Glenn Bailey, CPA
If you need help with your tax returns, the best time to choose a preparer is before the end of the year. That way you have time to find someone with the appropriate skill level for your situation and time to get on their schedule. Having a preparer with advance knowledge and understanding of your life can make your tax return preparation more efficient for the preparer and less stressful for you. Waiting until March can leave […]
Larry Beebe, CPA
How much time is the external auditor of the financial statements going to devote to the audit of petty cash? The auditor probably will not spend any time on petty cash because it is not a material item in the plan’s financial statements. Plan auditors spend most of their audit time in five major areas- investments, benefits, contributions, expenses, and participant data.
There is one exception. Transactions in petty cash can be indicators of fraud and, as such, […]
Larry Beebe, CPA
Window dressing as a technique used by investment advisers to make their investment portfolios look good at the end of an accounting period. The investment adviser accomplishes this by selling securities with large losses just before the accounting period end and replacing them with stocks where cost and market will be similar at the accounting period end. The adviser hopes that the losses will be absorbed in the clients gain and loss on sale of securities account […]
ISSUE
Nonprofits, like other businesses, are vulnerable to all categories of fraud, but there is general reluctance among nonprofits to prosecute employees due to fear of notoriety, fear of legal action, concern about personal safety and compassion for the offender. While nonprofits often devote their greatest attention to protecting cash and checking accounts, other assets such as inventory and contracts for services can be at risk for employee fraud abuse. Some conditions that may increase incidents of insider theft include […]
ISSUE
Liquidity is an essential element of running a successful business, but bridging the gap between “cash out” for production and “cash in” from customer sales can be a precarious balancing act. Are you doing everything you can to control the outflow of cash? How successful are your cash flow projections and what can you do to turn sales into real money quickly? Even with good profits, there will almost certainly be times when your business will run tight on […]
ISSUE
Expanding your operation can seem like a daunting task, particularly when keeping your venture afloat each month feels hard enough. In order to take your business to the next level, you’re seeking more than just financing – you need an engine that will best enable the business to achieve its primary business goals. Frequently, that engine is financial, such as the bank’s credit line or the venture capitalist’s cash. But it isn’t always. Sometimes, the right engine isn’t monetary […]
Larry Beebe, CPA
Entities have internal control systems that insure that investments owned by the organization are properly accounted for. Often the internal controls over the income of those investments is lacking.
During the audit of a pension fund, we examined whether the income on a $5,000,000 bond with a 9% interest rate had been received. We found that one of the semi-annual $225,000 interest payments was missing. When we tracked down the missing payment we found that it was being […]
ISSUE
Retirement, let alone plans to hand over the business, can seem like a distant speck on the horizon when virtually all of a business owner’s time is consumed by maintaining positive cash flow and a stable balance sheet. And if you don’t want to simply sell the business lock, stock and barrel – picking a successor isn’t always as easy as appointing a family member or assistant to take your place. Establishing a sound business succession plan is beneficial […]
Larry Beebe, CPA
What does “cooking the books” mean?
Investopedia defines “cook the books” as “a buzzword performed by corporations in order to falsify their financial statements.” Examples include accelerating revenues and delaying expenses. A pension fund could make its year look better by holding open cash receipts until after year end to record receipts as income that should be recorded in the following year.
I once audited a business that showed a high cash balance at their December 31 year end. […]
Larry Beebe, CPA
An employer to a collectively bargained employee benefit plan has a cash shortfall. He can’t stop paying his employees and he can’t delay the health and welfare contributions. What he can do is delay paying the pension contributions because his employees are unlikely to complain in the short or intermediate term.
I performed a payroll audit on an employer who was delinquent for months in pension contributions. The accountant for the employer admitted that he was delinquent to […]
