NAA2414. A&A Issues with Employee Retention Credits (ERC)

What do you need to know if a client used a “mill” to claim the employee retention credits (ERC)? What if the client already received the ERC refund? Should it be recognized as income or liability? This session will cover the accounting and auditing guidance for these situations. Many government assistance programs were created in response to the Covid-19 pandemic, and they often had requirements to qualify for the program and/or forgiveness. While all businesses would self-certify as to their compliance with qualifying for the program or the related forgiveness requirements, some entities have been in the press for not complying with the program requirements. Furthermore, the government agencies have the right to audit the compliance in many instances. This creates some interesting accounting and auding issues for the clients that were aggressively pursuing these programs.

Learning Objectives:

• Analyze the requirements in U.S. GAAP for recognition and disclosure of an entity’s involvement with government assistance programs.
• Evaluate the audit issues with assertions or positions taken in forgiveness applications related to government assistance programs.