Accounting and Audit Briefs

  Assessing fraud risks is an integral part of the auditing process. Statement on Auditing Standards (SAS) No. 99, Consideration of Fraud in a Financial Statement Audit, requires auditors to consider potential fraud risks before and during the information-gathering process. Business owners and managers may find it helpful to understand how this process works —…

  U.S. public companies are required to report their financial results using U.S. Generally Accepted Accounting Principles (GAAP). But, since 2007, hundreds of foreign companies listed on U.S. stock markets have been able to report financial results using International Financial Reporting Standards (IFRS) instead of GAAP. The Securities and Exchange Commission (SEC) is currently considering…

  What’s the most costly type of white collar crime? On average, a company is likely to lose more money from a scheme in which the financial statements are falsified or manipulated than from any other type of occupational fraud incident. The costs frequently include more than just the loss of assets — victimized companies…

Financial statements are generally prepared under the assumption that the business will remain a “going concern.” That is, it’s expected to continue to generate a positive return on its assets and meet its obligations in the ordinary course of business. But sometimes conditions put that assumption into question. Recently, the responsibility for making going concern…

An agreed upon procedures (AUP) engagement uses procedures similar to an audit, but on a smaller and limited scale. Here’s how a customized AUP engagement differs from an audit and can be used to identify specific problems that require immediate action. How do AUPs compare to audits? The American Institute of Certified Public Accountants (AICPA)…

  Businesses generally issue year-end financial statements to let investors and lenders evaluate their financial health. But proactive stakeholders — including the company’s CEO and board of directors — may want more than one “snapshot” per year of financial results. Interim statements let stakeholders know how a company is doing each quarter or month, but…

  In January, the Financial Accounting Standards Board (FASB) issued updated guidance to simplify goodwill impairment testing for public companies and private companies that haven’t taken advantage of the simplified reporting option for goodwill. Here are the details. The basics Goodwill shows up on a company’s balance sheet when it buys another business at a…

  If your business issues audited financial statements and follows a calendar year end, your external auditing procedures have already begun. At a minimum, you’ve signed an engagement letter, sent over preliminary financial statements and allowed your CPA to observe any year end physical inventory counts. But there are some steps you can still take…