The impact of hosting services on auditor’s independence

The AICPA Code of Professional Conduct provides guidance to CPAs and CPA firms related to the ability to perform non-attest services to attest (audit, review, and compilation) clients. Examples of non-attest services that practitioners, including us, provide are: Financial statement preparation Maintaining book and tax depreciation schedules Preparation of the company’s tax return Cash-to-accrual conversions …

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Importance of financial statement ratios

Monthly financial reports are a management way of obtaining a concise overview of the previous month’s financial wellbeing and performance. When reviewing these reports, there are common ratios that can give you insight into your company’s liquidity, financial leverage, and the overall efficiency of assets used, which can help when making future plans and decisions. One of …

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Funding capital to grow your business: debt vs equity

Generally, when your business requires outside financing, there are two different sources of funds, debt financing or equity financing. Both methods of financing can have a significant impact on your business and should be considered carefully. Debt Most of us are familiar with debt, whether you have had a credit card, taken out a student …

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FASB revenue recognition and lease accounting standard deferrals: You still have time!

Recently, the Financial Accounting Standards Board (FASB) voted to delay implementation of the new revenue recognition standards for nonpublic companies that have not yet issued their financial statements for calendar year 2019 and those with fiscal year ends ending after December 31, 2019. Leading up to this standard, the FASB proposed an optional extension of …

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Financial Accounting Standards Board issues guidance on how to account for a PPP loan

On June 9, 2020, the AICPA issued Technical Question and Answer (TQA) 3200.18 in conjunction with the Financial Accounting Standards Board (FASB) summarizing their responses relating to Paycheck Protection Program (PPP) loan accounting technical inquiries. PPP loans were made available through Congress’ passage of the Coronavirus Aid, Relief and Economic Security (CARES) Act in March …

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A basic understanding of the Three Market Cycles for Construction Companies

The COVID-19 pandemic has thrown a curveball that caused a unique environment in every industry. To most construction companies the pandemic had no significant effect on volume, however, most contractors are worried about what the future holds and believe that curveball is still making its way to the plate. While there are theories of how …

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Debt covenant impact on balance sheet classification

Quite often, debt with lending institutions will contain certain covenants within the agreement that your company must abide by. Included with these may be certain financial covenants that must be met. For example, your company may need to maintain a level of debt service coverage or a minimum level of net worth. When these are …

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Financial reporting considerations of COVID-19

While millions of businesses in the United States are grappling with the economic impact of COVID-19 and the uncertainly that lies ahead, there are potential items resulting from the pandemic that you need to consider as part of your financial reporting. You need to keep these in mind when reporting financial information to third parties. …

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Improving segregation of duties in a small organization

Internal controls should be designed to safeguard assets and help prevent or detect losses from employee dishonesty or error; the owner’s involvement in a small organization is important in maintaining good internal controls. One area of focus should be segregation of duties, which largely means having different people responsible for authorizing transactions or contracts, recording …

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It’s not all about the paycheck. Equity Compensation

Many companies look to other forms of compensation to reward employees outside of standard cash paid wages and salaries. One common form is equity compensation. Equity compensation is the practice of granting non-cash pay that represents partial ownership in a company in exchange for services. The purpose of equity compensation is to allow the company’s …

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