Business

Are you thinking about merging with or acquiring a business? CPA-prepared financial statements can provide valuable insight into historical financial results. But an independent quality of earnings (QOE) report can be another valuable tool in the due diligence process. It looks beyond the quantitative information provided by the seller’s financial statements. These reports can help buyers who want more detailed information — and help justify [...]

Auditing standards require external auditors to consider potential fraud risks by watching out for conditions that provide the opportunity to commit fraud. Unfortunately, conditions during the COVID-19 pandemic may have increased your company’s fraud risks. For example, more employees may be working remotely than ever before. And some workers may be experiencing personal financial distress — due to reduced hours, decreased buying power or the [...]

On October 25, the Financial Accounting Standards Board (FASB) issued a simpler accounting option that will enable private companies to more easily measure certain types of shares they provide to both employees and nonemployees as part of compensation awards. Here are the details. Complex rules Many companies award stock options and other forms of share-based payments to workers to promote exceptional performance and reduce cash outflows [...]

Graphs, performance dashboards and other visual aids can help managers, investors and lenders digest complex financial information. Likewise, auditors also use visual aids during a financial statement audit to quickly identify trends and anomalies that warrant attention. Powerful tool Your auditor uses many tools and techniques to validate the accuracy and integrity of your company’s financial records. Data visualization — using a picture to show [...]

Interest in environmental, social and governance (ESG) matters has grown significantly during the COVID-19 pandemic. And that momentum may continue under the Biden administration. Currently, about 90% of large public companies voluntarily publish so-called “sustainability reports” that communicate performance on ESG matters, according to a recent report published by the Center for Audit Quality and the American Institute of Certified Public Accountants. However, the information [...]

With the COVID-19 pandemic well into its second year and the start of planning for the upcoming audit season, you may have questions about how to evaluate your company’s going concern status. While some industries appear to have rebounded from the worst of the economic downturn, others continue to struggle with pandemic-related issues, such as rising inflation, along with labor and supply shortages. For some [...]

The COVID-19 pandemic is still adversely affecting many businesses and not-for-profit organizations, but the effects vary, depending on the nature of operations and geographic location. Has your organization factored the effects of the pandemic into its financial statements? You might not have considered this question since last year if your organization prepares statements that comply with U.S. Generally Accepted Accounting Principles only at year end. [...]

Timely financial reporting is key to making informed business decisions. Managers need to know what’s in the pipeline to respond promptly and decisively. Unfortunately, it typically takes several weeks to prepare financial statements under U.S. Generally Accepted Accounting Principles (GAAP). And many companies only produce GAAP financials at the end of the quarter or year. In the meantime, managers may turn their attention to simple [...]

Timely financial data is key to making informed business decisions. Unfortunately, it’s common for managers to struggle with their companies’ accounting systems to get the information they need, when they need it. Often, it takes multiple, confusing steps to enter and extract data specific to customers and/or projects. Businesses and accounting software solutions evolve over time. So, what worked for your company years ago may [...]

Related-party transactions and financial connections are a normal part of operating a business. But these arrangements have gotten a bad rap because dishonest people sometimes use them to disguise poor performance or dishonest activities. So, identifying related parties and evaluating your interactions with them are important parts of the external audit process — especially in today’s volatile market conditions. Accounting definition In an accounting context, [...]

In the first half of 2021, there was a surge in financial restatements. The reason relates to guidance issued by the Securities and Exchange Commission, requiring special purpose acquisition companies (SPACs) to report warrants as liabilities. SPACs are shell corporations that are listed on a stock exchange with the purpose of acquiring a private company, thereby making it public without going through the traditional IPO [...]

Many companies have resumed some level of business-related travel and entertainment (T&E) activities — or they plan to do so this fall. Unfortunately, these expense categories may be susceptible to incomplete recordkeeping and even fraud. So, it’s important for companies to implement formal T&E policies to ensure reporting is detailed and legitimate. Substantiating expenses Traditionally, executives, salespeople and other workers who travel or entertain customers [...]

In the midst of mounting inflation, supply shortages, geopolitical turmoil, threats of cyberattacks and continuing COVID-19 concerns, public stock prices are expected to fluctuate in the coming months. This situation has unsettled shareholders and makes long-term strategic planning challenging. Now might be a good time to consider getting off the rollercoaster by taking your company out of the public eye. While public companies enjoy easier [...]

Updated accounting rules for long-term leases took effect in 2019 for public companies. Now, after several deferrals by the Financial Accounting Standards Board (FASB), private companies and private not-for-profit entities must follow suit, starting in fiscal year 2022. The updated guidance requires these organizations to report — for the first time — the full magnitude of their long-term lease obligations on the balance sheet. Here [...]