Four Ways to Improve the Effectiveness of Your Audit Committee

Audit committees face many challenges in 2021. As the economy rebounds from the COVID-19 pandemic, there are new dimensions to the oversight roles and responsibilities of the audit committees. Consider taking these following four steps to fortify your committee’s effectiveness. 1. Focus on fundamentals Once you’ve wrapped up the financial reporting process for fiscal year […]

PPP Application Deadline Extended

President Biden has signed the PPP Extension Act of 2021. The new law extends the Paycheck Protection Program (PPP) application filing deadline from March 31, 2021, to May 31, 2021, thus providing potential PPP borrowers additional time to submit their applications. The law doesn’t provide the PPP with any additional funding. However, $7.25 billion in […]

Making Sense of Your Statement of Cash Flows

The statement of cash flows essentially tells you about cash entering and leaving a business. It’s arguably the most misunderstood and underappreciated part of a company’s annual report. After all, a business that reports positive net income on its income statements sometimes doesn’t have enough cash in the bank to pay its bills. Reviewing the […]

Make the Most of the Employee Retention Credit

The Employee Retention Credit (ERC), which was created to encourage employers to keep their workforces intact during the COVID-19 pandemic, has been with us for a year. But questions about it remain for many employers. With the new American Rescue Plan Act (ARPA) extending the credit and expanding eligibility — and the credit worth as […]

How to Compute Your Company’s Breakeven Point

Breakeven analysis can be useful when investing in new equipment, launching a new product or analyzing the effects of a cost reduction plan. During the COVID-19 pandemic, however, many struggling companies are using it to evaluate how much longer they can afford to keep their doors open. Fixed vs. Variable Costs Breakeven can be explained […]

Analytical Procedures May Make Your Audit More Efficient

The use of audit analytics can help during the planning and review stages of the audit. But analytics can have an even bigger impact when these procedures are used to supplement substantive testing during fieldwork. Definition of “Analytics” Auditors use analytical procedures to evaluate financial information by assessing relationships among financial and nonfinancial data. Examples […]

IRS Issues Additional Guidance on the Employee Retention Credit

On March 1, 2021, the IRS issued Notice 2021-20 to provide additional guidance on the employee retention credit (ERC) as it applies to qualified wages paid after March 12, 2020 and before January 1, 2021. Future guidance is expected to be issued as it relates to qualified wages paid after January 1, 2021. The Notice […]

Reporting Restricted Cash

Your company’s financial statements should be transparent about any restrictions on cash. Are your reporting practices in compliance with the current accounting guidance? The Basics Restricted cash is a separate category of “cash and cash equivalents” that isn’t available for general business operations or investments. There are many types of restricted cash. For example, companies […]