All Together Now Now that our firm has been through a few months of audit risk assessment under SAS 145, we felt it beneficial to identify key takeaways to keep in mind as we go forward. To give a frame of reference for our outline below, our clientele is concentrated in the construction industry, and we use Checkpoint Engage for our risk analysis. Hopefully, this outline will help bring the various pieces of the risk assessment process together. Risk of material misstatements (RMM). Remember that we, as auditors, are searching for areas of the financial statements that may be materially
Read More »Significant Refund Opportunity Created It’s a done deal! Tennessee has changed its franchise tax by removing the property measure. The bills making this change authorize refunds to certain taxpayers. Namely, those taxpayers who paid franchise tax based on the value of real or tangible property owned or rented in the state for all applicable open years (2020-2023). Effective for tax years ending on or after January 1, 2024, the legislation removes the property measure from the Tennessee franchise tax base. Additionally, taxpayers who paid franchise tax on the greater property measure can recalculate the tax using the apportioned net worth
Read More »Information Technology This blog is about a particular topic of SAS 145, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement, which largely stays hidden in plain sight. That topic is audit risk assessment related to information technology (“IT”). Risks related to IT are often (intentionally) overlooked. It’s problematic because some auditors don’t exactly feel IT-empowered, myself included. And even though IT requirements have been there for some time now, we find that SAS 145 has given it particular emphasis, perhaps to draw our attention to its importance. It will be no surprise if IT risk
Read More »Proposed Franchise Tax Would Generate Significant Refund Opportunities Current Tennessee Franchise and Excise Tax law requires that entities (corporations, subchapter S corporations, limited liability companies, professional limited liability companies, registered limited liability partnerships, professional registered limited liability partnerships, limited partnerships, cooperatives, joint-stock associations, business trusts, regulated investment companies, REITs, state-chartered or national banks, and state-chartered or federally chartered savings and loan associations) pay a Franchise Tax equal to 25 cents of every $100 of the greater of the entities Total Net Worth or Total Real & Tangible Personal Property. Example of an actual client: Total net worth Schedule F1, Line
Read More »Holding Business Meetings for Your Business at Your Personal Residence In the ordinary course of business, some companies, due to their structure, are required by law to hold meetings for their entities. Others hold meetings for a variety of purposes, including educational workshops, Christmas parties, or even regular staff meetings. Tax Code Section 280A contains provisions allowing a business owner to conduct regular meetings at his or her residence. Traditionally, business meetings are held on office premises or rented spaces such as a Board Room at a Hotel or Conference Center. The expense of conducting these meetings in an outside
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