Jim Ulvog

Going concern issues in SSARS 19 – part one

What should you do if it seems like there is a going concern issue on a review or compilation?

SSARS 19 discusses how to handle the situation when something comes to the accountant’s attention that there is some uncertainty about the organization’s ability to continue as a going concern for a reasonable period of time. 

Wow, how’s that for a sentence that begs for some definition?

I can’t . . . translation: I won’t

(duplicate of post from Nonprofit Update.)

Seth Godin talks about Accepting False Limits:

 I will never be able to dunk a basketball.

This is beyond discussion.

Imagine, though, a co-worker who says, “I’ll never be able to use a knife and fork. No, I have to use my hands.”

Or a colleague who says, “I can’t possibly learn Chinese. I’m not smart enough.”

Materiality in SSARS 19

SSARS 19 says misstatements are material when they could influence the economic decisions of users who are reading the financial statements.  If errors or misstatements in financial statements accumulate to the point where it could change decision-making, then you are in the range of material.  If there is something missing that should be present and it would change someone’s actions, that something is material. 

More concerns on IFRS

Those of us serving the business and NPO communities from smaller firms need to keep current on issues that are going to change our future.  IFRS is one of those issues.

“Convergence Flaws” v. Convergence Spin by Dr. Tom Selling, CPA, contrasts two speeches on IFRS.  One by David Tweedie, the IASB chair, and the other by David Reilly, a reporter from the Wall Street Journal.  The first one is obviously a push for adoption of IFRS.  The second one raises major reservations.

How to get 20 co-workers fired – today’s lesson on how NOT to use social media

(duplicate of post from Nonprofit Update.)

Seems that a fellow who was doing some marketing work for Chrysler sent out a tweet criticizing the driving skills of Detroit drivers and threw in an obscenity for spice.  He sent the tweet while stuck in traffic. 

Unfortunately, he accidentally used the Chrysler brand twitter feed instead of his personal twitter account. 

Oops.

So an auditor couldn’t pick up any red flags to a corruption case. Why is that a problem?

Getting back to the original question of whether a CPA could identify in the alleged incident that there was some kind of a fraudulent transaction during an audit (assuming it actually happened) – – I am thinking the answer is it would not be possible to find the fraud, even if you were looking for it.

So, what’s the problem?

Social media is now integral part of handling lawsuits

Gaining access to comments made through social media is now a standard approach when attorneys get involved in a conflict, whether checking out the situation as it is falling apart or handling litigation after it filed.

I have previously mentioned that the Internet is permanent and described how easy it is for anyone to run a low-level background check on you.

Now two attorneys, Leita Walker and Joel Schroeder, have given us a glimpse in their article, Eureka! Discovering (and Using) Social Media in Litigation, of what this looks like when attorneys dive into a case. 

How could an auditor pick up any red flags to this corruption case? Let’s change the circumstances

Previous posts have given the background about a corruption indictment and my questions of what could have possibly been seen by a CPA auditor in this alleged situation.

Now let’s change the scenario.  If it is your client getting shaken down the implications on the audit aren’t that severe.  Just change the alleged situation to something different where the local business approached the mayor and asked him to intervene.  By changing that part of the story, it will convert this from an allegation of the mayor shaking down a business to a hypothetical of your client successfully bribing a public official.  That would make it an issue with a very material impact on your client and therefore a huge issue for you and your audit report.

Having changed those circumstances to where your client illegally paid off a government official, how could you possibly detect that bribery payment?

How could an auditor pick up any red flags to this corruption case? What could have been seen?

Previous post gave the background of a corruption case in a city near to where I live.  I’m using this actual situation as a short case study for CPAs.

Now, if you are the auditor of the city how could you possibly come across any red flags that this alleged bribery had taken place?  I don’t see how any auditor would be able to see anything out of line.

Move the “Reply All” button to reduce the chance you will becoming the subject of a newspaper article

(duplicate of post from Nonprofit Update.)

Various tales of disasters arising from people hitting the ‘reply all’ button were told in an article from yesterday’s Wall Street Journal.  Simultaneously entertaining to see other’s embarrassment and fear-inducing that you could do the same thing.   I’d like to give you a link so you can read the full article, but it looks like the WSJ doesn’t like that idea anymore. 

Got a great idea from the article you might enjoy:

Move the ‘reply all’ button so you can’t accidentally hit it.  Also requires a more intentional effort to choose that option.

How could an auditor pick up any red flags to this corruption case? Background

When I see the details of a fraud that has worked into the public eye, I sometimes look a little deeper for my learning.  I also wonder what could have been seen by an auditor.  What catches my interest today is the criminal indictment of the mayor of Upland, California, which is the city next door to where I live.

Today’s post will provide some background.  Discussion to follow later.

There are two particular businesses in Upland that had their licenses revoked by the city.  The FBI alleges the mayor had his buddies approach each of the businesses and ask for money.  In return, the FBI says the mayor offered to intervene with different city agencies to get the licenses back.  In 2007 and 2009, the FBI claims the two businesses paid $45,000 to the mayor’s helper.  Last week the mayor and his helper were indicted.

So here’s the question: is there anything in this corruption case that an auditor could have seen that would have hinted of the existence of the scheme?

What you do after a discrimination claim can get you into REAL trouble

Attorney Jay Shepherd gives us 500,000 reasons to worry about retaliation claims.

He explains that when something bad happens to an employee after filing a discrimination claim, it makes it look like the employer retaliated against the employee for filing the claim.  Makes it look like payback.  That is a bad thing.  Very bad.  That is a serious offense in the eyes of the law.

“Clergy Killer” – people who destroy pastors

(duplicate of post from Nonprofit Update blog.)

While rare, clergy killers are real.  It would be wise to know of the concept and have a bit of knowledge on hand in case you should ever encounter one.

Clergy Killers, By G. Lloyd Rediger, ISBN 978-0664257538

From my review at Amazon:

You may wonder why there is a book tackling what seems to be an issue so severe that it must be extremely rare, if it even really exists.  The author is addressing the specific situation when a member of the congregation is truly focused on destroying a pastor.  Most people have never seen a clergy killer in operation.  I have.