Professional Accounting Blog

    Accounting For Your Prosperity

    Barry Thoman

    Barry Thoman is part of the Assurance Services and Mergers & Acquisition Groups at Meaden & Moore. He has over 20 years of experience in corporate audit and tax matters. In his spare time he enjoys cycling and running, especially after his 4 kids!

    Recent Posts

    Here Today, Gone Tomorrow: Planning for Employee Turnover

    Posted by Barry Thoman on Jul 25, 2019 10:27:00 AM

    Topics: Accounting & Auditing

    Imagine this: It's 9 a.m. on a beautiful Monday morning and the owner of a flourishing company is sitting at their desk enjoying that morning cup of coffee when in walks the Controller. The Controller smiles and says, “I’d like to thank you for 25 great years, but I’ve decided to retire and pursue my passion of ice fishing in Antarctica. You got me for 12 more months!” While this comes as a complete surprise to the owner, this news is already a distant thought. One year is plenty of time to find a new Controller, right?

    Well, this scenario may be a bit far-fetched since 40% of baby boomers say they will work until they die (baby boomers are reaching age 65 from 2011-2029)*. Employee turnover in the workplace, even in management positions, is inevitable and at times unpredictable.

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    Can Financial Statement Income Exceed Taxable Income?

    Posted by Barry Thoman on Jun 26, 2014 8:00:00 AM

    Topics: Accounting & Auditing

    The title of this blog might have you calling your tax accountant asking, “How can you work this magic for my company?” Well before you do that let’s first start with the basics. Financial statement income is based on Generally Accepted Accounting Principles (GAAP) rules of revenue and expense recognition which is primarily accrual based, while taxable income is based on the IRC’s (Internal Revenue Code) rules. These differences in revenue and expense treatment result in what is referred to as an “M-1” adjustment.

    What is an M-1 Adjustment?

    An “M-1”, which is known as an adjustment to GAAP income, is a tax concept that can either increase or decrease GAAP income when determining taxable income. The differences between GAAP and tax income are noted on the “Schedule M-1” of the tax return, typically located on page 5 of the tax returns of partnerships and corporations. There are two types of M-1 adjustments: permanent and temporary timing differences.

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    Audit Materiality – It’s in the Eye of the Beholder

    Posted by Barry Thoman on Apr 8, 2014 8:00:00 AM

    Topics: Accounting & Auditing

    As auditors, we constantly grapple with the concept of materiality. Materiality is different for every Company and must be determined with the financial statement’s users in mind. In this article, we will discuss the concept of materiality, the users of a financial statement, and the auditor’s responsibility throughout the audit process.

    The Concept

    Materiality is a concept relating to the significance of a financial amount, transaction or misstatement. The objective of a financial statement audit is to enable the auditor to express an opinion as to whether the financial statements are prepared, in all material respects, in accordance with an applicable financial reporting framework (typically GAAP). As auditors, in the normal course of an audit, we calculate a materiality threshold, which we use to determine the severity of potential misstatements. 

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