The Sarbanes-Oxley Act determines that the audit committee, rather than management or the full board of directors, is directly responsible for appointing, compensating, and overseeing external auditors. The responsibility of the audit committee means that it is smart to periodically assess their effectiveness using a self-evaluation.
Your income statement includes factors other than working capital that illustrate profit as well. Depreciation and amortization are non-cash expenses that are included on the statement. It is also significant that the income statement excludes fixed assets, bank financing and owner’s’ capital accounts; each factors that affect cash on hand.
A key hallmark of success in business is to perform better than last year, last quarter or last period. Metrics like increased revenue, profitability and decreased costs are essential metrics to every business regardless of industry.
What is the mark of a good peer review? Is it delivering a “Pass” without exceptions? Is it guaranteeing a conflict-free process for the firm? When we review fellow insurance CPA firms, neither of these play into our metrics for success. Rather, our goal is to help our colleagues resolve struggles they’re experiencing so they can perform higher-quality audits. And we take great pride in finding these solutions. We know our colleagues have a desire to perform top-notch audits, so instead of a quick fix, we always strive to find and help implement the permanent fixes that will serve them well into the future. We recently asked JLK Rosenberger partner James Dougherty, CPA, CGMA what he enjoys about performing peer reviews. He said, “I like to get to know the firm and their desire to do things correctly and know that we made a difference.”
One of the most crucial parts of payroll in a small company is remitting taxes on time. Often, when considering the importance of payroll, withholding comes to mind. Especially this year, as the IRS has released new tables under the Tax Cuts and Jobs Act. However, if taxes are not remitted to the federal government on schedule, harsh personal penalties can be incurred.
Now and then, CFOs and other executives present company information, like strategies, risks and operations, to the audit committee. Three key components will assist you in making the most effective presentation: thoroughly grasping the committee’s role; building relationships with committee members beforehand, and concentrating on the most pertinent information. Discover how.
Accountants can’t look into every transaction when running an audit or review so they appoint a “materiality” threshold instead. They apply this benchmark to gain reasonable assurance in an audit — or limited assurance in a review — of uncovering misstatements that might be big enough, individually or collectively, to be material to the financial statements.
For-profit companies, as evidenced by the name, have one primary goal — to maximize profits for their owners. Conversely, nonprofits are typically motivated by a charitable purpose. Read on to see how their corresponding financial statements reflect this difference.
Statement of Cash Flows was revised to adopt ASU 2016-18 to reduce the difference between statutory and US GAAP on cash flow classifications. In the revision, restricted cash and cash equivalents are no longer reported as cash flows from operating, investing or financing buckets. Instead, they are included in the beginning and ending balances of the cash flow statements.
The amounts reported on a company’s financial statements are meaningless without a relevant basis of comparison. Assessing certain financial ratios and comparing them to the same results over time and against those of competitors can be an invaluable tool. Consider … Continued