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Returning Value Blog

Close-up on Sources of Substantive Audit Evidence

Posted by Aaron K. Waller, CPA on Mar 17, 2023

Organizations that understand how auditors verify account balances and transactions can minimize disruptions during audit fieldwork and maximize the effectiveness of financial statement audits. Here’s a summary of the types of “substantive evidence” auditors gather to help them form opinions regarding your financial statements.

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Preparing for Year-End Inventory Counts

Posted by Aaron K. Waller, CPA on Nov 22, 2022

How accurate is the amount reported in your company’s perpetual inventory system? To best answer that question, a physical count is essential at year-end. For calendar-year entities, year-end is fast approaching on December 31.

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SEC Chair Gensler Warns About Conflicts of Interest

Posted by Aaron K. Waller, CPA on Oct 10, 2022

Securities and Exchange Commission (SEC) Chair Gary Gensler spoke during a recent webcast to commemorate the 20-year anniversary of the Sarbanes-Oxley Act. Gensler recommended that the SEC take a “fresh look” at its rules on the issue of auditor conflicts of interest. He also asked the Public Company Accounting Oversight Board (PCAOB) to add auditor independence standards to its 2023 agenda.

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How External Confirmations Are Used During an Audit

Posted by Aaron K. Waller, CPA on Aug 08, 2022

Auditors commonly use confirmations to verify such items as cash, accounts receivable, accounts payable, employee benefit plans, and pending litigation. Under U.S. Generally Accepted Auditing Standards, an external confirmation is “a direct response to the auditor from a third party either in paper form or by electronic other means, such as through the auditor’s direct access to information held by a third party.”

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Evaluating "Going Concern" Concerns

Posted by Melissa Motley, CPA on Aug 01, 2022

Under U.S. Generally Accepted Accounting Principles (GAAP), financial statements are normally prepared based on the assumption that the company will continue normal business operations into the future. When liquidation is imminent, the liquidation basis of accounting may be used instead.

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Remote Auditing: A Brave New World

Posted by Aaron K. Waller, CPA on Jul 19, 2022

The pandemic has presented numerous challenges for businesses, but it also taught us how to be resilient, cost-conscious, and adaptable. Over the last few years, we’ve learned that remote working arrangements offer many benefits, including reducing the time and cost of performing many tasks. Here’s how these lessons translate to the work auditors do to prepare your company’s financial statements.

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Does Your Nonprofit Need an Audit?

Posted by Lesley L. Price, CPA on Feb 25, 2022

The regulations on nonprofit auditing vary from state to state. There are federal laws that mandate audits for certain nonprofits too. First and foremost, you should educate yourself on the laws in your state and investigate whether you are legally required to undergo an audit. For example, the federal government requires that any nonprofit receiving above a certain amount in federal funding undergo a yearly audit. But again, there are still state regulations you have to adhere to even if the federal law doesn't apply to you. So, what does an audit actually entail?

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Take Your Financial Statements to the Next Level.

Posted by Aaron K. Waller, CPA on Feb 22, 2022

Spring is the time of year that calendar-year-end businesses issue financial statements and prepare tax returns. This year, take your financial data beyond compliance. Here’s how financial statements can be used to be proactive, not reactive, to changes in the marketplace.

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Audit Disclosures: Why the Fine Print Is Important

Posted by Melissa Motley, CPA on Feb 17, 2022

Footnotes appear at the end of a company’s audited financial statements. These disclosures provide insight into account balances, accounting practices, and potential risk factors — knowledge that’s vital to making well-informed lending and investing decisions. Here are examples of key risk factors that you might unearth by reading between the lines in a company’s footnotes.

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Preparations vs. Compilations

Posted by Aaron K. Waller, CPA on Jan 26, 2022

Your business needs financial statements so management can monitor performance, attract investment capital and borrow money from a bank or other lender. But not all financial statements are created equal. Audited statements are considered the “gold standard” in financial reporting. While public companies are required to issue audited statements, smaller, privately-held organizations have options. CPAs provide three other types of financial statements, which, in order of descending level of diligence, are: reviews, compilations, and preparations.

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