Auditors preparing for their year-end audits are planning to dig deep into new accounting, but they will beat up on internal controls as well.
As calendar-year companies approach their year-end close, audit firms are prepping teams for the big issues they need to scrutinize closely in their 2018 year-end audits. “By far, the No. 1 thing we will consider as companies close their books is how they report under new accounting standards,” says Phillip Austin, a partner at audit firm BDO USA.
Revenue recognition is at the top of that list. Accounting Standards Codification Topic 606 took effect in January, giving companies a new, five-step method for determining when and in what amounts to recognize revenue in financial statements. Calendar-year companies have completed three quarterly filings, and now they’re facing their...