/Audit & Accounting

3 financial statements you should know

By | April 7th, 2017|Audit & Accounting|

Successful business people have a solid understanding of the three financial statements prepared under U.S. Generally Accepted Accounting Principles (GAAP). A complete set of financial statements helps stakeholders — including managers, investors and lenders — evaluate a company’s financial condition and results. Here’s an overview of each report. 1. Income statement The income statement (also [...]

3 steps to ensure a smooth external audit

By | January 30th, 2017|Audit & Accounting|

If your company issues audited financial statements and follows a calendar year end, these steps are a part of your external auditing procedures. Once the engagement letter is signed, the process begins with preliminary financial statements and possible year-end physical inventory counts. However, audits can be complicated, so taking time to additionally streamline audit fieldwork [...]

One Key Step in Your Audit

By | December 14th, 2016|Audit & Accounting|

When performing an audit, CPAs send confirmation letters to outside parties typically via the U.S. Postal Service (and often through email) in accordance with Interim Auditing Standard AU Section 330, The Confirmation Process. Confirmation responses may be used to verify account balances, as well as unusual contractual terms and transactions. But the use of confirmations sometimes [...]

Reporting contingent liabilities

By | November 14th, 2016|Audit & Accounting|

Deciding whether to disclose pending litigation, a government investigation or another contingent liability is a highly sensitive matter, especially for public companies. Investors and other stakeholders want information about impending risks that may affect your company’s future performance. But you want to avoid alarming investors with losses that are unlikely to occur or disclosing your [...]

Accounting for “hard” assets

By | October 27th, 2016|Audit & Accounting|

How much do you really know about accounting for property, plant and equipment? U.S. Generally Accepted Accounting Principles (GAAP) permits some leeway when deciding whether to capitalize or expense a fixed asset purchase, as well as in choosing depreciation methods and useful lives. Such leeway is part of the reason many business owners are uncertain [...]

Is your company ready for ASU No. 2014-09?

By | October 11th, 2016|Audit & Accounting|

A landmark financial reporting update is replacing about 180 pieces of industry-specific revenue accounting guidance with a single, principles-based approach. In May 2014, the Financial Accounting Standards Board (FASB) unveiled Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. In 2015, the FASB postponed the effective date for the new revenue guidance by [...]

“Professional skepticism”: A necessary exercise for your auditor

By | October 3rd, 2016|Audit & Accounting|

CPA stands for Certified Public Accountant. Although the company pays their fees, public company auditors work for the audit committee and the public in general, not management. This “public watchdog” role demands that auditors exercise professional skepticism throughout the audit process. This role helps explain why auditors want concrete, third-party evidence to verify management’s assertions. [...]

Fair Value Reporting: What it means to the FASB and you

By | September 23rd, 2016|Audit & Accounting|

In 2002, the Financial Accounting Standards Board (FASB), as part of its move toward international financial reporting convergence, began to transition from the principle of historic cost to fair value reporting. Fair value estimates are now used to report such assets as derivatives, nonpublic entity securities, certain long-lived assets, and acquired goodwill and other intangibles. [...]

Sorting through the “Levels of Assurance” in Financial Reporting

By | September 13th, 2016|Audit & Accounting|

How confident (or assured) are you that your financial reports are reliable, timely and relevant? In order of increasing level of rigor, accountants generally offer three types of assurance services: compilations, reviews and audits. What’s appropriate for your company depends on the needs of creditors or investors, as well as the size, complexity and risk [...]

Fraudsters Target Accounts Receivable

By | August 11th, 2016|Audit & Accounting|

More than half of financial statement frauds involve sales and accounts receivable, according to the Committee of Sponsoring Organizations of the Treadway Commission. (COSO is a joint initiative of five private sector organizations that develops frameworks and guidance on enterprise risk management, internal control and fraud deterrence.) But why do fraudsters tend to target accounts [...]

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