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Audit America

Three accounting alternatives for private companies
To provide for accounting alternatives that certain private company reporting entities can use, the Financial Accounting Standards Board (FASB) has amended the Accounting Standards Codification. The FASB issued three Accounting Standards Updates in consensus with the Private Company Council. Specifically, the three updates provide alternatives within generally accepted accounting principles. (8/15/2014)

Three easy fixes to help reduce fraud
Job rotation and mandatory vacations, rewards for whistleblowers and surprise audits are the three least used anti-fraud controls by organizations that have been victims of employee theft. Less than one-third of organizations employ these methods to deter fraud. (8/15/2014)

Financial statement and compliance audits: What's the difference?
You're required to have an audit of your financial statements, and you have a contract or grant agreement that requires a compliance audit. What is the difference between these audits, and can they be done together? It depends on who is requiring the audits. (7/15/2014)

Alternatives reduce private company cost of standards compliance
Two accounting alternatives within U.S. generally accepted accounting principles, issued by the Financial Accounting Standards Board on Jan. 16, 2014, should reduce the cost and complexity of complying with accounting standards for many private companies. They were issued through Accounting Standards Update (ASU) 2014-02, Accounting for Goodwill, and ASU 2014-03, Accounting for Certain Receivable-Variable, Pay-Fixed Interest Rate Swaps - Simplified Hedge Accounting Approach. (6/6/2014)

Materiality? It's what matters
The concept of materiality is at the core of financial statement audits and independent auditors' reports. The topic is critical to the entire financial oversight and reporting function and is likely one of the most challenging to understand. (6/6/2014)

Don't wait too late to see the red flags of fraud
There are definite red flags of fraudulent behavior. Unfortunately, it is often after the crime has been committed that these warning signs become apparent. (6/6/2014)

Definition of 'public business entity' brings much-needed clarity
Currently, multiple definitions of "public entity" and "nonpublic entity" exist in the Financial Accounting Standards Board Accounting Standards Codification, and the inconsistency in the accounting literature has resulted in some confusion for financial statement preparers. On Dec. 23, 2013, the FASB issued a definition of the term "public business entity." Adding and defining the term was deemed necessary to enable the FASB to determine clearly which entities would qualify for private company accounting alternatives within U.S. generally accepted accounting principles going forward. (4/8/2014)

Audit coming? How to prepare
If your organization is facing an audit, it's important to be well prepared before the auditors arrive. Dedicating the necessary time and resources to prepare your company for the audit is a good investment. A financial audit is an important process for communicating a company's credibility. (4/8/2014)

Check tampering: One of most expensive employee frauds
Check tampering - a scheme in which an employee steals company funds by intercepting, forging or altering a check drawn on one of the organization's bank accounts - is one of the most frequently committed crimes in American companies. (4/8/2014)

Accounting for the formation of joint ventures
Almost all of the existing accounting literature focuses on how the parties to a joint venture known as venturers should account for their interests in a joint venture, rather than focusing on the accounting by the joint venture itself in its own separate financial statements. A question often arises about how the joint venture should recognize and measure noncash assets received from the venturers at formation of the joint venture. (2/3/2014)

Company tax returns can yield valuable information
Boards of directors and audit committees can find a wealth of information in income tax returns. For example, information obtained can assist in the process of conducting essential due diligence, provide information needed to determine whether a company could be subject to litigation, or divulge numbers helpful in a valuation. (2/3/2014)

Fraud-busting strategies: Accounts payable and disbursements fraud
Notorious bank robber Willie Sutton was once asked, "Why do you rob banks?" Legend has it that Sutton's response was, "Because that's where the money is." Not unlike banks, the accounts payable and cash payments process within any business is "where the money is." This is probably why accounts payable fraud, sometimes called vendor fraud, is one of the most common ways white-collar criminals exploit their employer's resources. (2/3/2014)

Consolidated and combined statements: A look at some practice issues
Certain business arrangements lead financial statement preparers to question whether consolidated financial statements are required, combined financial statements are needed, or separate financial statements of affiliated entities should be prepared. The authoritative accounting technical literature guidance that is applicable in preparing consolidated or combined financial statements is in the FASB Accounting Standards Codification (FASB ASC) Topic 810, Consolidation. The focus of discussions in these materials is on some of the more frequently asked questions. (11/25/2013)

Nipping fraud in the bud: Understanding it is key to stopping it
There is a common phrase heard over and over again: "To catch a crook, get inside the mind of a crook." Make it your mission to know their method of operation - or modus operandi. It is the "how" and "why" of what criminals do best. (11/25/2013)

Chance of IRS audit increases with income level
Just what are your chances of having your income tax return audited by the IRS? It depends on how much money you make. The average odds are approximately 1 in 100. In the latest figures released by the IRS, for tax year 2011, more than 1.4 million taxpayers were audited of 143 million tax returns filed. (11/25/2013)

Those performing review engagements face challenges
Sometimes it's obvious that practitioners face greater challenges in complying with review engagement technical literature than when complying with compilation and audit engagement technical literature requirements. (10/4/2013)

Safeguarding against expense reimbursement fraud
A close examination of employee and contractor expense reports may save more than just money. Your organization's reputation could be at risk. Plenty of public and governmental entities have been exposed in the media for lavish entertainment practices by their employees. Knowing what to look for can help you spot problems before your crisis response team is needed. (10/4/2013)

A decade later: Executives say Sarbanes-Oxley has improved fraud controls
After more than a decade of Sarbanes-Oxley governance, the increased oversight of corporate financial management is paying off when it comes to fraud controls. And, while organizations pay a bit more every year to comply, the costs are manageable, according to the 2013 Sarbanes-Oxley Compliance Survey by the Protiviti consulting firm. (10/4/2013)

 

 

 

In The News

UPDATE: 2011 Social Security Rates
For 2011 only, the new act reduces the Social Security tax on employees, which will result in a higher take-home pay. For details, read bottom of page 6 in our 2010 Tax Relief Act.
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2010 Tax Relief Act
After months of political inaction, countless hours of debate, threats, cajoling and a special post-election Congressional session, the Senate and the House of Representatives have approved, and the President has signed, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.
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