CPAs Calculating the Latest in Audit + Accounting News

The importance of understanding your cash flow

Cash is King! That’s what we all learn in Accounting 101. And every business owner knows that cash is the heartbeat of the business. Profitable companies can go out of business because they do not have enough cash on hand to pay their debts. This makes it all the more important that you know exactly …

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How to account for subsequent events

Financial statements generally report on a company’s financial position for a specified period of time or reporting period. However, sometimes transactions will occur after the reporting period has ended and the point in time when the financial statements are ready to be issued. These transactions may influence a user of the financial statements opinion on …

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Year-end physical inventory count instructions

The year-end physical inventory count can be a daunting task for companies that have large amounts of inventory. Having a successful physical inventory count relies heavily on planning, emphasis and direction provided by management. There can be significant ramifications to an unsuccessful inventory count such as recounts of total inventory, material adjustments to accounting records, …

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The basics of preventing fraud in any business

Upon hearing the term “fraud,” companies like Enron and Worldcom typically come to mind. While it’s usually these large, complex cases that get the public’s attention, the truth is that numerous forms of fraud can run rampant in any type of organization. In fact, a study by the Association of Certified Fraud Examiners (ACFE) reported …

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New method of accounting for credit losses

A number of Accounting Standards Updates (“ASU”) will become effective in the next few years, and perhaps most notable among them are the new lease and revenue recognition standards. ASU 2016-13, which introduces ASC 326 to the codification, will also be impactful and is worth taking note of. While the new standard will not be …

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Does your company have a capitalization policy?

When undergoing an audit, one question the auditors may ask is “does the company have a fixed asset capitalization policy?” While having a written capitalization policy in place will make your auditor happy, it will also help simplify the accounting for fixed asset purchases. Establishing a capitalization policy helps keep the treatment of property additions, …

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Carrying value of inventory

A lot of times the cost at which a unit of inventory is being carried at is made up of more than just the cost of materials used to produce the actual item. It often includes other costs which are incurred to get the items in place and ready for sale. Some of these other …

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Asking the right questions about your WIP schedule

As an auditor of companies in the construction industry, I often ask clients about the performance of specific jobs in their contracts schedule, also known as a WIP schedule or Jobs schedule. The job inquiries are designed to uncover potential contract-related accounting issues that should be corrected for adequate and useful financial reporting. These questions …

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Financial tips for starting a business

You are disruptive. You are SoLoMo (or is that MoSoLo?). You are ready to take your market by storm. But have you laid the accounting and tax groundwork for future success? A few simple things upfront can pay big dividends later, or cause huge headaches if they aren’t done. Here are a few financial tips …

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Utilization of service organizations

Service organizations exist to assist companies of all sizes in performing certain tasks that the company is not capable of performing or would rather outsource to a third-party. Examples of service organizations include: Payroll providers 401(k) record-keepers IT backup and cloud services And more But do companies understand and review the controls within the service …

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