August 10, 2016 – Piercy Bowler Taylor & Kern (PBTK), a full-service accounting firm, is pleased to announce that Lisa Cross, CPA and Ryan Whitman, CPA, CFE have been promoted from Principal to Shareholder. Both Cross and Whitman started their professional accounting careers at PBTK as Associates and moved up through the ranks, accepting more responsibilities and growing their technical skills.
Cross started with PBTK in July 2004 and has done tax planning and preparation for a wide variety of clients including individuals, partnerships, limited liability companies, corporations and not-for-profits. In addition to her work in the tax department, she also performs compilation services. She is a Partner in the newly opened Reno, Nevada office.
Since January 2005, Whitman has been involved in audit, review, compilation, and other attest services for a wide-range of national and international clients, including not-for-profits and publicly-traded companies. He also reviews forensic accounting reports for the Firm’s litigation support department. While servicing PBTK’s international clients, Whitman has spent time in the Caribbean Islands and Middle East performing both gaming-related audit and regulatory compliance services.
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.
An auditor does significant legwork before starting field work. During the audit planning phase, he or she reviews the preliminary financials and compares the current year’s results to last year and industry benchmarks. Here’s a closer look at what happens behind the scenes — and why you might want to implement a similar approach internally.
Preliminary analytics start with a horizontal comparison. That is, auditors compare internally prepared financial statements for the current year to last year’s audited results. Usually, changes are shown as a dollar amount and percentage.
The amount of change that warrants additional attention depends on the “materiality” threshold the auditor sets. For example, an auditor of a small business may decide to inquire about any line item that changes by, say, $10,000 or 10% and then possibly incorporate additional testing for questionable line items. A higher dollar amount threshold may apply for a larger company.
Accountants also may use a vertical or “common-size” approach when planning an audit. This technique shows each line item as a percentage of sales or total assets.
For example, a common-size income statement — which shows expenses as a percentage of sales — explains how each dollar of sales is distributed between costs, expenses and profits. Changes in a company’s financial statements over time can highlight trends and operating inefficiencies that warrant closer scrutiny.
Additionally, auditors calculate ratios to capture the relationships between various items on a company’s financial statements. For example:
Ratios are helpful when benchmarking a company against competitors (which may be bigger or smaller) or in comparison with industry averages. What’s good or bad for a particular ratio depends on the industry in which the company operates.
Significant variances from year to year and from industry norms can help auditors decide where to focus. Owners can adopt similar analytical procedures to anticipate the questions that will be asked during audit field work and improve audit efficiency.
More important, however, using a similar type of analysis in-house can help owners monitor the company’s performance throughout the year and catch mistakes early. Contact Martha Fordfor a detailed explanation of how to think like an auditor and perform an interim financial analysis of your company.