Legislative Action Center
Professional Standards
The Professional Standards Committee responds to exposure drafts issued by accounting and auditing standard setting bodies. The Professional Standards Committee invites members to submit comments to the committee in its deliberations on exposure drafts of accounting or reporting standards.
Exposure draft responses
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FASB Accounting Standards Update (ASU), Business Combinations (Topic 805) and Consolidations (Topic 810)
View request for comment | View TXCPA PSC comment letter (Dec. 13, 2024)
The Texas Society of CPAs' Professional Standards Committee (PSC) has provided feedback on the proposed Accounting Standards Update (ASU) addressing Business Combinations and Consolidations. The PSC supports the amendments, which improve comparability and clarity for transactions involving variable interest entities (VIEs) and suggests expanding the scope to include all acquisitions primarily involving equity exchanges, regardless of whether the legal acquiree meets the definition of a business.
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AICPA ARSC Proposed Statement on Standards for Accounting and Review Services: Applicability of AR-C Section 70 to financial statements prepared as part of a consulting services engagement
View request for comment | View TXCPA PSC comment letter (Nov. 20, 2024)
The Texas Society of CPAs' Professional Standards Committee (PSC) submitted comments to the AICPA ARSC regarding the proposed amendments to SSARS No. 21. The PSC supports explicitly excluding financial statements prepared as part of consulting services engagements under CS section 100 from AR-C section 70 requirements, citing benefits of clarity and competitive advantage for CPAs. The committee agrees with the proposed effective date, emphasizing it provides adequate implementation time and allows early adoption. Additionally, the PSC supports the revisions to paragraph .01 and the introduction of application paragraph .A4, finding them appropriate and beneficial.
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FASB Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606)
View request for comment | View TXCPA PSC comment letter (Nov. 7, 2024)
This letter is a response from the TXCPA Professional Standards Committee (PSC) regarding the proposed Accounting Standards Update (ASU) on stock compensation and customer contracts. The PSC generally agrees with the amendments, believing they are clear, operable, and consistent with existing guidance, and will reduce diversity in practice. The letter provides detailed feedback on specific questions, supporting changes such as the incorporation of customer performance targets and the elimination of certain forfeiture options. The PSC also offers recommendations on implementation timelines, suggesting staggered adoption dates for public and private entities.
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FASB | ASU: Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606)
View request for comment | View TXCPA PSC comment letter (Sept. 9, 2024)
The purpose of the proposed ASU is to address stakeholders’ concerns about the application of derivative accounting to contracts with features based on the operations or activities of one of the parties to the contract, and the diversity in accounting for a share-based payment from a customer that is consideration for the transfer of goods or services.
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AICPA PEEC: Revised Interpretation Tax Services
View request for comment | View TXCPA PSC comment letter (Sept. 9, 2024)
The proposal is part of the AICPA’s Professional Ethics Executive Committee (PEEC) project to harmonize with ethics standards promulgated by the International Ethics Standards Board for Accountants (IESBA). The TXCPA Professional Standards Committee (PSC) agrees with the proposal to revise the existing “Tax Services” interpretation to include tax advisory and tax planning services. However, the PSC does not agree with the addition of the advocacy threat when evaluating tax services for independence. The PSC does not believe that members performing tax services, such as tax return preparation, representation in administrative proceedings and representation in court services to an attest client, would compromise a member’s independence.
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AICPA PEEC Employee Recruiting for Clients
View request for comment | View TXCPA PSC comment letter (Aug. 30, 2024)
The proposal is part of the AICPA’s Professional Ethics Executive Committee (PEEC) project to harmonize with ethics standards promulgated by the International Ethics Standards Board for Accountants (IESBA). Primary revisions include additional prohibitions for key positions related to recommending the person to be appointed, and advising on the terms of employment, remuneration or related benefits of a particular candidate.
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PCAOB Substantive Analytical Procedures
PCAOB Proposed Auditing Standard - Designing and Performing Substantive Analytical Procedures
View request for comment | View TXCPA PSC comment letter (Aug. 9, 2024)
The TXCPA Professional Standards committee (PSC) supports the Public Company Accounting Oversight Board's (PCAOB) efforts to update and modernize rules and guidance on the use of substantive analytical procedures in the audit by issuing a new standard.
The PSC believes the proposed rules will help bring consistency in the execution of substantive analytical procedures.
However, the proposed standard as drafted does not meet the Board’s objective of clarification in many aspects. We believe the PCAOB erred by “removing descriptive language and illustrative examples” from the current standard.
Additional information is available in the following The Wall Street Journal article published on June 12, 2024: PCAOB Expands Liability for Auditors Involved in Firm Violations
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FAF Private Company Council Review
View request for comment | View TXCPA PSC comment letter (May 30, 2024)
The TXCPA Professional Standards Committee recognizes that the Financial Accounting Foundation's (FAF) Private Company Council (PCC) has, in general, done great work in reducing costs for private companies by developing accounting alternatives that are easier to apply and we continue to believe that the PCC is of critical importance for private companies. Overall, we believe that the PCC has been effective in its role.
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PCAOB Firm and Engagement Metrics | PCAOB Firm Reporting
PCAOB Firm and Engagement Metrics
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PCAOB Firm Reporting+ Firm and Engagement Metrics view proposal
+ Firm Reporting view proposal
+ View TXCPA comment letter (May 28, 2024)
+ PCAOB News Release (April 9, 2024)
Firm and Engagement Metrics
The TXCPA Professional Standards Committee (PSC) recognizes that some large firms are already providing many of the firm-level metrics specified in the Release and all stakeholders would benefit from a consistent calculation methodology and comparable presentation format. In general, the PSC agrees with the 11 proposed areas at the firm level.Firm Reporting
The Firm Reporting requirements would create significantly increased data accumulation and event monitoring and reporting burden on firms, with a disproportionate impact on smaller firms. The PSC recommends that smaller firms be exempted from the proposal’s expanded Special Reporting and Cybersecurity reporting requirements, including the reduced reporting deadline, as these firms do not represent systemic risk to the profession. -
PCAOB - False or Misleading Statements Concerning PCAOB Registration and Oversight
View proposal | View TXCPA comment letter (April 9, 2024)
The Public Company Accounting Oversight Board (“PCAOB” or “Board”) proposed for public comment a new rule, along with amendments to an existing rule and form, related to its registration program.
Proposed new PCAOB Rule 2400, False or Misleading Statements Concerning PCAOB Registration and Oversight, would prohibit a registered public accounting firm and its associated persons from making false or misleading statements concerning the firm’s PCAOB registration status, including the extent of the PCAOB’s oversight of the firm, when marketing or otherwise holding out the firm to clients, potential clients, or the public.
Proposed new paragraph (h), Constructive Withdrawal Requests, of existing PCAOB Rule 2107, Withdrawal from Registration, would permit the Board, under specified conditions, to treat a firm’s failures both to file annual reports and to pay annual fees for at least two consecutive reporting years as a constructive request for leave to withdraw from registration and to deem the firm’s registration withdrawn.
View proposal | View TXCPA comment letter (April 9, 2024)
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FASB Disaggregation of Income Statement Expenses
FASB Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)
View proposal | View TXCPA comment letter (October 17, 2023)
- PCAOB Amendments - Designing and Performing Audit Procedures that Involve Technology-Assisted Analysis
- PCAOB Amendments - Auditing Standards related to a Company’s Noncompliance with Laws and Regulations
- FASB - Stock Compensation (Topic 718)
- AICPA Professional Ethics-Exposure Draft: Revised interpretations related to fees
- FASB Accounting of Crypto Assets
- PCAOB Proposed Auditing Standard – General Responsibilities of the Auditor in Conducting an Audit and Proposed Amendments to PCAOB Standards
- PCAOB No 28 Auditor's Use of Confirmation
- PCAOB - A Firm's System of Quality Control
- FASB Proposed ASU, Leases (Topic 842)- Common Control Arrangements
- FASB - Segment Reporting
- AICPA ASEC- Criteria for Quality Control Materials (QCM) Content
- PCAOB Interim Attestation Standards
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GASB Certain Risk Disclosures
View TXCPA comment letter | GASB Project No. 3-41 no longer available.
- PCAOB 2022-2026 Strategic Plan
- AICPA PEEC Exposure Draft – Proposed New and Revised Definitions and Interpretations: Compliance Audits
- AICPA ASB Exposure Draft, Proposed Statement on Auditing Standards – Amendment to AU-C Section 935
- FASB ED - Accounting for Government Grants by Business Entities - Potential Incorporation of IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, into GAAP
- AICPA ASB Proposed Statement on Auditing Standards, Amendments to AU-C Sections 725, 730, 930, 935, AND 940