Accounting Miami – Financial Reporting Best Practices

Accounting Miami – Financial Reporting Best Practices

Accounting Miami Firms realize there is always the need for business people to understand and apply the principles of accounting according to requirements for Financial Reporting best practices. Miami accounting service agree there is never enough guidance when it comes to billing and taxes. There are certain sensitive guidelines which are recommended in order to ensure best practices.

Accounting services in Miami understand that in order to have efficient revenue negotiation there is the need to produce reliable and accurate Financial Reporting. This is because users of these reports must be satisfied to be able to trust the Miami accounting firms preparing the reports.

Follow the Standard Formats for Financial Reporting

Business and Miami accounting firms must have set out accounting principles based on which Financial Reporting must be prepared. These principles and format standards are very crucial because they increase comparability within the various departments in the firm and other Miami accounting service as well. Accounting services in Miami often rely on software which is designed to ensure that the reports are produced automatically. These software applications have been produced based on standard accounting principles. Therefore there is increased accuracy and dependability on the Financial Reporting generated.

Characteristics of a Good Quality Financial Reporting

 A useful and accurate Financial Reporting statement must comprise the following characteristics:

  •  Understandable and Clear: It must not be complicated and must have a clear presentation. The users of the financial statement must be able to spot the necessary information at a glance. There must be transparency because when Financial Reporting are difficult to understand banks may raise a red flag.
  • Significant Information: The information must be valuable and relevant to the financial or business institution. It is a best practice to make sure the report is prepared within a time period. This increases the accuracy of the report.
  • Trustworthy Information: The management of a firm is responsible for the information in the Financial Reporting to be reliable. The transactions must be consistent with what the financial report displays. Being faithful is the key! It must be neutral and free of bias.
  • Comparable: The Financial Reporting must be comparable to enable performance review over a specified period of time. The comparison is usually between companies and competitors.

Accounting services in Miami when preparing financial statements include information about assets, liabilities and taxes over the financial year. This is why there are a set of documents which play an important role in providing information for a financial statements. These documents include the following:

  • Balance Sheet
  • Income Statement
  • Statement of retained earnings
  • Statement of change in cash balance
  • Notes to the financial statement

Miami accounting firms must keep these documents must be up to date at all times as they can be used for references at any time of the financial year. This is why they must be accurate and authentic. The information available in these accounting documents is very helpful in best practices for risk management and compliance in banks and business institutions as well. There are other reasons why a good Financial Reporting is important, for example when it comes to revenue negotiation and recognition.

Therefore, all Miami accounting service must have a standard for Financial Reporting as a best practice to ensure success.


Miami CPAs Still Use Spreadsheets as a Crutch in the Financial Reporting Process

Miami CPAs and other finance executives still rely on spreadsheets when it matters

Despite all the sophisticated tools at their disposal, Miami CPAs and other finance executives still rely on spreadsheets when it matters — at financial-reporting time. More than 70% of Miami CPAs said they used spreadsheets to track and manage financial reporting on a daily basis.

Miami CPAs, Gustavo A Viera, has already made a substantial investment in this area in the past 12 months moving away from spreadsheets. In the United States, 76% of executives use spreadsheets daily, while in the United Kingdom, 86% rely on them. The next three regions or countries with the highest usage were the Middle East (76%), Russia (74%), and Italy (55%).

“Miami CPAs rely heavily on spreadsheets even in the financial-reporting process,” says Miami CPAs Gustavo A Viera. “We see a lot of spreadsheets being used in the budgeting, planning, and forecasting area. That’s an area that’s ripe for spreadsheets, but it did surprise us that with financial reporting we saw 72% [of executives] using spreadsheets in some way.”

Miami CPAs often use a dedicated application to consolidate data, but tend to use spreadsheets to extract specific information or collect data across disparate financial systems. They also use spreadsheets to generate their actual financial statements. But this hybrid approach does not give Miami CPAs a comprehensive, clear view of all of the numbers generated by their financial-reporting processes. Within the C-suite, it’s a pressing concern. Almost 40% of the C- and VP-level said their effectiveness was impaired by limited visibility into financial-reporting data.

“They don’t have all the dimensional analytics that they need to be able to go on the earnings call and say, yes, margins were up here, and here are the product lines or customer segments or geographies that drove that,” says Miami CPAs Gustavo A Viera.

If a company looks at the financial-reporting function a bit more holistically, it will be better prepared, says Viera. “Too many companies are taking a piecemeal approach to investing in systems for the closing, reporting, and regulatory filing processes,” he says. Coming out of the downturn, he notes, companies realize they need to ensure their financial data ties to their management and performance data, so they can do a “root-cause analysis” into why a quarter ended the way it did.



New Financial Audit Standard Encourages More Talking

New Financial Audit Standard Encourages Oversight

The Public Company Accounting Oversight Board on Financial Audit (PCAOB) today approved a standard on how to help auditors and audit committees communicate better. While Auditing Standard No. 16 (dubbed Communication with Audit Committees) still has to be approved by the Securities and Exchange Commission, the formal adoption of the rule shows the importance the PCAOB is placing on the need for better communication to improve the transparency and integrity of financial reporting by U.S. companies.

Requiring better financial audit communication is expected to help smooth out any wrinkles that might arise in advance of a company’s financial-reporting cycle. It is to the benefit of a company and its financial audit committee to hear upfront about concerns that might spring up over applying new accounting standards or about any unusual financial transactions that are outside of the normal course of business rather than when a company is about to release its earnings. It’s really putting them companies on notice that there’s a risk around financial reporting that we see emerging here.”

Under the new Financial Audit Standard, an auditor would also be required to ask a company what plans it has to mitigate a particular issue before formulating his or her conclusion, which would mark a change from current practice. “This significantly puts the audit committee into the equation and consideration of what the auditor is doing.

The auditor would also have to tell the audit committee about significant risks he or she may have identified and update the audit committee about changes he or she may have to the overall strategy of the audit. If any departure from a standard auditor report is necessary, that would also have to be shared with the audit committee.

Some audit committees may find the new communication process more helpful than others. “Audit-committee members who have had backgrounds as CFOs [and] former auditors really know what information they want and what to ask for, but other audit-committee members may not. This in a way is leveling the playing field so that everyone would get the same type of information.

The PCAOB does not have jurisdiction over corporate audit committees; instead, it would only oversee the way auditors will have to communicate with it going forward. If adopted by the SEC, AS 16 would go into effect for public-company audits of fiscal periods beginning after December 15, 2012.

The new Financial Audit standard became a priority at the board because of a perceived need to improve transparency in the entire audit process, from the development of company financial statements to the deliberations of audit committees to PCAOB inspections. PCAOB board member Jay Hanson notes that the oversight body should share as much as possible about its insights into public-company auditing. It’s clear that at least some audit-committee members are doing an outstanding job, exactly what the Sarbanes-Oxley Act envisioned, and I think part of our job is to help other audit-committee members to get to that high level. Sarbanes-Oxley requires that the audit committee be independent of company management.

The board originally proposed the standard in March 2010, and then worked on a revision at the end of 2011. AS 16 also builds on previous interim PCAOB standards that became effective in 1989, including AU Section 380, the first “Communication with Audit Committees,” and AU Section 310, called the “Appointment of the Independent Auditor.”

The new standard focuses on “communication with the audit committee, not necessarily information sent to the audit committee. “We’re mindful of this standard potentially becoming just another checklist or boilerplate exercise of going through a list of requirements. We heard from commentators who didn’t want that and we’ve been responsive to those comments.

One criticism of AS 16 lies in letting auditors communicate orally with audit committees, instead of just requiring written documentation. Despite the oral presentations, however, the auditor would still have to document what would have been in the report.

The cost to adopt the new standard, however, remains a low concern. The PCAOB says communication between auditors and audit committees can be scaled up or down to fit the size of a company.