Credit losses: A new scope

BB8Note: To read this intro as a Star Wars-style title crawl, click here.

If you have put off reviewing the Financial Accounting Standards Board’s (FASB) new Credit Loss standard since its effective date is “in a galaxy far, far away,” you are not alone.

This is the largest accounting standard change affecting depository institutions (and other industries) within the last 40 years, so it can be intimidating for management to get started. Plus, the amount of flexibility and professional judgement allowed within the standard itself has caused confusion and fear, making it hard even to begin.

Do not give into your fear. “Fear is the path to the Dark Side.” Instead, read below to digest the new standard piecemeal, and to understand what it does and doesn’t say. Then you will have the tools needed to take the steps to implement it. 

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Procrastinators beware, the nonprofit audit is not the place to drag your feet 

Can you prepare for your upcoming audit and still enjoy a relaxing lunch with colleagues? Yes, yes you can. If you want to learn how, join us and take the audit prep challenge. Just follow these four steps leading up to your next audit and see for yourself how it makes a difference. We’re sure you’ll feel better prepared and more balanced. Sound good? Let’s get started:

  1. Don’t procrastinate. Start preparing for your audit well before your year-end rolls around. Set up meetings with key internal stakeholders and external auditors well in advance and commit to updating schedules and reconciliations throughout the year. In many not-for-profit organizations, a lot of the audit prep work falls on one staff member. If that’s you, working ahead will make crunch time less hectic.
  2. Stay ahead of the curve. Keep up with accounting standards updates. Though not all updates will have the pervasive effects of ASU 2014-09 (revenue recognition) or ASU 2016-14 (not-for-profit financial statement presentation), you’ll still want to check them out. Read each standard and consider how it could impact your financial reporting. Discuss new standards with your external auditor to learn about potential effects on your upcoming audit. You may have to rethink your chart of accounts, gather new data, or draft new disclosures to comply with new standards. The sooner you identify these to-dos, the better.
  3. Get organized. What workpapers has your auditor requested? Who needs to complete them? When does your auditor need them? Most auditors will send you a workpaper list well in advance. If yours doesn’t—ask. Figure out the logistics sooner rather than later and tackle the complex and time-consuming ones first to give yourself a cushion. The AICPA Not-for-Profit Section provides account workpaper templates to help not-for-profits meet specific reporting requirements.
  4. Reflect on past audits. Get in the habit of taking detailed notes after each audit. Then, bring all the key players together and discuss what went well and what could be improved the next time around.

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Santa baby, all I want is a robot

Robot 2An artificial intelligence holiday wishlist

Everywhere I turn, there are articles about artificial intelligence (AI) and automation, the rise of robots and what it means for employees in all types of businesses. (Note: As you may have read in some of our previous blog posts, we think the accounting profession will fare a-ok.) Driverless cars and trucks are already a reality and have had both their first accidents and delivered their first kegs of beer. Not at the same time. While it is still a little difficult for me to wrap my head around the fact my son and daughter may do minimal driving as adults, I am more than ready for robots to lend a hand in a few other departments. Because isn’t the point of these things to take on tasks that consume too much time allowing me to focus on what really matters?

1. Holiday shopping. Every year, I spend hours hunting for the perfect gifts for my husband, who just wants Adidas to start making his favorite wind pants from 1997 again. (Note to Adidas: please don’t.) He wants nothing else and is generally horrible to shop for. I would gladly outsource this job to a robot. Who can then wrap the presents.

2. Clean my house. Where is Rosie (the Jetsons robot maid) when I need her? I know I could buy a Roomba, but a Roomba can’t dust, or change the diaper pail, or scrub the shower or toilet, or do my laundry.

3. Make repairs. Since my husband and I bought our house a year and a half ago, a tree fell through our fence, our garage roof needed to be replaced, our entire plumbing system got clogged and our upstairs toilet intermittently starts running for no reason. A fix-it robot would come in handy.

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7 key steps to master revenue recognition implementation

Deadline loomingStandard setters have made game-changing revisions to revenue recognition standards, and the effective date for implementation is fast-approaching. The new standard replaces the existing transaction- and industry-specific revenue approach with a principles-based approach. Is your organization ready for this shift?

The new standard was originally issued by the Financial Accounting Standards Board as Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (the International Accounting Standards Board has also issued guidance with the same name), and several clarifying amendments have since been issued. The guidance affects all entities—public, private and not-for-profit—that have contracts with customers. The standard’s original effective date was postponed because of the complexity involved.

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5 easy strategies to help your candidates pass the CPA Exam

CPA Exam prepAs a recently licensed CPA, the long study hours, time commitment and life balancing I did to prepare for the Uniform CPA Examination is still fresh in my mind. After reading the Journal of Accountancy article in which members shared their personal exam experiences, I started thinking back to my own journey as a candidate.  

I can remember the moment I finally received the results of my last exam section. I was filled with an overwhelming sense of relief and, of course, pride. My commitment to accounting had paid off. But one thing that stands out to me is when I prepared for the exam, I focused on a few strategies for success. 

I know your firm’s CPA candidates will each have their own way to tackle the exam. But as someone who has been through the experience, I think it’s helpful for you to share your knowledge and personal experience. Don’t hesitate to talk about what worked and what didn’t. Let them know you understand what they’re facing.

So, where to start? Ask your candidates a basic question: “What’s your exam strategy?” If you get the long, awkward pause, here are five quick tips to share:

  1. Understand the candidate requirements

For anyone pursuing the CPA, this is where it all starts. The exam process requires quite a few steps, so it’s best to know the lay of the land ahead of time. My journey began with a seminar hosted by the New Jersey Society of CPAs. I learned all about what I needed to do, what the requirements were and which exam partners I needed to turn to for guidance. The key is doing your homework before you jump into testing.

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