A sound business strategy is important no matter what the state of the economy. As you work with clients to determine the best methods of surviving the recession, be sure to discuss the following critical points for seizing opportunities to refocus, contain expenses and reassure customers. Take a fresh look
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Management accounting
IFRS: A Preparer’s Point of View
If you think IFRS is difficult for CPAs to comprehend, talk to non-CPAs. Historically, accounting professionals have insulated their colleagues from understanding the effort involved in implementing newly issued accounting standards. As a result, you cannot expect them to understand the challenge associated with adopting an entirely new framework. To
More CFOs Predict Staff Cuts Than Hirings for Second Quarter
The uncertain economic climate is making CFOs re-evaluate accounting and finance staffing levels. For the first time in more than five years, more CFOs interviewed for the Robert Half International Financial Hiring Index predicted decreases than predicted increases in personnel. Seven percent of CFOs interviewed by Robert Half expected to
Banking Regulator Urges Change in Accounting for Loan Losses
U.S. Comptroller of the Currency John Dugan said the “incurred loss” model banks use to account for loan losses may need to be changed to a more counter-cyclical approach that would allow provisions to be made earlier in the credit cycle when times are good. Dugan, who is the
Securities Covered by EITF 99-20
Accountants often struggle when attempting to determine whether an investment is covered by Emerging Issues Task Force (EITF) Issue no. 99-20, because its scope provisions contain a “double negative” that may make interpretation difficult. In summary, the scope of EITF 99-20, Recognition of Interest Income and Impairment on Purchased
IFRS Requirements for Recognizing Impairment on Securities
Given the movement toward acceptance of IFRS in the U.S., a discussion about other-than-temporary impairment on securities would not be complete without a discussion of the IFRS requirements. IFRS requirements for recognizing impairment on securities are specified in International Accounting Standard no. 39, Financial Instruments: Recognition and Measurement. IAS
Weathering the “Other-Than-Temporary” Impairment Storm
As if a recession, the credit crisis and the housing downturn were not causing enough stress, many companies, and their accountants and auditors, must also consider an accounting issue that has become increasingly pressing—should their investments be considered “other-than-temporarily impaired”? This issue is relevant not only for financial institutions but
Small Business
The Small Business Administration issued an interim final rule for new lender oversight regulations in its guaranteed loan program. The regulations, which went into effect Jan. 12, give the agency greater enforcement authority and increase transparency on how risk is evaluated. The new regulations clarify supervision and enforcement actions for
Best of Both Worlds?
Over the past several years many companies pursued extremely aggressive growth, resulting in an accumulation of fixed assets on balance sheets. Many of these assets (especially land and buildings) have enjoyed an unprecedented appreciation in value. However, the current recession and accompanying credit crunch have caught some companies in a
Time for a “Little GAAP”
Thank you for the article “Shaking Up Financial Statement Presentation” (Nov. 08, page 56). As a practitioner who regularly serves small business owners, I can only assume that those individuals involved with the FASB and IASB (International Accounting Standards Board) financial statement project have never worked with small businesses. The
Extra Credit
Thanks for the great article “Forecasting Post-Combination Earnings” (Dec. 08, page 48). I shared this article with my students from my Consolidation Accounting class at Everest University and my Colorado Tech University Online MBA class. They especially appreciated your detailed Exhibit 2, reporting the forecasted balance sheet of the acquired
ASB Issues Audit Documentation Guidance, Internal Control Standards
The Auditing Standards Board (ASB) issued the second clarified auditing standard resulting from its clarity project, which aims to make U.S. GAAP easier to understand and apply and gives each standard a principles-based objective. Statement on Auditing Standards Audit Documentation (Redrafted) supersedes AU section 339, Audit Documentation. The standard
Financial Executives Predict Gloomy Results Into 2010
CPA financial executives in industry offered little encouragement to those hoping for a quick recovery from the current recession in the quarterly Business and Industry Economic Outlook Survey released Wednesday and conducted by the AICPA and the University of North Carolina’s Kenan-Flagler Business School. A full 75% of respondents
CAQ Offers Pointers for Integrated Audits of Internal Control
The Center for Audit Quality (CAQ) issued a report highlighting lessons learned from section 404 audits of internal control over financial reporting. The nonauthoritative report, designed to help audit firms that have not yet conducted an integrated audit, as well as more experienced firms, identifies 21 practical tips for auditors.
IFAC Launches Sustainability Framework
The Professional Accountants in Business Committee of the International Federation of Accountants has developed a sustainability framework for businesses. The free Web-based framework tool is designed to support professional accountants and their organizations in integrating a sustainable way of thinking and working in all business processes. The framework, which
Guidance Released on Monitoring Internal Control
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) released guidance designed to help organizations better monitor the effectiveness of their internal control systems and to take swift corrective action if needed. The guidance, developed by COSO in a project led by a Grant Thornton LLP team, recognizes
CAQ Issues Aid on Testing Journal Entries
The Center for Audit Quality issued a practice aid on testing journal entries. The nonauthoritative document is designed to be a reference for auditors of public companies when applying certain sections of AU section 316, Consideration of Fraud in a Financial Statement Audit, of the PCAOB’s interim auditing standards. It
Sample Sabbatical Program Policy
Here is a sample sabbatical policy based on actual policies used by firms: 1. Eligibility. All partners with five years of service will be eligible to take a sabbatical every five years. All managing associates with seven years of service will be eligible to take a sabbatical every seven years. Partners
Government
The Office of the Inspector General of the Department of Defense (DOD) launched a Web site that gives guidance on using internal controls to prevent or eliminate fraud, waste and abuse. “Fraud Indicators in Procurement and Other Defense Activities” provides common fraud indicators in contracting and other areas susceptible to
Highlights
The Federal Reserve announced two initiatives totaling $800 billion designed to address the financial crisis. To reduce the cost and increase the availability of credit for home buying amid the economic crisis, the Federal Reserve unveiled a $600 billion program to purchase the direct obligations of Fannie Mae, Freddie Mac
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How to find the right CAS clients
The key to success with CAS is selecting the best clients. Tools like ideal client profiles (ICPs), buyer personas, and even artificial intelligence can help identify the businesses that best fit each CAS practice.
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