Communication With The Predecessor Auditor

We Are Required To Talk With Each Other It happens. From time to time, company management will decide to replace their current auditor. It can be for good reasons, wrong reasons, or no real reason at all. The predecessor auditor may be a repository of information that may be important to a potential successor auditor. Therefore, auditing standards require that before a new auditor can accept the engagement, they must inquire about certain matters of the predecessor auditor. In June 2022, the Auditing Standards Board of the AICPA issued Statement on Auditing Standards 147, Inquiries of the Predecessor Auditor Regarding Read More »

Information Technology

A Strange Bed-Fellow Indeed I recall the first day of my public accounting career. Right out of college and eager. When I walked through the office door on the 19th floor that cold January morning, I was immediately issued an Addo-x adding machine. What a jewel it was. It was huge. It had to be made from cast iron and weighed enough to earn the nickname TwoTon Tessie from Tennessee. That thing was lugged around to clients in a banged-up dull black carrying case that was impregnable –designed to carry a small nuclear arsenal. And what an arsenal it was. Read More »

Private Company Policy Election Not to Consolidate Variable Interest Entities

The Opt-Out Trap and the Way Around It Last month’s blog took a look at the use of proportional consolidation in the construction industry. This month, I thought we would continue the consolidation theme by examining the topic as it relates to variable interest entities. For two decades now, the consolidation of variable interest entity (“VIE”) has been a bane for private companies. Its application is complex, and its usefulness to the end users may be questionable. So how did the requirement to consolidate an entity that is not majority-owned come about anyway? Origin of Variable Interest Entity Consolidation Those Read More »

Joint Venture Proportional Consolidation

The Report of Its Death is Out of Proportion Construction Joint Ventures What is a construction joint venture (JV) anyway? And why do construction companies enter into such JVs? And, does US GAAP still permit the investing company the choice to use proportional consolidation, instead of the equity method, to present a construction JVs in its financial statements? This article will attempt to shed some light on these questions. What is a Construction Joint Venture? A construction JV is generally a legal entity of limited duration, usually between two construction companies, to join forces to bid, obtain, perform, and complete Read More »

Income Tax Questions and Answers

Declare the Pennies on Your Eyes It’s tax season. Clearly, not the most wonderful time of the year. I know that the day I sit down to prepare my income tax return every year is somewhat of a cloudy, rainy day. So I put it off for as long as possible. I think the vast majority of people feel the same way. It’s a real drag getting everything together and organized. Nevertheless, this month’s blog will be devoted to that subject again, federal income tax. Below are some income tax questions and answers that may apply to your situation. If Read More »
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