Category: Accounting Advices

Here are some helpful tips and useful tricks to help you accurately spot any accounting discrepancies — which can lead to lasting mistakes.

Unfortunately, accounting errors are all too common. In fact, even the most educated accountant and the most experienced CPA can make minor mistakes. However, these mistakes could be detrimental, which is why you want to avoid making some of the most common accounting errors out there. Understanding the most common accounting errors will equip you with the tools to properly spot those errors effectively and efficiently. The reality is, every small business will need to keep their books in order — particularly their accounting records. Ultimately, knowing the telltale signs to look for when it comes to the all too common accounting mistakes will allow you to fix them before they become a big issue down the line. Here are some helpful tips and useful tricks to help you accurately spot any accounting discrepancies — which can lead to lasting mistakes.

lways Keep A Proper Audit Trail

There is nothing worse than not having the receipts for any discrepancy that may arise. Having a proper storage or filing solution to keep all your accounting records on file and up to date will make your process much more seamless. The reality is, if you are looking for an easy way to implement such a process, a proper filing system that is automated can be the best solution for your small business. Ultimately, if you are looking for help making sure your audit trail system is working properly, seek out the help of a professional who can help ensure things go smoothly. Your business can stay on track for the accounting audits year after year and quarter after quarter.

Be Sure To Double-Check All Your Work

To properly find accounting errors in your books, it becomes increasingly important for business owners to always double or even triple-check their work. In fact, putting in the extra legwork can make a massive difference in your accounting systems in the long run. The reality is, going through all of your transactions may be tedious, but they’ll allow you to ensure that all your accounting measures are proper and accurate. Conducting these checks is a great way to double-check all your accounting to ensure your books are accurate and up to date.

Trust the Professionals at the Harding Group

Unlike other accounting firms, The Harding Group, located in Annapolis, MD, will never charge you for consultations and strive for open communication with our clients. 

Are you interested in business advising, tax preparation, bookkeeping and accounting, payroll services, training + support for QuickBooks, or retirement planning?  We have the necessary expertise and years of proven results to help. 

We gladly serve clients in Annapolis, Anne Arundel County, Baltimore, Severna Park, and Columbia. If you are ready to take the stress out of tax time, contact us online or give us a call at (410) 573-9991 for a free consultation. For more tax tips, follow us on FacebookTwitterYouTube, and LinkedIn

 

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From the Financial Times yesterday:

A senior KPMG partner advanced an “untruthful” defence at a disciplinary hearing into the accounting firm’s misconduct in the sale of bedmaker Silentnight to a private equity fund, a tribunal has found.

The tribunal also found that KPMG and David Costley-Wood, the partner who led the Silentnight work, had failed to co-operate in not providing evidence to investigators from the UK accounting regulator.

KPMG was fined £13m in August and ordered to pay more than £2.75m in costs for its role in placing Silentnight into an insolvency process in 2011, which allowed HIG Capital to acquire it without the burden of its £100m pension scheme.

The accounting firm was found to have acted in the interests of HIG, which it was nurturing as a potential client, even though these were “diametrically opposed” to those of its client Silentnight. KPMG sold its own insolvency advice business, now called Interpath, to HIG this year.

In addition to the £13 million fine the Queen’s KPMG received, Costley-Wood was fined £500,000, severely reprimanded, and excluded from holding an insolvency licence or being a member of the Institute of Chartered Accountants in England and Wales for 13 years. The tribunal recommended he be banned for 15 years. During a four-week hearing held last November and December, he called the Financial Reporting Council’s case against him a “witch hunt” and said the regulator was “trying to trash my name in the press.”

However, most likely knowing the shit was going to hit the fan, Costley-Wood conveniently “retired” from KPMG on June 4.

You can read the tribunal’s full report here.

KPMG accused of ‘untruthful’ defence over Silentnight misconduct [Financial Times

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KPMG U.K. Restructuring Partner Channels Angry Donald Trump During Disciplinary Hearing

The post A Big 4 Firm Being Untruthful? You Don’t Say! appeared first on Going Concern.

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Last month the PCAOB teased the results of its 2020 inspection reports by saying audit firms were getting better at not being awful at auditing. From the PCAOB’s Staff Update and Preview of 2020 Inspection Observations:

For the majority of the annually inspected audit firms, we identified fewer findings in 2020 compared to our 2019 inspections. In our triennially inspected audit firms, some improvements were noted, although deficiencies continue to remain high.

Annually inspected firms would include the Big 4, Grant Thornton, RSM US, and BDO USA, for example. Now that the US’s audit cops released the 2020 report cards for six of those firms earlier this week, we’ve seen substantially less mistakes made in public company audits at two of those firms: PwC and Deloitte.

Is the pandemic the reason why PwC and Deloitte had the No. 1 and No. 2 lowest audit deficiency rates of all time, respectively? Maybe. The PCAOB admitted that its response to the pandemic included:

Conducting all inspections remotely;Adjusting its inspection approach to consider the impact of COVID-19 on the audits of public companies;Refining its planned quality control procedures; andProviding insights to inform stakeholders on the PCAOB’s oversight activities related to the COVID-19 pandemic.

Who knows if those heavy-handed and intimidating inspectors are just as thorough going through the audit inspection process off-site as they are on-site. But it does make you wonder if these audit firms are actually getting better at auditing or is it the circumstances caused by the pandemic that are making it seem like these firms are getting better at auditing? Time will tell.

Another firm that showed improvement in its deficiency rate from 2019’s inspection report to 2020’s inspection report is EY—and its leadership couldn’t wait to tell everyone about it.

A day after the PCAOB released EY’s latest inspection report, Uncle Ernie put out its 2021 audit quality report, which includes all sorts of boring EYspeak on how performing high-quality audits builds a better working world … or something like that. The report also includes a colorful snapshot of key EY audit metrics:

One stat missing from this chart is EY’s audit error rate from its 2020 inspection report, which was 15.4%, down from 18% in its 2019 report and 26% in its 2018 report. But there is an entire section of EY’s latest audit quality report devoted to PCAOB inspections and how the firm isn’t botching as many audits as it used to:

In a press release accompanying the audit quality report and in the report itself, you’ll see quotes from EY leaders who are just beaming with pride that their US audit professionals are more competent than EY Germany’s auditors “committed to continuously improving the quality of the firm’s audits and strengthening the firm’s system of quality control.”

Kelly Grier, EY US chair and managing partner who announced to staff on Oct. 21 that she is not seeking a second term, said: “The independent auditor’s role in promoting trust and confidence in the capital markets is critical and our 2021 report highlights our commitment to audit quality. I am so proud of how we’ve continued to focus on the fundamentals—performing high-quality audits with integrity, independence, and professional skepticism—while using technology to innovate how we audit and meeting new challenges such as reimagining where we’ll work and how we’ll maintain our culture of belonging.”

Says Denise Pelli, EY’s US director of professional practice quality and regulatory matters: “Our latest inspection report indicates that the investments we have made in audit quality are paying off. The results reflect a focus by our audit teams on careful execution and timely supervision and review. They also reflect our investments in the digital audit and other changes to our audit approach and support from our quality network and specialists.”

Great job, everyone. Now share what you’re doing with your colleagues in Germany.

Below is EY’s 2020 PCAOB inspection report, if you are inclined to read it:

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Related articles:

EY Isn’t Botching As Many Audits These Days, According to Latest PCAOB Inspection Report

It’s True: PwC Had a Nearly Flawless 2020 PCAOB Inspection Report

Deloitte Came Oh So Close to Having a Historically Low Audit Deficiency Rate

EY US Chair Kelly Grier Will Not Seek a Second Term

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Wealthy retired accountant is found guilty of murder [Daily Mail] The pregnant daughter of a wealthy retired accountant who was today jailed for life after stabbing her husband to death has told the court of her heartbreak, saying: ‘I lost my dad but I’ve also lost my mum.’ Isabelle Potterton said on Friday that her mother Penelope Jackson – who murdered her retired colonel husband David, 78, on her 66th birthday and calmly told police ‘I should have stabbed him more’ as he lay dying – is ‘not the person I knew’.

SEC Acting Chief Accountant urges scrutiny of auditor independence in current environment [JD Supra] This week, Acting Chief Accountant Paul Munter issued a statement regarding the importance of auditor independence—a concept that is “foundational to the credibility of the financial statements.” The responsibility to monitor independence is a shared one: “[w]hile sourcing a high quality independent auditor is a key responsibility of the audit committee, compliance with auditor independence rules is a shared responsibility of the issuer, its audit committee, and the auditor.”

New Deloitte report explains how tech companies have to change to be more ethical [TechRepublic] The report released on Wednesday, “Beyond good intentions: Navigating the ethical dilemmas facing the technology industry” spells out the contradictory forces at work. In a survey of tech professionals, 82% strongly agreed that their company was ethical. In the same survey, only 24% strongly agreed that the tech industry takes an ethical approach to the products and services that it creates.

EY report: Fortune 100 companies boost audit transparency, including on ESG [Compliance Week] “Our examination of proxy disclosure data for 2021 demonstrates that companies continue to provide voluntary disclosures in audit-related areas of interest to investors and other stakeholders, typically going beyond the specific areas of required disclosures,” EY stated. In addition to providing required disclosures about the functions, policies, and procedures of audit committees, many companies are also shedding new light on “the type and degree of oversight exercised by audit committees.”

PwC upskills business workforce to leverage automation opportunities [SiliconANGLE] PricewaterhouseCoopers LLP has developed a new software product, called ProEdge, which focus on identifying the skills needed for the future, teaching those talents, and helping to scale the usage of the skills across the organization, according to Kevin Kroen, partner, PwC Advisory, intelligent automation and digital upskilling leader at PwC.

Grant Thornton commits to net zero greenhouse gas emissions by 2030 [Business Wire] Grant Thornton plans to achieve its net zero goal by reducing business travel, better using its office space and increasing energy efficiency across its operations. The firm may also use carbon credits and other investments in the future to account for any residual carbon emissions.

FASB addresses contract assets, liabilities acquired in a business combination [Journal of Accountancy] Acquiring entities are required to measure contract assets and liabilities acquired in a business combination in accordance with FASB’s Topic 606 revenue recognition guidance, according to a new FASB standard issued Thursday. To eliminate diversity in practice, FASB issued Accounting Standards Update No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities From Contracts With Customers.

Hunting for Money, Democrats Rush to Rewrite Tax Code [New York Times] Lawmakers are racing to finalize legislation to pay for new spending initiatives. The process usually takes months, but they are trying to do it in days.

Photo by Tranmautritam from Pexels

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After months of rumors and speculation online about whether or not PwC was selling its global mobility services business and, if so, to whom, we now have answers to both questions: Yes and private equity firm Clayton, Dubilier & Rice.

Here’s the press release that just hit our inbox:

Clayton, Dubilier & Rice and PwC today announced an agreement under which CD&R funds will acquire PwC’s Global Mobility Tax and Immigration Services business. The business is the global leader in employee tax, immigration, business travel, mobility managed services, and payroll solutions to multinational organizations and their employees. Terms of the transaction were not disclosed.

The Global Mobility Tax and Immigration Services business serves more than 3,000 multinational clients worldwide. The business helps organizations manage global talent mobility, while providing personalized, high-quality tax and immigration services to cross-border employees, as they navigate compliance issues associated with global employment. The transaction will create a free-standing, global platform with more than 5,700 professionals hyper-focused on a seamless cross-border experience for clients, while accelerating investment in technology and new services.

Throughout its more than 50-year history, the business has been the leader in global mobility services, supporting its clients’ talent mobility programs by helping solve cross-border employment challenges. Recently, the business enhanced its service offerings to reflect the changing needs of clients and their cross-border employees throughout the pandemic.

“We are excited for the opportunity to become a free-standing organization and partner with CD&R to build on our market leadership and drive more value for clients,” said Peter Clarke, Global Managing Partner for Global Employee Mobility at PwC, who will be CEO of the new company. “The pandemic proved that global employment issues remain a key challenge for companies, especially as compliance requirements become more complex. Our partnership with CD&R will allow us to accelerate our technology investments to offer what our clients are asking for: an integrated digital experience across the entirety of the talent mobility ecosystem. These technology investments along with our new global operating model will support an even more differentiated service experience for our clients with the same laser focus on the quality and confidentiality of the services we provide to our cross-border employee clients, while providing expanded and rewarding career opportunities for our team.”

“CD&R has a longstanding track record of executing global carve-out transactions helping companies transition from corporate ownership to independent models,” said Stephen Shapiro, a CD&R partner.  “We believe, as a free-standing platform, PwC’s Global Mobility Tax and Immigration Services business will be positioned to increase its value proposition to its world-class client base.”

“The Global Mobility Tax and Immigration Services business has significant global capabilities to support emerging trends and complexities in talent mobility. The business is well positioned to capitalize on the future growth of global employee mobility, as companies and economies rebound from the pandemic. The return of business travel, emerging mobile work patterns, and the heightened need for compliance in a complex business and regulatory environment will drive significant need for a globally integrated provider with a sophisticated digital platform,” said Russ Fradin, CD&R Partner and former CEO and Chairman at Aon Hewitt, who will become board chairman of the new independent company upon close. “We are excited to partner with a very talented team to unlock their potential as a free-standing enterprise.”

“The best interests of our clients, people and partners have been at the forefront of this transaction and I’m confident that, with CD&R’s backing, the new business will be well equipped to grow and meet the developing needs of its clients of all sizes and in all segments around the world,” said Bob Moritz, Global Chairman of PwC. “This sale will allow PwC to increase its investment in and prioritize building capabilities relevant to our global strategy – The New Equation. I’d like to thank the partners and people involved for their great work and wish them well for the future.”

The business will be rebranded following the completion of the transaction, which is expected to close in the first half of 2022, subject to customary closing conditions including completion of certain local works council consultations. Deutsche Bank Securities Inc., JP Morgan, UBS Investment Bank, BMO Capital Markets Corp., BNP Paribas Securities Corp., Mizuho Financial Group Inc., RBC Capital Markets, LLC, and Societe Generale have committed financing to the transaction and are acting as financial advisors to CD&R; Debevoise & Plimpton LLP is providing legal counsel to CD&R. Morgan Stanley & Co. LLC is acting as financial advisor and Davis Polk & Wardwell LLP and Linklaters LLP are providing legal counsel to PwC.

The Financial Times reported earlier today that the deal is worth about $2.2 billion, and it’s the largest sale by PwC since it dealt its consulting division to IBM for $3.5 billion in 2002.

PwC to sell mobility unit to private equity group CD&R for $2.2bn [Financial Times

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Robert Half finally released its 2022 Accounting & Finance Salary Guide late last week, and the good news is starting salaries in public accounting are expected to increase by more than 1% next year, unlike in Bob’s salary projections for 2021.

Of the five positions each under “tax services” and “audit/assurance services” in the 2021 salary guide, not a single one had a starting salary that was projected to increase by 1%. The largest increase was only 0.66% for staff with under one year of experience in both tax and A&A.

But starting pay in each of the 10 public accounting roles in the 2022 salary guide is expected to rise by an average of between 1.4% and 2.6%:

Tax services

Senior manager/director: 2%Manager: 2%Senior tax accountant: 1.4%Tax accountant, 1-3 years’ experience: 1.6%Entry-level tax accountant: 2.6%

udit and assurance services

Senior manager/director: 1.6%Manager: 1.4%Senior auditor: 1.6%Auditor,1-3 years’ experience: 2.2%Entry-level auditor: 1.6%

For its annual salary guides, Robert Half breaks down starting pay ranges by percentile, based on a candidate’s experience. For 2022, there are three salary percentiles:

25th percentile: New to the type of role, still acquiring relevant skills.50th percentile: Average experience, has most of the necessary skills.75th percentile: Above-average experience, has all needed skills.

Below are the starting salaries for each of the 10 public accounting jobs in the 2022 salary guide, listed by percentile with a comparison of 2021’s starting salary projection and 2022’s starting salary projection (2021 -> 2022) and how big the pay increase is expected to be (in parenthesis):

Senior manager/director tax services

25th percentile: $114,250 -> $114,500 (0.2%)50th percentile: $137,500 -> $141,500 (2.9%)75th percentile: $165,000 -> $170,000 (3%)

Manager of tax services

25th percentile: $88,500 -> $90,750 (2.5%)50th percentile: $107,000 -> $110,000 (2.8%)75th percentile: $127,000 -> $128,000 (0.8%)

Senior tax accountant

25th percentile: $62,000 -> $62,500 (0.8%)50th percentile: $73,250 -> $75,500 (3.1%)75th percentile: $87,250 -> $87,500 (0.3%)

Tax accountant, 1-3 years’ experience

25th percentile: $49,000 -> $49,750 (1.5%)50th percentile: $59,750 -> $61,500 (2.9%)75th percentile: $70,500 -> $70,750 (0.4%)

Entry-level tax accountant

25th percentile: $40,500 -> $41,000 (1.2%)50th percentile: $49,000 -> $50,250 (2.6%)75th percentile: $57,250 -> $59,500 (3.9%)

Senior manager/director audit and assurance services

25th percentile: $112,500 -> $113,000 (0.4%)50th percentile: $134,750 -> $139,750 (3.7%)75th percentile: $161,000 -> $162,000 (0.6%)

Manager audit and assurance services

25th percentile: $76,250 -> $77,000 (1%)50th percentile: $93,500 -> $96,250 (2.9%)75th percentile: $110,000 -> $110,250 (0.2%)

Senior audit and assurance services

25th percentile: $54,250 -> $55,000 (1.4%)50th percentile: $66,750 -> $68,750 (3%)75th percentile: $78,500 -> $78,750 (0.3%)

udit and assurance services, 1-3 years’ experience

25th percentile: $45,000 -> $46,000 (2.2%)50th percentile: $54,500 -> $56,750 (4.1%)75th percentile: $64,250 -> $64,500 (0.4%)

Entry-level audit and assurance services

25th percentile: $40,500 -> $41,000 (1.2%)50th percentile: $49,000 -> $50,500 (3.1%)75th percentile: $57,750 -> $58,000 (0.4%)

Accounting Principals still hasn’t released its Accounting & Finance Salary Guide for 2022 yet, but it should be made available sometime within the next month.

Related article:

How Are Public Accounting Salaries Stacking Up For 2021?

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