The Yellow Book Update and New Independence Standards

The Government Accountability Office (GAO) has recently updated the Government Auditing Standards this year.  Some of you may wonder, “How is this update going to affect me?”  Or, “What is my auditor going to be asking that I should be prepared for?”  Among the seven chapters and over 200 pages of information that you and …

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Compensated Absences

“Compensated absences” refers to employee absences for which employees will be paid, including vacation and sick leave.  Expenses are normally recognized during the period for which the employee provides services qualifying that employee for compensated absences.  If the employment policy specifically dictates, a liability is accrued for unused portion of such compensated absences. Liabilities are …

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Governmental Accounting Standards Board’s (GASB) Addition to the Financial Statement Elements and Implementation of GASB 65

GASB has added two elements to the original five financial statement elements.  GASB Statement No. 65 Items Previously Reported as Assets and Liabilities, issue guidance on using the new elements.  The two new elements are Deferred Outflows of Resources and Deferred Inflow of Resources.  GASB’s seven financial statement elements are defined as follows: Assets- resources …

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Government Cash Requirements

Recently, while working with a few of our smaller governmental clients, we had recognized a concern by those client regarding their requirements to collateralize and/or maintain deposit balances below the ever changing Federal Deposit Insurance Corporation limits (FDIC).  We realize how much those working in government finance are constantly bombarded with items in their day …

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ARS 41-725: Increasing Governmental Transparency

Over the past several years there has been a great demand to increase the transparency of governmental spending as citizens want to know how tax dollars are being spent. ARS 41-725 requires the state and local governments to provide taxpayers with exactly that kind of information. The statute requires the State of Arizona provide information …

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Don’t Forget about your Retainages

Most companies have a variety of projects going on every year.  One of the things that is negotiated early in the process of creating a contract for a project is if a retainage will be built into the terms.  A retainage refers to a portion of the payment that is withheld until the project is …

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Self-Fulfilling Going Concerns

In this heated political environment combined with one of the largest recessions in a century, it is no surprise to find that governments are slashing budgets and will no doubt continue to cut programs across the country.  Recently we were on an audit of an entity that relied heavily on government funding for its programs, …

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What is the Appropriate Level of Cash Reserves?

That is a question that the management of many governmental entities asks. Governmental entities also have another layer of complexity in determining appropriate levels of cash reserves due to the fact that there are many different funds within a governmental entity. For example, a governmental entity may have General, Special Revenue, Debt Service, Capital Improvement …

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Governments Get Special Treatment

Recently our audit team had been presented with an unusual circumstance regarding losses due to impairment of capital assets.  While performing research surrounding this situation I was reminded of the three different ways a governmental agency can present a loss due to impairment, one of which is different from that of a private entity. GASB …

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GASB 54, the Devil is in the Details

As most readers of this blog know by now, governmental entities are now required to adopt “Governmental Accounting Standards Board Statement 54 (GASB 54) Fund Balance Reporting and Governmental Fund Type Definitions” for their Comprehensive Annual Financial Reports (CAFR) for the year ending June 30, 2011.  We at Henry & Horne are well into our …

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