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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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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How to increase your 401(k) participation

Like most people who work in the accounting field, I am a stickler when it comes to spending. I am also a strong believer in the concept of living below your means and that saving early for retirement can go a long way. But I know that everyone is not like me. When I saw …

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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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Is your government entity secure from cyberattacks?

Unfortunately, it is becoming commonplace to hear news of a large organization whose data was hacked. But data breaches should not only be of concern for large organizations – small organizations are susceptible as well, including government entities. You can put a few practices in place to keep your organization and employees safe from data …

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What is a Multiple Employer Plan? Benefits, things to know

What is a Multiple Employer Plan? A multiple employer plan (MEP) is a type of employee benefit plan where several employers can participate. In certain instances, the employers participating in the plan can operate as one plan. What are the benefits? A significant reason why employers do not offer a benefit plan to their employees …

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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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Reviewing and implementing plan level controls

Many payroll companies and third-party administrators (“TPA”) ascertain Service Organization Controls (“SOC 1”) Reports on the Suitability of the Design and Operating Effectiveness of Controls. These reports summarize the opinion and results of the audit of internal controls in place at the service provider. In addition, these reports provide complementary user entity controls, which list …

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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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