Friday, June 17, 2016

Week-End: Interview tips. Video by PWC

Amp up your interview!
Express yourself with the power of storytelling. Be authentic and memorable!
Here is a practical application of some of the top Interview tips from PWC US recruiter.



Thursday, June 16, 2016

Audit Method: Subsequent Events

Subsequent Events as defined in ISA 560 are Events occurring between the date of the financial statements and the date of the auditor’s report, and facts that become known to the auditor after the date of the auditor’s report.”

The objectives of the auditor for considering subsequent events are:

(a) To obtain sufficient appropriate audit evidence about whether events occurring between the date of the financial statements and the date of the auditor’s report that require adjustment of, or disclosure in, the financial statements are appropriately reflected in those financial statements in accordance with the applicable financial reporting framework; and
(b) To respond appropriately to facts that become known to the auditor after the date of the auditor’s report, that, had they been known to the auditor at that date, may have caused the auditor to amend the auditor’s report.

Perform audit procedures designed to obtain sufficient appropriate audit evidence that all events up to the date of the audit report that may require adjustment of, or disclosure in, the financial statements have been identified

·   Consider changes in the areas which may affect the financial statements and other information in the annual report such as banking arrangements, currency and interest rates, key markets, key products, customers or vendors, key management or employees, government regulation or policy and the ratio of orders to sales and cash receipts and the position of the order book.

·   Consider other significant knowledge gained, for example press comment, internal audit reports, changes in client trading patterns, changes in laws or regulations, currency devaluations, major fires or catastrophes, or technology failures (e.g. computer operations failures) and security incidents.

·   Evaluate procedures management has established to ensure that subsequent events are identified.

·   Inquire of management and, where appropriate, those charged with governance as to whether any subsequent events have occurred which might affect the financial statements.

·   Review the results of the review of minutes of meetings of the entity’s owners, management and those charged with governance, including audit, executive and other Board committees since the balance sheet date.

·   Consider reviewing invoices from lawyers received after the year-end to determine whether any litigation, claims or assessments exist that were not previously identified in our analysis of legal expenses and other procedures.

·   Review the latest available interim financial statements and, as considered necessary and appropriate, budgets, cash flow forecasts and other related management reports. Consider whether they reveal any adverse trends or significant movements in balance sheet headings compared to the audited financial statements. Consider whether the management information is reliable.

Practice
Where a material subsequent event has been identified, determine whether it is reflected in the financial statements in accordance with the applicable financial reporting framework by adequate disclosure and, where appropriate, adjustment of the account balances and transactions affected. Consider also its effect on the audit report.

Wednesday, June 15, 2016

Audit Firm: Busy Season

Hello, my followers! Do you have busy season during off season time (it is summer after all, isn't it?!) ? Well, I have. I have to perform audit of 8 statutory financial statements during this summer, then the audit and review of listed companies. I am not complaining, I am just saying: "Busy!". And here is my next article for you about the busy season time tips.

Intro
Busy Season for auditors means long hours, tight deadlines, and constant pressure. It can be exhausting for even the most experienced accountants. The busy season for auditors normally starts from around mid-January and lasts till the end of March.
Here are few tips that will help you to get through the busy season in a successful manner.

Start your day earlier
Starting to work early in the morning can save you some time for a calm sleep in the night that will make you refresh for the next day. Although late sitting is a norm and not an exception during the busy season for auditors, but starting your day earlier can actually help you manage your tasks more efficiently.
Take advantage of travel time to the office: While on the way to office if you are not driving, you can easily check your e-mails, prioritize your most important tasks and preplan the schedule for the whole day.

Set Agenda for meetings
Plan your meetings well ahead of time by setting agenda for each meeting so as to avoid missing out on any important issue that needs to be discussed and clarified from the client.

Make a To-Do List
At the end of every day make a To-Do List for the next day. Things that are left undone today should be given priority the next day so as to avoid backlog of activities. 

Delegate Work
Activities that can be handled by subordinates should be handed over to them in a timely manner to free up yourself for handling more productive tasks.

Keep office and personal time separate 
Busy season does not mean you should ignore your family, health and other recreational activities. Exercise regularly. Do take breaks on the weekends and enjoy passing time with family and friends which will help you to be more effective at work. .

Apply the “Pay time” Sale Concept
Pay time is the time during the day when clients are available; normally it is from 9:00 a.m. in the morning to 6:00 p.m. in the evening. No pay time is when you would not be able to reach out to them. Use no pay time for responding to e-mails, writing, research, or for any other marketing activity that does not directly lead to a paycheck. (Kelley C. Long, CPA, personal financial coach)

Additional Thoughts

The thought of busy season can bring some stress but if you mentally prepare yourself and try to weigh the positives and the negatives you can tackle it with ease and full of productivity. Do plan a trip at the end of the busy season that will keep you motivated throughout the tough busy working season and will also re-energize you at the end of it. 

Thursday, December 24, 2015

Audit News Briefing: 24 December 2015

Audit-is-cool is pleased to accumulate and provide its readers with the news on audit and related topics:

December 16, 2015
Reuters - dailymail.co.uk
Accounting firms, SEC hobble U.S. audit watchdog
"U.S. rule-making is a complex process that involves people with many different perspectives who care deeply about the issues… I think this is the case with the PCAOB and SEC in the work we do together, including proposals to give more information to investors about who is leading the audits of the companies in which they invest." This is what PCAOB chief Doty said in a written statement during the annual accounting-industry gala. James Schnurr, who is just two months into his job as chief accountant at U.S. SEC also addressed auditing failures that had shaken public confidence in recent years. Investigative journalist Charles Levinson enumerated all exchanges of thoughts and surrounding events of this so-called hobble.


December 15, 2015
The Wall Street Journal
Regulator Approves Naming of Audit-Firm Partners in Charge of Corporate Audits
Under the long policy aim to make auditors more accountable – Beginning with audits performed in 2017, audit firms will have to name their “engagement partner” in charge of each audit in a new form to be filed with the Public Company Accounting Oversight Board. The PCAOB voted unanimously last December 15 (Tuesday) to enact the proposal, which is still subject to Securities and Exchange Commission approval.


December 10, 2015
Street Insider
SEC Suspends Five Public Accountants and Two Audit Firms for Bad Auditing
“Auditors must follow the professional standards and avoid conflicts of interest when they opine on the financial information reported by public companies… These accountants and their firms showed complete disregard for the basic rules of their profession. As a result, they are now barred from working on any SEC-related matters.”

This was the pronouncement of Director Paul G. Levenson of the SEC’s Boston Regional Office. The government regulator suspended five accountants and two audit firms from practicing or appearing before the SEC after they violated key rules that are designed to preserve the integrity of the financial reporting system.

According to the SEC’s orders finding violations by Peter Messineo and his firm Messineo & Co., Charles Klein and his firm DKM Certified Public Accountants, Robin Bigalke, Joseph Mohr, and Richard Confessore:

·         Messineo and his firm, which had more than 70 corporate clients, skipped mandatory quality reviews for their own audits and performed deficient quality reviews for audits by another audit firm.
·         To cover up these violations, Bigalke falsified and backdated audit documents in her role as Messineo & Co.’s senior accountant. She also arranged with Mohr, the firm’s quality reviewer, the backdating of quality review documents.
·         Mohr falsely identified himself as a certified public accountant during a time when was not licensed as a CPA.
·         Messineo served as the CFO of two public companies being audited by Klein and DKM. Messineo falsely certified the companies’ public filings despite knowing that auditor independence rules were being violated as Confessore was improperly serving conflicting roles as a member of the DKM audit team and an employee of Messineo & Co.
·         After Messineo resigned from his CFO positions at both public companies, he merged his audit firm into DKM and exacerbated DKM’s independence issues because he retained ownership interests in the two companies while DKM continued to audit them.




Wednesday, December 23, 2015

Audit Method: Small Business Audit

An audit is designed to evaluate and verify the effectiveness of company’s financial operations. It can also help the management or owner detect circumstances that could lead to financial problems in the future.
But the audit strategies used on bigger companies may not be applied for audits of a small business.  Big companies can rely on their own internal auditors to provide assistance.  But small businesses, given a limited budget, have limited personnel.  With this, auditors of a small business might also need to adjust their audit strategy.
Auditors of a small business may encounter some challenges that affect their audit strategy since small businesses face certain challenges in executing effective internal control, particularly if management of the business perceives internal control as something to be added on rather than integrated with core processes.
Audit in a small businesses is very important so as to minimize the potential risks of material misstatements in the financial statements whether it is caused by error or fraud.
So what do Auditors need to pay attention on auditing a small businesses?
First, auditors should review the systems and examine financial documentation whether it is being processed in a timely manner. Without timely and reliable information, accounting records can become unreliable that may create discrepancies in a company's financial records.
Second, auditors should identify and review each component of the company's accounting system, including journal entries, T-Accounts, general ledger and financial statements.  Analytically work through the accounting system to ensure that all accounts are present, that all journal entries are posted to the general ledger in a timely manner and that the system has the ability to correct human errors, such as calculation errors.
Third, auditors should check into the company's internal controls policies to measure the level of security they provide from theft and fraud.  
Fourth, auditor should compare internal records of cash possessions, income and expenses against external records.   The auditor should check the company's stored external records and compare selected transactions against internal records.   For example, a purchase receipts sent from suppliers for a certain month will be compared against internal purchase records, or compare cash register tapes against revenue recorded on the books.
And finally, auditors should analyze the company's internal tax records and official tax returns.  Auditors should also take a little extra time to review the range of credits and deductions claimed on the most recent tax return, looking for areas of dubious reporting, such as inflated expense numbers.
Efficiency in audit is achieved through a careful audit planning.   One specific example is that auditors review the prior years’ workpapers to familiarize themselves with client issues and to look for past inefficiencies and possible improvements.  Another factor that contributes to audit efficiency is Auditors’ independence and objectivity.  Auditors should be free from bias, conflict of interest and undue influence of others to override professional judgements
Sources: 

Tuesday, December 22, 2015

Audit Firm: Interview with KPMG Partner

Audit-is-cool presents an excerpt from the Interview of Simon Collins (Chairman & Senior Partner KPMG UK).

Lane Mean: Hi, I am Lane Mean, I am content director of local world newspapers and I am introducing this evening Simon Collins. Simon is the chairman of the KPMG group, one of the big four. The debate tonight is actually being sponsored by the Bristol Post.

Simon you are seen as something of an inspirational leader in accountancy terms in the big four. How have you achieved this do you think? Because you were actually voted in as chairman by your peers, were not you?

Simon: Yes we had a pretty full blooded election, so it‘s a real democracy. 600 partners chose who they wanted to lead the firm for the next five years.

Lane Mean: So why do you think you won that?

Simon: I think you would have to ask the 600 truthfully but I think you the sort of messages I think were important to the partners were about a clear sense of purpose and direction about where the business goes, where it fits in society and a very big theme for me was how we put trust and respect back into business and the accountancy profession and KPMG.

Lane mean: And how do we because, I mean I am not bracketing you in the same way as bankers, but a lot of mistrust in the financial area is not there?

Simon: I think there is a huge amount of mistrust, I think broken is the only way to put it between business generally and society and I think there is a number of reasons    for that .We have got in almost every industry there is an example of behaviors that you cannot hold up and say that‘s what good business is. So whether it’s pharmaceuticals and rivalry, whether it’s horse meat, whether it’s liable miss–selling, whether its tax, every industry has got something that damages trust. So I think we have got a long slow journey to claw that back through good behavior and actually concentrating on doing the right.

Lane Mean: But how can you hope to do that because you have got loads and loads of partners have not you?

Simon: I don’t think that in a sense is the difficult bit, I mean certainly for us as a firm we have integrity and responsibility really close to our hearts and frankly the partnership model is really good. I don’t think I have got a single partner who does not care passionately about leaving the business in better shape than they find it and so doing the right thing, I think comes naturally.

Lane Mean: Yeah I mean the right thing, so what is right thing for a member of the “big four” like KPMG?

Simon: The right thing is to advise clients responsibly, to behave with integrity, to be a true commercial animal. I make no apology for profit being a big part of what we are trying to achieve to be sustainable business you have to make profit you have to be successful, but to be sustainable and to pass on a better business you also have to have at least a benign footprint in society, better still if business can actually contribute to society and leave good behind.

Lane Mean: Is it ethical to advise people to dodge tax do you think?

Simon: No if you ask question like that, no. Is it ethical to take advantage of legislation that   specifically encourages companies to locate in the UK and to take advantage of tax breaks yes. So I think where we get into trouble in part of that trust equation is when there is a lack of clarity about what we‘re talking about. Genuinely agree just bad behavior in tax planning is immoral, just outright wrong  and we condemn  it, the big accounting firms will have nothing to do  with it , utilizing tax breaks that are specifically put in place by government to compete  internationally, to encourage investment and people to come here and do business is a really good thing  to do. Good things to do for society at large and we get mixed up with that.

Lane Mean: But when we see companies going before select parliamentary committees as we have done and being frankly terribly embarrassed, I am not saying that you are involved with any of those people ,but it’s not good is it when the public sees that?

Simon: No it’s really bad for trust  but I think what we  have got to look at is several  things , you have got to look  at whether companies have been lawful and then whether politicians and society like the outcome of them being lawful, so if you look at some of big companies in the news for paying low headline rates of corporation tax ,that looks on the face of it  something that doesn’t work  for  society, but they have got  there without a breach of law at all, and in fact  in many cases they have  got there  specifically taking advantage of  things the government,  successive governments  have intended them to do. If society and government does not  like the result of that , which is that company X only pay 5p in the pound corporation tax, for me and for the profession. I think that’s a problem for legislators and not a problem to parcel out to tax advisers.

Lane Mean: No, now the day after the election, the budget rather, not the election, we are talking, I mean if you were in number 11.What would you do in terms of your first budget if it was yesterday? Have you got some thoughts on that?

Simon: I think that I wake up many days grateful. I am not in number 11 or politics generally, and I think one of big problem on number 11 anytime. NOW or recently is being not a great deal of money or flexibility to do things. it seems to me what the chancellor was looking to do, was to encourage growth in the economy to make the cake bigger and actually to get Britain exporting again, manufacturing again, and to the extent the limited money available was directed in those directions, actually I think it was a pretty decent budget for business.

Lane Mean: what about the grey vote, now lots there wasn’t there? Lots to encourage people retired people, to vote for the coalition in a year’s time?

Simon: I don’t know about voting, I think there was a lot for savers and there probability is, I think you’re right ,there’s probably a correlation between savers and the grey pound and so on .I think there was a lot there to actually encourage saving and actually investment indirectly as well and I think again you know that goes around in a virtuous circle for me with encouraging investment in industry and growth in manufacturing and so on ,so I don’t know ,I am sure, you’d have to ask the chancellor what his political ambitions were around those things, but from an economics point of view I think they made perfect sense.

Lane Mean: So what are you advising your clients from today on about how they see the next couple of years? Because you know we are going into election in a year’s time you will have a view about that?

Simon: Well it’s not so much political thought what we have got .we have got 24 offices up and down the country ,we look after companies from relatively small companies right through to the multinationals what we are seeing is a definite uptick in sentiment .definitely a more positive feel from our clients up and down the country .manufacturing, export, every, one feeling a little bit brighter .The growth figures support that ,job creation support s that ,so I think for the first time in quite a few years we have got what I would describe as a “benign back cloth “for business to plan .now we have also got some uncertainties we have still got very topical things around the Ukraine and political uncertainty, geo-political uncertainty if you like, Scottish independence is worrying people it’s not much that business should have or does have an outright view of right or wrong it’s simply uncertainty .So we have got, now we are in march, we have got general election next may. Business does not like uncertainty. On the other hand it’s learnt to cope with it, and I think overall watch for uncertainty, but invest into that “benign back cloth”.

Lane Mean: And what about you? You have got a five year plan.   I guess in your head? You are an accountant, accountant plan, so what’s the five years plan?

Simon: The five year plan, if you start at what I think of as sort of 70,000 feet, the five year plan is to leave behind a better business after my period of leadership than I inherited, and I think all leaders should have that in mind. I want to leave the business prouder, financially stronger and with a better footprint in the communities what you referred to earlier, than I found it.

Source
Complete Interview can be watched at the following link.

Monday, December 21, 2015

i-Monday: Every Person is Important

“Without realizing it, we fill important places in each other’s lives. It’s that way with the guy at the corner grocery, the mechanic at the local garage, the family doctor, teachers, neighbors, coworkers. Good people who are always “there,” who can be relied upon in small, important ways. People who teach us, bless us, encourage us, support us, uplift us in the dailiness of life. We never tell them. I don’t know why, but we don’t.
And, of course, we fill that role ourselves. There are those who depend in us, watch us, learn from us, take from us. And we never know.
You may never have proof of your importance, but you are more important than you think. There are always those who couldn’t do without you. The rub is that you don’t always know who.”
This quote teaches us that every person we encounter in our lives is important. We might not see it or understand it right away, but eventually, we will. And, later on, we will begin to understand that we are equally as significant in the lives of those around us as well. Even if we don’t know how or why we are important, or to who exactly we are important to, we need to know that we are; everyone is.
From: This quote is from “All I Really Need to Know I Learned in Kindergarten”, written by Robert Fulghum is an American Author, and the book from which the quote is from is how he came to fame. “All I Really Need to Know I Learned in Kindergarten” was all about seeing the world from a child’s eyes, which became a worldwide phenomenon when it became published in 1988.

Picture reference:

https://upload.wikimedia.org/wikipedia/commons/thumb/1/1a/Robert_Fulghum.jpg/547px-Robert_Fulghum.jpg