Categories
Accounting

What Accountant Miami Resume’s Should Look Like

What Accountant Miami Resume’s Should Look Like

If you’re an Accountant Miami in the market for an accounting job in Miami, you’ll have greater success if your resume contains accounting key words and specific accounting skills. Accountant Miami these days will have greater success if they are “Subject Matter Experts” (SME). As an Accountant Miami for over 25 years, I found my niche in the medical field. Our CPA Firm is one of a handful of Accountant Miami Firms that specialize in Medicare Cost Reports, AHCA Proof of Financial Ability reports, Medicaid Cost Reports and Home Healthcare Accounting.

An Accountant Miami should be able to:

  • First and foremost, ensure compliance with accounting and tax preparation deadlines
  • Make sure your accounting records can pass a financial audit
  • Create accounting budgets & forecast and perform gap analysis between the two
  • Manage payroll functions
  • Perform month-end accounting close
  • Reconcile sub-ledgers to the general ledger (A/P, A/R etc)
  • Prepare bank reconciliations
  • Prepare month end accounting journal entries
  • Maintain fixed assets depreciation schedule
  • Prepare financial statements

 The following skills (in no specific order) will give you the edge landing that accounting job:

  •  Excellent oral and written communications skills with the ability to articulate complex issues
  • Great boardroom presence (excellent presentation skills are invaluable)
  • Listen first, paraphrase to make sure you understand, then speak
  • Detail oriented, efficient and organized with the ability to execute on project
  • Strong analytical and problem solving skills. Don’t point out problems unless you have the solutions
  • Highly trustworthy, ethical and discreet
  • Team player

Accountant Miami Background:

  • BA in Finance or Accounting
  • Certified Public Accountant (CPA) or MBA will give you an edge over the competition
  • 3 to 5 years accounting experience in the industry
  • Big 3 Public Accounting experience is looks great, but not always required
  • Fluent in English and Spanish in Miami is a definite plus

It goes without saying that computer skills and knowledge of accounting software is a given these days.

Good luck!

 

Categories
Accounting

Miami Accountants Miami Accounting

Miami Accountants aka Miami Accounting

Miami Accountants aka Miami Accounting is concerned with the provisions and use of accounting information to small business owners, to provide them with the basis to make informed business decisions that will allow them to be better equipped in their accounting Miami small business control functions.

In contrast to other Miami Accountants information is:

  • Forward-looking for an Miami Accountants
  • Model to support decision making vs. just looking at historical after-the-fact financial statements
  • Designed and intended for use accounting small business to improve control functions.
  • Miami Accountants responds to the needs of small business, using management information systems

Miami Accountants firms are traditional vs. innovative

According to most Miami Accountants, accounting processes is mostly about the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan, evaluate and control within an entity and to assure appropriate use of and accountability for its resources. Miami Accountants also complies with the preparation of financial statements for non-management groups such as shareholders, creditors, regulatory agencies and tax authorities such as AHCA Medicare Cost Reports.

Miami Accountants recently updated its definition of its accounting practice as follows:  “Accounting is a profession that involves partnering in management decision making, devising planning and performance management systems, and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization’s strategy.”

Our Miami Accountants extend best practices to the following three areas:

  • Our Miami Accountants are strategic partners in your organization.
  • Developing our accounting firms practices to assist in decision-making and managing the performance of the organization.
  • Risk Management contributing to frameworks and practices for identifying, measuring, managing and reporting risks to the achievement of the objectives of the organization.
 When hiring Miami Accountants, consider if you want traditional vs. innovative practices

Please call us for a free initial consultation.

 

Categories
Medicare

Proof of Financial Ability to Operate

Healthcare Accounting Specialist Explains Proof of Financial Ability to Operate

As you may know, part of the process to complete the Health Care Licensing Application, the Florida Agency for Health Care Administration (AHCA) and the Florida Statutes requires that each applicant to establish AHCA Proof of Financial Ability to Operate and to show per Healthcare accounting requirements the anticipated provider revenue and expenditures, the basis for financing anticipated cash-flow requirements of the provider, and an applicant’s access to contingency financing. To establish AHCA proof of financial ability to operate, information is provided in detailed forms and schedules which include the monthly projected summary of revenue and expenses, the monthly projected cash flow statements for 24 months and the two annual balance sheets and detailed footnotes that include summaries of significant assumptions, accounting policies and other informative disclosures as required by Generally Accepted Accounting Principles (GAAP). Typical Excel based spreadsheets may be cumbersome to design for this purpose.  Because of the special requirements to produce monthly income statements and cash flows for 24 months, customized projection software is needed to meet the reporting requirements. Subsequent to approval, certain Medicare providers will have to file an annual Medicare Cost Reports.

To show AHCA proof of financial ability to operate per Healthcare accounting requirements the forms and schedules must accompany any initial or change of ownership (CHOW) application for the following types of health care providers.

•  Adult Day Care Centers

•  Assisted Living Facilities

•  Health Care Clinics

•  Home Health Agencies

•  Home Medical Equipment

•  Hospice

•  Intermediate Care Facilities for the Developmentally Disabled

•  Prescribed Pediatric Extended Care Center

•  Skilled Nursing Facilities

All schedules must be prepared in accordance with generally accepted accounting principles (GAAP). A Certified Public Accountant (CPA) must compile, examine, or apply agreed-upon procedures to prospective financial statements, including summaries of significant assumptions and Healthcare accounting policies. Such a requirement is usually not required for the annual Medicare Cost Reports

To establish AHCA proof of financial ability to operate each applicant can select the type of financial statement to be given to the Provider.  As mentioned above, the three choices are :

1.  Compiled

2.  Agreed-upon procedures

3.  Examined

To establish AHCA proof of financial ability to operate and to learn more about your financial statement options and Healthcare accounting requirements:

Before you select the level of service from the CPA , the following will serve as a brief analysis of each option.

1.  Compile – A compilation engagement is the lowest level of service that an accountant can perform on prospective financial presentations that is intended for third parties. Despite it being the lowest level of service, it is a very common deliverable provided by a CPA and often a cost effective solution for many companies, when required or accepted by third parties and acceptable healthcare accounting practices utilized. Compilation procedures includes assembling, to the extent necessary, the prospective financial information based on the responsible party’s assumptions. Performing the required compilation procedures, including reading the prospective financial statements with their summaries of significant assumptions and healthcare accounting policies, and considering whether the prospective financial statements appear to be (1) presented in conformity with American Institute of Certified Public Accountants(AICPA) guidelines and (2) not obviously inappropriate. The compilation procedures are not performed for the purpose of providing any assurance on the presentation or on the underlying assumptions. The accountant may prepare the financial statements or then reads them when they are prepared by the Company’s management  to make sure that they appear appropriate in form and content. Because the accountant does not perform any other procedures, the accountant does not obtain any assurance that the financial statements are free of material misstatement. A compilation report is issued by the CPA.

2.  Agreed-upon procedures – With an agreed-upon procedures engagement the accountant is engaged by a client to perform specific procedures and report findings. The accountant does not perform an examination or provide an opinion. Rather, the accountant reports only procedures and findings. In this type of an engagement, the accountant performs whatever procedures the users of the prospective statements specify. It is a flexible form of engagement; the procedures may be as extensive or cursory as the specified parties want, but should include more than a mere reading of the prospective financial statements. The service may be lower than a compilation, between a compilation and an examination, or as high as an examination.

3.  Examined – An examination engagement is a professional service that involves extensive corroborative procedures, resulting in the CPA’s expression of positive assurance about the presentation and the underlying assumptions. It is similar to an audit of historical financial statements and is the highest level of service that CPA’s can provide on prospective financial statements. The examination involves (a) evaluating the preparation of the prospective financial statements,(b) evaluating the support underlying the assumptions,(c) evaluating the presentation of the prospective financial statements for conformity with AICPA presentation guidelines, and (d) issuing an examination report.

Some additional insight factors to consider when choosing the levels of service

In an examination engagement an opinion is given by the CPA and it states that (i) the prospective financial statements are presented in conformity with AICPA guidelines and (ii) the assumptions provide a reasonable basis for the responsible party’s projection, the assumptions provide a reasonable basis for the responsible party’s projection given the hypothetical assumptions. Because an examination is an extensive service, it is more expensive to provide than the other two alternatives. Examinations are typically performed when the prospective presentation is associated with a decision involving a large amount of money or when a regulatory agency (such as a securities commission or health care authority) requires it.

Notwithstanding the statutory requirement for either a compilation, or agreed-upon procedures or examination to establish the AHCA proof of financial ability to operate, you may want to consult with your counsel and the healthcare accounting authority before hiring the accountant to prepare the Florida AHCA Proof of Financial Ability application.

We can help you with …..

•Due diligence on acquisitions of Home Health Agencies  that are  primarily Medicare based.

•To provide the AHCA proof of financial ability to operate, we can assist  you with the Florida AHCA Proof of Financial Ability application including assistance with compiled prospective(projected) financial statements that are required to be completed by a Certified Public Accountant for Home Health Agencies that are primarily Medicare based. We have developed specialized projection software that was customized to meet the AHCA requirement(s) for a Medicare based Home Health Agency that shows the monthly projected summary of revenue and expenses and the monthly projected cash flow statements for 24 months and the two annual balance sheets.

•Setting up accounting systems with QuickBooks and related training after obtaining your license from the State of Florida.

We have prepared dozens of projections  over the years in various industries and recently successfully assisted a Medicare based Home Health Agency and HME   in completing and filing a AHCA proof of financial ability to operate (CHOW) and to attain a license from The Florida Agency for Healthcare Administration (AHCA) by completion of the  Proof of Financial Ability To Operate application, which included preparation of the projections, forms and schedules referred to above and communication with the AHCA reviewer.

Categories
Tax

Accounting Services in Miami Review LIFO Rules

Accounting Services in Miami Review LIFO Rules

During inflationary times, Accounting Services in Miami can reduce company’s taxable income by using the last-in, first-out (LIFO) cost flow assumption for inventories. However, the tax savings from using LIFO come at a cost. Under the LIFO conformity rule in Sec. 472(c), if Accounting Services in Miami us LIFO is used on a taxpayer’s tax return, no other method can be used to value inventory to calculate income, profit, or loss in any report or statement covering the same tax year that is provided to shareholders and other owners, or to creditors. Accounting Services in Miami strictly enforces this rule.

The increase in multinational companies and the disparity in financial reporting standards among countries add to the complexity of satisfying the LIFO conformity rule. While LIFO is allowed under U.S. GAAP, it is not allowed under IFRS.  If an Accounting Services in Miami Violates the LIFO conformity rule would certainly be a concern if the United States adopts IFRS for financial reporting rules; however, even if the United States does not adopt IFRS, these standards are increasingly being used globally. Accounting Services in Miami preparing financial statement for U.S. entities that are members of larger consolidated groups with foreign operations or ownership need to be aware of what is and is not allowable to avoid violating the conformity rule.

In a recent legal advice memorandum (FAA 20114702F), the IRS determined that a U.S. taxpayer had violated the LIFO conformity rule by providing a bank with financial statements prepared under both U.S. GAAP and IFRS. In this case, the taxpayer, which had been using LIFO for both financial statement and tax reporting purposes, was bought by a foreign entity that used IFRS for financial reporting purposes. The taxpayer continued to use LIFO for tax and financial reporting purposes but reported to its foreign parent on an IFRS (non-LIFO) basis. To meet the bank requirements for a letter of credit, Accounting Services in Miami provided a nonconsolidated IFRS-only balance sheet and income statement, and a balance sheet and income statement in a three-column tabular format showing the reconciliation between IFRS and U.S. GAAP. The U.S. GAAP column was calculated using LIFO to value inventories. Analyzing the mistakes made by this company that led to the decision in FAA 20114702F can help both domestic and multinational companies better understand what is allowable under the conformity rule.

The first mistake the Accounting Services in Miami made was to provide the non-LIFO financial statements for credit purposes. Even though the statements were provided as required by an already existing letter of credit rather than to obtain new credit, the IRS considered maintaining a current credit relationship to fall under the definition of “credit purposes.” Taxpayers that use LIFO for tax reporting purposes are allowed to issue financial statements on a basis other than LIFO only if they are for noncredit purposes and are not provided to shareholders or other owners. “Noncredit purposes” generally applies to statements provided to government agencies for regulatory purposes. Specific examples of statements that have been considered to be for noncredit purposes are information statements provided to the Council on Wage and Price Stability (Rev. Rul. 79-139), state franchise tax returns (Rev. Rul. 78-304), and information provided to the Bureau of Census and the Bureau of Economic Analysis (Rev. Proc. 76-36).

In all these situations, the information provided to these agencies did not violate the conformity rule because the agencies kept the information confidential and did not use the information for purposes other than the official purpose for which it was collected. In addition, using a non-LIFO method to calculate and report a financial forecast is not a violation of the LIFO conformity rule, as forecasts are speculative and do not report actual income, profit, or loss (Rev. Rul. 88-84).

The second mistake the Accounting Services in Miami made was to provide the creditor with statements for the U.S. subsidiary only rather than consolidated statements for the entire foreign-owned consolidated group. Sec. 472(g) requires that all corporations that consolidate their financial statements for financial reporting purposes be treated as a single taxpayer for purposes of the LIFO conformity rule. Rev. Rul. 78-246 provides an exception for foreign-controlled consolidated groups. The use of a non-LIFO method of calculating income, profit, and loss in the consolidated statements of a foreign-controlled consolidated group even when one or more of the subsidiaries uses LIFO for U.S. income tax reporting will not be considered a violation of the LIFO conformity rule as long as the consolidated group has “substantial foreign operations.” The consolidated group is deemed to have substantial foreign operations if 30% or more of the group’s total operating assets are used in foreign operations.

Entities with less than 30% of the total operating assets used in foreign operations may also fall under this exception if, based on the facts and circumstances of the case, it is determined that they still meet the qualification of “substantial foreign operations.” (See, e.g., Letter Rulings 200703018 and 200540005.) It is not clear from the facts presented in FAA 20114702F whether the foreign-owned consolidated group would have met the “substantial foreign operations” test, but if that test had been met, providing a consolidated financial statement using a non-LIFO method would not have been considered a violation of the LIFO conformity rule. This exception does not apply to a domestically controlled consolidated group (Rev. Rul. 89-41).

The final mistake the taxpayer made was that the statements containing non-LIFO information were not marked as supplementary or presented in a format that could be considered acceptable under the conformity rule. Regs. Sec. 1.472-2(e) provides an exception to the conformity rule that allows a taxpayer to use a method other than LIFO in reports that are provided as a supplement or an explanation of their primary presentation of income, profit, or loss. Specific rules, however, have to be met for the information to be considered as supplemental. Information provided in an appendix or supplement to the income statement qualifies only if it is issued in the same report as the income statement and clearly marked as an appendix or supplement. The item being explained in the supplement must be presented in the main statement or report on the LIFO basis. The only time that a note or notes presented on the face of the income statement are considered supplemental is if all the notes are presented together on the face of the statement.

The rules for the balance sheet are somewhat more flexible, in that the parenthetical disclosure on the face of the balance sheet is considered supplemental information and therefore does not violate the conformity rule (Regs. Sec. 1.472-2(e)(4)). Examples that satisfy the exception in Regs. Sec. 1.472-2(e) are explained and illustrated below. For these examples, the taxpayer’s financial statements on a U.S. GAAP (LIFO) and an IFRS (non-LIFO) basis are shown in Exhibit 1. The current-year difference between LIFO and non-LIFO cost of goods sold is $60,000. The cumulative effect of the difference between LIFO and non-LIFO on the balance sheet is $150,000.

The taxpayer in FAA 20114702F provided a bank with an IFRS-only income statement and an income statement that presented the information under IFRS with a reconciliation to U.S. GAAP. The IFRS-only statement was not marked as an appendix or as supplementary. Even if the taxpayer had provided only the statement with the reconciliation, the IFRS information could not be considered supplemental because it was presented on the face of the statement. If the creditor had been provided with a U.S. GAAP-only income statement and the reconciliation in a separate but attached document that was clearly marked as a supplement, the taxpayer would not have violated the conformity rule (Regs. Sec. 1.472-2(e)(3)).

The IFRS-only balance sheet that was provided to the bank violated the conformity rule because the non-LIFO information was not supplemental, but rather the primary presentation of the financial information. The taxpayer could have provided the creditor with the IFRS balance sheet information if that information had been presented in parenthetical disclosures as shown in Exhibit 2 (based on the financial statements from Exhibit 1) rather than as the primary accounting method.

It should be noted that for companies that do not want to translate every inventory-related number in their financial statements to the LIFO basis, there are some presentation options that would not violate the conformity rule. LIFO does not have to be used to calculate cost of goods sold or operating profit in the primary income statement as long as there is an adjustment so that ending net income is calculated on a LIFO basis.

In Rev. Rul. 97-42, Situation 2, the IRS allowed a taxpayer to present cost of goods sold and operating profit using a non-LIFO basis with an adjustment to LIFO included as part of the total nonoperating items presented as a single line item. The detail of the nonoperating items could be presented in a supplement to the income statement or in the notes to the income statement. Exhibit 3 presents an income statement based on the income statements from Exhibit 1 with the cost of goods sold, gross profit, and operating profit presented on a non-LIFO basis and the current-period LIFO effect of $60,000 included in the $(10,000) total nonoperating items. The detail of the nonoperating items is presented in Supplement 1 to the income statement.

Valuation of the inventory asset on the balance sheet using a non-LIFO basis is not considered a violation of the conformity rule as long as equity is not calculated in a way that states income, profit, or loss for the current year under a non-LIFO basis (Regs. Sec. 1.472-2(e)(4)). In Letter Ruling 201034004, the IRS said that it was not a conformity violation for a taxpayer to provide a LIFO-basis income statement and a balance sheet with inventory and total equity on a non-LIFO basis if retained earnings are on the LIFO basis and a conversion to the non-LIFO basis is included in the total of other comprehensive income. The detail of other comprehensive income can be provided in a secondary schedule that is clearly marked as a supplement as illustrated in Exhibit 4 (once again, based on the financial statements from Exhibit 1). The income statement is fully presented on the LIFO basis. In the balance sheet, inventory is calculated on a non-LIFO basis, retained earnings is calculated on the LIFO basis, and the $150,000 cumulative LIFO-effect adjustment is included in the total of accumulated other comprehensive income.

Violating the LIFO conformity rule could lead to a company’s loss of the right to use LIFO for tax reporting purposes, which would result in a large taxable gain. Organizations that use LIFO for tax reporting purposes need to be careful to not issue financial information that would violate the conformity rule. This is becoming especially important as more U.S. corporations are being required to issue certain information under the IFRS rules because they are affiliated with a foreign group that reports under IFRS. A solid understanding of what is and is not allowed under the conformity rule can help U.S. taxpayers avoid the negative consequences that occur when the conformity rule is violated. If a taxpayer is concerned about violating the conformity rule, a private letter ruling should be requested before issuing financial statements or providing other financial information. Instructions for requesting a private letter ruling can be found in Rev. Proc. 2012-1.

Categories
Accounting

Proposed revisions clarify responsibilities for Accountants in Miami

Proposed revisions clarify responsibilities for Accountants in Miami

In accordance with recently proposed revisions to professional standards, Accountants in Miami who prepare financial statements for clients would consider that a nonattest bookkeeping services in Miami and would no longer be required to perform a compilation service with respect to those financial statements unless engaged to do so.

The changes, proposed in June by two AICPA committees, would require Accountants in Miami who prepare financial statements, but are not engaged to perform a compilation, review, or audit, to request that management include a label or notation that makes clear that the financial statements were not compiled, reviewed, or audited. Alternatively, Accountant in Miami can attach a disclaimer to the financial statements to indicate when they have not been compiled, reviewed, or audited.

It is anticipated that the proposed changes would have minimal impact on CPAs who prepare financial statements for their clients, except with regard to the requirements to perform a compilation service, which will undergo significant revision under the proposal.

In accordance with current rules, a Accountants in Miami who prepares and presents financial statements to a client or third party must also perform the compilation service, whether or not the client has engaged the Accountant in Miami for the compilation.

The proposed standard would dictate that CPAs who prepare financial statements would perform a compilation only if they are engaged by their client to do so. The compilation would be a “read and report” service separate from the preparation. Once engaged to perform a compilation service, the CPA would read the financial statements to see if there are obvious mistakes or flaws, and then issue an accountant’s compilation report on the financial statements.

This change is contained in a proposed Statement on Standards for Accounting and Review Services (SSARS) exposed for public comment by the AICPA Accounting and Review Services Committee (ARSC). ARSC has also exposed for public comment a proposed standard that addresses the accountant’s association with financial statements that the accountant has not compiled, reviewed, or audited.

The proposal that would make preparing financial statements and performing certain bookkeeping services Miami nonattest services is contained in an exposure draft issued June 29 by the AICPA Professional Ethics Executive Committee (PEEC), the technical committee charged with interpreting and enforcing the AICPA Code of Professional Conduct. The nonattest services would be subject to the provisions of an AICPA professional standard on independence. The standard is Interpretation No. 101-3, “Performance of Nonattest Services,” under Rule 101, Independence (AICPA, Professional Standards, ET sec. 101 par. 05).

This proposed change would harmonize the ethical standards with the views of some Accountants in Miami who already consider the financial statement preparation to be a nonattest bookkeeping service in Miami. The proposal also would conform the standards to the revised independence standard issued in August 2011 by the U.S. Government Accountability Office (GAO), which indicates that financial statement preparation is not part of the audit service.

Specifically, the GAO’s revised standard includes a provision stating that nonattest bookkeeping service Miami, such as preparation of financial statements, cash-to-accrual conversions, and reconciliations, would be considered nonattest services, not routine services related to the performance of an audit. This standard is inconsistent with a nonauthoritative frequently asked question (FAQ) published by the Professional Ethics Division.

In this FAQ, the division took the position that preparing financial statements as part of an attest engagement would not be considered a nonattest service, provided the client’s records are substantially complete and current in order to conduct the attest engagement on those books and records. The FAQ further stated that if the member performed a service to bring those books and records current or complete, the service would be considered outside the scope of the normal attest engagement and, therefore, a Accountants in Miami subject to the requirements of Interpretation No. 101-3.

PEEC reconsidered the position taken in the FAQ and agreed to conform to the GAO position.

Interpretation No. 101-3 has been under review since November 2009, when PEEC learned of confusion and diversity in practice related to a provision within the interpretation that concluded independence would be impaired if a member established or maintained internal controls for a client. PEEC was advised that some members believed this provision prohibited certain activities for an attest client, such as preparing financial statements or reconciling accounts, because under the Committee of Sponsoring Organizations of the Treadway Commission’s Internal Control—Integrated Framework, such activities could be viewed as part of the system of internal control over financial reporting.

This belief conflicted with PEEC’s intention on how the provision governing establishing or maintaining internal controls should be applied. PEEC intended that the establishing-or-maintaining-of-internal-controls provision should apply to situations whereby the member, in effect, manages the internal audit activities of the client or situations when the member accepts responsibility for designing, implementing, or maintaining internal controls for his or her clients. PEEC believed its intention was supported by the fact that 101-3 provides that independence can be maintained when CPAs assist clients with performing bookkeeping services, including financial statement preparation, and reconciling a client bank account when certain safeguards are in place.

At its meeting in May, PEEC approved two sets of revisions to 101-3. One set of revisions was previously exposed for comment and will take effect on Aug. 31, 2012. The second set of revisions appears in an omnibus ED from the Professional Ethics Division dated June 29, 2012. The revisions that are effective Aug. 31 include clarification that independence would be impaired if members accept responsibility for designing, implementing, or maintaining controls for a client but would not impair independence if members perform certain nonattest services, including Accountants in Miami services such as preparation of financial statements or preparing account reconciliations, provided certain safeguards are in place.

IMPACT ON THE AUDITING, REVIEW, AND COMPILATION STANDARDS

Current auditing, review, and compilation standards permit the Accountants in Miami to prepare or draft financial statements, in whole or part, as part of the attest engagement:

Auditing standards (paragraph .03 of AU section 110, Responsibilities and Functions of the Independent Auditor [AICPA, Professional Standards]) state that the independent auditor may make suggestions about the form or content of the financial statements or draft them, in whole or in part, based on the information from management during the performance of the audit.

Review standards are silent with respect to preparation of financial statements, but it is understood that accountants often prepare financial statements as part of a typical review engagement.

Compilation standards (paragraph .01 of AR section 80, Compilation of Financial Statements [AICPA, Professional Standards]) state that the Accountants in Miami is required to comply with the provisions of AR section 80 whenever he or she is engaged to report on compiled financial statements or submits financial statements to a client or third parties. Paragraph .04 of AR section 60, Framework for Performing and Reporting on Compilation and Review Engagements (AICPA, Professional Standards), defines submission of financial statements as presenting to management financial statements the accountant has prepared.

Because any financial statement preparation or drafting would be considered a nonattest service under the PEEC proposal, clarifications to these standards will be necessary. The audit and review standards can be easily clarified by including a footnote or other language that states that the provisions of 101-3 apply when the auditor or accountant prepares financial statements. But the compilation standards will require more extensive revision, which is addressed in the proposed SSARS exposed by ARSC.

As a result of the PEEC and ARSC revisions, an engagement to prepare financial statements would be a nonattest service and not subject to the compilation standard. To make clear the accountant’s responsibility when the accountant is engaged to prepare financial statements but is not engaged to perform a compilation engagement, ARSC has also exposed for public comment an additional proposed standard. That proposal addresses the accountant’s responsibilities when he or she is associated with financial statements that have not been compiled, reviewed, or audited. That proposed standard would require certain legends, notations, or disclaimer language be placed on or with the financial statements when the accountant prepares financial statements but has not compiled, reviewed, or audited the financial statements. This association standard is in response to a public interest concern that anyone using financial statements that have been prepared, in whole or part, by a Accountants in Miami understands that those financial statements have been prepared without audit, review, or compilation.

The proposed association standard would be effective for unaudited financial statements with which the accountant is associated on or after Dec. 15, 2014. The proposed revisions to the compilation standard would be effective for compilations of financial statements for periods ending on or after Dec. 15, 2014.

The proposed effective date of the revisions to Interpretation No. 101-3 would be two years from the date when the revision is published in the JofA. Early implementation of the proposed revisions to 101-3 and the new SSARSs would be permitted so that accountants can implement the revised standards simultaneously.

EXECUTIVE SUMMARY

Recently proposed revisions to professional standards would require CPAs who prepare financial statements for clients to consider that service a nonattest bookkeeping service Miami. The CPAs would no longer be required to perform a compilation service with respect to those financial statements unless specifically engaged to do so. The proposed changes would consider all financial statement preparation to be a nonattest service, regardless of whether the accountant also is engaged to compile, review, or audit the financial statements.

CPAs who prepare financial statements would perform a compilation only if they are engaged by their client to do so in accordance with the proposed standard. The compilation would be a “read and report” service separate from the preparation of the financial statements. Once engaged to perform a compilation service, the Accountants in Miami would read the financial statements to see if there are obvious mistakes or flaws, and then issue an accountant’s compilation report on the financial statements.

The changes proposed would harmonize the professional standards with the views of some practitioners who already consider the financial statement preparation to be a nonattest service, and would conform the standards to corresponding U.S. Government Accountability Office (GAO) literature.

Proposed changes include a standard addressing the accountant’s association with financial statements that he or she has not compiled, reviewed, or audited. The proposal would require Accountants in Miami who prepare financial statements, but are not engaged to perform a compilation, review, or audit engagement, to request that management include a label or notation that makes clear that the financial statements were not audited, reviewed, or compiled. Alternatively, CPAs can attach a disclaimer to the financial statements to indicate when they have not compiled, reviewed, or audited the financial statements.

The proposed changes are expected to have minimal impact on CPAs who prepare financial statements for their clients, except with regard to the requirement to perform a compilation service, which would be revised significantly under the proposal.

 

Categories
Accounting

Does your Miami Accountant understand your financial situation?

Does your Miami Accountant understand your financial situation?

I recommended that Miami Accountant conduct a 30-minute financial checkup annually for all clients. A Miami Accountant by simply sitting down with clients and reviewing financial statements, you can build a bridge from the past to the future. This session is not time consuming, and it is highly productive. At a minimum, it will deepen the relationships you have with clients. It may also generate additional fees for the practice — clients will learn that you are more than Miami Accountant, tax preparer Miami/compliance professional.

Basic things that Miami Accountant should do:

1. Explain the financial statements in plain and easy-to-understand language. The worst thing to do is turn these sessions into one-way communication where clients are lectured and may not understand the issues being discussed. Numbers from a balance sheet or income statement don’t mean anything to the average and highly intelligent business client. Break things down and make sense of the financial numbers for clients. This point is vital.

2. The Miami Accountant should develop some understanding of margin management. Most businesspeople don’t understand the importance of margins. In many businesses, either the gross margin or the net margin drives the business most. (Gross margin is sales less cost of sales divided by sales. Net margin is net profit divided by sales). Many good business people think that the key to success is increasing sales volume. They don’t have an appreciation for how volume affects both cash and profit. Many times, increases in sales may decrease profits or cash or both.

3. Point out some very simple areas the business person can work on. In my experience, the vast majority of businesses are driven by three or four key pieces of data. If these are managed well, the business does well. If they are not managed well, the business does not do well. It is important to try to identify these before the session.

The sessions should be informal and brief. If the session goes well, you will be viewed as a true strategic partner by your client — as a friend and ally. If it does not go well, then at least the client will know you care. In all likelihood, your clients will be surprised and impressed that you took the time to help them. In my experience, you will also generate additional fees from these sessions since almost all of these types of sessions will lead to further questions, challenges, and work.