Nov 01, 2021

New Auditor’s Reporting Standards: What You Need to Know!

You’re likely aware that the AICPA's Auditing Standards Board (ASB) new auditor's reporting standards set to go into effect for audits with years ending on or after December 15, 2021.

This is a big deal, with a big upside: The new suite of standards is designed to enhance the relevance and transparency of the auditor’s report. And, simply put, the new rules make good sense: CPAs and their clients will benefit from implementing the new standards because they were created to provide greater value to users of audit reports by making the auditor’s opinion more transparent.


In addition, changes to language in the report are meant to provide more valuable information and more distinctly define the responsibilities of both the auditor and management. Another objective of the new standards was to align generally accepted auditing standards (U.S. GAAS) with the standards issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC) and the Public Company Accounting Oversight Board (PCAOB).


The bottom line? The new auditor's reporting standards are intended to improve the transparency and relevance of the communication in the auditor’s report.


Here are five key changes that practitioners should pay particular attention to:

One of the biggest changes: With the new standard, SAS 134-140 address the auditor’s responsibility to form an opinion on the financial statements. As a result, the auditor’s opinion has been moved to the first part of the report, to be followed by a Basis for Opinion section. This new section focuses on the obligations relating to independence and clarifies that there are other ethical requirements of the audit engagement.


The new guide also requires enhanced reporting of going concern. This includes a description of management’s responsibilities to evaluate whether conditions of events raise substantial doubt about an entity’s ability to continue as a going concern.


There is an expanded description of the auditor’s responsibilities for the audit, including the auditor’s communications with those charged with governance.


When engaged by management to include key audit matters (KAMs) in the auditor's report, Section 701 addresses both the auditor’s judgement about what to communicate in the auditor’s report and the form and content of such communication.


The definition of materiality has been revised as follows: Misstatements, including omissions, are considered to be material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.


This is only a quick snapshot of the new reporting standards. Now that adopting the standard is imminent for those who have calendar year-end audit clients, it’s important to take the time to review it thoroughly in order to adequately prepare for implementation. But there’s no need to go at it alone. At Collemi Consulting & Advisory Services, LLC, we’ve been spending the past year walking our CPA firm clients through the new standards to quickly get them up to speed with expert guidance.

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Hook 'em! How to Deliver More Compelling Presentations

21 Dec, 2023
Prepping to give a presentation? Here’s a quick trick: Make sure your introduction is attention-getting, and you’ll help ensure your audience members are thoroughly engaged until the very end. If you’re giving a slide presentation, that means that your first three slides are critical. A recent survey of businesspeople by Storydoc, a business presentation company, revealed that 80 percent of audience members who are engaged in the first three slides of a presentation will likely stick with you until the end of your presentation. That’s critical, considering another Gallup study that revealed that 60% of businesspeople admit to being “indifferent” to presentations, while another 11% say they’re “actively disengaged.” So, what to include in those first three slides? The best strategy is to start off with a hook: an eye-catching photo, an impressive number, an agonizing problem that members of the audience are likely to face, or a shocking statistic. Adding that hook toward the beginning of your presentation will help reel the audience in. Here are some additional presentation best practices that we at Collemi Consulting recommend: Know your audience. Understanding who comprises your audience is critical so that you can ensure you’re covering the material that matters the most to them. If you’re speaking at a conference or training event, get a list of attendees ahead of time and see who they are and where they’re from so that you can get an idea of their background. If it’s possible to communicate with attendees beforehand, send them a note introducing yourself and ask them if there are specific issues, they’d like you to touch on during your presentation. Ask questions. If you don’t interact with your audience at the beginning of your presentation, people will settle into a passive “TV-watching” mode, and it will be difficult to keep them engaged. And asking questions can also help you zero in on what matters most to the audience. For instance, you might throw out a question like, “What keeps you up at night most, XX or XX?” (reference specific challenges). Or, ask people to raise their hands if they’ve struggled with a specific obstacle. Then, you can be sure to address the challenges that most audience members indicate they’ve faced. Another way to keep people engaged with questions is by throwing out “trivia” questions related to specific new accounting standards or something else that pertains to the content you’re covering. If you make participants feel like they’re part of the presentation, they’ll be much more likely to pay attention — and retain the information. Add visual appeal. While your presentation is likely filled with a lot of important content, it’s critical to remember not to overload your audience with pages and pages of text. Break up slides with text and simple photos or illustrations that support your message. A well-chosen image is a welcome break from text that can grab your audience’s attention and help reinforce your message. You can find professional stock images on sites like Shutterstock. Provide a next step. Don’t just end your presentation abruptly by thanking people for coming. Close by including a slide that mentions what you’d like the audience to do with the information you shared with them. Perhaps you’d like them to make a list of ‘to-dos’ that will help them implement the information you’ve shared with them. Or maybe you’ll invite them to reach out to you should they need your services. A solid closing will build rapport — and help audience members retain what they’ve learned. Collemi Consulting leverages almost three decades of experience in providing trusted technical accounting and auditing expertise when you need it the most. Salvatore A. Collemi, CPA, Managing Member & Founder, is regarded as an industry leader and subject matter expert by various organizations and media outlets. To schedule an appointment to see how we might work together, contact us at (732) 792-6101.

Marketing for Auditors: 4 Savvy Strategies

20 Nov, 2023
Want to know the difference between high-growth and average-growth firms in the public accounting profession? Here’s a hint: It begins with the letter “M.” If you guessed “marketing,” you’re correct. According to the 2023 High Growth Study by Hinge, public accounting and finance firms grew at a median rate of 11%, lagging behind many other professional services categories. But the study also uncovered that public accounting firms that focus on marketing as a top priority see regular, year-over-year growth of 20% or more! Here is the good news: You don’t have to be a Big 4 firm with extensive resources to leverage marketing to your advantage. Small-and mid-sized CPA firms, and even sole practitioners, can take some simple steps to differentiate themselves in their respective field. Many auditors & accountants and their firms are missing out on major opportunities to target clients using tools that are right at their disposal. Here are four strategies to build visibility for your practice and differentiate yourself from your competitors: Strategy #1—Public Speaking. Landing speaking gigs at industry conferences or on an industry podcasts or webinars are one of the best ways to position yourself and your firm as an expert in the field. Speaking gigs offer auditors a platform to showcase their knowledge, provide insights on relevant topics and establish themselves as an authority in the field while increasing their firm’s visibility. You can use speaking engagements to share best practices, identify emerging trends and offer solutions. To get started, do some research on upcoming conferences in your area where you might offer to contribute. Your State Society and local Chambers of Commerce may also have seminars or online events that offer speaking opportunities. Strategy #2—Create a newsletter. Some savvy CPA firms create email newsletters that provide valuable and relevant information to clients and prospects. Sending out periodic newsletters helps drive traffic to your website or blog (when you include links to relevant articles or resources), builds credibility by positioning yourself and your firm as a subject matter expert (SME), and encourages social sharing. If your content is engaging, it may prompt subscribers to share it on social media. Your newsletter doesn’t have to be lengthy: Two to three short articles, plus a call to action at the end, is enough to capture a reader’s attention. Strategy #3—Include lead magnets on your website. Lead magnets are incentives on your website that you offer potential clients in exchange for their contact information. For example, you might offer a white paper you’ve created on an important topic or a PDF that highlights important new information regarding the latest accounting rules. Creating these kinds of lead magnets can help you grow you email list and build a database of potential leads. Strategy #4—Amp up your social media. You may already be leveraging social sites like LinkedIn to promote yourself or your business, but are you gaining followers and increasing engagement? The best way to grow followers and generate more interaction is to share information of real value to those you want to target. It’s also important to post content frequently and interact regularly with followers. Remember that social media is all about dialogue (not sales pitches!). Approach it as a conversation; post content your followers are likely to share or comment upon, which will extend your reach to their connections. Be generous with your time and advice, and potential clients will want to work with you. Short on time? Pick one or two of these strategies to focus intently on in the upcoming year; the investment in time will be worth it. Collemi Consulting leverages nearly three decades of experience to provide trusted technical accounting and auditing expertise when you need it the most. We regularly work with CPA firm leadership to help them reduce risk and maximize efficiencies to grow their attest practices. To schedule an appointment, contact us at (732) 792-6101.
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