Waypoints: Ideas and Insights to Navigate Enterprise Complexity

When I began my initial review of the new revenue recognition literature, I expected that some industries like technology, construction, telecommunications and software would see significant consequences to their financial reporting because of changes to the standards.

I’ve worked with a variety of companies – both public and private – during my career, and I have seen a variety of approaches to the role of audit committees. In the best cases, the audit committee works in collaboration with the internal audit group, the external auditor and management, and all of them share common goals.

Here are two important facts:

1. This year, Millennials, adults between the ages of 18 and 34, became the largest cohort in the U.S. workforce, according to Pew Research Center reports.
2. The Census Bureau predicts that Millennials will become the largest group in the U.S. population, not just the workforce, later this year.

Anyone who tried to sell a home during the Great Recession had to work harder than usual to make a good deal. It was a buyer’s market, flooded with inventory, and old tactics just didn’t sell houses. I think the lessons we learned in a recession-era housing market are valuable now in mergers and acquisitions. Here’s why.

It has been 29 years since the last major rewrite of the Internal Revenue Code.  That effort in 1986 was preceded by one in 1954, a 32-year interval.  If we are to see another one, it could happen in 2017 or 2018, interestingly also nearly an identical interval.

With the rapid evolution of cloud based computing, many organizations face the fundamental question of whether or not they should employ third party solutions to facilitate convenience within their entity.

As I work with companies that are growing and facing new challenges, I am often asked if they should create an audit committee, and the answer is – it depends. I would like to present some recommendations that can help you decide if you should establish an audit committee in your company. Of course, these suggestions apply only to private companies, as SEC registrants are required to have independent audit committees.

According to a recent article in Fortune magazine, the SEC questioned 88 percent of companies in the technology, media and telecommunications industries that went public in 2014 regarding their revenue recognition policies.

I spent three fascinating days last month with some of the best and brightest from the corporate compliance world at the Compliance Week 2015 Conference in Washington, D.C.

Let’s admit it – mergers are exciting. You get to realize your company’s strategic plan and grow the company. The intricacies of negotiations can occupy all of your attention, and getting the deal right is incredibly important. But often, transition plans for managing the resulting company are lost in the process.

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.

The Financial Accounting Standards Board gave us some good news and some bad news in a recent update. The good news is the Board has delayed the effective date for the proposed accounting standards update until periods beginning after December 15, 2017, giving everyone an extra year to prepare. The bad news is that the Board has given everyone an extra year to prepare. With this type of update, it is easy to put off making changes in your company until it’s too late. Don’t delay!

Describing today’s business environment as complex is an understatement. In fact, a recent survey showed that four out of five CFOs rank internal complexity as the number one challenge facing their organizations. Adding the ever-evolving external factors impacting your business increases the challenge even more. Yet, you are asked to manage and succeed in just such an environment, and the risks are often huge.