Information Technology This blog is about a particular topic of SAS 145, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement, which largely stays hidden in plain sight. That topic is audit risk assessment related to information technology (“IT”). Risks related to IT are often (intentionally) overlooked. It’s problematic because some auditors don’t exactly feel IT-empowered, myself included. And even though IT requirements have been there for some time now, we find that SAS 145 has given it particular emphasis, perhaps to draw our attention to its importance. It will be no surprise if IT risk
Read More »Proposed Franchise Tax Would Generate Significant Refund Opportunities Current Tennessee Franchise and Excise Tax law requires that entities (corporations, subchapter S corporations, limited liability companies, professional limited liability companies, registered limited liability partnerships, professional registered limited liability partnerships, limited partnerships, cooperatives, joint-stock associations, business trusts, regulated investment companies, REITs, state-chartered or national banks, and state-chartered or federally chartered savings and loan associations) pay a Franchise Tax equal to 25 cents of every $100 of the greater of the entities Total Net Worth or Total Real & Tangible Personal Property. Example of an actual client: Total net worth Schedule F1, Line
Read More »Holding Business Meetings for Your Business at Your Personal Residence In the ordinary course of business, some companies, due to their structure, are required by law to hold meetings for their entities. Others hold meetings for a variety of purposes, including educational workshops, Christmas parties, or even regular staff meetings. Tax Code Section 280A contains provisions allowing a business owner to conduct regular meetings at his or her residence. Traditionally, business meetings are held on office premises or rented spaces such as a Board Room at a Hotel or Conference Center. The expense of conducting these meetings in an outside
Read More »Just a Bit More Well, let’s add a bit more about SAS 145, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement. And let’s do it in a question-and-answer format. This SAS is enormous – it’s over 250 pages long. Those in public accounting must understand its implications since understanding the entity, environment, and financial statement risks is the heart and soul of financial audits. An understanding of the risk of misstatements is what drives the remainder of the audit engagement. So, with that being said, let’s begin. Is SAS 145 principle-based, and is the methodology
Read More »An Important Heads Up What is the Corporate Transparency Act? The Corporate Transparency Act authorizes the Financial Crimes Enforcement Network to collect certain identifying information about the beneficial owners and company applicants. The Act applies to domestic corporations, LLCs, and any entity created by the Secretary of State (or similar office) in any state or tribal jurisdiction, as well as foreign entities registered to do business in any state or tribal jurisdiction. Who Must Report? All domestic corporations, LLCs, and other entities created by filing with a Secretary of State or similar office All foreign corporations, LLCs, and other entities
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