[Las Vegas, NEV] November 28, 2016 – Piercy Bowler Taylor & Kern (PBTK), a full-service accounting firm, announces that its Director of Technical Resources, Howard B. Levy, has been appointed Auditing Editor of The CPA Journal, a highly regarded monthly publication of the New York State Society of CPAs.
Levy’s appointment to Auditing Editor entails authoring a monthly column on new developments and other selected issues in financial auditing. A frequent contributing author of material for publication in the Journal, Levy was appointed to the magazine’s Editorial Board in November last year.
The CPA Journal has been earning its reputation as an objective, critical source of information on issues of interest to CPAs for more than 85 years. It is widely regarded by its users as one of the top publications for members of the accounting profession in public practice, industry, government and education and provides analysis, perspective, and debate on the issues in topics that include accounting and auditing, taxation, personal financial planning, finance, technology, and professional ethics.
Levy’s first article published in the Journal was in 2005. Articles published in 2015 and 2016 are listed below in reverse chronological order (copies of selected items may be obtained by contacting Shannon Hiller at email@example.com):
About Piercy Bowler Taylor & Kern
Piercy Bowler Taylor & Kern is a full-service accounting and business advisory firm that provides accounting and auditing, tax, consulting, valuation and litigation support services. Founded locally in 1990, the firm specializes in the casino gaming and leisure time industries, governmental and not-for-profit organizations, real estate development and construction industries and the legal and general business communities. Now with offices in Salt Lake City, Reno and Las Vegas, PBTK is one of the few independent accounting firms in its local markets to perform SEC audits. For more information on PBTK, visit pbtk.com or call Shannon Hiller at 702.384.1120.
A basic postulate of financial accounting is that timely financial reporting requires the use of estimates. And all accounting estimates inherently involve a degree of subjectivity, complexity and uncertainty — some considerably more than others. Although your auditors or other outside accountants may provide advice and guidance, like the financial statements in general, accounting estimates are ultimately the responsibility of management.
Some estimates may be relatively simple to make, but the more subjective or complex they are, and the more quantitatively significant they are to the financial statements, the more judgment and expertise are required to arrive at reliable and supportable results. Sometimes, to provide the necessary expertise to assist management in making and supporting important estimates, it will be necessary to engage outside specialists, such as appraisers, actuaries, lawyers, engineers or geologists.
When financial statements are audited, significant accounting estimates — such as allowances for doubtful accounts, useful lives and possible impairments of long-lived assets, and fair values of financial and sometimes nonfinancial assets — often require special attention from auditors. But whether the financial statements will be audited or not, when accounting estimates are particularly subjective or complex and have the potential to affect reported results of operations of financial position materially, management should take all steps reasonably possible to make the estimation process appropriately robust and the estimates sufficiently reliable, based on all information practically available.
What Auditors Look For
Auditing standards provided by the AICPA’s Auditing Standards Board (ASB) and the Public Companies Accounting Oversight Board (PCAOB) generally require auditors to test fair value measurements and other accounting estimates by management, including when supported by the work of outside specialists, in one or more of the following ways:
At the time of this writing (December 2016), the ASB and PCAOB are both currently engaged in projects intended to strengthen their respective standards that control the nature and extent of the procedures used by auditors to support management’s estimates, including procedures applied when outside specialists are engaged. So now is a good time for company managements to strive to make their estimation processes more robust and supportable under scrutiny.
Public companies are required to disclose in their periodic SEC filings (in a section called “Management’s Discussion and Analysis”) details about the underlying processes and significant assumptions used to develop what are called “critical accounting estimates.” An online search of the filings of public companies in your industry can provide useful information on how to develop and support your critical estimates. For additional help and guidance, contact your PBTK representative or Howard B. Levy.