Craig Morris & Company Celebrates The Start of Their 35th Year

Craig Morris & Company, Certified Public Accountants, is proud to celebrate the beginning of their 35-year anniversary. We’d like to thank all of you for making our success possible. For the past 35 years, our value proposition of customer intimacy has allowed us to focus on delivering exactly what specific customers want. Over the years, we’ve had the opportunity to serve individuals and businesses in many different industries. We’ve worked hard for our clients to plan for tax savings and wealth building through strategic planning and good common sense. We’ve taken a “lifetime” approach to help our clients plan for first home, children, college, retirement, estate and other goals they have.

For our audit, tax and compliance clients, our services provide the management reporting, planning and analysis needed to understand profitability and plan for improvement. In all of our compliance-related services, we look for the ideas that improve operations, save money and generate profits. Whether we’re handling tax matters, financial statement preparation or audits, those are always our goals. Today, we continue to satisfy unique needs, which we recognize through our close relationships and intimate knowledge of the clients we serve.

We work hard to continually provide traditional CPA services but pay strong attention to the special needs unique to the clients and industries we serve. The requirements for these industries can be complex, so we work with our clients to help put compliance and financial matters into terms that are clear and understandable. Our size has allowed us to be versatile, efficient and effective in addressing a wide variety of financial problems, and has given us the ability to serve each client’s unique situation.

So, we’d like to thank you for helping us to achieve the success that has made 35 years of service possible. We look forward to many more years of achievement and we welcome your thoughts and comments on how we can serve you better.

Craig Morris & Company

Certified Public Accountants

Is a Limited Scope Audit Right For Your Pension Plan?

In our recent post, “Is Your Employee Benefits Plan Audit Full or Limited Scope?”, we discussed the differences between a full and limited-scope audit of a plan’s financial statement. The Employee Retirement Security Act of 1974 (ERISA) requires employee benefit plans with 100 or more participants to have an audit as part of their obligation to file an annual return/report (Form 5500 Series).

The Department of Labor determined that a plan’s administrator may direct an independent auditor to perform a limited-scope audit of financial statements in the case that investments held by a qualified institution is subject to annual examination by state or federal agency. The qualified institution must then certify as to both the completeness and accuracy of the required information. A plan’s administrator is liable for determining that all requirements for a limited-scope audit are met.

What does a limited-scope audit mean for a company?

When an auditor is instructed to complete a limited-scope audit for your plan’s financial statement, it is usually because investments are held and certified to by a qualified financial institution. Therefore, the auditor is exempt from the following regarding plan investments:

• Testing the accuracy and completeness of investment information provided by their certified financial institution. Investments held by a certified financial institution are bound by periodic examination by a state or federal agency and, therefore, are already disclosed.
• Obtaining insight into the internal control processes over investments.
• Determining the control risk of the institution’s assets held and the investment transactions carried out.

The auditor is not relieved of responsibility for detecting obvious, material errors that would normally be noticed through careful observation. But, it should be noted that due to lack of appropriate audit information obtained on investments, the independent auditor would be unable to express an in opinion on the financial statements.

However, if a plan has separate investments not held by a certified financial institution, these investments do not qualify under the limited-scope umbrella and they are subject to a full-scope audit.

Why do administrators opt for limited-scope audits?

As it is up to your plan’s administrator, upon meeting all qualifications, it is important to understand why and if a limited-scope audit is best for your company. Inherently, a limited scope audit prevents duplication of efforts for your independent auditor, in that the CPA does not need audit data coming from a trusted fiduciary. Since, a limited scope audit requires less information from your independent auditor a prime reason for choosing one is saving time and effort. In most situations, the less time, and effort you require from your independent auditor the lower the audit fee might be.

Conclusion

If qualified, a well performed limited scope independent audit can provide many of the benefits of a full scope audit while saving time and money. It is extremely important for the plan’s administrator to thoroughly inspect that all qualifications are met. As the plan’s administrator, you will want to consider all options when it comes to making the right choice for your plan.

Tangible Property Regulations

Background
New tax regulations effective January 1, 2014 will affect every taxpayer that uses tangible property in its business. The rules are complex, and implementation requires careful consideration. Why is this important? For one, these changes can significantly impact the cash flows of a business, because the new rules will likely change the timing of deductions (both positively and negatively). Secondly, they are mandated. They take away what previously may have been considered judgmental.