In this Update: Retractable or Mandatorily Redeemable Shares; ASPE Resources; Practice Inspection Report; Pricing Client Engagements
We are headed into the last month of the year and there are a number of things to think about to get ready for the new year. The more prepared we are, the smoother the work flow which allows us to concentrate on our clients which is always the priority. New accounting standards, upcoming changes in assurance standards and general quality matters all make preparation even more important. The topics below will help you be prepared for the coming months. Read on…
Retractable or Mandatorily Redeemable Shares Issued in a Tax Planning Arrangement
These amendments have been around for awhile but are finally in effect for the upcoming year. Amendments to Section 3856 Financial Instruments provide new conditions in order for retractable or mandatorily redeemable shares issued in a tax planning arrangement to be classified as equity as well as some changes to measurement, presentation and disclosure requirements. The amendments are effective for fiscal years beginning on or after January 1, 2020, that is the upcoming year. Not only do you have to think about new shares issued, there are several transition issues that you will have to address in financial statements. Make sure you spend the time to understand the amendments. The resource tool on this topic from CPA Canada along with the handbook section itself, will help you do that.
ASPE Resource Summary
Speaking of resource tools, CPA Canada publishes many resources and tools on a variety of topics throughout the year, all with the objective to assist practitioners. A recent publication is a summary of all ASPE guidance issued over the past year. It is a great publication to have on hand when you are dealing with specific issues. Topics include financial reporting alerts and ASPE briefings that provide implementation guidance on new and/or amendments to ASPE standards. In the document, there are hot links to the relevant resource so very easy to access. It also includes links to free webinars and other ASPE resources. Keep this publication on hand and access when needed.
Focus on Practice Inspection Report
The provincial bodies are the governing bodies of our self-regulating profession; they promote the highest standards of integrity and expertise to their members. Practice Inspections are a key component of the overall regulatory process. CPA Manitoba’s annual report, Focus on Practice Inspections was released this past October and is very similar to the reports issued in other provinces. The report provides a summary of findings in each of the areas of financial statement presentation, audit engagements, review engagements, special reports and quality control. Detailed common deficiencies are included in Appendix 3. The report also includes other matters for consideration in Appendices 1 and 2. The report is worth the read as it highlights key things to think about in the upcoming year. You may even want share this report with staff so they understand common deficiencies and are then able to address these in your client files. If you need to get ready for an upcoming practice inspection or implement an action plan in response to one, reach out for assistance. I can help you through the process.
How to Price Client Engagements and Increase Firm Profits
With all the upcoming changes, it can be a challenge on how to price engagements. Fees are important and discussions on such are not always easy but we cannot lose sight of the fact that while assisting our clients is of upmost priority, we should be paid fairly for the work that we do. A fantastic article from IFAC covers approaches to fee increases and value pricing. Included in the article strategies for increasing fees and provides food for thought on value pricing.
As we move into the last month of the year, please feel to reach out at any time to help you be prepared for the upcoming year. As one other year-end reminder, check on your CPD hours as December 31, is coming quicker than we think. Reporting deadlines are January 31, 2020. I am delivering in-house PD courses to several firms over the next few weeks but have some availability left in my schedule before the end of the year if needed. Over the coming months I will continue to keep you updated on new standards, including the recently approved CSRS 4200, as more details become known. There are so much to think about but I am always here to help provide you peace of mind and save you time.
Kirsten S. Albo, FCPA,FCA
In this Update: Standards Updates; PEG Updates; Firm Risk Management; Pricing Client Engagements
The end of August is upon us and it has been a busy month. Summer is winding down (even though I don’t want to admit it) and minds are turning to fall and the planning that it brings. This month’s topics include matters that will help you get ready as you continue to think about upcoming standards changes, new PEG forms, quality management and discussing fees with your clients. Read on…
No significant news to report but wanted to provide an update so you stay informed; changes are coming, that is a known! Exposure drafts being deliberated as response deadlines have passed. The key topics that will impact your practice include Quality Management (CSQM1 and CSQM 2), Identifying and Assessing Risks of Material Misstatements (CAS 315 Revised) and Compilation Engagements (CSRS 4200). A summary of the status of these is:
Other assurance exposure drafts still being deliberated include Key Audit Matters, for public companies, along with Public Sector Auditing Standards and Reporting Controls at a Service Organization. Responses to the Discussion Paper of Less Complex Entities were due this month and are now being deliberated. Finally, accounting exposure drafts on Agriculture and Revenue are still out there.
This month the 2019 Edition of the Professional Engagement Guide (PEG) was released. I have spent time understanding the changes and would be happy to discuss them further with you to determine what is most efficient and effective to implement in your practice. Key changes include:
Ten Steps to Successful Firm Risk Management
Since quality management is top of mind with the CSQM1 and CSQM 2 Exposure Drafts, I thought you may be interested in an article to help you address quality matters in your firm. This is the second article of a risk management series and covers 10 steps for successful risk management. The first article is 8 steps to Establishing a Firm Risk Management program (link within). These articles are a result of discussions at recent IFAC SMP Committee meetings, the committee that is focused on practice management for small- and medium-size practices (SMPs).
How to Price Client Engagements and Increase Firm Profits
With all the changes coming, another topic that is top of mind is how to price engagements and discussing fee increases with your clients. The attached link is the second of a three-part series addressing this critical area; it covers approaches to fee increases and value pricing. The first in the series, the Importance of client Selection and Relationship Management (link within), features client classification and the importance of engagement letters and the third instalment will highlight credit control, collection techniques and dealing with conflict.
Lots to think about in the upcoming months but I am here to assist as needed to save you time and provide peace of mind. But first, enjoy the long weekend. Work will always be there, it is more important to spend time with your family and friends. I know I will this weekend.
Kirsten S. Albo, FCPA, FCA
In this Update: Managing Fee Pressures; Better Client Meetings; Learning Mindfulness
The start of a new year brings many things to think about. I am excited to head into 2019 and have spent the last month thinking about what I hope to accomplish over the upcoming year. With the ever changing standards, working with clients, dealing with staff, there is never a shortage of things to think about. The last few updates have been very focused on standards and while I plan to keep you updated over the coming months as things evolve, this month I thought I would pass on a few tips about managing client relationships, including fee discussions – topics that are always top of mind for those in public practice. Read on…
Three Ways to Effectively Manage Fee Pressure
As you head into busy season, the focus can sometimes be “just get the work done” but it is important to not to lose sight of fee discussions with your clients – earlier rather than later. Pressure to lower fees has consistently appeared as one of the top challenges facing small to mid-sized practices (SMPs). Members of the IFAC SMP Committee discussed fee pressures with practitioners from around the world who in turn shared their experiences, tips and best practices.
Communicating Value and Quality with Price
Another good article on addressing fee pressures. Clients often seek a better price, even when they are deeply interested in the services offered. This presents a great dilemma on which the Chairman of IFAC SMP Committee addresses. Key tips are provided to use when setting fee levels and engaging in price discussions with clients.
Five Tips for Better Client Meetings
With the ever-changing standards (including the new auditor’s report) and the requirement to have in-depth discussions with your clients, it is important that you hold meetings to provide value and gain information and not just hold a meeting for the sake of meeting. Boomer Consulting has five tips for holding better client meetings and ensuring these meetings are operating at an optimal level. They state: “You want to make sure that your team and your client understand what the purpose of each meeting is and ensure that everyone is on the same page before and after the meeting takes place”.
Why Accountants Need to Learn Mindfulness
With the upcoming busy season, it is easy to get caught up in doing the work and letting other things slip away. I enjoyed reading this article highlighting the ability of mindfulness is essential for time management, productivity and the development of the soft skills needed to succeed. The AICPA CPA Insider reminds us that as accountants we learn technology and technical skills but do not necessarily take the same amount of time improving how we communicate, how we collaborate and how we deliver our services. To grow as an advisor, we need to dedicate as much time to soft skills as we do to technical skills.
A few final short snappers. Today is the reporting deadline for CPD requirements. Don’t forget to submit your hours. As well, as you head into the next few months, remember to issue the correct auditor’s report – and ensure the wording is correct if it is the new report you are issuing. And finally, anytime you encounter an assurance or accounting issue, remember I am here to assist you as needed. But most importantly, try and stay warm!! The weather has to break soon.
Kirsten S. Albo, FCPA, FCA