CPA Advocate

CPA Advocate, Summer 2014

by MICPA | Aug 26, 2014   ()

Definition of Attest

Recently the Uniform Accountancy Act (UAA), which is model statute and regulations for accountancy set jointly by the AICPA and NASBA, was amended with an expanded definition of “attest”. The expanded definition would include any engagement to be performed in accordance with the statements on standards for attestation engagements (SSAE). By expanding the definition in Michigan, the client or recipient of such a report is able to differentiate the work done by a CPA in accordance with SSAE, versus other work not performed by a CPA. Currently there are multiple professions which could perform services citing particular SSAE standards. The MICPA is actively considering legislative action on a similar revision to Michigan law.

Michigan Department of Treasury - Legislative Efforts Continue

The legislature continues to do what it can to help improve the “customer-centric” nature of the Treasury Department. Since the last edition of the CPA Advocate, the following items became law:

• Public Acts 108 and 109 of 2014 prohibit the use of indirect audit procedures. This was a major concern of taxpayers as this procedure often resulted in overstated estimates of taxes owed. The practice is now prohibited from use by Treasury auditors.

• Public Act 35 of 2014 requires the Treasury Department to provide all audit work papers to the taxpayer upon request. This is in response to taxpayer and tax preparer concerns that information used in arriving at a tax amount owed was not being shared with the taxpayer.

Completed: CIT Technical Corrections (Public Acts 13, 14, 15, 16 of 2014)

Based largely on the issues addressed through previously enacted MBT legislation, the MICPA State & Local Tax Task Force worked to develop a series of needed technical corrections and ambiguity clarifications within the new Corporate Income Tax (CIT). Language developed to address these seven issues was introduced in the House of Representatives in the form of a four bill package in late September of 2013. All four measures were approved by Governor Snyder earlier in 2014.

MBT Reform Moves Along

In the MICPA’s ongoing work to correct the Michigan Business Tax (MBT), 17 issues were identified, mostly ambiguities and unintended consequences. Through previous legislative initiatives, all but 7 of the issues have been successfully addressed. Some of the remaining issues, addressing COD Income, ITC Recapture and Renaissance Zones, are rolled into Senate Bill 156. Senate Bill 156 passed the full senate 26 to 11 and the bill has since been referred to second reading in the State House of Representatives, awaiting its final step before going to the Governor. Be on the lookout for updates via “Advocacy Alerts” sent to your email. Since passage of this legislation is not a forgone conclusion, contacting your State Representative would go a long way to ensure passage of this complex legislation. If these MBT issues are of concern to you or your clients, contact the Government Relations Department at 248.267.3686 to see how you can get in contact with your State Representative.

Acceleration of School Audit Deadlines

The Governor’s office has proposed accelerating the current November 15th audit report deadline for school districts to October 15th (all school districts have June 30th year-ends). This proposal is intended to improve the early warning system for financially troubled school districts. School district audit firms, while sympathetic to the intent, question the proposal’s potential to provide a useful warning as intended. Alternatively, auditors recommend alternative proposals for consideration, including budget and enrollment-based triggers, which would provide the needed early warning system. With the direction of interested firms, the MICPA will be developing a model early warning system that expert auditors believe would create a true early warning system.

Opposition to Limiting the Use of Cash Basis Method of Accounting

There have been recent proposals on the federal level that would limit the use of cash basis accounting method and the AICPA has reached out to the MICPA asking for our help communicating the concerns of CPA firms with the Michigan Congressional Delegation. The MICPA reached out to the Michigan Congressional Delegation regarding this issue and has received positive responses in opposition of any form of legislation that limits the use of cash basis accounting method. The MICPA will continue its communication with the AICPA and offer our assistance wherever possible.

Primary in the Books, On to the General Elections

Through a heavily contested primary, the MICPA is very pleased by the prospect of another CPA legislator in Chris Afendoulis (R - Grand Rapids Twp.). Chris is a former auditor with PWC and runs the family business. The MICPA PAC was very supportive of Chris knowing the type of community leader and MICPA member he is. Chris now will head to the general election in a district with a historically 64% Republican base. Barring any surprises, Chris is likely to be our next CPA legislator. At the congressional level, though he put forth an impressive effort, garnering 40 percent of the vote in the Republican primary, term limited State Representative Tom McMillin was unsuccessful in his bid for federal office. Our other CPAs, Governor Rick Snyder and State Representatives Paul Clemente (D - Lincoln Park), Earl Poleski (R - Jackson), and Martin Howrylak (R - Troy) did not have opponents in the primary election, so their seats, along with every other Michigan lawmaker, will be up for re-election in the November 4th general election.

Source: MICPA
Source: MICPA