Waypoints: Ideas and Insights to Navigate Enterprise Complexity

The AICPA has issued a much-anticipated standard on cyber security. The new guidance, referred to as the “Cyber SOC,” creates a process that CPA’s can use to review and report on a company’s cyber security. In the past, organizations relied on various consultants, internal resources, and sometimes just plain luck, to identify and mitigate cyber risks. The Cyber SOC fundamentally changes how cyber threats are evaluated and managed. It allows for an independent, objective look at an organization’s processes, policies and controls around cyber risks. 

Like most businesses, we’re constantly seeking to improve our services. The biggest change we’re anticipating and planning for is automation of audit and internal audit services. There is a lot of discussion about how this development will impact the profession. But we’ve noticed that very little has been written about the impact of these changes to our clients. As we develop and deploy new technology for our audit projects, how will our services and delivery to you change?

To close out our series, Top Middle Market CFO Challenges for 2017, we see a key concern for CFOs this year is managing financial strategies in light of the potential changes in tax laws. There will certainly be new changes to tax regulations in the coming years. This is welcome news to the business leaders surveyed by CNBC. Of this group, 73.9 percent of U.S.-based CFOs agree that Trump's principal focus should be corporate tax reform. In response, the new Congress and President have made tax reform a key element of their policy agenda. How these changes impact your business and how you capitalize on them will help drive your success in coming years.

As we continue in our series, Top Middle Market CFO Challenges for 2017, the growing threat of cybercrime is becoming top of mind for today’s CFOs. Cyberattacks are on the rise. In 2016, the number of US data breaches increased 40%—an all-time record high according to the Identity Theft Resource Center.

It may be easy to assume that the responsibility for addressing cyber risks rests with your IT department, because after all, these appear to be mostly IT-related risks. However, what may be less obvious are the very significant financial risks involved with a cyber breach. This should be keeping most CFOs up at night. 

Imagine you’ve just received an email from a potential vendor looking to make a connection. You notice that after his name in the signature block he has listed five abbreviations, all intended to make him appear qualified, reputable and knowledgeable. But what do the abbreviations actually mean? Are they relevant to the service you're trying to procure? 

I don’t know if you’ve ever attended a Meet the Firms event—it’s similar to a career fair but specific for the accounting field. Colleges and universities hold them to help graduating students make connections with hiring firms. When I was at The University of Southern Mississippi, the process consisted of waiting in boring long lines, crowds of people, and praying that I got to talk to the firms I was interested in.

I recently wrote about the major financial reporting changes in the new lease standard and the potential impacts the changes could have on your business. When I wrote the blog, the Financial Accounting Standards Board was finalizing the standard, and it officially issued the new lease guidance on Feb. 25.

At the beginning of December, I finally decided to buy a nice insulated cup, a purchase I had debated for some time. I decided which cup I wanted, and started looking for it in my neighborhood. Three different retailers were out and told me they would not have another shipment until after Christmas. I was disappointed and a little irritated.  I finally decided that I wanted it, and now, I couldn’t have it. Who knows exactly where the problem lay – Did the store place the order in a timely way? Did the manufacturer have problems? Was shipping an issue? Either way, it all came back to supply chain management.

If your company uses leases to acquire assets without huge cash outlays, to enjoy lower interest rates than is possible with loans, or to reduce the risks of ownership, you may need to re-examine your lease and purchase decisions very soon. On November 11, the Financial Accounting Standards Board voted to proceed with the issuance of a final Accounting Standards Update on leases in early 2016.

Congress over the years has wisely invested in American companies by incentivizing innovation.  You may have heard of the R&D tax credit, as it has been around since 1981. What you may not know is that only one of every 20 eligible companies actually applies for the R&D credit – a mistake that can cost your business thousands or, in some cases, millions of dollars.