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Review Financial Statements
Feb 14

Review Financial Statements on Monitors

By Charles Hall | Accounting and Auditing , Technology

Today I give you seven steps to review financial statements on computer screens. I explain how to review financial statements in Word and in PDFs. 

In another post titled How CPAs Review Financial Statements, I provide information about creating and reviewing financial statements, but it doesn’t provide information about doing so on computer screens. This article does.

Review Financial Statements on Computer Screens

Financial Statement Review in Word

  1. First, open and visually scan the entire financial statement (spend two to three seconds per page) just to get a feel for the whole product. How do the parts fit together? Are the financial statements subject to the Yellow Book? Do they contain supplementary information? Are the statements comparative?
  2. Second, use a large computer screen (22 inches or more) to compare your financial statement pages. If you are reviewing in Word, reduce the financial statement page size by holding the control key down and scrolling back with your mouse. As you do so, you will see multiple statements on the screen, for instance: balance sheet, income statement and cash flow statement.  Now that you can see multiple statements, you can tick and tie your numbers. I use step 2. to compare the financial statement numbers. For example, I compare the net income number on the income statement to the same number on the cash flow statement. Then I use step 3. to compare the financial statements to the notes and the supplementary information.
  3. Next, use two to three computer screens to compare your financial statements with the notes and supplementary information. Open the financial statement on each screen–for instance, the balance sheet on screen 1, the notes on screen 2, and the supplementary information on screen 3. In Word, click View, New Window and another instance of the document will open. Then you can move the new instance to a second screen. Alternatively, you can use the side-by-side feature in Word to place two open documents on one screen. 
  4. After completing your review of the notes, return to and take a second look at the balance sheet to see if the disclosures are complete. (Since you just reviewed the notes, it’s easier to compare them to the balance sheet. If, for example, you look at the balance sheet and see inventory but no disclosure for the same, you’ll more easily see the error.)
  5. Use the find feature (in Word, click the Home tab, click Find, then key in the number–or word–you are looking for) to locate words or numbers. If you want to compare the long-term debt number on the balance sheet to the notes and to supplemental information, type that number into your search dialog box and you’re immediately taken to the same number in the notes. Click next, and you will see the next instance (in the supplementary information). You can do the same with words. (Note: If you embed Excel tables in the Word document, the find feature will not locate numbers in the embedded tables. Consider PDF review option below.)
  6. When needed, take breaks. Never spend more than 1.5 hours reviewing statements without taking a short break. You get more done by relaxing periodically.
  7. Finally, if you are reviewing financial statements in Word, consider turning on Track Changes and key in suggested revisions. Word reflects your modifications in a distinct color. That way, others can see your suggested changes. They can also see who made the suggested corrections. Thereafter, they can accept or reject the proposed changes.

Financial Statement Review with PDF Documents

You may find it easier to review financial statements after converting them to a PDF (rather than in Word). This makes all numbers and words fully searchable (no embedded Excel spreadsheet limitation issue). 

You can use the split screen feature (click Windows, Split in Adobe Acrobat) to see the same financial statements on one screen. I usually do this on my center screen. This allows me to scroll and compare numbers in the financial statements. For instance, I compare total assets with total liabilities and equity. Or I compare equity on the balance sheet with my statement of changes in equity ending balances. 

I also open a second instance of the PDF on my right-hand screen, mainly to compare my notes with the financial statements (on my center screen). Then I use control-f to locate numbers or words. For instance, if I see $456,856 for total plant, property, and equipment (on my center screen), I click on the right-hand screen, then control-f, then key in the number to find it in the notes. 

I make review comments in the PDF using the comments feature in Adobe Acrobat. Then persons can respond with the reply feature in the comments field. That way, they can provide a response, whether they agree or not—and what they did if a correction was made. 

Your Suggestions

Those are my ideas. What are yours?

Accountant’s ipad
Nov 02

Accountant’s iPad: My Favorite Computer

By Charles Hall | Technology

Today I discuss an accountant’s iPad.

Accountants use all types of electronic devices and software: Caseware, Excel, scanners, Powerpoint, Adobe Acrobat, monitors, QuickBooks, iPhones—just to name a few. For me, the iPad tops them all.

Accountant’s ipad

I purchased my first iPad about six years ago for about $500.  Then, four years ago, I bought a second one. A year ago I picked up my third. Now, having spent hundreds of hours on iPads, I am smitten. 

You may be thinking, “Charles, you’re a CPA. How do you and why do you spend that much time on an iPad? Don’t you primarily use a desktop computer?” Yes, my work computer is my primary tool. But in terms of enjoyment, the iPad wins hands down. 

Accountant’s iPad

“How do you use it?” you say. Here are few ways:

As you can see an accountant’s iPad is a powerful tool.

Convenience and Portability

Mostly, I use my iPad at home, seated on my couch. The portability of the device is its primary benefit. It’s large enough to read from and work on—and small enough to take wherever I go.

Your Favorite Device

So what’s your favorite tool and how do you use it?

Here are my favorite iPad apps.

Save Time with Online Meetings
Feb 10

CPAs Save Time with Online Meetings: Getting Started

By Charles Hall | Technology

An online CPA meeting can save time. At least, they can if you know how. In this article, I provide examples of online CPA meetings and online software that you can use.

Are you tired of driving hours to see clients? Or maybe you drive two hours to meet with a customer and realize you left files on your office computer. Online meetings solve these problems and make you more accessible. Below I show you how to get started. 

CPA Meeting

Pick an Online Meeting Solution

First, you need to choose a video conferencing solution.

Some popular alternatives include:

Here is a PC Magazine article that compares these products (and others). All of these packages offer free trial versions. And they all provide similar abilities. The main thing is they allow me to share what’s on my computer monitor and my voice. 

So, what video conferencing software do I use? Zoom. Why? It is easy to use and reliable. While Zoom offers a free version, I use their paid Pro version

The point of this article is not to sell you on a particular online meeting product (though I do like Zoom), but to sell you on the concept. I have spent years of my life (at least it feels that way) driving to and from clients’ offices. So when I heard about online meetings, I gave it a try.

My First Online Meeting

My first online meeting sold me. A few years ago I was assisting an attorney with a forensic project. My final report was several hundred pages long. Rather than making a 4.5-hour trip to meet with my client, I did the following:

  • Opened the draft report on my center computer screen
  • Opened supporting documents on my two side computer screens
  • Shared my center computer screen using my online meeting software—the attorney, once he clicked the link I emailed him (see the next bullet), could see my screen
  • Sent the attorney an email (with a hyperlink) to join the meeting—my online software automatically created the email as I invited him 
  • Called the attorney with my cell phone and went hands-free so I could use my mouse (you can use your computer audio, I just prefer using my phone)
  • When the attorney answered my call, I told him I had sent him an invitation email, and I walked him through connecting (which took less than two minutes)
  • We reviewed the draft report from my center computer screen
  • When needed, I moved supporting documents from my two side screens to the center display (and then moved them off as needed)—think of this as moving information on and off stage

The meeting lasted one hour. Once done, the attorney said to me, “This is one of the best meetings I’ve ever attended.” 

So rather than taking 5.5 hours (4.5 hours of driving and the 1-hour session), the meeting took 1.5 hours (including setup time). I saved four hours—and I didn’t even have to sit in the attorney’s lobby and wait for him. Also, I didn’t have to stop and refuel my vehicle—or file an expense report.

If sharing video works with an out-of-town client, does it work with in-the-office staff?

CPA Meeting Online

Yes, an online CPA meeting works with others in your office as well. Why? For the same reasons. I can share any information from my computer screen. And I can invite several people to the meeting at the same time. They can view what I am sharing from the comfort of their offices. Believe me, it’s better than several people huddling around one computer.

Other Online Meeting Thoughts

Here are some additional thoughts about online CPA meetings.

Though I don’t do so often, I can record my online meetings in Zoom. Then if I need to watch the session, I can.

Once you are in a Zoom meeting you can share your mouse. This allows your client to control your computer. I find this useful when my client wants to show me something. Rather than the client telling me where to click, I simply hand the mouse control over to her. Then she can move around in the documents we are viewing.

Are there any downsides to online meetings? Yes. Some people don’t want to be seen. Perhaps they are working from home and are still in their pajamas. If they have their camera on, you will see them, and if your camera is on, guess what? Yep. They can see you. You can, however, turn your camera off. And they can as well.

For a more professional look, consider buying a video camera. I use a Logitech 930e (cost is $71.50). It sits on top of my right monitor. Why buy a camera? For higher quality video. Additionally, the camera has a microphone. If you’re wondering about the quality of the video from this device, see the recording above. I used the Logitech 930e for that one.

Sharing Video with a Client

What if your client is too busy for an online meeting? Record a video and share it. I can do so from Zoom, but I use Camtasia to record my videos. (A single license is $249.)

Say you need to explain the details in a lease document. And you want to show and explain the related journal entries. Turn Camtasia on and shoot the recording with your Logitech camera. Whatever appears on your monitor (e.g., lease agreement in a PDF; journal entries in Excel) is captured in the video. Once done, save the video and send a link to your client. And why do this? So your client can watch the presentation at her convenience.

Don’t want to be seen on video? Then turn it off. Camtasia provides that option. You can record what you present on your monitor and your voice narration–with no video.

I store my videos on Screencast. The cost is $99.95 per year.

You may wonder why I use Camtasia and Screencast, especially when I can record and store video with Zoom. The short answer is I create training videos. Camstasia gives me better editing capabilities. And Screencast was built for the purpose of sharing videos. So the two products (both made by TechSmith) work well together for the creation and sharing of video.

Sharing Video with Your CPA Firm Members

I create and share videos with my partners and staff. Once a video is created, I store it on my Screencast site. Then I share the video link on our firm intranet. That way I can demonstrate something once and share it with everyone. 

Your Thoughts

Do you already use online meeting or video capture software? If yes, what solutions do you use? Share your suggestions below.

accountant's scanning system
Aug 27

Accountant’s Scanning System: How to Build

By Charles Hall | Technology

In this article, I tell you how to build an accountant’s scanning system.

Are you overwhelmed by stacks of paper? Do you find it difficult to locate the information you know you have? Today, I teach you how to build an accountant’s scanning system.

accountant's scanning system

Accountant’s Scanning System

I have the privilege of visiting other CPA firms, and our firm has about 120 people, so I have the opportunity to see plenty of offices. It is my observation that some CPAs are paperless, but many are not.

One problem with “paper everywhere” is we can’t find what we need. We have it (somewhere), but we can’t find it. Scanning is the easiest way to capture and organize the paper monster.

To create order, take three steps:

  1. Buy a scanner
  2. Build a scanning structure
  3. Build scanning habits

1. Buy a Scanner

My scanner is a Fujitsu iX500. (There is a newer model now, the iX1500.) It sits just to my right in my office, so I don’t have to leave my desk to scan. Convenience is key to creating order. Otherwise, you will think I’ll scan that later, but it doesn’t happen. Then the paper litters your desk–and distracts you.

The iX1500 costs $420, so it’s not a huge cash outlay. The scanner’s footprint is small (the dimensions are 11.5 x 6 x 6.3 inches) and it weighs 7.5 pounds. Also, the scanner comes with  software (ScanSnap) that offers you destinations such as these:

accountant's scanning system

ScanSnap File Locations

I often scan to Evernote, my cloud-based library. (Amazon also offers Fujitsu ScanSnap iX1500 Document Scanner with Evernote Premium.) If I were buying my first scanner and didn’t have cloud-based storage, this would be my choice.

Another favorite destination: Caseware, our paperless engagement software. 

2. Build a Scanning Structure

So, of course, when you scan, you need final resting places for your documents.

My two primary file locations are:

  • Evernote for non-engagement documents
  • Caseware for engagement documents

Non-Engagement Documents

If you’ve followed my blog, you know I’m a raving Evernote lunatic. Why? 

  • Ease of use 
  • Notebooks (you use notebooks to organize your documents)
  • Tags (you can tag each note with multiple tags, making it easy to find the material)
  • Feed-ability (I can feed Evernote from my scanner, email, clip-apps, drag and drop, and many other ways)
  • Find-ability (Evernote even recognizes hand-written notes making it possible to search electronically and find keywords–even if written)
  • Accessibility (I can access Evernote from my iPhone, iPad, and desktop)
  • Cost (paid version starts at $7.99 per month; they do offer a free version but with limitations)
  • Allows storage of a variety of documents (including Excel, Word, PDF, Audible files)

There are other cloud-based storage systems such as OneNote and Dropbox. Pick one and learn it well.

Engagement Documents

If your audit and tax services are not already paperless, consider making the leap. We have used Caseware for years and, personally, I love it. We use this software for storage of the following engagement files:

  • Tax
  • Audit
  • Reviews
  • Compilations
  • AUPs

My firm has built templates for each of these services, so everyone in our firm knows where documents (including scans) belong.

To scan promptly, you need to build habits, so creating a repeatable, mental system is critical to the process.

3. Build Scanning Habits

Build your scanning habits. My system is as follows:

  • If it takes less than two minutes to scan, scan now
  • If it takes more than two minutes, I place the paper in a file tray where I will later batch process
  • Scan all paper by the end of the day
  • Don’t leave unscanned paper on my desk (it’s a distraction)
  • Keep a shred box just below my scanner (where I place sensitive paper documents)
  • For long documents (e.g., CPE workbook), ask an assistant to break down the paper copy, scan it, and email it to me (I don’t use my Fujitsu scanner for heavy-duty scanning. We have a copy machine that will convert large scans to PDF.)

Like any new habit, new scanning actions will–at first–feel awkward and inconvenient. But push through the pain and the actions will become routine. (Some of the above thoughts come from David Allen’s book: Getting Things Doneone of the best productivity books you’ll find.)

Act Now

You may feel like the above will take too much time to implement, especially if you have lots of paper. So how do you eat an elephant? One bite at a time.

Schedule your scanning plan. Pick two days a week and put one hour a day on your calendar. Then attack. Slay your paper monster. I dare you.

More Evernote Information

For more information about Evernote, check out these posts:

Evernote for CPAs

Seven Ways to Feed Evernote

Tips on Searching Your Evernote Account

Livescribe
Jun 26

Livescribe: Note Taking Magic (for CPAs)

By Charles Hall | Accounting and Auditing , Technology

Livescribe: Note taking magic. Here’s an overview of how auditors are making their lives easier using the Livescribe pen.

Have you ever interviewed a client, feverishly taking notes, and straight away forgot critical facts? You wish you had a recording of the conversation. Better yet, you wish you could touch a particular word in your notes and hear the words that were being spoken at that moment. What if I told you, “you can”?

Livescribe: Note taking magic

How? Livescribe.

Think about what you could record with such a tool:

  • CPE class lectures
  • Walkthroughs of transaction cycles
  • Board or committee or partnership meetings
  • Fraud interviews

Livescribe: Note Taking Magic

What is Livescribe? It’s an electronic pen/recorder. As you write on special coded paper, you simultaneously record the conversation (the recorder is built into the pen). Once done, you touch a particular letter in a word (with the tip of your pen) and you hear–from the pen–the words spoken at that moment. No more forgetting and not being able to retrieve what was said. And it’s efficient since you can go to any particular part of the conversation using your notes as signposts.

To start a recording, you press the tip of the pen to the “record” icon at the bottom of the page.

IMG_0002

To stop the recording you press the “stop” icon above.

Once the recording is complete, you simply touch the tip of the pen to any letter and the audio recording will start playing–from the pen–at that point.

IMG_0004

You can upload the pen notes and the audio to your computer desktop Livescribe software using a USB cord that connects to the pen. (See below.)

IMG_0003

You can also play back notes from your uploaded desktop copy just as you can with your pen. Click a letter with your mouse and the recording will play.

I was surprised by the clarity of the sound from the pen and the audio capacity200 hours (for the Echo version that you see below).

There are different versions of the pen. I bought the Echo version due to the lower price. You can review the available pens on Amazon. I also bought additional Livescribe notebooks (they come in packs of four) and a portfolio (binder) to hold the notebook and pen.

My Experience with Livescribe

I have used a Livescribe pen for four years. After using to it to record hundreds of hours of audio, I consider my Livescribe pen to be one of my best audit tools. I recommend it.

What if you don’t desire to shell out the $155 for the pen? Consider using the Notability app. 

Another Option 

If you have an iPad, you can buy the Notability app for $9.99 and record conversations with your notes (with play-back similar to Livescribe). You will need a stylus (I use an Apple pen) to take notes since you write on your iPad screen. See my article about using Notability.

One More Thought

If you are performing a walkthrough of a complex transaction cycle, consider using your phone to take pictures of what you are seeing (e.g., computer screens, documents). I use the Scanbot app. Between your notes (with audio) and your pictures, you will have a good understanding of what you have seen and heard.

You might also be interested in my article Four Keys to Better Client Interviews.

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