Risk Management for CPAs in a Tough Economy

Source: Accounting Today

Here are three exposures that can be particularly risky in a tough economy:

• Mark-to-market accounting permits the client to determine market value for investments that cannot be sold on an active market. This can result in write-downs that are less than adequate.
• Banks have often waived compliance with certain loan covenants if the borrower was current in its payments. They may not do so in these times. CPAs should meet with bankers to discuss loan covenant compliance.
• Going-concern disclosures may soon be extended from one year to at least one year to match IFRS (International Financial Reporting Standards) requirements. Additional disclosures may also be required.

For the complete article, click here and select “Accounting in Uncertain Times” in the February 23, 2009, issue.

From Accounting Today, February 23, 2009, SourceMedia Inc., One State Street Plaza, 27th Floor, New York, NY 10004, 800-221-1809.