All Certified Public Accountants (CPA’s), in the US and foreign, that provides audited financial statements for public companies registered with the SEC (Securities and Exchange Commission) must be registered with the Public Company Accounting Oversight Board (PCAOB), sometimes referred to as Peekaboo. The PCAOB is a private-sector, nonprofit corporation that was created by the Sarbanes-Oxley Act of 2002 which is under the jurisdiction of the SEC. The Sarbanes-Oxley Act and the creation of the PCAOB were a result of the accounting fraud scandals of Enron and WorldCom.

Only Certified Public Accountants (CPA’s) can prepare audited financial statements on behalf of a business or non-profit organization. In order for a non-certified accountant to become a CPA, the accountant needs to work for an accounting firm for a few years, acquire five hundred hours of auditing time, and pass a test from the American Institute of Certified Public Accountants as well as from their state. A CPA also must take 120 hours of continuing education courses every three years to maintain their license.

The purpose of the Public Company Accounting Oversight Board is to oversee auditors, (accounting firms, CPA’s, accountants) of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, fair, and independent audited financial statements. The PCAOB’s goal is to improve the quality of audited financial statements, reduce the risk of auditing failures, and increase public trust in financial reporting processes and of the auditing profession. The PCAOB has established auditing, quality control, ethics, and independence standards to be used by registered public accounting firms and CPA’s in the preparation of audited financial statements for publicly traded companies, as required by the Sarbanes-Oxley Act of 2002 and the rules of the Securities and Exchange Commission (SEC).

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All Certified Public Accountant (CPA) firms, in the US and foreign, that provide audited financial statements for public companies registered with the SEC (Securities and Exchange Commission) must be registered with the Public Company Accounting Oversight Board (PCAOB), sometimes referred to as Peekaboo. The PCAOB is a private-sector, nonprofit corporation that was created by the Sarbanes-Oxley Act of 2002 which is under the jurisdiction of the SEC. The Sarbanes-Oxley Act and the creation of the PCAOB were a result of the accounting fraud scandals of Enron and WorldCom. There are currently over 2,000 public firms registered with the PCAOB, with more pending registration. A list of current and pending registered firms can be found on the PCAOB website.

Only Certified Public Accountants (CPA’s) can prepare audited financial statements on behalf of a business or non-profit organization. In order for a non-certified accountant to become a CPA, the accountant needs to work for an accounting firm for a few years, acquire five hundred hours of auditing time, and pass a test from the American Institute of Certified Public Accountants as well as from their state. A CPA also must take 120 hours of continuing education courses every three years to maintain their license.

The purpose of the Public Company Accounting Oversight Board is to oversee auditors, (accounting firms, Certified Public Accountants (CPA’s), accountants) of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, fair, and independent audited financial statements. The PCAOB’s goal is to improve the quality of audited financial statements, reduce the risk of auditing failures, and increase public trust in financial reporting processes and of the auditing profession. The PCAOB has established auditing, quality control, ethics, and independence standards to be used by registered public accounting firms in the preparation of audited financial statements for publicly traded companies, as required by the Sarbanes-Oxley Act of 2002 and the rules of the Securities and Exchange Commission .

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All accounting firms, in the US and foreign, that provide audited financial statements for public companies registered with the SEC (Securities and Exchange Commission) must be registered with the Public Company Accounting Oversight Board (PCAOB), sometimes referred to as Peekaboo. The PCAOB is a private-sector, nonprofit corporation that was created by the Sarbanes-Oxley Act of 2002 which is under the jurisdiction of the SEC. The Sarbanes-Oxley Act and the creation of the PCAOB were a result of the accounting fraud scandals of Enron and WorldCom. There are currently over 2,000 public accounting firms registered with the PCAOB, with more pending registration. A list of current and pending registered firms can be found on the PCAOB website.

Only Certified Public Accountants (CPA’s) can prepare audited financial statements on behalf of a business or non-profit organization. In order for a non-certified accountant to become a CPA, the accountant needs to work for an accounting firm for a few years, acquire five hundred hours of auditing time, and pass a test from the American Institute of Certified Public Accountants as well as from their state. A CPA also must take 120 hours of continuing education courses every three years to maintain their license.

The purpose of the Public Company Accounting Oversight Board is to oversee auditors, (accounting firms, Certified Public Accountants (CPA’s), accountants) of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, fair, and independent audited financial statements. The PCAOB’s goal is to improve the quality of audited financial statements, reduce the risk of auditing failures, and increase public trust in financial reporting processes and of the auditing profession. The PCAOB has established auditing, quality control, ethics, and independence standards to be used by registered public accounting firms in the preparation of audited financial statements for publicly traded companies, as required by the Sarbanes-Oxley Act of 2002 and the rules of the Securities and Exchange Commission (SEC).

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The financial forensic1 experts of today possess a litany of credentials and licenses that are intended to promote and define their particular expertise. This article provides attorneys and clients the recipe for the “alphabet soup” that follows the name of an expert in order to assist in their hiring or cross examination in litigation. Simplified explanations, commentary and web page references are included for the most common and widely-held litigation-oriented credentials2.

FINANCIAL: The CPA, Certified Public Accountant, is a state-issued license that is well known and respected by judges and juries. Currently, the CPA license requires a five-year college degree, passing what is perceived as one of the most difficult of professional exams plus two years of supervised experience. CPAs are governed by the holder’s state board of accountancy3 and the AICPA, American Institute of Certified Public Accountants4. CPAs must obtain forty hours of continuing professional education per year and must adhere to a strict code of ethics. CFAs, or Chartered Financial Analysts, 5 are focused on investment analysis and valuation. The designation requires an intensive educational course, passing a rigorous exam and three years of experience, but requires no continuing education. The CFP, Certified Financial Planner6, is oriented towards personal financial planning, requires passing a comprehensive exam and completion of thirty hours of continuing education every two years. CFAs and CFPs, along with CPAs, must adhere to strict ethical and competency guidelines. The CDFA, Certified Divorce Financial Analyst7 is a credential which requires passing an online exam.

BUSINESS VALUATION: Valuation credentials have become more prevalent in the last fifteen years and are essential if one is attempting to qualify as an expert witness. The ABV, Accredited in Business Valuation8, and CVA, Certified Valuation Analyst9 are issued by the AICPA and National Association of Certified Valuation Analysts, respectively. The CVA requires an intensive valuation course or holding of another valuation credential and passing a rigorous exam. The ABV requires a similar exam and valuation experience. Both credentials require the holding of a valid CPA license, therefore the ethical and continuing education requirements apply. The American Society of Appraisers issues the ASA, Accredited Senior Appraiser10, which requires a college degree, passing a comprehensive exam, five years of experience and obtaining forty hours of continuing education very five years. ASAs are usually not CPAs therefore they generally have less of a background in accounting and tax issues.

FORENSICS: A relatively new but rapidly expanding designation is the CFF, Certified in Financial Forensics11, which is issued by the AICPA. The CFF requires holding a valid CPA license, a minimum of one thousand hours of work experience and seventy-five hours of education in forensic-related disciplines. Since the CPA is required, the ethical and continuing education requirements apply. Almost all serious fraud investigators hold the CFE, Certified Fraud Examiner12. The CFE is issued by the Association of Certified Fraud Examiners and requires a bachelor’s degree, two years of experience, passing a comprehensive exam and completing twenty hours of continuing education per year.

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Accounting is one of the most important internal aspects to any business that is to be financially successful in today’s market. It is the process of documenting all relevant economic information about a firm and communicating that information to key players. Managers and Executives need accounting information to make decisions and run their business to achieve maximum profitability. Shareholders need accounting information to make informed investments.

There are many types of accounting that all have different roles in the business world. Probably the best-known and most ‘classic’ type of accountant is a CPA, or Certified Public Accountant. A CPA has a very diverse client list. They can serve anyone including individuals, private firms, large publicly traded corporations, the government, or non-profit organizations. They can perform the role of an independent auditor, tax advisor, or financial consultant.

When performing an audit, a CPA will produce an independent auditor’s report that will tell the client four key pieces of information. First it identifies the documents that were audited and describes that the purpose of this report is to express an opinion about the documents in questions. Next it explains the standards used to analyze the data. Third is the actual opinion of the auditor in regards to the financial documents reviewed. Finally, the auditor elaborates on his opinion regarding the effectiveness of the financial reporting of the firm.

Another type of accountant is a CMA, or Certified Management Accountant. A CMA serves a smaller customer base, because they typically work for a single firm. The major role is to advise the company on their financial management, accounting processes, and budgetary issues. A CMA may work with individual employees of that company, but their main function is to advise the executives on the company’s complete financial structure. They are often involved in major decisions for the company.

A subset of managerial accounting is cost accounting. A cost accountant works closely with the budget structure of a company. They are typically involved with determining the internal costs of many functions and the profitability of the routine company operations. Cost accountants have a very future-oriented job in that they are primarily concerned with using historical data to forecast what the prospective financial strength of the company will be.

A third major type of accounting is a financial accounting. Financial accountants are primarily responsible for the preparations of the financial documents for review by the corporate decision makers. Managerial accountants, cost accountants, top management, and shareholders use these documents to make major business decisions. Financial accountants assemble an annual report including balance sheets, income statement, statement of cash flows, and statement of change in owners’ equity (or retained earnings). These documents are usually targeted to an external audience.

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All organizations, whether private, public, or non-profit, need to prepare financial statements on their performance to provide fiscal accountability and accuracy to their stakeholders and people with an interest in the company. Financial statements enable management to make business decisions, enable creditors to evaluate loan applications, and provide individuals with information to make investment decisions.

Financial statements provide information from an organization’s accounting documents about their economic resources and obligations on a specific date, as well as their financial activities over a period of time. Financial statements are usually prepared in accordance with Generally Accepted Accounting Principles (GAAP), which are the standards issued by the American Institute of Certified Public Accountants (AICPA), but they may also be prepared on other comprehensive basis of accounting, such as cash basis or tax basis, depending on the needs of the users of the financial statements.

The lowest level of assurance in regards to financial statements is compiled financial statements. One of the main reasons these are used in lieu of other financial statement presentations is for the timely release of financial information about an organization. Compiled financial statements are presentation of various financial reports and documentation, which is the representation of management or owners of an organization. Compilation standards allow the organization to omit note disclosures as long as there is no intent to mislead the users. This is the only type of financial statement that allows omitted disclosures.

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All organizations, whether private, public, or non-profit, need to prepare financial statements on their performance to provide fiscal accountability and accuracy to their stakeholders and people with an interest in the company. Financial statements enable management to make business decisions, enable creditors to evaluate loan applications, and provide individuals with information to make investment decisions.

Financial statements provide information from an organization’s accounting documents about their economic resources and obligations on a specific date, as well as their financial activities over a period of time. Financial statements are usually prepared in accordance with Generally Accepted Accounting Principles (GAAP), which are the standards issued by the American Institute of Certified Public Accountants (AICPA), but they may also be prepared on other comprehensive basis of accounting, such as cash basis or tax basis, depending on the needs of the users of the financial statements.

The middle level of assurance in regards to financial statements is reviewed financial statements. A Certified Public Accountant (CPA) must obtain a reasonable basis for expressing limited assurance that the financial statements meet the requirements of the US GAAP are free of material misstatements or false/missing information.

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Too often business owners make common mistakes that cost time, money, effectiveness, and profitability. Identifying the five most common management mistakes can help you increase your company’s productivity.

1. FOCUS ON YOUR CORE BUSINESS

The single best way to better manage any firm is to focus on the business at hand and on your customers. You are skilled at what you do; that is why you started your business. Typically, as the company grows and the client base increases, owners and managers try to wear too many hats. They become accountant. Network administrator. Office manager. Think back to that first job, the one that inspired you to go out on your own. All your focus was on the client, on your specialized product or service. That inspiration and success is why your business grew. To maximize your potential now, every customer should be treated that way. You cannot do this unless you focus solely on your specialty and leave the accounting, network administration, and office work to other trained professionals.

2. DELEGATE

Delegating non essential jobs will allow you to better manage your time, make you more effective, and increase your profits. You must delegate some responsibilities so that your time can be dedicated to your own area of expertise. The best way to do this is to work with people who are extremely competent at what they do, just as you are at your profession. In many cases it is best to go outside your company to manage details such as payroll, accounting, and bookkeeping. Outsourcing this will save you money.

3. DOWNSIZE AND CUT COSTS

Cutting payroll saves both time and money and also increases your profitability. Frequently, business owners hire full-time office and accounting staff when they really need someone only 10 or 15 hours a week. Why not just outsource this work? You pay for only what you need, when you need it. Downsizing in this way saves money on costly overhead, while it also makes you more effective and your business more profitable. You save valuable time because you do not need to find busy work, train, or supervise staff. Think of how much more time you can devote to your clients!

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If you’re worried about Uncle Sam taking an especially close look at your tax return, you’re not alone. It’s only natural to feel uneasy about an audit when you’re tallying your financial records.

The good news is your chances of an audit are slim.

On average, only about 1% of all individual returns filed during the previous three years (2006, 2007 and 2008) were audited. Roughly 36% of the returns audited were selected because of an earned income tax credit (EITC), a tax credit for certain people who work and have low wages.

Of the 1.36 million individual farm returns with gross receipts from farming in 2008, only 0.5% were audited. In comparison, audit rates for nonfarm business returns (by total gross receipts) were: under $25,000, 1.2%; $25,000 under $100,000, 1.9%; $100,000 under $200,000, 3.8%; and $200,000 or more, 0.6%. Percentages decreased over FY 2007 in each income category.

The IRS maintains a table of average deductions for each income group. When your “score” exceeds this computer-generated average, your likelihood of an audit increases. (As you can see in the statistics above, returns with higher incomes also come under scrutiny more often.)

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