Management Letters: Follow Up On Your Auditor’s Recommendations

Maintaining the status quo in today’s volatile marketplace can be risky. To succeed, businesses need to “level up” by being proactive and adaptable. But some managers may be unsure where to start or they’re simply out of new ideas. Fortunately, when audited financial statements are delivered, they’re accompanied by a management letter that suggests ways […]

FAQS About Fair Value In Accounting

In recent years, accounting rule makers have issued guidance that requires certain items on the balance sheet to be reported at “fair value.” Here are some answers to frequently asked questions about this standard of value and how it’s measured. What is fair value? Under U.S. Generally Accepted Accounting Principles (GAAP), fair value is “the […]

Timing Counts: Reporting Subsequent Events

Major events or transactions — such as a natural disaster, a cyberattack, a regulatory change or the loss of a large business contract — may happen after the reporting period ends but before financial statements are finalized. The decision of whether to report these so-called “subsequent events” is one of the gray areas in financial […]

Audit Disclosures: Why The Fine Print Is Important

Footnotes appear at the end of a company’s audited financial statements. These disclosures provide insight into account balances, accounting practices and potential risk factors — knowledge that’s vital to making well-informed lending and investing decisions. Here are examples of key risk factors that you might unearth by reading between the lines in a company’s footnotes. […]

Nonprofit Observer Spring Newsletter

Here’s a brief glance at what you’ll find in the Spring issue… 4 tips for rebuilding your operating reserves The COVID-19 pandemic has driven home many lessons for nonprofits, perhaps none so much as the importance of operating reserves. This article provides some steps nonprofits with dramatically depleted — or nonexistent — reserves can take […]

Changes Are Coming To Your Auditor’s Report

The American Institute of Certified Public Accountants (AICPA) Auditing Standards Board’s latest standards are kicking in, and many nonprofits will notice resulting changes to the format and content of auditor reports on their organizations’ financial statements. The updates are intended to make auditor reports more meaningful and transparent for the users of financial statements, including […]

4 Levels Of Audit Opinions

The first page of audited financial statements is the auditor’s report. This is an important part of the financials that shouldn’t be overlooked. It contains the audit opinion, which indicates whether the financial statements are fairly presented in all material respects, compliant with Generally Accepted Accounting Principles (GAAP) and free from material misstatement. In general, […]

Preparations Vs. Compilations

Your business needs financial statements so management can monitor performance, attract investment capital and borrow money from a bank or other lender. But not all financial statements are created equal. Audited statements are considered the “gold standard” in financial reporting. While public companies are required to issue audited statements, smaller, privately held organizations have options. […]

Reporting and Managing Inventory

Ineffective inventory management and reporting can result in bloated working capital and impaired business profits. In industries that rely on overseas suppliers, best practices for managing inventory may have recently changed. In today’s uncertain marketplace, it’s clearly a good idea to review your current approach and make adjustments as needed. What’s the right reporting method? […]

How To Assess Fraud Risks Today

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 […]