Profit Matters
by Alex Vuchnich, CPA, CFE - Alex Vuchnich is the developer of Controlzkit an internal controls anaylsis tool and shares his perspective on how audit and accounting theory, technology and professional ethics interrelate to create forward thinking profitable firms.
Latest posts
Nov
20
This weeks ethics case is focused on evaluating the proper use of grant funding and expenditures during the course of an audit engagement. Evaluating the appropriateness of an expenditure under a government or private grant can be subjective in nature and professional skepticism can create a situation where the auditor and the client may not agree on the propriety of a grant expenditure. Who is ultimately right? Who are the stakeholders that must be considered? What is the auditor's responsibility?
Nov
20
Here are the results from the ethics poll from a couple weeks back on the Trust But Verify case study.Request that the engagement partner confront the client67%Ask the audit partner why you were pulled from the assignment11%Contact the Board or other governing body11%Other11%
Nov
19
My mother in law recently gave me a 'starter bag' of Amish friendship bread. Friendship bread is a sourdough based cinnamon bread that has been a hit with everyone I have shared it with. The starter bag is a concoction of milk, sugar and flour that acts as the basis for the friendship bread. As a by-product of baking friendship bread, the starter bag multiplies at a geometric rate (that is 1 starter bag will yield 4 new starter bags after making friendship bread, those 4 produce 16, and so on). These starter bags are supposed to then be given to friends, family and neighbors so they can make and share their own friendship bread. Friendship bread may very well have been the predecessor to the chain letter or viral video. However, it always seems that you end up with more starter bags than you can give away so you end up throwing most of the excess starter in the garbage. What makes it so hard to give away all the starter bags?
Oct
27
Invoicing customers is a critical function of most organizations and good invoicing practices result in better collections of receivables. Organizations that fail to invoice in an efficient manner are missing an opportunity to improve cash flows and increase collection rates. Accelerating payment on customer accounts is essential for improving cash flows of an organization and for minimizing the opportunity cost associated with financing customer accounts. When collections cycles continue to get longer there is also an increasing risk of doubtful accounts. Using simple invoicing best practices such as the following, can help accelerate turnaround time on customer payments, reduce doubtful accounts and avoid unnecessary mail delays or float due to incorrect addressing.
Best practices:
1. Include a windowed or pre-addressed return envelope with the invoice.
2. Include a detachable remittance advice with the invoice for the customer to return with the payment.
3. Send first invoice requests 30 days prior to the due date of the invoice.
4. Send the follow up second request within 15 days of the due date of the invoice.
5. Send invoices in multiple mediums, preferably electronically and by fax as well as by mail.
6. Review the accounts receivable aging weekly and send past due notices and make any follow up calls as soon as accounts enter past due status.
Oct
09
This weeks Friday Accounting Ethics Case centers around the concept of trust as an inadequate internal control.
Oct
09
The results of the accounting ethics case poll from last week, located here, were as follows:
Disengage the client, you are no longer independent
50%
Proceed with issuing the financial statements, the client has accepted responsibility for the services you performed
25%
Other (Predominantly, requesting that the client provide an explanation of the accounting treatment in their own words before signing off.
25%
Oct
08
Included in the 2009 Economic Stimulus Package (ARRA) was a provision for subsidized COBRA premiums for individuals who have lost their jobs. The subsidy pays the cost of 65% of COBRA premiums while the individual picks up the remaining 35% rather than the usual 100%.
Oct
07
Here's a video on how I have been attempting to use MS OneNote as an alternative to some of the more expensive paperless engagement software for CPA firms.
Free online screen recorder
Oct
02
This weeks accounting ethics case deals with our professional responsibilities concerning the clients ability to oversee any of the attest services we provide, and for evaluating the adequacy and results of those services.
Oct
02
The results of the accounting ethics case poll from last week, located here, were as follows:
