ssfs 1

AICPA Introduces SSFS 1

The Statement on Standards for Forensic Services No. 1, (SSFS 1) was announced by The American Institute of CPAs (AICPA) in July of 2019.  SSFS 1, developed by the AICPA’s Forensic and Valuation Services Executive Committee, gives better authoritative and enforceable guidance for the CPAs performing forensic accounting services. It applies to all AICPA members, AICPA member firms, and their employees.

What you need to know about SSFS 1

The new standard helps to clarify the definition of “litigation and “investigation” for accounting purposes. It also helps to establish clear boundaries on what services members can deliver. 

SSFS 1 defines investigation as:

Collecting, analyzing and evaluating evidence to assist clients, the board of directors, independent auditors, or regulators in reaching a conclusion. [Source]

SSFS 1 defines litigation as:

Appearing at a regulatory proceeding as an expert witness, consultant, mediator, or arbitrator in connection with the resolution of disputes between parties. The term litigation is inclusive of all forms of alternative dispute resolution. [Source]

Anne Stalker, chair of the AICPA’s Forensic and Valuation Services Executive Committee says, “These new forensic standards are the first time we are codifying best practices for litigation and investigation consulting work.” She also goes on to state, “Forensic accounting is a diverse practice, and this standard is unique because it is applied based on why a service is provided -litigation or investigation- rather than what skill set is employed.”

Additionally, SSFS 1 also brings clarity to the following topics:

  • A member acting as an expert witness, may not work under the Agreed Upon Procedures Standard.
  • The judge, jury or mediator, not the member, makes the ultimate decision of fraud. However, based on an objective assessment, the member can suggest whether the evidence is consistent with fraud.

For more news relating to accounting and finance professionals, check out: The Accountants’ Code of Ethics is Under Revision.

financial controls

The Increased Demand for Financial Controls

Financial cost controls enable you to trust your numbers and drive more efficiency. While the demands for financial controls continue to increase at a steady rate, more regulations are being added. This means that there is a greater need for creating a more thorough process. 

Ultimately your goal is to increase control and trust your numbers. With that in mind, we have compiled 5 helpful steps that will help you implement control activities, streamline your processes and improve risk identification. 

5 Vital Components of Internal Control Over Financial Reporting:

Setting the Financial Controls Foundation

Your foundation is what sets the tone for all of your internal control activities. That being said, having a solid plan in place for producing knowledge and clarity regarding the potential risks in a financial close is imperative. These risks can include fraud, manual errors, and shared spreadsheets. 

Assess the Risks

Identify and analyze every possible risk. It is also essential to cross-reference those findings with your key objectives to make sure that there is nothing in the way, blocking your success. 

Communication

Communication is critical. Keep your finance staff updated and familiarized with the continuing control activities.

Monitor

Use an IT system that is purpose-built for monitoring the financial close process. It can help you to test and modify the control activities. 

Define the Processes and Activities

By clearly defining your processes and activities, you can reduce your risks. Transaction matching and audit trails are both examples of a control activity.

Many business owners think that it will take months of analysis before they start to improve their financial close process. Fortunately, this is not the case, when done correctly, you can get a lot evaluated in a short amount of time. When you apply the right steps, you can meet the needs for financial control without unnecessary stress.

To read about DLC’s Financial and Accounting Reporting services, click here.

work productivity

3 Work Productivity Tips

Having a good sense of productivity can impact your mental and physical health, your mood, and your decision-making skills. Within your work environment, it’s fundamentally important to increase your productivity because it not only benefits you but also helps to benefit your company and colleagues. Optimizing your work productivity at the office helps to create an ideal environment for success.

Preparing yourself for work productivity can be done with these simple changes to your daily routine:

Create an office culture that embraces work productivity

Your work environment isn’t just a location. It’s also procedures and processes that require your attention daily. Keep in mind the following:

  • What are your goals? This will help you to determine the exact purpose of each task for completion.
  • Set individual goals for members of your team.
  • Encourage collaboration among your colleagues.
  • Be supportive of your team, and encourage them to take breaks so that they can stay refreshed
  • Change routines or scenery every once in a while to help boost moods and productivity
  • Provide the tools and resources needed so that everyone can complete their work.

Create and manage a calendar that optimizes time and tasks

Making a calendar can be time-consuming, but once it’s completed, the results will speak for themselves.

You can reduce the number of tasks for each individual by spreading them out nicely amongst the team members. Color coding the calendar can help to make it easier to understand and differentiate between functions. Don’t forget to include break periods for your employees so that they can take a minute to recharge.

Manage meetings

Do not schedule more time than necessary. Rather than scheduling an hour for an in-person meeting, try scheduling just 20 or 30 minutes. Have a conference call? Aim to keep it under 19 minutes. This will help keep unrelated chit-chat to a minimum and stay on-point.

Be proactive about keep meetings on track. Provide everyone with a meeting agenda, and if the conversation gets off topic, speak up and rein it back in. A statement, such as, “We can schedule time to discuss that topic at another time, since we only have 5 minutes left,” works perfectly.

Lastly, don’t schedule update meetings, instead updates can be sent by email.

Redesign the office space

A pleasing physical environment can create optimal work conditions for increasing work productivity. A positive work-space includes natural light, appealing colors, plants, and ergonomics to help prevent carpal tunnel and eye strain.

Overview

By making these minor changes, you can see an increased amount of productivity within your workplace that can help to create a great work environment for you and your colleagues.

Click here for more Satisfaction and Productivity Boosting Ideas

cryptocurrency less overwhelming

Making Cryptocurrency Less Overwhelming

The cryptocurrency and blockchain technology buzz has been trending since the cryptocurrency or “crypto” boom of 2017 and shows no sign of slowing down. Everywhere you look, more and more accounting and financial professionals are attempting to learn everything they can about crypto. But, with so much information out there, many are feeling overwhelmed.

If you want to stay ahead of the crypto curve, follow these methods:

Keep tabs on the compliance laws, taxation and regulation of cryptocurrency

The best way to follow the rules is to know the rules. You can easily stay up to date with the latest laws and regulations in the cryptocurrency market by setting up Google Alerts. This will allow Google to send you email notifications when something new is published online regarding your chosen topic. Setting up Google Alerts for the terms: cyrpto accounting, crypto tax, crypto law, and crypto compliance will be very helpful.

Also, consider adding an alert specialized for your state so that you can have localized information as well.

Stay Organized

Learning more about cryptocurrency will mean nothing if you don’t find a way to stay organized with your knowledge. Developing a reliable system for handling crypto can make it much more manageable. While it might take a lot of work and effort to set up a good system, it will pay off in the end. You will have much quicker access to the complex information of crypto.

Create an Automated Process

Manually inputting information from every transaction or account is practically impossible when it comes to crypto. With automation revolutionizing the accounting industry, why not make the crypto process automated and save yourself some trouble?

The world of crypto runs incredibly fast, and when it comes to finances, crypto moves significantly faster than traditional finances. As a bonus, using automation can help you to reduce your error rate.

While cryptocurrency can be overwhelming, it can also be rewarding. Set aside some time to study up on the topic, set alerts, and organize your knowledge and documents that relate to crypto. In the end, it will help you to turn a stressful topic into one that’s much more relaxed.

You may also enjoy, Blockchain and Financial Reporting

lease standard

How to Prepare for The New Lease Standard

In Mid-July, FASB members unanimously voted to extend the effective date for lease accounting for private companies, nonprofits, and small companies. This extended deadline applies to the adoption of ASC 326 and ASC 815, the Current Expected Credit Losses and the Derivatives and Hedging. This is good news for companies that were struggling to meet the new lease standard deadline. With internal resources already stretched to the limit, many managers reported feeling overwhelmed while preparing for the new changes. 

Here are a couple of things that you can do to prepare for these new lease standard:

Identify your inventory and determine if it is covered by this new lease standard.

Create a transition timeline and action plan.

Run through an analysis to see how the new lease standard will affect your company’s financial statements.

Make sure that management fully understands the impact of the new lease standard in the present and on the future financial reports.

 See if you find any way that you can make the improvements needed in the financial report.

Going through the process regularly can help to avoid some of that added pressure of the impending deadline.

FASB is accepting early applications for all organizations. By preparing for these lease changes now, you can be ready for any bumps in the road.

The longer you procrastinate, the more difficult it will be to meet the deadline. Wishful thinkers may be hoping that FASB delays the deadline again, but there is no indication that will happen.

Click here for help Troubleshooting ASC 606 and click here for details about IFRS and US GAAP.

summertime financial projects

Financial Projects to Take Advantage of This Summer

Summer might be coming to a close, but there is still plenty of time to get stuff done before it’s over. Summer is usually a time when work slows down, and you end up with extra time on your hands. This means that there should be plenty of time to manage some of those financial projects you may be procrastinating about.

Some of the things that you could be doing to make the best out of time that you have available are:

Reevaluate your budget process

Look at your historical data and analyze whether it is still efficient. You might find that you need a new approach. Crunch some numbers and see if there are any ways that you can make this process more efficient. Consider running an analysis of the current year’s budget to see if everything is happening as initially predicted and planned. Are there any things that you can do to rework it and make it better?

All the efforts that you put into this reevaluation can be a great benefit to you next year when trying to develop the new yearly budget.

Learn more about your current tools

With updates always happening and technology continually advancing, you could find the financial tool you are currently using isn’t being used to its full potential. Spend a few hours and get to know it. Follow along with tutorials and guides, look up any questions that you might have and see what features you’re missing out on.

By adding software retraining to your financial projects, you may improve the value that you are receiving from your software. You never know, you might discover something that could make your daily tasks more manageable.

Take on open items from last year’s audit

After an audit is completed, one of the most natural things to do is to go back to work and sigh a breath of relief. While this is perfectly okay, there could be some open items that still need addressing a few months or years down the road. By checking out last year’s audit report, you can spot anything that might need attention and compare it to the current year. Is your company falling into a deficit or keeping with a dangerous pattern? Finding these things out now can help you to correct them before it’s too late.

Using your extra time to review your financial projects not only helps you but also helps the company.

You may also enjoy, “Is it Time for an ERP System Upgrade”

Organizational tips by Cristo Paraskevas

Consultant Corner-Organizational Tips from Cristo

Being reliable, whether at home, with your family and friends or at work with your colleagues, is a fundamental value.  People appreciate those that follow through on commitments in a timely manner.  At DLC, our consultants demonstrate this value through organizational skills with an eye on deadlines, budgets, and excellent customer service. 

How do our consultants consistently deliver this level of service on time and on budget?  There are many dimensions including, effective time management and organizational skills.

Prepping the To-Do Lists

We all keep to-do lists, whether in our heads, in our email, in a notebook, or anywhere else where thoughts and ideas can be recorded.  The key to managing our lists is to have consistent organizational skills.

There are many tools and approaches available to manage time effectively.  The following is an organizational approach that has consistently made me a reliable person.

Effective Time Management and Organizational Skills

Being organized starts with email.  Does that sound crazy?  It’s easier than you think.  Most email can be categorized as either a call to action or informational.  Emails providing information should be filed as soon as they are read.  Emails requesting an action can either be dealt with immediately or triaged.

You don’t need a complicated filing system to keep track of emails.  A simple folder titled “Filed” will suffice.  Newer email tools, from Outlook to Gmail, are powerful and provide many options to search through emails.  You can quickly find a note, sorting by “From”, “Date”, “Subject”, etc.

For emails requiring your response or action, use built-in flags and keep the emails in your inbox until you’ve addressed them.  The key here is to prioritize what you respond to and when.  By continuously filing emails that you’ve read and prioritizing the ones you need to respond to, you’ll manage to empty out your inbox, or close to it!  Your inbox essentially becomes part of your to-do list.

While we’re discussing email, I also leverage the calendar to block time with a specific to do when it’s time-sensitive.  The calendar can also be a part of your to-do list.

The To-Do-List

Finally is the actual to-do list.  I use Microsoft OneNote since it’s compatible with all my devices and has everything I need to effectively manage tasks.  There are many products that offer similar functionality including Apple Notes, Evernote, among others.  They all deliver the same value and it comes down to your own preferences.

I have three main tabs in OneNote: Triage, To Do, and Waiting.

The Triage tab has raw notes that I’ll need to deal with at the end of the day.  The To-Do tab is further divided into ASAP, SOON, and LATER, depending on prioritization.  The Waiting tab is a list of actions I am waiting for others to take before I can proceed on my own responsibilities.  I note the deliverable, the person’s name, and the date they committed to on this tab.  I also set agendas, record conversations, and note ideas I might follow up with in the future on other tabs, as needed.

Putting It All Together

My day starts at the end of the day.  This is when I go through my meeting notes and Triage list.  I move items into my To-Do tab as either ASAP (within 5 days), SOON (within the next three weeks), or LATER (sometime in the future).  It is critical that the Triage list gets managed down to nothing every day.  This is the key to making the system work.  A to-do should never remain in the Triage tab.

As I take notes during meetings, I number all my actions and use alpha characters to note actions others are taking that impact me.  When I triage at the end of the day, I clean up my handwritten notes in Word.  I move numbered items to the To-Do tab or put them on the calendar if they are time-sensitive.  Move alpha characters to Waiting.

Lastly, I go through emails, filing informational emails after I read them and working through the rest by either responding or prioritizing the action by putting it on my OneNote To-Do tab, adding an action to the calendar, or leaving it in email with a priority flag.

When I come in the next day, I know what is expected of me and I start executing on my deliverables.  I attend meetings, record notes, and check email throughout the day working away at the ASAP to-do list.  Once the ASAP list is cleared, I start working on LATER, which eventually turns into ASAP when the deadline is imminent.

Organizational Skills Results

Behavior changes take time and require real motivation.  Once you’ve developed your organizational system you’ll notice a reduction in stress levels, you will forget things less, and you’ll be meeting other’s expectations of you.

Now that you’re organized, it’s time to get to work and deliver value to your stakeholders in both your private and professional lives!

Author: Cristo Paraskevas, MBA – DLC Finance and Accounting Consultant

EBITDA

Driving EBITDA Quickly, Post Acquisition

While most private equity acquisitions are relatively straightforward, things are seldom as painless as they seem. The hard part is trying to leverage the synergies between companies during the investment strategy roll-out.  After laying the groundwork for a successful post-acquisition integration and enterprise resource management implementation, the next step is to drive the Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) growth as quickly as possible. To ensure that your EBITDA strategy delivers the effectiveness and the market advantages that your investors are expecting, focus on the following concepts to help you through the process:

Automate Manual Processes

If you want to grow your business in the next few years, you may find that sustaining certain human-intensive methods are illogical.  Instead, automate manual processes with an Enterprise Resource Planning system (ERP). Automating workflows can reduce the administrative overhead, saving you money that you can apply elsewhere. Start by determining how and why certain processes emerged. Once you understand the “how and why,” it will be easier to utilize the ERP’s automated workflow capabilities.

Integrate Systems for Efficiency

As businesses grow, they often acquire independent point solutions for different methods, including sales, warehouse management, financial management, and e-commerce. Some of these systems may be held together by employees moving data from one system to another and fixing errors manually.  By integrating with an ERP, you can be much more efficient. Initial integrations should be focused on the high volume or manually intensive operations due to the high cost and complexity.

Overview

Most companies that fail to meet their objectives during an ERP implementation, have not sufficiently set the stage for integration. By carefully planning the ERP implementation with focus and direction, you can be far more successful. 

For more information about DLC’s Post Merger Financial Integration services, click here.

code of ethics

The Accountants’ Code of Ethics is Under Revision

Recently, the International Ethics Standards Board for Accountants (IESBA) proposed changes to the International Code of Ethics for Professional Accountants. These proposals came in response to requests from stakeholders asking the Board to examine how the code of ethics can contribute to strengthening professional skepticism.

They are hopeful that these proposed changes to the Code of Ethics will improve the mindset of accountants. Additionally, they are hoping that the changes to the Code’s conceptual framework will be easier to understand.

What are the current Codes of Ethics?

The current Code of Ethics is summarized by five fundamental principles.

  1. Integrity.
  2. Objectivity.
  3. Professional Competence and Due Care.
  4. Confidentiality.
  5. Professional Behavior.

Each one of the above five has its own set of standards to follow.

The Proposed Changes Will:

  • Highlight the professional accountant’s roles in society.
  • Accentuate the relationship between complying with the codes and the responsibilities to act in the public interest
  • Include improvements to the quality of the principles of integrity, objectivity, and professional behavior.
  • Strengthen the Code by requiring professional accountants to have an inquisitive mind when applying for work.
  • Highlight how important it is to be aware of biases. 

You can view these proposed amendments in more detail by viewing them here. The board is accepting comments until October 31, 2019.

The proposed changes were developed with the help of the International Auditing and Assurance Standards Board (IAASB) and the International Accounting Education Standards Board (IAESB).

More About These Changes

The changes proposed are quite extensive, including restructuring the entire framework.

Presumably, if these changes are made, the Code will be:

  • Clearer and more precise.
  • Easier to use.
  • More applicable.
  • Easier to enforce proper use.

With the substantial changes to the Code of Ethics being in consideration, The Ethics Board will be hosting a webinar in September to present an overview of the requested changes. You can follow @Ethics_Board on Twitter for updates and on how you can register for this event.

For more accounting and finance industry news, click here.

ai technology

How AI Technology is Helping Today’s CFO

AI technology is taking the “work” out of busy work thanks to its ability to make many job functions easier. It has truly revolutionized the world of corporate finance. AI can run through massive amounts of data and find relevant patterns and trends that may have otherwise been missed.

Here are a few ways that AI technology is helping CFOs:

Predictive Analytics

Human eyes can’t compare to AI in speed, detail and accuracy. AI can spot correlations between things that may otherwise seem unrelated and can also help to spot emerging trends. Not only that, but AI can give you the exact steps needed so that you can react to those trends appropriately.

Saving the Company Money

With company finances, any uncertainty in appraisals can cost the business millions of dollars. Using AI can help to remove those uncertain variables and give a more accurate reading. It can also remove the human bias and errors.

When applied to corporate finance business planning, AI can help to determine short term and long term goals for the company as well as help attain them. With the system always learning and evaluating the business, it can find the best ways to optimize profit margins.

Stopping Internal Fraud

With company embezzlement usually being an inside job, it can often go undetected. They can also make fraud as unnoticeable as possible because the perpetrator knows how to hide their tracks.

Thanks to AI, expense data reports are very accurate. With a careful eye, a CFO can analyze the data and detect suspicious activity.

AI technology has also advanced far enough that it can help to predict common behavioral patterns of employees. This allows a CFO to foresee possible fraud risks and put a stop to them before they happen.

As science and AI increase in their capabilities, they become more integrated into our financial companies. They not only help CFO’s to maximize profit margins but also help to stop fraud and protect the company as well. CFO’s should continue to observe AI advancements so that they can be adopted into their companies as soon as possible.

Click here to learn more about the Digital Future of the Accounting Industry.