Auditors have an unnatural ability to select THE ONE sample you know will get you in trouble...that one sample that caused you heartburn and you were glad to see posted and filed....and that one sample that is almost a year old and you cannot remember the clear details about.  Unfortunately, you cannot simply ask your auditors to select a new sample to make your life easier.  Once your auditors start asking questions and realize that you can't fully remember why that sample isn't as easy to explain as they would hope, they may conclude that the rest of your samples should be scrutinized even further. So the tip is to write everything down on the journal entry itself, regardless of how ugly it looks! Those notes will keep you sane at the end of your audit period because you'll never remember why you didn't write it all down in the first place!

Here is a snippet of a great article we found very interesting and thought our readers would enjoy:

We at Vibato have posted about this topic before but some of our customers just don't seem to want to believe it.  I thought I'd post again since there is now recent case law to support our claim.  The IRS may hold people responsible for overdue taxes that you wouldn't typically suspect - what this means is if you are an accountant, administrative assistant, CEO, etc at a company and you sign the tax return, you could be held liable for the tax due from your company.  Yes - you could be liable.  This happened to a customer of ours; when the company ran out of money and didn't pay the tax bill, the IRS came to the office and told the Jr. accountant that because she signed the tax return, she was personally liable for the taxes due. 

During a recent conversation with a Managing Partner at a local CPA firm I learned that the PCAOB is starting to use forensic statistics to determine which external audit firms to review; it isn't random.  The PCAOB has apparently come to the (logical) conclusion that if an audit fee is usually low relative to their comparative companies audit fees, then the quality of the audit is also probably low.  What this means is that if a company decides to price shop for their audit, chances are they will not only get what they pay for but they may also be subjected to the scrutiny and potential requirement for an additional audit by the PCAOB.  This could cause restatements, lawsuits, and just a laundry list of bad things.

This is a great press release we thought our readers would enjoy.  Here is a snipet: