Video overview of SSARS 21
The AICPA has a great five-minute video providing an intro to SSARS 21.
Check out:
Can’t go into much detail in five minutes, but it is a superb place to get started.
Video overview of SSARS 21 Read More »
Sample compilation report under SSARS 21
Update: If you are checking out the requirements for compilation reports, you might benefit from buying a Primer on Compilation and Preparation engagements under SSARS #21. Book is written by my friend, Charles Hall, CPA. For Wednesday 12/2 the price is a mere $0.99.
Here is the new compilation report that will be used when SSARS 21 goes into effect.
I will provide three examples. First, the illustrative standard report. Second, modification of the standard report for a sole practitioner. Third, modification for a non-profit organization.
Copy and paste at your own risk.
Illustrative standard report …
Sample compilation report under SSARS 21 Read More »
Frauds are a cancer destroying capitalism
My previous post described a comment by Sam Antar during his CPE session that the fines arising from of a long list of financial fiascos are essentially a tax on illegal behavior.
He made another comment in that session that I wanted to describe in detail. He said these frauds are a cancer destroying capitalism.
I had opportunity to visit with him a few weeks ago and asked him to expand on this idea. I will summarize what we discussed.
Cancer destroying capitalism
He indicated the foundation of capitalism is reliability of financial information. If you can trust financial information you read then we can do business with each other.
He says the extent of frauds we have seen are leading people to lose faith in financial information. That leads to losing faith in their counterparties. Therefore people have less trust. In financial terms that means the risk premiums for transactions go up. The interest rate built into a transaction increases and the return drops.
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Frauds are a cancer destroying capitalism Read More »
Flash update on SSARS #21
The new statement that overhauls the SSARS body of knowledge and opens up a new service called preparation was released on October 23, 2014.
Update – See also:
- Effective date of SSARS #21 and ideas on how to use the early implementation option
- Newly approved SSARS will allow a new service, ‘preparation’. Will also require written & signed engagement letters.
- Sample compilation report under SSARS 21
- Sample accountant’s review report for SSARS 21
- New risk alerts for 2014/2015 are available
- Video overview of SSARS 21
From the 30,000 foot level, here are just a few changes:
Flash update on SSARS #21 Read More »
Huge fines are a tax on illegal behavior
Several weeks ago I listened to a continuing education class presented by Sam Antar, current felon and formerly CFO of Crazy Eddie.
In the session, he made two comments that caught my ear. First, the fines we read about as a result of various financial scandals are just a tax on illegal behavior. Second, those fiascos are, he said, a cancer destroying capitalism.
After the session, I had opportunity to interview him by phone and follow-up on both of those ideas.
Fines are a tax on illegal behavior
He indicated that essentially no one has been implicated in any of the disasters we’ve read about, which I have discussed extensively on my blog.
He said corporations don’t commit crimes. People commit crimes.
And the people who committed crimes aren’t going to jail.
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Huge fines are a tax on illegal behavior Read More »
SSARS #21 to be released today (10-23) – 2 hour AICPA webcast to describe changes
SSARS #21 is an overhaul of the entire body of SSARS. It will be released today. I’ll have lots of discussion of the document over the next few weeks.
The AICPA is presenting a 2 hour CPE webcast today at 2 Eastern Time. Cost is $99 for one attendee, with discounts for multiple people.
Check out Understanding the SSARS 21 Clarification and Revision.
Great course to listen to if you aren’t going to be at the always superb CalCPA A&A conference.
Update – See also:
SSARS #21 to be released today (10-23) – 2 hour AICPA webcast to describe changes Read More »
Time to renew your PTIN
If you prepare tax turns you already know you must have a PTIN and must renew it every year. The IRS days you can file your renewal now.
Fee is $63.00 for a renewal.
Check out PTIN Renewal Season Open.
Time to renew your PTIN Read More »
Warning to bankers that too-big-to-manage might mean too-big-to-exist
Federal Reserve officials gave too-big-to-fail bank leaders a warning at a private lunch that they need to improve the risk management and ethical behavior inside the banks. The alternative put on the table is a suggestion that if they are too large to manage then they may need to be broken up into smaller banks that can be managed.
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Warning to bankers that too-big-to-manage might mean too-big-to-existRead More »
Warning to bankers that too-big-to-manage might mean too-big-to-exist Read More »
SSARS 21 will be issued 10/23; will allow “preparation” and revise comp & review standards
The rewrite of SSARS into clarified format will be issued this week, Thursday, October 23.
Here is a one sentence summary: The new document will completely rewrite the SSARS literature, will add a new service called “preparation”, and will add new requirements for comps & reviews.
For a bit more information, check out AICPA Modernizes Non-Audit Standards for Accountants in Public Practice.
FASB is starting to write a major overhaul of NPO accounting
One discussion inside the accounting rule maker deals with a massive restructure of the accounting for nonprofit organizations. The FASB staff have started drafting the changes.
Exposure draft might be released in early 2015. Adjust the estimate by a few months to allow for the complexity of a rewrite that affects such a wide variety of organizations and I’ll guess we may see an exposure draft in spring or summer 2015.
Thomson Reuters Tax & Accounting News reports Not-for-Profit Proposal Targeted for 2015 Release.
If you are involved in the finance or accounting areas of the NPO world, it might be worth keeping your eye out for this issue.
FASB is starting to write a major overhaul of NPO accounting Read More »
Starting template to develop a Quality Control document for CPA firm. It’s even legit to copy & paste.
The AICPA has provided a number of new documents to help firms improve the quality control systems and to start looking at the enhancing audit quality initiative. I’ll list a few of them. It’s easy to copy & paste and at a great price.
Tools to develop a quality-control document
Every CPA firm performing assurance services is required to have a quality-control document. That applies even if you only do comps and reviews. Even if you aren’t going through a system review.
The AICPA has free practice tools to explain the QC standards along with a sample document based on the size of the firm.
You can find the documents on this page.
You can also find a document that is geared to the size of a firm: …
Update for accountants – posts from CPA-Scribo
While I’ve been getting a book into print and writing some CPE classes during the last few months, Charles Hall has posted a bunch of great articles of interest to CPAs. Haven’t mentioned any of them yet. Here’s a few that I think would be most helpful for you.
- Audit Lessons from a Brain Tumor – His successful battle with brain cancer gave lessons learned that can be applied anywhere, even the middle of an audit. Great story.
- Evernote for CPAs – Great tool for accumulating your own personal library of resource articles. I use it all the time.
- Preparation of Financial Statements and Independence – You will be hearing a lot more about SKE – skills, knowledge, and experience
Here’s some more posts that would well be worth your time.
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Update for accountants – posts from CPA-Scribo Read More »
Is the cost of reducing fraud risk greater than the loss from a fraud incident?
I recently had the opportunity to visit with Sam Antar, convicted felon and former CFO of Crazy Eddie. This is cross-posted from my other blog, Nonprofit Update.
During our interview, Mr. Antar suggested a reason why businesses don’t put enough effort into fraud prevention and detection. He said the cost of deterring fraud may be more expensive than the consequences of fraud. Before I refine the concept, look at some costs he mentioned:
- In the corporate world, particularly companies that have grown for a while, there needs to be a lot of systems put in place to deter and mitigate fraud risk.
- There needs to be an audit committee and they need to have resources available to them. Translate that to they have authority to hire legal and accounting experts. They need training personally. This is expensive.
- The audit committee, consisting of skilled and knowledgeable people, must have a direct line of contact to the Board of Directors. That is expensive in terms of time.
- The Board of Directors has to have a substantial amount of financial skills. That is expensive in terms of time and dollars for training and dollars for their access to expert resources.
- At some point in the growth curve, there needs to be a robust, skilled internal audit department. That could get quite expensive, if you look at it only in terms of cash outflows.
I would add to that the time involved to implement quality controls, policies, and procedures. Those will take a lot of time for the finance & accounting team. In turn, those procedures will take time for operational staff to follow. All of that translates into more staff.
That can get costly fast.
What is the cost of a fraud incident
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Is the cost of reducing fraud risk greater than the loss from a fraud incident?Read More »
Is the cost of reducing fraud risk greater than the loss from a fraud incident? Read More »
“Top 10 questions that Ministers, Missionaries, and Church Treasurers Ask Tax Preparers”
Following discussion is cross-posted from my other blog, Nonprofit Update. This may be helpful for CPAs serving the NPO community. You can point your clients to the linked article as a way to address common basic questions.
Corey Pfaffe, CPA, provides answers to those top questions at MinistryCPA.
The questions, with links to each answer, can be found here.
You can download a superb 12 page PDF of the full set of answers here.
If you are a pastor, missionary, church treasurer, or on the finance staff of a charity, I recommend you check out Prof. Pfaffe’s superb explanations. Get professional advice to apply the information to your situation or if you need to go beyond the very straightforward answers.
There is a bonus question: …
“Top 10 questions that Ministers, Missionaries, and Church Treasurers Ask Tax Preparers”Read More »
“Top 10 questions that Ministers, Missionaries, and Church Treasurers Ask Tax Preparers” Read More »
Nonprofits cannot *prevent* fraud but they can reduce the risk
Sam Antar is a convict and former CPA. He was the CFO of Crazy Eddie, which by his description was an intentionally fraudulent business.
I recently had opportunity to interview him by phone. Will have more of our conversation in future posts.
What I’m going to do in these discussions is combine his comments and ideas with my thoughts. Cross-posted from my other blog, Nonprofit Update.
Advice for charities
I asked him what advice he would have for small charities to prevent fraud.
Wow, was that a mistake. I should not have used the word “prevent.”
You can’t prevent fraud. If someone is intending to steal or is completely determined to cook the books, they will find a way.
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Nonprofits cannot *prevent* fraud but they can reduce the riskRead More »
Nonprofits cannot *prevent* fraud but they can reduce the risk Read More »