Make sure to do your research, when selecting your financial advisors

Description: Due diligence regarding the person who is in charge of investing the organization’s money, can make all the difference.

Here at Hinkle + Landers, PC, one of the Albuquerque accounting firms; we stay up to date on news that has an impact on our community. By keeping current on settlements and awards regarding fraud that affect members of our community, we are able to remain vigilant regarding potential risks to our clients. Investor risk is not only relevant to individuals, but also any size organization. Many organizations rely on financial advisors, investment firms, or Foundations to manage their investments. These investments usually make up a significant portion of the organizations assets. As a result, due diligence regarding the person who is in charge of investing the organization’s money, can make all the difference.

Recently a hedge fund manager, Matthew Sample settled a federal lawsuit, where he was accused of defrauding five investors, two of whom were from New Mexico. The lawsuit accused him of raising $1 million from the investors over a 3 year period. Of that million about $500,000 was actually traded, and the remaining money was used for his personal use, or to pay other investors. The New Mexico investors invested over $700,000 with Mr. Sample and when they requested to withdraw $500,000 from their funds, Mr. Sample gave multiple excuses as to why their money was not available.

Although this news story relates to defrauded individuals, Albuquerque accounting firms, such as Hinkle + Landers, pass this news and others like it on to our non-profit organization clients. Since many of our clients are involved with financial advisors and Foundations, we cannot over emphasize the importance of researching who is in charge of investing their money once they outsource that responsibility. When one of our clients is deciding whether or not to change financial advisors or Foundations, we encourage them to reach out to us, and in turn we reach out to other Albuquerque accounting firms, and see if the potential advisor or Foundation is working with other non-profit organizations, and what their reputation is. We strive to work with our clients in order to prevent any misuses of their money, and stay ahead of anyone trying to defraud them out of their hard earned assets.

Firm Profile:  Hinkle + Landers, CPAs is one of Albuquerque New Mexico’s leading accounting firms.  Hinkle + Landers, CPAs has been operating for over 40 years in Albuquerque as well as all parts of New Mexico.  Hinkle + Landers, CPAs also provides audit, fraud and forensic accounting services as well as tax preparation and bookkeeping in Albuquerque New Mexico.

 

Why Should I Hire a CPA?

I always get the question, “why should I hire a CPA; what does a CPA do that’s different than a bookkeeper or accountant or software?”

I recommend to people often about searching and finding a CPA firm that has bookkeepers and accountants on staff.  This way you have the best of all worlds.  The value of hiring the CPA firm with all three housed in one place I believe can be summarized in four top reasons.

First of all, CPA’s are licensed by a state, and must keep up-to-date with tax laws in order to maintain their license in the state. Accountants are not licensed. The CPA examination is, in my opinion, the most rigorous test for anyone who’s going to be licensed to study for and to take. That’s why you may have heard that CPA actually stands for “Can’t Pass Again” because there is so much subject matter packed into four parts of an exam just to qualify for a license; then there’s the classroom education required and the hours of experience required; not to mention the continuing professional education required to maintain the license.  The only way I can describe the whole process is by comparing it to jumping out an airplane without a parachute and having to figure out how to survive the landing because you know you get to jump out of the airplane ten thousand more times this week.

Second of all, while not all CPA’s specialize in taxes, almost all of them are more familiar with the tax laws than are accountants. Knowledge of the tax code is a huge part of the CPA’s licensing examination and many CPA’s take tax courses every year to keep up-to-date on the changes in the tax code. An accountant also may be able to prepare and sign your tax returns, but being an accountant does not provide assurance of certification, nor does it give them the ability to represent their clients before the IRS, even if this person signed your tax return. Accountants are classified as “unenrolled preparers” by the IRS.  Read more from the IRS on Understanding Tax Return Preparer Credentials.

Third of all, a bookkeeper post transactions into software, the accountant reviews the postings and analyzes financial reports, then the CPA does more detailed and thorough financial analysis to advise businesses and individuals on tax or financial matters. Although the designation of “CPA” does not mean that this individual is giving the best advice, a CPA is more prepared and puts his or her license on the line when providing this advice.

Fourth of all, a CPA is eligible to represent his or her clients before the IRS, while the accountant is not. Therefore, if you are paying a professional to prepare your tax return, then make sure this person has full authority to represent you in an audit and to execute any claims on your behalf. This representation is by far, in my opinion, the most critical need an individual or business has for hiring a CPA.

The bottom line is this, the accountant is going to do the daily work and complete tax returns, while the CPA can analyze that work, represent you before the IRS, and help you make more high-level business and tax decisions. Yes, the CPAs charge more; and you get what you pay for.

I’ll leave you with one of my quotes to ponder: “a bookkeeper is going to get you to the sports arena eating the food with the other tailgaters; the accountant will get you to the seats up in the press box eating with all the celebrities and dignitaries; and the CPA will get you down on the field interacting with the players and coaches and back to the locker room eating the catered food with everyone. You get to choose where you want to be and who you get to be with.”

Firm Profile:  Hinkle + Landers, CPAs is one of Albuquerque, New Mexico’s leading accounting firms.  Hinkle + Landers, CPAs has been operating for over 40 years in Albuquerque as well as all parts of New Mexico.  Hinkle + Landers, CPAs also provides audit, fraud and forensic accounting services as well as tax preparation, bookkeeping and elder care in Albuquerque, New Mexico.

2014 Non-Profit of the Year – Accounting Clients

Each year Albuquerque Business First, hosts an event for non-profit of the year, last year Hinkle + Landers was one of the sponsors of this award and this year they are excited to be the main sponsor for 2014.   Hinkle + Landers invited all of their non-profit accounting business clients to submit their entry for this prestigious award.

All applications will be evaluated on mission, innovation, impact and sustainability. The types of outstanding non-profit accounting businesses that will be considered are those that represent the arts, culture and humanities; crisis resources; education; environment and animals; family services; health and human services; and public and societal benefit.

Those selected as honorees will be celebrated at the event on September 18^th and in a Business First special publication in September 2014.  You can find more information about this event at AlbuquerqueBusinessFirst.com/events.

There are 32 submissions this year and Farley Vener, President of Hinkle + Landers, is currently reviewing all information to be submitted to the panel of judges.  Judging begun Monday July 14^th. 

Hinkle + Landers believes in and appreciates non-profit organizations who serve New Mexico and they are excited to find out who will be the new 2014 Non-Profit of the Year!

Hinkle + Landers is very proud to serve their clients and provide them with solutions they need to gain financial stability and ultimately reach their goals.  As a local New Mexico CPA firm they appreciate helping other New Mexicans, especially in the difficult economic times. 

Hinkle + Landers has been working with non-profit accounting businesses in Albuquerque and throughout New Mexico for over 40 years.  Hinkle + Landers specialize in audit, tax, fraud examination and business consulting and serve non-profits local and state governments, small businesses, and health care organizations.  

Form 990 related to non-profit accounting

Form 990 related to non-profit accounting and non-profit organizations

Hinkle + Landers, PC, one of the leading Albuquerque CPAs and accounting firms, stays up to date on news that has an impact the accounting industry and our community.  The following is a blog by Steve Nolan, CPA, an Audit Manager of Hinkle + Landers, PC related to the tax form 990 related to non-profit accounting for non profit organizations.

My daughter is a program director for a non-profit organization that operates a small organic farm for the purpose of educating about healthy and responsible eating.  The program is funded by grants mostly from two mainline church denominations.  The program is not required to file any returns with the Internal Revenue Service such as a Form 990 information return.  She also volunteers for another organic farm that also promotes education concerning healthy food consumption.  This organization is a non-profit organization and is required to file a 990 information return.

Why would one non-profit organization be required to file a Form 990 and one non-profit organization not required to file?  I will answer this towards the end of the article.

Non-profit Accounting in Albuquerque spans a large spectrum of charities and health and welfare organizations with different purposes that meet non- profit criteria.

According to IRS regulations covering Non-profit Accounting in Albuquerque, and in general, requires non-profit organizations that have $50,000 or less in gross receipts to file a Form 990N through an e-Postcard.  An e-Postcard is simple to complete with eight questions required to be answered.  There is no penalty for late filing of an e-Postcard but organizations that does not file for three years risks losing their exempt status.  The non-profit organization may also file a regular Form 990 if it wishes.

Non-profit organizations with less than $200,000 in gross receipts or $500,000 in assets may file Form 990-EZ of a full Form 990.  The Form 990-EZ is shorter than the Form 990 but does require some expertise to complete.

Non-profit organizations that have at least $200,000 in gross revenue and $500,000 in assets are required to file a complete Form 990.  Form 990 has a number of schedules to be completed and requires a good working knowledge of preparing that information return for Non-profit Accounting in Albuquerque.

A Form 990-PF is required to be filed for a private foundation non-profit organizations.

Hinkle + Landers, CPAs, who are Albuquerque Accountants and have more than 40 years experience in filing Form 990s for Non-profit Accounting in Albuquerque can provide expert advice and services for any non-profit organization.

So why would two seemingly similar organizations mentioned above have different filing requirements.  It is because certain non-profit organizations are exempt from filing any type of Form 990.  These include churches and religious organizations, organizations included in a group return and organizations require filing another type of return.

Firm Profile:  Hinkle + Landers, CPAs is one of Albuquerque New Mexico’s leading accounting firms.  Hinkle + Landers, CPAs has been operating for over 40 years in Albuquerque as well as all parts of New Mexico.  Hinkle + Landers, CPAs also provides audit, fraud and forensic accounting servicesas well as tax preparation, bookkeeping and elder care in Albuquerque New Mexico

Business Consulting Service – Hinkle + Landers, PC

 

The importance of researching, who is in charge of investing your money

 

Here at Hinkle + Landers, PC, one of the Albuquerque accounting firms, as a part of our Business Consulting Service we stay up to date on news that has an impact on our community.  By keeping current on settlements and awards regarding fraud that affect members of our community, we are able to remain vigilant regarding potential risks to our clients. Investor risk is not only relevant to individuals, but also any size organization.  Many organizations rely on financial advisors, investment firms, or Foundations to manage their investments.  These investments usually make up a significant portion of the organizations assets.  As a result, due diligence regarding the person who is in charge of investing the organization’s money, can make all the difference.

 

Recently a hedge fund manager, Matthew Sample settled a federal lawsuit, where he was accused of defrauding five investors, two of whom were from New Mexico.  The lawsuit accused him of raising $1 million from the investors over a 3 year period.  Of that million about $500,000 was actually traded, and the remaining money was used for his personal use, or to pay other investors.  The New Mexico investors invested over $700,000 with Mr. Sample and when they requested to withdraw $500,000 from their funds, Mr. Sample gave multiple excuses as to why their money was not available.

 

Although this news story relates to defrauded individuals, our business consulting service, pass this news and others like it on to our non-profit organization clients.  Since many of our clients are involved with financial advisors and Foundations, we cannot over emphasize the importance of researching who is in charge of investing their money once they outsource that responsibility. When one of our clients is deciding whether or not to change financial advisors or Foundations, we encourage them to reach out to us, and in turn we reach out to other Albuquerque accounting firms, and see if the potential advisor or Foundation is working with other non-profit organizations, and what their reputation is.  We strive to work with our clients in order to prevent any misuses of their money, and stay ahead of anyone trying to defraud them out of their hard earned assets.

 

Firm Profile:  Hinkle + Landers, CPAs is one of Albuquerque New Mexico’s leading accounting firms.  Hinkle + Landers, CPAs has been operating for over 40 years in Albuquerque as well as all parts of New Mexico.  Hinkle + Landers, CPAs also provides fraud and forensic accounting services in Albuquerque New Mexico

 

Forensic Accounting Services and Fraud Prevention Services – Why Bother?

 

 

One only has to search the internet using the key words “fraud articles” to see the plethora of examples of fraud.  From corporate fraud to medical fraud, from large organizations to “Mom & Pop” organizations, from highly-skilled fraud to easy-as-pie fraud, no organization or person is fully protected or out of the reach of the arms of fraud.

 

Identity theft scams abound with direct contact schemes using email or cold-calling, credit card fraud such as hacking or un-authorized use, and alliance scams which rely on familiarity such as a caregiver or a relative, trusted or not.  Medical fraud is also flourishing from a variety of billing schemes.  Churches and social groups are popular targets from the outside and the inside, from financial advisors to clergy.  Corporate fraud is more diverse than the organizations that are its targets.  Simply put, the old English proverb of “Where there’s a will, there’s a way” is the rule of thumb.

 

There are some common denominators to all frauds and one of the most pervasive is the lack of sufficient internal controls.  Internal controls are their relative importance are deeply imbedded in the foundation of generally accepted accounting principles, both state-side and abroad.  So how do we protect ourselves from fraud?  Proactive is almost always better than reactive.

 

Fraud Prevention Services are an effective proactive approach.  An expert assessment of risk and internal controls is a must, and arguably is as paramount of an input into the services or products that are sold as the raw ingredients.

 

Forensic Accounting Services that are reactive in nature or after-the-fact such as services for damages calculations related to various litigation scenarios or procedures designed to detect irregularities or reconstruct records.  There are also forensic accounting services such as those related to bankruptcy or valuations either for business purposes or related to family law areas such as divorce, spousal support or custodial support determination.

 

The benefit of expert Fraud Prevention Services and/or Forensic Accounting Services performed by a reputable CPA firm cannot and should not be underestimated.  The high costs of fraud and its increasing prevalence in the marketplace are sufficient reasons to engage in asset protection tactics.  There are no guarantees but it is logical to conclude that using sunscreen in the Mohave desert in mid-day August is better than going without.   

 

Firm Profile:  Hinkle + Landers, CPAs is one of Albuquerque New Mexico’s leading accounting firms.  Hinkle + Landers, CPAs has been operating for over 40 years in Albuquerque as well as all parts of New Mexico.  Hinkle + Landers, CPAs also provides fraud and forensic accounting services in Albuquerque New Mexico

Here at Hinkle + Landers, PC, one of the Albuquerque accounting firms, we stay up to date on news that has an impact on our community.  By keeping current on settlements and awards regarding fraud that affect members of our community, we are able to remain vigilant regarding potential risks to our clients. Investor risk is not only relevant to individuals, but also any size organization.  Many organizations rely on financial advisors, investment firms, or Foundations to manage their investments.  These investments usually make up a significant portion of the organizations assets.  As a result, due diligence regarding the person who is in charge of investing the organization’s money, can make all the difference.

Recently a hedge fund manager, Matthew Sample settled a federal lawsuit, where he was accused of defrauding five investors, two of whom were from New Mexico.  The lawsuit accused him of raising $1 million from the investors over a 3 year period.  Of that million about $500,000 was actually traded, and the remaining money was used for his personal use, or to pay other investors.  The New Mexico investors invested over $700,000 with Mr. Sample and when they requested to withdraw $500,000 from their funds, Mr. Sample gave multiple excuses as to why their money was not available.

Although this news story relates to defrauded individuals, Albuquerque accounting firms, such as Hinkle + Landers, pass this news and others like it on to our non-profit organization clients.  Since many of our clients are involved with financial advisors and Foundations, we cannot over emphasize the importance of researching who is in charge of investing their money once they outsource that responsibility. When one of our clients is deciding whether or not to change financial advisors or Foundations, we encourage them to reach out to us, and in turn we reach out to other Albuquerque accounting firms, and see if the potential advisor or Foundation is working with other non-profit organizations, and what their reputation is.  We strive to work with our clients in order to prevent any misuses of their money, and stay ahead of anyone trying to defraud them out of their hard earned assets.

Find Accounting Software

Hinkle + Landers, PC, an Albuquerque New Mexico CPA firm recommends this article by Luke Wagner

Project Specialist at Find Accounting Software

 

Understand your current setups positives and negatives

The first thing to do when considering a switch to new accounting software is to look at your current setup. Does it make sense to replace your current way of accounting? Let’s take a look at a few of the different options:

1. Continue with an off the shelf bookkeeping program. It is likely that, like most small businesses, you are currently using some sort of small business accounting program that was purchased off-the-shelf or online. You set up the software yourself and trained yourself how to use it. What’s nice about this software is it was very cost effective and handled the basic needs of the business. These relatively easy to use, intuitive systems are good for many companies as they start but are not industry specific and have other performance limitations.
2. Manual accounting. Perhaps you are currently doing everything manually. Using a paper chart of accounts or checkbook, handwriting sales orders, and tracking inventory on a notepad or through Excel spreadsheets. When sales volumes and outgoing expenses are low, this can be the easiest and most effective approach. As transactions increase and business picks up, this setup very quickly can become both prone to errors and inefficient.
3. Outsourcing accounting to a provider. Outsourcing can be attractive because it allows you to focus on your business and pass the duties to an accounting/bookkeeping firm. What better way to do accounting than have an actual accounting or bookkeeping firm do the accounting for you? Outsourcing the bookkeeping allows you to focus on your customers rather than worry about your books. However, the data you are receiving from the accountant is not real time. Plus, you are not free from all of your responsibilities. You still need to track your inventory, your job costs, your daily sales and provide that data to the accountant. As your business picks up, outsourcing accounting can become increasingly more expensive and prevent you from exercising a stronger measure of control on your company’s financial performance.

Keeping informed on anti-hacking and anti-virus technology

Hinkle + Landers, PC an Albuquerque CPA firm prides itself on remaining at the forefront of cyber-security and efficiency. Keeping informed on the latest anti-hacking and anti-virus technology is one of our top priorities. Client confidentiality and data security are crucial to any high-functioning CPA firm.  This must-read article was posted on www.AccountingToday.com  and explains the basics of smart WiFi protection:

Protect Your Firm’s WiFi Network

Los Angeles (June 4, 2014)

By Daniel Hood

“Is your WiFi network just low-hanging fruit for bad guys?” asked security expert Rolfe Pope, in a session titled ““Locking Down Your WiFi Network Security” at the California Accounting and Business Show this week — and then proceeded to detail exactly how vulnerable WiFi networks can be.

Using four different scanning programs that are available free on the Web, Pope, a consultant and advisor with over 30 years experience managing and advising on network security, including work at the Department of Defense, described how he was able to scan WiFi networks at an airport gate, a coffee shop, and a hotel, and to find identifying information and even login names for a wide range of attached devices, from traveler’s iPhones and laptops to local printers and even cash registers. With similar information from your firm’s WiFi network, hackers can hijack your network, steal or change client data, or use your network to attack others.

“It’s true that hackers can break into your security, but if you do some simple things, it makes it much harder for them,” Pope said.

• Hide your network. The Service Set Identifier or SSID for most networks is broadcast — it’s the name you see when you go looking for WiFi networks — but you can set your router to not broadcast the name, so that the only people who can access your network are those to whom you’ve told its name.
• Camouflage your network. Pope actually recommends this over hiding your network, since there are ways to find even hidden networks, and hackers assume something that’s hidden must be valuable. Instead, give it a meaningless name, a random string of letters and numbers, rather than “XYZFirmNetwork.”
• Set up two networks. Stern, a CPA, CFF and a partner at Clumeck Stern Schenkelberg & Getzoff, said that his firm has established both an inside network and an outside or guest network on its router. The guest network — set up outside the firm’s firewall, forestalls hackers, and also prevents guests from inadvertently infecting the firm’s internal system with viruses.
• Upgrade your security. “Usually you want to disable the built-in WiFi network security, since it’s relatively easy to hack,” Pope said. Set your encryption levels to the WPA2 standard — currently the strongest.
• Get a good router. While you can buy cheap routers, Stern said that their security is often weak or unreliable. A good router can run anywhere from $500 to $1,500, he suggested, and is worth the price for the protection it can offer.

Hinkle + Landers is an experienced Forensic Accounting firm.

Engagement Letters in Accounting

How to Use Engagement Letters in Accounting Services

T. Steele Rose, CPA, recently published an article in CPA Magazine regarding new guidance for preparing financial statement engagement letters. He states that early implementation is permitted for the proposed SSARS, which covers the Preparation of Financial Statements. If accepted they would be effective for the preparation of financial statements for periods ending on or after December 15, 2015.

See below for his example of an engagement letter:

 

To the appropriate representative of management of ABC Company:

You have requested that we prepare the financial statements of ABC Com­pany, which comprise the balance sheet as of December 31, 2014, and the re­lated statements of income, and changes in stockholders’ equity, and cash flows for the year then ended and the related notes to the financial statements. We are pleased to confirm our acceptance and our understanding of this engagement to prepare the financial statements of ABC Company by means of this letter.

Our Responsibilities:

The objective of our engagement is to prepare financial statements in accor­dance with accounting principles gener­ally accepted in the United States based on information provided by you.

We will conduct our engagement in accordance with Statements on Stan­dards for Accounting and Review Ser­vices (SSARSs) promulgated by the Accounting and Review Services Com­mittee of the AICPA and comply with the AICPA’s Code of Professional Con­duct, including the ethical principles of integrity, objectivity, professional com­petence, and due care.

We are not required to, and will not, verify the accuracy or completeness of the information you will provide to us for the engagement or otherwise gather evidence for the purpose of expressing an opinion or a conclusion. Accordingly, we will not express an opinion or a conclu­sion or provide any assurance on the fi­nancial statements.

Our engagement cannot be relied upon to identify or disclose any financial statement misstatements, including those caused by fraud or error, or to identify or disclose any wrongdoing within the entity or noncompliance with laws and regulations.

Your Responsibilities:

The engagement to be performed is con­ducted on the basis that you acknowl­edge and understand that our role is the preparation of the financial statements in accordance with accounting principles generally accepted in the United States.

You have the following overall re­sponsibilities that are fundamental to our undertaking, in accordance with SSARSs, the engagement to prepare your financial statements:

a. The prevention and detection of fraud

b. To ensure that the entity complies with the laws and regulations appli­cable to its activities

c. To make all financial records and re­lated information available to us

d. The accuracy and completeness of the records, documents, explanations, and other information, including significant judgments, you provide to us for the en­gagement to prepare financial statements

You agree that the financial state­ments will clearly indicate that no CPA provides any assurance on them.

Our fees for these services are…

You agree to hold us harmless and to release, indemnify, and defend us from any liability or costs, including attorney’s fees, resulting from management’s know­ing misrepresentations to us.

Please sign and return the attached copy of this letter to indicate your ac­knowledgement of, and agreement with, the arrangements for our engagement to prepare the financial statements de­scribed herein, and our respective re­sponsibilities.

Sincerely yours,

_______________________

[Signature of accountant or accountant’s firm]

Acknowledged and agreed on behalf of ABC Company by:

_______________________

Signed

[Name and title]

 

Hinkle + Landers, PC provides professional bookkeeping and accounting services in Albuquerque, New Mexico