Free One-Month Training On Demand

It’s Friday afternoon. You’re working late trying to put the finishing touches on a project, and all you need to do is sort your spreadsheet in alphabetical order by your clients’ last name, then you can go home. Unfortunately, your names are all written as “John Doe” and are sorting by John instead of Doe. Wouldn’t it be great if you could find a quick fix and go home instead of trying to muddle through figuring it out? Lynda.com provides just that.

CPAmerica is looking into ways to bring on-demand training to its members. The impetus for this pursuit arose from the 2014 HR and IT survey results. On the HR Survey, member firms expressed training as one of their top concerns. On the IT Survey, member firms indicated Excel and Word were two of the top three needed trainings for their staff. When exploring what levels and timing would work best for trainings to meet this need, IT professionals at several CPAmerica firms requested on-demand trainings that could be taken whenever was most convenient for their staff, as well as instruction at various levels.

Lynda offers a plethora of trainings ranging from software (e.g. Excel, Word, Access, Photoshop, Captivate, etc.), to professional development skills (e.g. professionalism, business writing, marketing, IT, etc.), to personal development skills (e.g. photography, editing videos, etc.). The training videos on Lynda.com contain a comprehensive course where you could learn the software or skill from start to finish. Additionally, it also provides a well-organized structure with clear, step-by-step brief modules so you could learn a specific feature such as pivot tables or reference a quick look-up, such as “text to columns” in our opening example. Lynda’s training videos have great teachers that are experts in their fields, and being able to replay or skip any portions you already know will allow you to tailor your learning to exactly what you need to know without it being beyond or beneath you; flexibility you just can’t get in most training sessions.

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Can you see the potential benefit of Lynda.com for your firm? If so, click here to apply for a free trial from June 1 – June 30. Applications must be received by May 22. CPAmerica will evaluate this program’s adoption after the 30-day trial concludes so the board can determine if this is a provider worth pursuing for members.

CPAmerica is constantly looking for ways to provide services and opportunities that will help our members continuously improve. We look forward to seeing if Lynda.com helps you as much as it has other companies who deployed Lynda.com such as Google, Facebook, Delta, and its new acquirer, LinkedIn. Like it? Don’t like it? Have other services you would like to see CPAmerica offer? Feel free to leave suggestions below or contact memberservices@cpamerica.org to let us know how we can best serve you.

 

Kaylen Saunders, Member Services Manager for CPAmerica International, holds a masters in Curriculum and Instruction and has experience as a professional development trainer. Saunders is responsible for scheduling and hosting webinars, administering CPE, maintaining the members-only website, and coordinating the CPAConnect Roundtable.

To Pitch or Not to Pitch

I used to work for a non-profit organization. I had a boss that was highly motivated and wanted to be mentioned in our local paper and other local news outlets at any chance we had. So I wrote and pitched a lot of stories. But, I asked myself, even with her untiring positive motivation, and even with all the good we were doing in our community: “Is this really news?” I will admit, it wasn’t news every time.

Most people have a good, healthy, amount of apprehension when pitching to the media. Hopefully, this apprehension will force you to develop a solid (remember newsworthy) and short pitch. This leads me to my tips for pitching to the media.

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Pitch Tips to Live By:

  1. First and foremost, do your research. Search for publications you think would be fitting for your target audience. Now engage with these publications by liking or sharing fitting stories on social media.
  2. Keep your pitch short. Whether a phone call or an email, keep your pitch short, and keep the flattery to a minimum. The media gets hundreds of pitches every day, they don’t want to hear how great they are. And always remember to include up-to-date contact information.
  3. Grab their attention. Why would they be interested in this story? You need to “Wow!” them in your first sentence. Make it pitch-worthy and explain how this benefits your audience.
  4. Bring a different angle to the table. Remember, just because your company is doing great things doesn’t mean it’s newsworthy. Tell them something they didn’t already know. Develop different story angles that you can easily pitch in different situations and to different media outlets.
  5. Don’t follow up more than once. If they aren’t biting, just leave it alone until the next newsworthy story arises. If you follow up more than once, you are now in the spam zone.

Here’s a link to an outstanding infographic on why people are so bad at media pitching by PRNews: http://www.prnewsonline.com/water-cooler/2014/11/20/infographic-why-are-people-so-bad-at-pitching/.

Back to my past position. Although we over-pitched and wrote too many press releases, we did do something pretty amazing. Even though most of our pitches weren’t used, we built positive relationships with the media. Local media would often call us when they were having a slow news day and ask us if we had anything they could cover. They turned to us, and I really believe they turned to us because of our persistent approach. Just as it is very important to build a positive relationship with media, it is just as important to know what is newsworthy and what is not newsworthy.

Sarah Coulson is the Marketing Communications Specialist for CPAmerica International. She manages the association’s external communication, including branding, social media, press releases, event marketing collateral and the website for CPAmerica and CPAConnect.

Do You Communicate with Clients on their Wavelength?

Communicating information that you really want your clients to understand and possibly act on is a very delicate business.

 

Whether you’re conducting a seminar, writing an article, giving a presentation to prospects or updating your website, every word of your message should be presented with your client’s viewpoint in mind.

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When it comes right down to it, most clients or prospects are searching for the answer to just two key questions: How will this make my life better? How will this put more money in my pocket?

 

Your clients or potential clients want their questions answered simply and understandably. So take care not to present your message as if you’re talking to the CPA across the hall.

 

The problem is, you know your topic so darned well. And it’s easy to forget that your listeners or readers may not know the first thing about it. You may think they are absorbing more than they actually are.

 

Be sure to explain unfamiliar names or terms, present information in an organized manner and answer any questions your audience might logically have. Absolutely nothing can be assumed or taken for granted. Terms like basis, capitalization, gross margin, safe harbor may be second nature to you, but your clients may need a simpler explanation.

 

Gauge the knowledge level of your audience and then put yourself in their position. What do they know and what don’t they know? What questions do they want the answers to most?

 

You don’t want to oversimplify information for more sophisticated clients, but remember, just because they are knowledgeable in one aspect of business doesn’t mean they know one iota about your current topic. Better to give a little too much explanation than not enough.

 

If you’re writing or presenting to an audience with mixed levels of expertise, figure out a way to impart information so that the person with the least amount of knowledge will understand, while you hold the interest of those with higher levels of expertise. Not always an easy task.

 

Your message needs to be basic without being boring. Draw your readers in with simplicity, substance and maybe a little humor. Tell them in an honest, forthright way what you want them to know, backed up with helpful research and examples or case studies. Keep the hype at bay.

 

And as hard as it may be to hear – and it is hard for many of us – the listeners or readers don’t care about us. Beyond knowing that we are qualified and have the expertise that can help them, they don’t want to hear about how wonderful we are, how big our vocabulary is, or how much time we spent developing our services. They don’t care. Really, they don’t.

 

The word “you” is the one they’re looking for. Show them how important they are to you by giving them the important information they need in a manner that is understandable to them.

 

Judy Moore, publications director of CPAmerica International, holds an M.A. in journalism from University of Florida. She is a former business editor of a large metropolitan daily, journalism professor and author of hundreds of business articles that have been published in regional and national magazines.

 

Expectations and the Auditor

The “expectations” of users as to “what does the auditor do in regard to the auditor’s performance of procedures and what is the auditor required to communicate in the audit report, including opinion,” has been a discussion that has taken place for decades and continues today. Commonly referred to as fulfilling the “expectation gap,” this discussion has been between users of financial statements and auditors. It has been robust and has served users and auditors well.

 

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Since the late 1980s, the American Institute of Certified Public Accountants (AICPA) has issued various Statements on Auditing Standards (SAS) with the intent to address the “expectations” of users of audited financial statements. The first of these SASs addressing the “expectation gap” was SAS 53. This particular SAS created requirements for the auditor as to the “auditor’s responsibility to detect and report error and irregularities.” SAS 53 was followed by SAS 54 – the “auditor’s requirements regarding illegal acts by clients” and SAS 55 – the “auditor’s consideration of internal control.” Over the years, these SASs have been amended and/or superseded. Other SASs have been issued, including SAS 99 in 2002 which provided for specific requirements for the auditor’s “consideration of fraud in an audit.” In 2007, SASs became effective for what auditors termed the “risk assessment suite SASs.”

 

In 2012, SAS 122 effectively clarified and converged all of the SASs, i.e., all auditing standards were issued in a new codification. All of the “expectation” standards issued from SAS 53 in the late 1980s through SAS 122, about 25 years later has had an overall objective to reduce the expectation gap for users of audited financial statements.

 

All of that short history leads us to where we are today. In the U.S., the AICPA and the Public Company Accounting Oversight Board (PCAOB) have had basically the same standards since 2012. On January 15, 2015, the International Auditing and Assurance Standards Board (IAASB) revised their International Standards on Auditing (ISA) 700, 701, 705, and 706. With the exception of ISA 701, AICPA AU sections 700, 705, and 706 formerly ran practically parallel to the similarly numbered ISAs.

 

The IAASB’s recent revisions reflect that the auditor’s report is the key deliverable of the audit process, and therefore should be more informative. This means that auditors need to provide more relevant information. Those calls simply represent the continued desire to reduce the “expectation gap” users have regarding what procedures the auditor performed, the auditor’s responsibilities, and the communication of the results of the audit from the auditor.

 

The benefits intended by the IAASB are: enhanced communications between the auditor and users and between the auditor and those charged with governance; increased attention by management and those charged with governance to disclosures in the financial statements to which reference will not be made in the report; and renewed focus of the auditor on matters to be communicated in the report which could directly result in an increase in the auditor’s skepticism.

 

There are separate requirements for auditors of listed companies, e.g. public in the U.S. The listed companies’ auditors will be required to communicate “key audit matters.” Those matters are, in the auditor’s judgment, of most significance and also require the name of the engagement partner. In regard to all audits, the opinion section will be the first paragraph presented followed by the “basis for opinion” paragraph. There are enhanced reporting requirements on “going concern” including: description of the responsibilities of management and the auditor for “going concern”; a separate section when a material uncertainty exists and is disclosed with the heading “Material Uncertainty Related to Going Concern”; and a new requirement for the auditor to challenge the adequacy of disclosures for “close calls” in view of the applicable reporting framework when events or conditions are identified that may cast doubt on the entity’s ability to continue as “going concern.”

 

There is also a requirement that the auditor make an affirmative statement about the auditor’s independence and fulfillment of the auditor’s relevant ethical responsibilities.

 

While there is no absolute projection, these same changes could eventually be required in the U.S. by both or either the AICPA or the PCAOB and is important to remember two important facts. The first is that there is a current project and exposure draft in process by the PCAOB, and second, the AICPA does have a goal in their standard setting not to deviate when possible from the IAASB standards or the PCAOB standards.

 

If I had to offer a projection as to what may happen, I believe similar changes will eventually become requirements by the both the AICPA and PCAOB. Also, I personally believe those changes would provide users with information they want and need while continuing to reduce the “expectation gap.”

 

Art Winstead is the Director of Accounting and Auditing Services for CPAmerica International. He has over 30 years of experience with DMJ & Co. PLLC. He manages technical resources, engagement support, audit practice matters, reviews A&A publications for CPAmerica and is a part of the Expert Services team.

10 Tips to Gain 10 Minutes a Day During Busy Season

Every position has a busy season.  In my current role, my busiest months are June and July as every aspect is in full swing.  When the summer comes for me, or the first two weeks in April come for you, there will still only be 168 hours in a week, however utilizing just a few quick tricks before and during busy season can feel like you’ve somehow managed to squeeze out a couple extra hours.  Even if one of these tricks, such as speeding up how you open your most frequented folder, only saves you ten brief seconds every time you open it, if you open that folder ten times a day you could save three hours during tax season just in folder-opening time alone.  Imagine the potential if you learned even just a few tricks like that!  Here are a few tips like folder-opening that I utilize to prepare for a busy season.

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  1. Create Templates – You already know many types of messages you’re probably going to have to send in April: “It appears that your Tax Organizer is missing a couple of documents.  Please submit these documents by [deadline] so we can process your return in a timeline manner.”  There are also probably particularly long client names that you have to type frequently.  So why not write those canned phrases out while your head is clear and re-use instead of re-think them every time you need to call upon it? These template phrases or paragraphs are called “Quick Parts” in Outlook and in Word.  To create a new Quick Part, type out your canned phrase.  Select it, then go to the Insert tab > Quick Parts > Save Selection.  When you need to insert that phrase or paragraph into one of your emails, simply go back to the Quick Parts button and click on it to insert. To make insertions even faster, you can right click the Quick Parts button and “Add to Quick Access Toolbar” at the top of your window so it’s always handy.  Also, in Outlook, try naming your Quick Part as the first few words you usually type in when using that phrase, so when you start typing, Outlook will even guess you want to enter that pre-set text and all you have to do is click Enter and it appears on your page!Templates1
  2. Keep your favorites at your fingertips – Instead of wasting time navigating to or trying to remember where you stored that form template or important spreadsheet, keep your most frequently used documents always within reach.  On your taskbar, right click your Word or Excel icon, and click the “pin” next to a recent document to have it always show in that list.  Then anytime you need it, simply right click on the icon and open your document without having to navigate around to find it or having to close any windows to get to it on your desktop.
  3. Set up your Favorites Folders – If there are certain folders you look in frequently that are embedded in other folders, save time by only having to click and think once rather than dig through sub folders.  In Windows Explorer, find a folder you often navigate to, then click and drag that folder into the left navigation pane and drop it onto the yellow star called Favorites.  You can then rename and reorder your favorite folders to make it easier for you to get to quickly.Favorites
  4. Clear your desk – Research studies indicate that our minds pay attention to everything we can see, even if it’s just slowly working in the background.  Help yourself focus on one task at a time by moving all the piles on your desk to outside your peripheral view so when you look at your computer screen all your mind can see is the task at hand.  One trick I use is to add the project that piece of paper represented to my To-Do list, then file the papers away.  My list will remind me to do it at the appropriate time, and I won’t waste my time thinking about it every time I step up to my desk just because it’s sitting there demanding attention.
  5. Space it out – In launching into our busy season at my last position, my supervisor and I used to set a day aside for planning.  We would brainstorm all we wanted to get done in the upcoming season, then order them based on priority, then I would sit down with my calendar and estimate how long it would take to do each project and pop them onto my calendar starting with the most important project until I ran out of calendar.  Spacing projects out ahead of time helps set mini deadlines so you can regularly monitor if you are on track and stay focused on your goals, and have forewarning if you need to adjust your plan to delegate or drop any projects.

STAY FOCUSED

  1. Set your day’s goals – In busy season, our lists are so long sometimes it’s hard to know where to start. I usually write the items that have to get done that day on a dry erase board or in a different color on my To-Do List each morning so as emergencies come up throughout the day trying to turn my attention elsewhere, I can clearly stay focused on what the Seven Habits of Highly Effective People’s Time Management Matrix encourages: the important, not the urgent.
  2. Break projects into bite-sized chunks – One trick that’s suggested by popular time-management method Getting things done is to write out the steps necessary to accomplish a project and focus on them one at a time.  So instead of writing on your To-Do list “Johnson Audit,” perhaps for that day you might write “Clear review notes.”  Breaking it down into manageable tasks, you don’t have to remember every time you look at it where you are and what to do next, and it feels less overwhelming so you are more likely to start the project rather than put it off.  Additionally, it helps me to see a verb/action rather than a noun/item on my To-Do list such as “Clear review notes” instead of just “Review notes.”
  3. Save it for later – Another trick from David Allen’s book Getting Things Done is if a task will take you less than two minutes, it’s better to take care of it right then.  If it takes longer than that, don’t stop your train of thought; add it to your To-Do list and take care of it when you choose to not when it comes onto your desk.
  4. Schedule email time – On a similar note, just because John emails you at 11:43 a.m. doesn’t mean you have to drop what you’re working on and respond right then.  As your company’s customer response-time policy allows, select a particular time to respond to emails, such as once in the morning, at lunch, and in the afternoon.  Mind Tool’s Time Management Training suggests it takes approximately 10 minutes to get re-focused; stopping every time an email comes in may never allow us the time necessary to accomplish a particular project.
  5. Set an alarm – Not surprisingly, “Pick up the house” is an item I often avoid on my mental home To- Do list as it doesn’t feel accomplishable and takes an undefined and increasingly greater amount of time as I go.  However, selecting a small task like cleaning the dishes, then setting an alarm for how much time I think it should take, turns the task into something accomplishable and measurable.  A variation on the Multiple Put Down Technique, setting an alarm for a manageable increment such as 20 minutes helps you keep focused on one project until it is complete.

What productivity techniques do you use?  Please feel free to share in the comments section below.  Best of luck in busy season.

Kaylen Saunders, Member Services Manager for CPAmerica International, holds a masters in Curriculum and Instruction and has experience as a professional development trainer. Saunders is responsible for scheduling and hosting webinars, administering CPE, maintaining the members-only website, and coordinating the CPAConnect Roundtable.

 

A Look into CPAmerica’s VIP

CPAmerica has just crossed the half way mark in their goal of all member firms hosting a Visitation Improvement Program (VIP) event by the end of 2016 with 41 of our 74 firms having participated.

 

Three years ago, the update to our strategic plan validated our primary purpose of “Improving through Sharing.” The planning group searched for programs that would enhance our members’ ability to share and the VIP offering was started with five beta visits in 2012.

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The program is designed to bring two leading partners of fellow member firms to visit a third CPAmerica firm. In preparation for the visit, partners in the host firm complete surveys of their firm and participate in pre-meeting conference calls outlining expectations and providing background.

 

The actual visit is over two and a half days and usually starts with a dinner of the two visitors and the host leading partner. In this dinner, any last minute discussions are conducted and a general plan is confirmed. Interviews with partners, senior staff and support staff are conducted on the first full day. Lunch is often with the partner group and visiting leading partners.

 

After sharing their observations with each other, the visiting leading partners formulate a common observation and summarize it into four to five major discussion points. Day two begins with a short briefing to the host leading partner followed by a detailed discussion of the observations with the entire partner group.

 

This process has been proven to be helpful in confirming host firm partner plans and directions, as well as providing insight from the perspective of trusted friends. The visiting leading partners also take best practices home from their visit to be shared with their own partner group. All the participants win.

 

One best practice that has evolved from the VIP events have been timing of the visit and the host member partner retreat. Though coincidence, a partner retreat was scheduled for the following week after the VIP event. The host firm found that observations that rose from the visiting leading partners were a great starting point for their own firm retreat.

 

CPAmerica pays the cost of travel for the visiting leading partners as well as meal expenses during the two and a half day event.

 

The Visitation Improvement Program is yet another way that CPAmerica firms “Improve through Sharing.”

 

 

Alan Deichler is the president of CPAmerica International. Since joining the organization in September 2009, he has overseen the transition of the national association of local accounting firms to an emphasis on service to its members. Recent accomplishments include implementation of the Visitation Improvement Program (VIP), the Next Generation Conference, tax and auditing/accounting webinars, and development of the Large Firm, New Leading Partners and International groups.

 

5 Things I Learned My First Year in a CPA Firm

My name is David Milligan, and I am a staff accountant at Brickley DeLong. As my one year anniversary here at Brickley DeLong approaches, I wanted to offer some insight into five lessons I learned in my first year at a CPA firm.

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1.    Tax season does not stop for bad weather

The weather no longer closes work like it did in college. My first day at Brickley DeLong, PC, was one of the worst ice/snow storms of 2014. Needless to say, it was a stressful drive; but, if I could make it on that day, then the rest of the tax season would be a breeze. The weather is a significant factor when you are driving toward the lakeshore in the middle of winter.

2.    You must experience your first tax season to understand it

Tax season is nothing like what I thought it would be like in college. During my entire time at Grand Valley State University, I only had to prepare a single 1040 for a class. That was definitely not the case once January approached. Learning everything there was about tax made for a quick study on the whole tax side.

3.    Tax returns have a “feel” and “smell”

Partners and managers have a “feel” and “smell” when preparing tax returns. As stated earlier, I had only prepared a single return through college. When I began preparing returns for clients, I would be asked if the return “smelled” or “felt” right. Over the first couple weeks, you get to know exactly what those smells and feelings are. They develop without any conscious thought; and, before long, I could see the input and know what was supposed to be showing up on the return.

4.    Audit and tax are very different

Audits and tax are not similar in any way, well at least 1040s and audits. Learning how to do both at once was, in my opinion, like jumping off the proverbial deep end.  While this was difficult, it also got me acclimated quicker.  I am so thankful for all of the experience I got at the time. Learning to manage both and overcome the stresses made me a stronger person than if I had eased into it.

5.    Workplace culture is important

The final thing I learned is that the people you work with make all the difference in the world. The feel and culture at Brickley DeLong is amazing. Having people who care about your learning and education are key to your success in your future career. So, thank you to all who have helped me learn so far, and those who will help me learn in the future.

 

David Milligan is a staff accountant at Brickley DeLong, a full-service public accounting and business consulting firm serving the West Michigan community with offices in Grand Rapids, Muskegon, and Hart. Brickley DeLong has been a member of CPAmerica International since 2004.

For more information about Brickley DeLong, please visit our website at www.brickleydelong.com or contact Christine Dill at (231) 726-5835.

6 Tips for Conducting a Successful Client Satisfaction Survey

Client satisfaction surveys are an effective, timely and cost-efficient tool that can easily help you identify your business’ strengths and weaknesses. Sounds great, right? The only pressure is you have to get it right! A bad survey can annoy customers, or even worse, scar your brand.

Below are 6 tips to consider when developing a client satisfaction survey:

1. Purpose

Before you begin, it’s important to identify clear objectives. What do you want to get out of this survey? Are you looking to improve your business, compete with top companies, etc.? Once you have set clear objectives, you’ll be writing questions with ease.

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2. Narrative

Have you ever opened a survey to find a full page of text and immediately closed it saying, I’ll visit that later, or worse, I would NEVER complete that? Most people don’t have time. Surveys must be short and they must be simple, otherwise you’ll lose potential feedback. Questions, based on your objectives, should be stated in logical order and can be open-ended or closed-ended (a mix is recommended). Lastly, avoid using leading questions. They’re pointless, you will not gather useful insights from leading questions.

3. Timing

CPAmerica International certainly wouldn’t conduct a client satisfaction survey in the thick of tax season. For you, what time of year would be an optimal time for you to survey? Also, clearly state the closing date of the survey and send a reminder a few days before. Don’t leave too much time for respondents to complete, otherwise your survey will be long forgotten.

4. Branding

If you haven’t thought about how this survey fits with your branding, don’t do it! Just like everything else, surveys are a piece of marketing. Just as a poorly constructed survey can really hurt your brand, a poorly branded survey can hurt your brand!

5. Pre-Test

Before you press send, test your survey. Then test it again. A survey that has a glitch, big or small, will make all of your hard work pointless. Be especially careful if you plan to use question skip logic (more about skip logic http://support2.constantcontact.com/articles/FAQ/2138).

6. Action

Now that you have all the data, start analyzing and reporting. Make sure to share your game plan with your clients. Tell them what you plan to do now that you have these survey results.

 

Sarah Coulson is the Marketing Communications Specialist for CPAmerica International. She manages the association’s external communication, including branding, social media, press releases, event marketing collateral and the website for CPAmerica and CPAConnect.

Ever Wish You Could Take That Email Back?

It wouldn’t hurt any of us to hesitate a second and review our emails before hitting the “send” button.

 

Some people have learned that the hard way. And, boy, have there been some whoppers.

 

Can you imagine accidentally emailing:

  1. Confidential salary information – to the entire company
  2. A nasty comment about your supervisor – to your supervisor
  3. A job offer – to the wrong applicant
  4. A derogatory email about a customer – to the customer
  5. A job application – to your current boss
  6. Confidential information about a client – to another client
  7. Price information meant for a vendor – to a customer

ImageThose are just a few of the embarrassing blunders reported by 250 executives across the country in a survey by the Robert Half consulting firm.

 

In fact, 78 percent of those executives themselves say they have mistakenly emailed someone the wrong message or copied someone on a message without intending to.

 

Not surprisingly, some of the email gaffes above resulted in the termination of the employee.

 

And, in other cases, breaches of email etiquette can adversely affect the sender’s career prospects.

 

Three of four of the executives surveyed said technology etiquette breaches could somewhat (61 percent) or greatly (15 percent) hurt the employee’s career. One quarter said, “Not at all.”

 

In Business Etiquette: The new rules in the digital age, the Robert Half staffing firm addresses some of the fine points of email etiquette:

  1. Be kind. It is commonly known that using all CAPS is “cybershouting.” But emailing critical, negative or bad news is also a no-no. Negative news should be handled face-to-face or by phone.
  2. Be considerate. Succinctly summarize your email request. Don’t expect the recipient to read through a long thread of previous emails.
  3. Be clear. Always, always include a subject line and immediately let the recipient know if you need something or if the email is just FYI.
  4. Be concise. The less you write and send, the more your emails will be read. Be cordial, but get to the point. Use bullets, which are easier to read than long blocks of type. Consider zipping large attachments to ensure they reach the intended      recipient.
  5. Be timely. Respond to all messages in a timely manner and within 24 hours at most. If you say you’ll answer more fully later, be sure to follow up. If you are away from the office or email, be sure to put on an out-of-office message so people don’t wonder why you haven’t responded.
  6. Be humble. Is your email really so important it needs a red flag? Or are you just being impatient? And is it really necessary to “reply to all”? Bad “reply to all” threads run rampant in many organizations.
  7. Be careful. The list of painful examples at the top should be warning enough. Always review your distribution list before hitting the “send” button and reply with care.

 

Judy Moore, publications director of CPAmerica International, holds an M.A. in journalism from University of Florida. She is a former business editor of a large metropolitan daily, journalism professor and author of hundreds of business articles that have been published in regional and national magazines.

The Auditor’s Responsibility for Compliance with Laws and Regulations: Where to Stop

It’s long been said that CPAs should not assume the rule of legal counsel. That is true regardless of the level or type of service being provided. One place in particular is the professional requirements for CPAs in the AU-C 250: “Consideration of Laws and Regulations in an Audit of Financial Statements.” And yes, before going further, there are requirements within professional standards in which the auditor must consider, including the specific governmental engagements to test and report on compliance with laws or regulations. For the brief time here, I want to offer my thoughts on the requirements when performing an audit of financial statements. This applies to any audit of any financial statements.

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We need to start with the premise directly from AU-C 250: “It is the responsibility of management and those charged with governance offering oversight, to ensure that the entity’s operations are conducted in accordance with the provisions of laws and regulations, including compliance with the provisions of laws and regulations that determine the reported amounts and disclosures in an entity’s financial statements.”

 

The auditor “is responsible for obtaining reasonable assurance that the financial statements as a whole are free from material misstatement, whether caused by fraud or error. In the audit, the auditor takes into account the applicable legal and regulatory framework.” The auditor is not responsible for preventing noncompliance and cannot be expected to detect noncompliance with all laws and regulations. That too, is from AU-C 250.

 

As an experienced auditor, that does seem to have its share of contradictions, but no more than the auditor’s overall objectives when conducting an audit. The use of materiality, performance measurement and professional judgment are just as applicable here as they are in other AU sections. The requirements do provide two categories to distinguish compliance with laws and regulations:

  1. The provisions of laws and regulations generally recognized to have a direct effect on the determination of material amounts and disclosures, such as tax and pension laws and regulations.
  2. The provisions of other laws and regulations that have a direct effect on the amounts and disclosures but compliance may be fundamental to the operating aspects of the business, fundamental to an entity’s ability to continue its business, or necessary for the entity to avoid material penalties such terms as an operating license, regulatory solvency or environmental regulations.

 

In carrying out responsibilities, an auditor has to obtain an understanding of the environment which includes the legal and regulatory framework of the entity, including how the entity is complying with that framework. To do so, an auditor can use specialists, including tax professionals within their audit firm, and management representations and specialists. They can also request and inspect correspondence with licensing or regulatory authorities. Ultimately, auditors must remain alert throughout the audit procedures which may bring instances of noncompliance or suspected noncompliance with laws and regulations.

 

In the absence of identified or suspected noncompliance, the auditor is not required to perform audit procedures other than those discussed previously.

 

The challenge of the auditor as outlined above is indeed great. To determine those laws and regulations that have an effect on the material amounts and disclosures is surely difficult. For example, the specific considerations of environmental laws and regulations, the Affordable Care Act, OSHA and ERISA requirements, wage and hour rules…the list goes on and on. We need to stop somewhere and making the professional judgment of where is difficult to determine.

 

With that said, I cannot think of any other considerations that must be taken into account for an auditor to consider in regards to “obtain[ing] reasonable assurance that the financial statements as a whole are free from material misstatement, whether caused by fraud or error.”

 

 

Art Winstead is the Director of Accounting and Auditing Services for CPAmerica International. He has over 30 years of experience with DMJ & Co. PLLC. He manages technical resources, engagement support, audit practice matters, reviews A&A publications for CPAmerica and is a part of the Expert Services team.