By Deepa Bhat, CPA, CFE, ACA, Assurance & Advisory Principal
ASL Construction Group
It’s been a while since we’ve had a deep dive article on work in progress (WIP) schedules (to refresh your memory, see Red Flags on a Contractor’s Work in Progress Schedule). As I review the WIP schedule for a new client, I find myself referring to this article for all the recommendations I’d like to make to this client. A few additional observations are noted below: (more…)
By Deepa Bhat, CPA, CFE, ACA, Assurance & Advisory Principal
Sometimes, even the most thought-out plans don’t work out. Organizations experienced this first-hand over the last two years with COVID-19. Almost overnight, everything changed: operating models, financial forecasts, and the labor market, to name a few of the biggest impacts. Even now, many Bay Area and California companies are grappling with the effects of an uncertain economy. External events, like the pandemic, have the potential to upset the typical financial reporting process. Questions remain about how to reflect external pressures on internal reporting; what needs to be adjusted and when, and how management can best respond to changing conditions while still meeting current compliance requirements. In other words, the pandemic and other events have made it difficult for management to make essential estimates required for financial reporting. Here are some key factors to consider during this time of uncertainty. (more…)
By Deepa Bhat, CPA, CFE, ACA, Principal
Starting in January 2023, businesses must conform to a new accounting standard for measuring expected credit loss. It’s perhaps one of the biggest accounting changes for financial institutions in a decade – but they’re not the only ones affected. Nonfinancial institutions may still have financial instruments and other assets that will require a different accounting approach and new internal controls. Implementing the current expected credit loss (CECL) accounting methodology takes a forward-looking approach to risk modeling and will be a significant undertaking for many. (more…)
By Deepa Bhat, CPA, CFE, ACA, Principal
ASL Construction Group
The COVID-19 pandemic created challenging circumstances for many Bay Area construction contractors. The combination of government orders and fear of virus transmission led to the delay or cancellation of many scheduled projects. And unfortunately, even prior to the COVID-19 pandemic, construction companies were dealing with another challenging situation, employees and vendors perpetrating fraud schemes against the company. According to the ACFE 2020 Report to the Nations, the median fraud-related loss experienced by construction companies was $200,000 per incident (based on investigations that occurred between January 2018 and September 2019). This means, construction is in the top six of the highest median loss experienced, behind mining at $475,000; energy at $275,000; real estate at $254,000; telecommunications at $250,000; and health care also at $200,000. This unfavorable ranking reflects the need for construction companies to do more to prevent and detect fraud schemes to limit losses. (more…)
By Deepa Bhat, CPA, CFE, ACA, Principal
ASL Construction Group
I was once again at my annual Board retreat (virtual, alas!) for the Builders’ Exchange of Santa Clara, and came away with some fascinating data – both historical and predictive. Like many of us, I was curious to understand the impact of COVID-19 on this industry in 2020. These were the top takeaways from this meeting: (more…)
In response to the widespread disruption caused by COVID-19, the Financial Accounting Standards Board (FASB) announced in their Board meeting on April 8, 2020, a proposal for delays in the following accounting standards for certain entities: (more…)
By Deepa Bhat, CPA, Principal
ASL Construction Group
I recently attended our annual Board retreat for the Builders’ Exchange of Santa Clara, and came away with some fascinating data – both historical and predictive. As someone who routinely works with contractors, I was intrigued by the statistics and forecast data presented to the group. Here’s a list of my top takeaways from the meeting: (more…)
Companies often need financial audits when they seek additional funds or have to satisfy the requirements of owners, creditors, investors and other outside parties who want a higher level of comfort on the accuracy of financial statements.
My experience auditing privately held companies has taught me that a few proactive measures can go a long way in avoiding audit delays, keeping you and your auditor on track, and ensuring a smoother audit process for all. So, let’s jump right into those tips, shall we? (more…)
By Deepa Bhat, CPA, Principal
ASL Construction Group
As we were wrapping up the reviewed financials for my General Contractor client, I asked the Controller, “what are some of the issues often overlooked by contractors as it relates to accounting?” And she was happy to oblige me with her top three issues for contractors to consider for better reporting: (more…)
