Audit and Assurance

Tax reform legislation might be enacted before year end. If it is, companies following U.S. Generally Accepted Accounting Principles (GAAP) will have to recognize the effects of the changes in 2017 — not when the changes go into effect in 2018 and beyond. Here’s what calendar-year businesses need to know as they report their year-end…

Most companies prepare financial statements on a monthly or quarterly basis. Unfortunately, it usually takes between two and six weeks for management to finalize reports that comply with U.S. Generally Accepted Accounting Principles (GAAP). The process takes even longer if an outside accountant reviews or audits your financial statements. Decision-making based solely on this stale…

Under U.S. Generally Accepted Accounting Principles (GAAP), there are strict rules on when to recognize revenues and expenses. Here’s important information about end of period accounting “cutoffs” as companies start to adopt the new revenue recognition standard. Cutoff rules The end of the period serves as a “cutoff” for recognizing revenue and expenses. However, some…

For years, private companies and their stakeholders have complained that the Financial Accounting Standards Board (FASB) catered too much to large, public companies and ignored the needs of smaller, privately held organizations that have less complex financial reporting issues. In other words, they’ve said that U.S. Generally Accepted Accounting Principles (GAAP) are too complicated for…

Do you know how to categorize items on your statement of cash flows? Accounting Standards Update (ASU) No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, attempts to minimize diversity in cash flow reporting practices. 8 issues Accounting Standards Codification Topic 230, Statement of Cash Flows, provides guidance…

The American Institute of Certified Public Accountants (AICPA) has clarified its guidance on pro forma compilations. Here’s an explanation of when the new Statement on Standards for Accounting and Review Services (SSARS) applies and what your CPA now expects from you when performing these nontraditional attestation services. What does this mean? SSARS 22 applies when…

By midyear, most businesses that follow U.S. Generally Accepted Accounting Principles (GAAP) have issued their year-end financial statements. But how many have actually used them to improve their business operations in the future? Producing financial statements is more than a matter of compliance — owners and managers can use them to analyze performance and find…

Think the rules for reporting employee stock options and restricted stock are too complicated? The Financial Accounting Standards Board (FASB) agrees — and it has simplified the rules starting in 2017 for public companies and 2018 for private companies. Here’s how: Old rules Under current U.S. Generally Accepted Accounting Principles (GAAP), for each share-based payment,…

When companies reissue prior financial statements, it raises a red flag to investors and lenders. But not all restatements are bad news. Some result from an honest mistake or misinterpretation of an accounting standard, rather than from incompetence or fraud. Here’s a closer look at restatements and how external auditors can help a company’s management…