• Eat the Frog Now: Your Auditor Will Thank You Later

    A famous quip advises, “Eat a live frog first thing in the morning and nothing worse will happen to you the rest of the day.” Metaphorically, this comic principle holds true for the annual compliance ritual of the company audit. Those who invest the time to prepare for the audit process in advance will have a smoother and less stressful experience than those who delay or procrastinate. Whether you recently completed an audit or one is coming up soon, here are some “frog-eating” tips and best practices.
  • Elder Financial Abuse Is a Growing Problem: CPAs Can Help Prevent It

    Elder fraud has been defined as “an act targeting older adults in which attempts are made to deceive with promises of goods, services, or financial benefits that do not exist, were never intended to be provided, or were misrepresented.”
  • Improving the Employee Plans Compliance Resolution System

    When acting as an administrator to an employee benefit plan, or an auditor of such, it is almost inevitable that you will become aware of a plan failure. The IRS describes a failure as those plans that are intended to satisfy the requirements of Internal Revenue Code Sections 401(a), 403(a), 408(k), or 408(p), but have not met those requirements for a period of time. The Employee Plans Compliance Resolution System was established to permit plan sponsors to correct failures and continue to provide employees with retirement benefits on a tax-favored basis.
  • How the Pandemic Impacts Determining Economic Damages

    Financial experts have a challenge, now and into the future, of separating out the effects of the once-in-a-lifetime COVID-19 economic disaster when expressing an opinion about lost profits, lost earnings, or other related damages in litigation matters, insurance claims, and other applications requiring financial forecasting.
  • Due Diligence on the Flip Side: A Seller’s Tool Too

    When thinking about due diligence in a merger or acquisition context, we tend to think about it solely from the buyer’s perspective. Perhaps you have a picture in your head of a team of lawyers, CPAs, and other experts combing through financial records and legal documents, searching for potential liabilities or areas of risk that the buyer soon will be inheriting as their own. Depending on the size of the transaction, this process can take weeks, or even months. The seller often discovers the literal torment of “sleepless nights,” finding themselves in a period of limbo hoping that no major issues exist that could delay or terminate negotiations.
  • TCJA: Mining the Tax Benefits for Natural Resources Holders

    Pennsylvania has a vast wealth of natural resources: minerals, coal, stone, forests, and, of course, natural gas and petroleum. This abundance can result in an economic benefit for property owners as well as for those who develop, mine, and harvest such resources.
  • Story Time: CFOs Can Make Their Financial Tales Engaging with a Good MD&A Report

    Have you ever produced financial statements that you reported out at a monthly management meeting only to be met by blank stares on the faces of those without a financial background? It can be unsettling, but it can be overcome. To break through those blank stares, you have to tell the financial story of your organization in a meaningful way to those with diverse backgrounds and varying levels of financial knowledge.
  • Corporate Tax Reform and Its Impact on Private Company Valuation

    The Tax Cuts and Jobs Act became law in December 2017, and now private companies and their investors must consider how the changes in tax law impact business valuations. Specifically, stakeholders should consider how the Tax Act impacts their projected cash flows and the inputs and assumptions that drive the estimation of enterprise value.
  • The Pandemic’s Impact on Business Insurance Coverage

    With the pandemic and its consequent economic turmoil, new challenges and questions arose for companies, including the power and limits of business insurance coverage. To explore the pandemic’s impact on insurance coverage, I spoke with Todd Rhoads, vice president and professional services practice group leader at EHD Insurance. I wanted to find out what he is seeing in the business insurance arena.
  • Business Interruption Claims in a Knot after Pandemic

    This feature does not look at business interruption claims as a result of COVID, but rather how business interruption claims were analyzed and evaluated in the past and what impact COVID-19 has had on this process to date and going forward. The world is adjusting to a new normal, and how business interruption claims are evaluated is evolving as well.
  • New Depreciation Rules Affect Mergers and Acquisitions

    The Tax Cuts and Jobs Act modifies rules related to depreciating tangible property, net operating losses (NOLs), interest expense limitations, and the taxation of foreign income. One area that remains mostly untouched are the rules related to taxable and nontaxable reorganizations, spin-offs, incorporations, and liquidations.
  • Five Ways to Enhance Your Banking Relationships

    Financial services are critical to the long-term viability of an organization, yet the global pandemic and the resulting economic uncertainty presents a challenge even to the most well-established banking relationships. Over the past year, lenders and borrowers contended with the introduction, and regulatory evolution, of new federal programs – such as the Paycheck Protection Program – and the frustrations of maintaining operations amidst public health regulations. Here are a few tips for fostering productive communications with your lender during difficult times and beyond.
  • IRC Section 1031 and Real Estate Like-Kind Exchanges

    Owners of investment property are acutely aware of the double-edged sword that awaits a sale. The owners will finally be able to realize the benefit from years of hard work maintaining the appreciated property, but they also could face a substantial tax liability on the sale of the investment property. For taxpayers who wish to continue holding an investment rather than cashing out, Internal Revenue Code (IRC) Section 1031 provides a strategy that allows for tax deferral whereby the taxpayer exchanges the investment property for like-kind property. There have been some major changes to Section 1031 in recent years. Notably, the Tax Cuts and Jobs Act (TCJA) made only exchanges of real property eligible for Section 1031 exchanges, and the Treasury Regulations that were issued in November 2020 provide a revised definition of real property for purposes of Section 1031. However, understand that President Joe Biden’s tax plan, mentioned during the 2020 election, referenced eliminating tax breaks for real estate investors; thus, Section 1031 could be eliminated as a strategy in the future
  • Building a Core Competency in Mergers and Acquisitions

    At many middle-market companies, mergers and acquisitions (M&A) are few and far between. But if your company’s strategy includes growth by acquisition, M&A needs to be a core competency. Fortunately, this does not require staffing a large internal transaction group.
  • Comfort with the Uncomfortable: CFO Leadership

    Recently I had a conversation with a coworker about professional development to help them prepare to move beyond their current role. The exchange took me back to how unprepared I felt some 10 years ago when I stepped into the CFO role for the first time. There was no textbook I had read or class I had taken that prepared me for the pace and randomness of the CFO role. One can certainly learn from others if you have a good mentor or teacher, and reading articles and attending CPE do help take some of the mystery away over time. In the end, though, the best way to learn is through the experience of being in the role. This column has been prepared to help those who aspire to be CFOs someday understand some of the dynamics they may encounter when stepping into that role.
  • The Past, Present, and Future of Consolidation in Public Accounting

    In many ways, the KPMG transaction was the catalyst for a wave of mergers and combinations that has taken place across the accounting profession over the past 30 years among firms of all sizes. In this feature, we look at what motivates “the urge to merge” and examine the implications of continuing consolidation within the profession.
  • Corporate CPAs: A Beacon of Ethical Behavior

    In all likelihood, I’m guessing your CEO and board usually set financial targets that call for significant sales growth – perhaps even when the core product line has been in decline for years. You and your finance team are expected to deliver this growth while also planning for reduced costs and delivering increased income on the bottom line. If you hit headwinds, you better protect the bottom line at all costs, right? Wall Street and other stakeholders will not be forgiving if you miss the targets you’ve communicated.
  • Lean Accounting Brings Focus and Direction to Company Performance

    Companies across all industries for the past 20 years have been adopting lean manufacturing as a strategy to improve performance. Lean accounting emerged soon after, and it has grown in recent years as a related strategy to align the financial side of an organization with the overall lean effort.
  • Private-Label Pricing Strategy to Optimize the Bottom Line

    Most manufacturing companies, especially in the consumer products industry, will encounter the situation when the sales department presents an opportunity to sell a private-label product to a customer. Unless you have a strategy in place to determine if you can compete in this area, properly vet the opportunity, and then price it, your bottom line could be adversely affected.
  • Forecasting Cash Flow Vital to Surviving the Storm

    Cash is king! Without cash, you are done: turn out the lights, lock the doors, and go home. Monitoring cash and modeling future cash flows can provide an early warning regarding the health of your organization, so accurately forecasting your company’s cash flow is a business imperative. Indeed, accurately forecasting cash flow, especially as you continue navigating COVID-19 and its economic impact, is a matter of corporate survival.
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