Category

Audit & Accounting

Audit & Accounting
December 11, 2018

Why revenue matters in an audit

For many companies, revenue is one of the largest financial statement accounts. It’s also highly susceptible to financial misstatement. When it comes to revenue, auditors customarily watch for fictitious transactions and premature recognition ploys. Here’s…
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Audit & Accounting
December 2, 2018

LIFO Lesson Learned

You have choices when it comes to reporting inventory costs. One popular technique — the last-in, first-out (LIFO) method — assumes that merchandise is sold in the reverse order it was acquired or produced. That…
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Audit & Accounting
October 26, 2018

Assessing the effectiveness of internal controls

Strong internal controls can help prevent and detect fraud. That’s why Section 404(a) of the Sarbanes-Oxley Act (SOX) requires a public company’s management to annually assess the effectiveness of internal controls over financial reporting. And…
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Audit & Accounting
October 24, 2018

Audit opinions: How your financial statements measure up

Audit opinions differ depending on the information available, financial viability, errors discovered during audit procedures and other limiting factors. The type of opinion your auditor issues tells stakeholders whether you’re in compliance with accounting rules…
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Audit & Accounting
September 18, 2018

Sustainability reports look beyond the numbers

In recent years, environmental, social and governance (ESG) issues have become a hot topic. Many companies voluntarily include so-called “sustainability disclosures” about these issues in their financial statements. But should the Securities and Exchange Commission…
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Audit & Accounting
September 7, 2018

How to trim the fat from your inventory

Inventory is expensive. So, it needs to be as lean as possible. Here are some smart ways to cut back inventory without compromising revenue and customer service. Objective inventory counts Effective inventory management starts with…
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Audit & Accounting
September 4, 2018

Beware of unexpected tax liabilities under new accounting and tax rules!

The Tax Cuts and Jobs Act (TCJA) contains a provision that ties revenue recognition for book purposes to income reporting for tax purposes, for tax years starting in 2018. This narrow section of the law…
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Audit & Accounting
August 30, 2018

Use pay-ratio disclosures with caution

Starting in 2018, certain public companies must disclose the ratio of their CEO’s annual compensation to that of its “median employee.” The rule allows for significant flexibility in calculating these ratios, leading to widely divergent…
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Audit & Accounting
August 29, 2018

Identifying and reporting critical audit matters

For over 40 years, the Securities and Exchange Commission (SEC) has required only a simple pass-fail statement in public companies’ audit reports. But the deadline for mandatory reporting of critical audit matters (CAMs) in audit…
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Audit & Accounting
August 21, 2018

Auditing the use of estimates and specialists

Complex accounting estimates — such as allowances for doubtful accounts, impairments of long-lived assets, and valuations of financial and nonfinancial assets — have been blamed for many high-profile accounting scams and financial restatements. Estimates generally…
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