CPA is not required to apply AR-C Section 70, Preparation of Financial Statements, when financial statements are prepared as a byproduct of a client advisory services (CAS) engagement.

Client advisory services, which include controllership and CFO services, have been an area of significant growth over the past several years. In many of these engagements, the outside accountant assumes management-level responsibilities that may run to functioning as the client’s outsourced CFO. If the accountant prepares financial statements as part of such services, those financial statements are a by-product of the broader engagement.

There is currently significant diversity in practice as many accountants consider the service to be performed under the consulting services standard (CS Section 100, Consulting Services: Definitions and Standards). Other accountants consider the financial statement preparation as a separate service and perform that part of the engagement per AR-C section 70. Either pathway is acceptable – however, if the accountant chooses, or believes they are required, to follow AR-C section 70, there are additional requirements that the accountant would have to comply with that an in-house CPA or an accountant who performed the full engagement as a consulting services engagement would not.

The AICPA’s Accounting and Review Services Committee (ARSC) is responsible for AR-C section 70. ARSC determined there is no perceivable harm to users of the financial statements if the full engagement is performed per CS section 100. The proposed amendment clarifies that while the accountant is not precluded from applying AR-C section 70, the accountant may perform the engagement per CS section 100.

The exposure draft of the proposed Statement on Standards for Accounting and Review Services (SSARS) can be reviewed here.

If approved and issued as final, the amendment, titled Applicability of AR-C Section 70 to Financial Statements Prepared as Part of a Consulting Services Engagement, would revise AR-C Section 70 of SSARS No. 21, Clarification and Recodification.

The AICPA & CIMA Adds to the U.S. Apprenticeship Program with the entry-level Accounting and Finance Associate Program

The AICPA & CIMA, which together form the Association of International Certified Professional Accountants, recently announced the launch of the Registered Apprenticeship for Accounting and Finance Associate. The new program is designed to enhance the talent pipeline by offering an “earn and learn” opportunity to recruit new talent or upskill those in entry-level positions.

In the new AICPA & CIMA program, apprentices will work directly for the participating organization and receive foundational and operational levels of the world-leading CGMA Finance Leadership Program instruction, on-the-job training, a progressive wage scale, and mentorship.

There are key benefits to the Accounting and Finance Associate Apprenticeship Program for both participating students and organizations:

Recruitment: Promotes social mobility by attracting a wider range of candidates sooner.

Retention: Promotes retention in two ways – 1) Apprentices continue with the employer post-apprenticeship, and 2) incumbent employees are upskilled to enhance or change roles within the employer.

Career development: Identifies candidates early who then receive accelerated real-world competency-based training. Eligible candidates must be 16 years of age with a high school diploma.

Earn while you learn: Bridges education and employment.

The Accounting and Finance Associate Apprenticeship Program is a stackable apprenticeship that could lead into the earlier established Registered Apprenticeship for Finance Business Partners Program or be the next step after the Youth Apprenticeship Program.

To learn more about the U.S. Apprenticeship programs contact Joanne Fiore at joanne.fiore@aicpa.cima.com

AICPA and NASBA Seek Input on Proposed Uniform Accountancy Act Changes

As part of efforts to address accounting’s talent needs and expand access to accounting careers to more candidates, the American Institute of CPAs (AICPA) and the National Association of State Boards of Accountancy (NASBA) have proposed changes to the profession’s model law.

The Uniform Accountancy Act (UAA) provides state legislatures and boards of accountancy with a national model that can be adopted in full or partially adapted to meet the needs of each jurisdiction.

The proposed changes to the UAA would enable the potential adoption by states of the CPA Competency-Based Experience Pathway — an additional path to CPA licensure proposed by the AICPA and NASBA.

The Competency-Based Experience Pathway would allow CPA candidates to demonstrate their professional and technical skills in the workplace after earning a bachelor’s degree and meeting their state’s requirements for accounting and business courses. The AICPA and NASBA released an exposure draft outlining the proposed pathway on Sept. 12. That comment period is open through Dec. 6.

To facilitate state adoption of the CPA Competency-Based Experience Pathway, the AICPA and NASBA boards of directors each approved for exposure changes to the UAA that would:

• Set the education required to sit for the Uniform CPA Examination at a baccalaureate degree or higher
• Define the requirements for an additional pathway for licensure as a CPA
• Maintain mobility for those licensed under a pathway defined in the UAA
• Facilitate a means to allow state boards of accountancy to identify those licensed under a pathway that is not substantially equivalent to the UAA through a national licensee database, and
• Provide a mechanism for those who are licensed under a pathway that is not defined in the UAA but who later meet the mobility requirements defined in the UAA

Separately, the NASBA Board of Directors approved for exposure UAA Model Rule changes updating the definitions to reflect the additional pathway for licensure and the experience required for the issuance of an initial certificate under the proposed additional pathway.

The AICPA and NASBA are seeking input on the proposed changes through a comment period that will remain open until Dec. 30. Comments can be sent to UAA Exposure Draft Comments.