Are you wondering about PPP and EIDL accounting? Well, you've come to
Accounting and Auditing for CPAs
Understanding accounting and auditing is key to becoming an outstanding CPA. There's no way around it. If you want to be a great accountant or auditor, you have to keep up with the ever-changing accounting and auditing landscape. And believe me, it's always changing.
.
Being an excellent accountant or auditor requires knowledge in:
Accounting
Accounting standards primarily come from the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB). Other types of reporting frameworks include cash-basis, modified-cash basis, tax-basis, contractual, and regulatory. An accounting framework is used to create financial statements. The selection of the reporting framework is based on legal and regulatory requirements we well as the needs of users.
Once financial statements are created, they may be subject to attest procedures performed by a third-party CPA or CPA firm. Possibilities include a compilation engagement, a review engagement or an audit.
Many accountants are not auditors, but some are.
Auditing
Auditing is the inspection of accounting records, usually financial statements, by a third party CPA or CPA firm. The standards for auditing U.S. entities primarily come from the Association of International Certified Professional Accountants (AICPA) and are called Statements on Auditing Standards (SASs). Additionally, the AICPA provides attestation standards in the form of Statements on Standards for Attestation Engagments (SSAEs). Whether the SASs or SSAEs are used, the accountant--as an independent third party--uses these standards to add credibility to the information by rendering a opinion or report about the subject matter.
Auditors must understand accounting and audit standards.
Below are articles I've published to help you improve your accounting and auditing skills.
Accounting Articles
Below are articles about FASB and GASB standards.
ASU 2016-01 – Changes in Accounting for Equity Securities
Are you aware of the coming changes in accounting for equity securities?In
GASB 87 Lease Accounting
Are you looking for GASB 87 lease accounting information? Are you a
Debt Covenant Violations: How to Report
How does a debt covenant violation affect the presentation of debt on
Financial Statement References (at the Bottom of the Page)
What financial statement references are required at the bottom of financial statement
Understanding the New Nonprofit Accounting Standard
Are you ready to implement FASB’s new nonprofit accounting standard? Back in
ASU 2018-17: A VIEry Good Gift from FASB
It's time for another change to VIE accounting! The variable interest entity (VIE) considerations just
Going Concern Accounting and Auditing
Are you preparing financial statements and wondering whether you need to include
Simplifying the Measurement of Inventory (ASU 2015-11)
Are you up to speed on ASU 2015-11 Simplifying the Measurement of
Do Loan Guarantees Create Liabilities?
Can a loan guarantees create liabilities that go on the balance sheet
Debt Issuance Costs Have a New Parking Place
Debt issuance costs have a new parking place. For some time now,
Solve Accounting Problems Quickly: The Crystal Ball
Do you ever need to solve accounting problems quickly? I often hear
How to Account for Cash Overdrafts
How should you account for cash overdrafts (also called negative cash balances)
How to Account for Finance and Operating Leases
Most CPAs grapple with leases from the lessee’s point of view, so
Get Ready for Changes in Leases and the Leasing Industry
The Leasing Industry will Change In my last lease post, we saw
How to Understand the New Lease Accounting Standard
Do you need help in understanding the new lease accounting standard? This
GASB 63 and 65 (Deferred Outflows and Deferred Inflows) – A Summary
GASB 63 and 65 provide guidance regarding deferred outflows and inflows in
Auditing Articles
Below are articles about auditing and attesation standards.
Seven Excuses for Unnecessary Audit Work Papers
Unnecessary audit work papers create clutter and potential legal problems. I see
Segregation of Duties: How to Overcome
Segregation of duties is key to reducing fraud. But smaller entities may
Management Override of Internal Controls
Management can override internal controls, resulting in fraudulent financial reporting. Below I
A Guide to Audit Materiality and Performance Materiality
Want to perform your audits correctly but with less time? Then understand
Wrapping Up Audits: The Why and How
Wrapping up audits is a chore. But today's post will help you
Disbursement Fraud Audit Tests: Five Powerful Ideas
Are you looking for disbursement fraud audit tests? Here’s your article. You
2018 Yellow Book CPE Requirements – A Summary
What are the 2018 Yellow Book CPE requirements? You’ve heard about the
Auditing Equity: The Why and How Guide
Auditing equity is easy, until it’s not. Auditing equity is usually one
Single Audit Major Program Determination
Single Audit major program determination can be challenging. And if this determination
Single Audit Applicability and Objectives
Your organization received federal funds but you're not sure about Single Audit
Higher Audit Prices Due to Higher Risk
Audit risk increases uncertainty—and price. At least, it should. In this post,
Auditing Debt: The Why and How Guide
What are the keys to auditing debt? While auditing debt can be
The Why and How of Auditing: My Book on Amazon
Auditing Payroll: The Why and How Guide
Auditing payroll is a critical skill. Today I explain how.While payroll is
Auditing Accounts Payable and Expenses: A Guide
Accounts payable is usually one of the more important audit areas. Why?
Test of Controls: When to Perform and How
How to Identify and Manage Audit Stakeholders
Auditing Investments: The Why and How Guide
Want to know how to audit investments? You're in the right place. Below
Auditing Plant, Property, and Equipment: A Guide
Today, we talk about auditing plant, property, and equipment (or capital assets
Forty Audit and Work Paper Mistakes
Five Dirty, No Good, Terrible, Audit Habits
Today I describe five dirty, no good, terrible, audit habits. Certain peer review
Auditing Receivables and Revenues: The Why and How Guide
Today we take a look at auditing receivables and revenues.Revenues are the
Tests of Details: Substantive Procedures
Tests of details are the auditor's primary responses to risks of material
Auditing Cash: The Why and How Guide
Auditing cash tends to be straightforward. We usually just obtain the bank
Audit Planning: Develop Your Audit Plan and Strategy
This article teaches you how to develop your audit plan and strategy.
Substantive Analytical Procedures: Power Up
Are you using substantive analytical procedures in your audits? Many auditors rely
Auditing for Fraud: The Why and How
Auditing for fraud is important, but some auditors ignore this duty. So
Audit Documentation: If It’s Not Documented, It’s Not Done
Peer reviewers are saying, “If it’s not documented, it’s not done.” Why?
Audit Risk Assessment: The Why and the How
Today we look at one of most misunderstood parts of auditing: audit
Client Acceptance and Continuance: The Why and How
Client acceptance and continuance may be the most critical step in an
The Why and How of Auditing: A Blog Series about Basics
Audit Lessons from a Brain Tumor
SSAE 19: Agreed-Upon Procedures Engagements
On December 19, 2019, the AICPA released SSAE 19, Agreed-Upon Procedures Engagements.
Independence in Attest Engagements: Peer Review Focus
Independence in attest engagements in critical. Peer reviewers continue to focus on
Inherent Risk: How to Save Time by Properly Assessing
Do you know how to assess inherent risk? Knowing when inherent risk is low
Emphasis-of-Matter and Other-Matter Paragraphs: What You Need to Know
Do you know what you need to know about emphasis-of-matter and other-matter
Three Considerations in First Year Audits
Congratulations! You've won a new audit client. Now, let's consider the first
Seven Deadly Audit Sins
Seven deadly audit sins can destroy you. You just completed an audit
Yellow Book Independence and Preparing Financial Statements
Yellow Book independence is a big deal. And if you prepare financial
The Skinny on ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash
FASB issued ASU 2016-18, Statement of Cash Flows, in November 2016. This standard
AICPA Hosting Services Interpretation
As of July 1, 2019, hosting services impair independence, so says the
Government Auditing Standards 2018 Revision (Hot Off the Press)
Government Auditing Standards 2018 RevisionThe Government Accountability Office just issued the new
Going Concern Accounting and Auditing
Are you preparing financial statements and wondering whether you need to include
Preliminary Analytical Procedures: What You Need to Know
You can identify risks of material misstatement with audit planning analytics. Audit Planning
Supplementary Information, Other Information, and RSI
What’s the difference in supplementary information, additional information, and required supplementary information?
Four Keys to Better Client Interviews
Many times I have interviewed accounting staff and walked away thinking, “I
Internal Control Weaknesses: Capturing and Communicating
Too many times auditors fail to capture internal control deficiencies. Today I
Understand and Communicate Material Weaknesses and Significant Deficiencies
In today’s post, I tell you how to understand and communicate material
Uncollected Prior Year Fees: Can They Impair Your Independence?
Can uncollected prior year fees impair your independence? Answer: It depends. If a
Fake Bank Confirmation Responses: How One Man Defrauded Investors of $6 Million
The Western District of North Carolina U.S. Attorney’s Office issued a press
Obtain your copy of my book from Amazon
The Why and How of Auditing
Auditing Made Easy
Learn auditing from client acceptance to audit opinion issuance!
