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Category Archives: Audit News

How Long Do You Need To Keep Records?

In general, you must keep records that support items shown on your individual tax return until the statute of limitations runs out -- generally three years from the due date of the return, or the date you filed, whichever is later. In most cases, the IRS can audit your return for three years. You can also file an amended return on Form 1040X during this time period if you missed a deduction, overlooked a credit or misreported income.

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Audit Quality and Effectiveness

These new standards were undertaken in response to recommendations to the ASB made by the Public Oversight Board’s Panel on Audit Effectiveness. The development of these SAS’s was influenced by the major corporate failures of the past several years which weakened the public’s confidence in the effectiveness of audits and led to an intense scrutiny of the work of auditors.

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SAS 112 Management Letters

If you aren't aware yet, we want to inform you that most, if not all, of our audit clients will be receiving a management letter along with their audit, or shortly thereafter, this year. New Audit Standard No. 112 requires auditing firms to communicate in writing, to management and those charged with governance, any current control deficiencies they find that may be considered significant or material weaknesses, even if they communicated those findings to their clients during previous audits. Now we're taking the seriousness of conducting audits one step further. This new standard will help enhance awareness of deficiencies in internal control over financial reporting- no matter how mild or extreme those deficiencies may be- and will allow management to better assess the costs and benefits of repairing those deficiencies. Writing those deficiencies down in the report, and distributing it to management and those charged with governance, ensures that everyone has the opportunity to be on the 'same page' with the same information. All in all, this new standard will help minimize the risk of future financial misstatements, including fraud. We know you understand the importance of internal controls and identifying any deficiencies within them. We're here to help you evaluate those risks, if there are any, and address them in a cost-beneficial way. As always, we will answer any questions you may have and we look forward to continuing to serve as your auditing firm.

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