Category Archives: Audit News

Non-qualified Patronage Received from Regional Cooperatives

By Dennis Gardiner, CPA, Managing Partner

We are seeing more use of non-qualified patronage from the regional cooperatives. Treatment of these allocations varies from client to client, firm to firm, etc. Even our decision may change as we see the regional indicate or demonstrate they intend to revolve the non-qualified patronage. For example, CoBank specifically indicates they have no intention of […]

Debt Issuance Costs

By Robert Bell, Auditor

On April 7th, 2015, the Financial Accounting Standards Board (FASB) unveiled new accounting standards updates. One notable update is the modification to debt issuance costs. This new accounting treatment, as part of the Board’s Simplification Initiative, is aimed at reducing costs and complexities and improving the usefulness of information provided to financial statement users. This […]

Going Concern

By Robert Bell, Auditor

Before too much attention is placed on the new Accounting Standards Update issued earlier this year, it is important to remain cognizant of the updates from 2014 that have not yet taken effect. Annual periods beginning after December 15, 2016, will be subject to certain disclosures regarding going concern in accordance with FASB ASU 2014–15. […]

Credit Unions: What We’ve Seen and What We Expect To See

By Brian Sullivan

WHAT WE HAVE SEEN IN 2014 Credit unions have seen their profitability continue to stabilize in 2014 when compared to 2012. Through the first six months of 2014, credit unions have maintained a return on assets of 0.80%. For the first half of 2014 the interest margins continue to tighten as yields on loans have […]

Businesses: How to Help Prepare for Audit Season

The busiest time of year for external financial statement auditors generally runs from January to April each year. But CPAs usually start gearing up for audit season in November of the preceding year. Accountants meet with clients, assign staff and schedule fieldwork. Then, the team conducts preliminary financial analytics, observes physical inventory counts, assesses risk factors […]

IRS Notices Regarding Unreported Income

By: Charles L. Telk Jr., CPA, Partner  |  email Recently we have seen a new type of IRS notice that I have not previously seen in my 28 years of practicing public accounting. The IRS sends a letter to a corporation assessing additional tax on “unreported income”. The source of this unreported income are 1099’s […]

Correspondence / Inquiries from Taxing Authorities

Recently some taxing agencies have become very aggressive with their enforcement actions. These agencies send out questionnaires to taxpayers which are designed to determine if the target taxpayer should be filing tax returns (income, sales, payroll, etc.) in their jurisdiction.

Passing the Peer Review

Firms participating in the Peer Review Program must have an independent review of its accounting and auditing practice every three years. Its peer review rating of pass indicates Gardiner Thomsen meets the accounting profession’s high standards of quality and professionalism. If requested, the firm will provide a copy of the report on the results of the review to all interested parties.

Accounting for Involuntary Conversions

By definition, an involuntary conversion is a mandatory liquidation of assets (such as a loss due to fire, wind, flooding, or tornado). The lost property is normally replaced by another asset, such as cash from insurance proceeds. According to generally accepted accounting principles (GAAP), the difference between the value of the asset lost (property) and the value of the asset received (cash) is recognized in financial statements as a gain or loss. An involuntary conversion, and the resulting gain or loss, is considered to have occurred even if an entity reinvests the monetary assets with non monetary replacement assets.

How Do Your Local Savings Stack Up?

Local Savings are the key to maintaining a viable cooperative. You hear it from us in every audit meeting report, from the bank, and at management and director training programs you attend. The percentage of local savings is the key factor in determining a cooperative’s profitability.