Best Practices for Reporting Business-Related T&E Expenses

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, […]

Are You on Track to Meet the 2022 Deadline for the Updated Lease Standard?

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 nonprofit 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 […]

Follow Up on the Management Letter from Your Audit Team

Auditors typically deliver financial statements to calendar-year businesses in the spring. A useful tool that accompanies the annual report is the management letter. It may provide suggestions — based on industry best practices — on how to fortify internal control systems, streamline operations and reduce expenses. Managers generally appreciate the suggestions found in management letters. […]

Financial Statements: Take the Time to Read the Entire Story

A complete set of financial statements for your business contains three reports. Each serves a different purpose, but ultimately helps stakeholders — including managers, employees, investors and lenders — evaluate a company’s performance. Here’s an overview of each report and a critical question it answers. 1. Income Statement: Is the Company Growing and Profitable? The […]

Analytics Software: A Brave New World in Auditing

Analytical software tools will never fully replace auditors, but they can help auditors do their work more efficiently and effectively. Here’s an overview of how data analytics — such as outlier detection, regression analysis and semantic modeling — can enhance the audit process. Auditors Bring Experience and Professional Skepticism When it’s appropriate, instead of manually […]

Auditing WIP

Many types of businesses — such as homebuilders and manufacturers — turn raw materials into finished products for customers. Production is a continuous process. So, any work that’s been started but isn’t yet completed before the end of the accounting period is reported as work in progress (WIP) under U.S. Generally Accepted Accounting Principles (GAAP). […]

Follow the Cutoff Rules for Revenue and Expenses

Timing counts in financial reporting. Under the accrual method of accounting, the end of the accounting period serves as a strict “cutoff” for recognizing revenue and expenses. However, during the COVID-19 pandemic, managers may be tempted to show earnings or reduce losses. As a result, they may extend revenue cutoffs beyond the end of the […]

Accounting Methods: Private Companies Have Options

Businesses need financial information that’s accurate, relevant and timely. The Securities and Exchange Commission requires publicly traded companies to follow U.S. Generally Accepted Accounting Principles (GAAP), often considered the “gold standard” in financial reporting in the United States. But privately held companies can use simplified alternative accounting methods. What’s right for your business depends on […]

Accounting Estimates Present Challenges in Times of Uncertainty

In today’s unprecedented market conditions, it can be challenging to predict metrics that underlie your company’s accounting estimates. Examples of key “unknowns” include how much longer certain pandemic issues will continue, how federal stimulus spending will affect the economy over the long run, and the extent to which tax laws and environment regulations may change […]