Posts Tagged ‘audit and assurance services’

Employee Spotlight: Vince Ravotto

Vince Ravotto first joined Sponsel CPA Group as an intern in the midst of the 2017 tax season. He started full-time as a Staff Accountant in the Audit & Assurance Services in mid-September of this year. A graduate of Marian University with a bachelor’s degree in accounting, Vince brings a wealth of knowledge and experience to the team.

Vince’s duties include conducting audits, reviews, compilations and agreed-upon procedures for clients across a broad spectrum of industries including construction, distribution, manufacturing, service and not-for-profit.

Outside of work, Vince enjoys cheering on his favorite sports teams — the Chicago Cubs, the Minnesota Vikings and the Virginia Tech Hokies. He’s also an avid golfer and world traveler. Welcome to the team, Vince!

Financial Reporting for Not-for-Profit Entities — A NEW STANDARD!

By Lila Casper, CPA
Senior, Audit & Assurance Services
lcasper@sponselcpagroup.com

ASU 2016-14 is a new Financial Reporting Standard affecting not-for-profit (“NFP”) entities, which is effective for fiscal years beginning after December 15, 2017. In the year of implementation, all prescribed provisions must be applied. Some of the primary changes in NFP financial reporting pertain to net asset presentation, a required liquidity and availability of resources disclosure, and expense reporting.

On the Statement of Financial Position, the minimum required presentation includes presenting net assets under the following two classifications: without donor restrictions and with donor restrictions. An allowable alternative presentation includes additional categories of net asset classifications, which are considered subsets of without donor restrictions and with donor restrictions, and they can include the following: undesignated, operating reserve, board-designated (for specific purpose), time restricted for future periods, purpose restricted, and endowment fund. NFP entities are also required to disclose the timing and nature of restrictions, the composition of net assets with donor restrictions, an analysis by time, purpose, and perpetual restrictions, and board designations.

Board-Designated Net Assets are defined as net assets without donor restrictions subject to self-imposed limits by action of the governing board. NFP entities are required to disclose the nature and amounts of board designations. Amounts may be earmarked for future programs, investment, contingencies, purchase or construction of fixed assets, or other uses. Organizations will need to review their existing policies regarding board designations.

In addition, NFP entities are required to provide qualitative information (in the footnotes to the Financial Statements) on how they manage their liquid available resources as well as their liquidity risk and quantitative information that communicates the availability of their financial assets at the Statement of Financial Position date to meet cash needs for general expenditures within one year. Also note that the availability of a financial asset may be affected by its nature, external limits imposed by donors, laws, and contracts or internal limits imposed by governing board decisions.

The schedule of functional expenses will no longer be an optional supplemental schedule. It is now a required part of the basic financial statements. The new standard also expanded on guidance for allocations of Management and General Expenses.

Sponsel CPA Group has expertise in not-for-profit financial reporting and can go over the new rules with you to find the best options for your organization. If you have any questions please contact Lila Casper at (317) 613-7860 or email lcapser@sponselcpagroup.com.

Is Your Accounting Department Dysfunctional?

By Mike Bedel, CPA, CGMA, MBA
Partner, Director of Audit & Assurance Services
mbedel@sponselcpagroup.com

Cash flow is the lifeblood of any business. That’s why the cornerstone of any company is an efficient accounting department and financial reporting system that promptly measures and reports the results of your operations.

Financial statements should be prepared on a regular, systemic basis, around the 15th of the month. Timely, accurate information is essential to your management team. Consistency of practice is crucial.

Is your accounting department meeting these demands? Failure to pay invoices on time or deliver accurate, comprehensive reports can severely harm your company’s reputation and result in late payment fees, decreased credit worthiness, issues with your suppliers, etc. Lack of consistency, planning, transparency and oversight can also quickly lead to untimely financial reporting and poor management information systems. The risk of fraud is also increased in an undisciplined accounting environment.

As a business owner, it’s vital that you determine the people, processes and discipline necessary to make your accounting function run as smoothly as possible. Your management team should be reviewing your financial statements and key performance metrics on a regular, MONTHLY basis! A business that is not doing this on a regular basis is setting itself up for a less than successful result!

If you’re experiencing accounting issues in your company, it’s time to step back and determine the source of the problem. And if you need a fresh set of eyes on your accounting function, Sponsel can help!  Is it your people? Is it your systems, or lack thereof? Or do you simply not know? Whether you’re seeking consultation or thinking about outsourcing your bookkeeping needs, we can offer support.

If we can assist you with achieving success in your business or personal affairs, please contact Mike Bedel at (317) 613-7852 or email mbedel@sponselcpagroup.com.

Don’t Wait to Put Your 2018 Plan into Action

Eric WoodruffBy Eric Woodruff, CPA
Manager, Audit & Assurance Services

Now is the time of year when people look back on 2017 to take stock of the good and the bad, both personally and professionally. If you’re the member of an organization, whether as an employee, manager or owner, this is the season for things like performance evaluations, making goals for the new year and setting budgets.

If you really want to feel satisfied when this time rolls around at the end of 2018, you need to develop a strong bias for ACTION, and avoid accepting the status quo of yesterday!  Put together your plan for improvement, and put it into action – TODAY!

Not long ago we were speaking to a client who was talking about how 2017 was such a bad year for their company, but they had high hopes for 2018, with a list of plans to start doing in January. Our reaction was, if those steps will make a significant improvement in your operations and outcomes, why aren’t you doing them right now instead of waiting for New Year’s Day?

We all know how New Year’s resolutions tend to fade if you procrastinate about putting them into action right away. Without accountability and follow-up, they get put in a drawer and forgotten. So don’t wait for January 1 to get started!

If you’re an employee looking to move up the ladder at your firm, reflect on the things you’re not happy about from your last performance review, and set out a plan for improvement. Think about the skillset you want to build upon. Set benchmarks, such as monthly self-evaluations, to help measure your progress.

If you’re the owner or leader of a business, perhaps your plan of action is about increasing revenue or net profits, or articulating a vision for the future of the company. For a manager, your goals may have to do with improving operational efficiency and meeting the aspirations of the owners, or enhancing the working relationship you have with the team you supervise.

Most people find it difficult to truly hold themselves accountable. Endeavor to step back from your daily duties to give yourself some frank self-analysis that allows you to look for barriers to personal performance. Identify mistakes you’ve made, and take proactive plans not to repeat them.

If you start right away to set a really strong foundation for action in 2018, you’ll be better poised to ask the big question – “Am I satisfied?” – and come away with a positive answer a year from now.

Take the first steps now, even if it’s something as simple as scheduling time every month next year to do a self-evaluation of your progress, and perhaps asking colleagues and supervisors to give you feedback, too. Match their views with the self-assessments you perform to see where you are lacking.

The challenge is to open yourself up, be transparent and be willing to accept constructive criticism. If criticism is delivered in a positive way, it should be focused on ways of making you better. It can be hard to hear, but it gives you a solid plan going forward.

And don’t wait – start right now!

If you need any assistance with helping improve your organization, please call Eric Woodruff at (317) 613-7850 or email ewoodruff@sponselcpagroup.com.

6 Ways to Prepare for Your Audit

Emily CampbellBy Emily Campbell
Staff, Audit & Assurance Services
ecampbell@sponselcpagroup.com

When you hear the word “audit,” do the words “stress” or “dread” immediately come to mind?

At Sponsel CPA Group, we want your audit to be a positive, hassle-free experience with us. Consider the audit process as an investment in your organization’s future by way of fine-tuning processes that allow for adequate oversight and preparation of financial statements.

To ensure you have the best experience possible with your audit, here are six steps to help the process go smoothly:

  1. Communicate with your audit team

The first thing you can do to reduce the stress of an audit is establish a timeline with your audit team. Set fieldwork dates and deadlines for compiling all requested items. Make sure any required financial statement deadlines are communicated. This will ensure everyone is on the same page and allow both you and the audit team to plan accordingly.

It is also important to communicate significant changes from prior years, such as changes in business operations, changes in accounting methodology or other major transactions (refinancing debt, new lease agreements, adopting a new accounting pronouncement, etc.) with your audit team, so that they can appropriately plan for the audit. In addition, be prepared to discuss variances in budget to actual, variances between current and prior year, and other changes – such as restructured management, ownership, new business operations, or a change in accounting personnel.

  1. Reconcile your accounts

It is crucial to reconcile all balance sheet accounts at year-end. Maintain supporting schedules for the final balances, especially for major accounts such as cash, accounts receivable, inventory, accounts payable and accrued expenses. Make sure you are able to support any management estimates used in financial reporting (e.g., allowance for doubtful accounts, inventory allowance, depreciation, functional expense allocation, etc.). We recommend having different levels of review to identify any errors, discrepancies, or variances from expectations. Review the prior year adjusting journal entry report to determine whether or not similar adjustments should be made in the current year.

  1. Update your Property, Plant and Equipment (PP&E) schedules

Review your current PP&E schedules to determine whether all assets listed are still in use and if there have been any additions or disposals the past year. Compile a list of assets purchased or sold during the year, including dates, amounts and detailed description of the assets to provide to the auditors. Also, review repair and maintenance detail to verify all assets were appropriately capitalized.

  1. Assemble an audit folder

To manage the volume of information we request, it may be helpful to compile items in one folder throughout the year for the audit team. These items could include new lease agreements, line of credit renewals, correspondence with regulators and lawsuit correspondence. The year-end request information can be saved with those documents already set aside during the year.

  1. Evaluate internal controls

Review your internal control procedures as well as the prior year management letter, and correct any deficiencies. Some areas to focus on include segregation of duties, managerial review or physical safeguards. Document the controls that are in place. Following these steps can improve the company’s internal structure and will give us a good understanding of procedures in place.

  1. Review recent accounting rule changes

Read over the new accounting rule modifications and standards and evaluate if they are applicable to your entity. See our recent article, New Accounting Standards Your Organization Needs to Know, for a brief description of key changes.

If you need help preparing for your audit, please contact Emily Campbell at (317) 613-7873 or email ecampbell@sponselcpagroup.com.

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