Surety Bond Quarterly - Fall 2014 - 24

ThE PArTNEr ANd MANAgEr ArE ThE
CrITICAL dECISION-MAKErS, ANd TUrNOvEr
IN ThESE ArEAS CAN rESULT IN dIFFErENT
rISK TOLErANCES WIThIN ThE CONTrACTOr'S
FINANCIAL STATEMENTS.
surety to provide sensible advice and
remain skeptical as an auditor about
estimates of future performance.
The best-of-class CPAs are thought
leaders. you should see articles written
by them in journals or newsletters
that demonstrate that they are on
the leading edge of accounting and
tax developments.
There are several national construction
conferences that
focus
on training construction industry
accountants on latest developments.
These include the Construction
Financial Management Association
(CFMA), AGC/CFMA and AICPA
national construction industry financial
management conferences. There
also are state-level conferences in
many regions. From time to time,
ask your CPA if he or she is attending
these programs. They have the
top minds in the industry leading presentations,
and you want your CPA
to either be the best or be learning
from the best.
INDUSTRY COMMITMENT
Best-of-class
construction CPA
firms are frequently in attendance
at construction industry gatherings.
However, it is easy to pay some dues
and show up at a few association
meetings. The firms that see themselves
as a contributing member of
the construction industry will also
get involved in committee and leadership
roles in the trade associations.
Where available, you should
expect
the firm to participate in
the local surety association as an
associate member.
Great networking and industry best
practices, particularly for CFos and
audit firms, can be found in the activities
of local and national meetings
of the CFMA. you should expect any
best-of-class construction CPA to be
a member; CFMA only has individual
memberships and not company
24 surety BoNd Quarterly | FAll 2014
membership. Ask how many of the
firm's partners and staff are members
of CFMA.
The CFMA has created a separate
entity to certify construction
financial management experience
and knowledge, the Institute of
Certified Construction Industry
Financial Professionals. The credential
requires several years of
experience followed by a 4-hour
exam covering all aspects of financial
management and reporting
around the construction industry.
After certification, the candidate
must continue with industry-specific
continuing education. The certified
members (CCIFPs) are in every state
and growing. In addition to the CPA
credential, producers should inquire
about how many members in the
firm have the CCIFP credential. The
CCIFP is another way of assuring that
industry knowledge is present. This
does not in any way mean that a firm
without any CCIFPs is less qualified,
but there is no third-party validation.
Another bonus is if the firm has
one or more means of staying current
with construction industry best
practices through some form of peerto-peer
involvement. In large firms,
this will be manifested as some firmwide
industry practice group. other
firms may join a network that has
specialty practice groups. Be cautious
about relying on these groups
as many firms are accepted into peer
groups to learn about an industry.
one group, Construction Industry
CPA/Consultants
Association
(CICPAC), requires a level of existing
contractor clientele as a condition
of membership.
FINANCIAL PRESENTATION
Timelines
Nothing signals problems as firmly
as a late financial report. We have
heard all of the reasons, but as one
major surety CEo was fond of saying,
"I never received a late financial
statement that had good news."
Quality CPAs recommend clients
use current accounting practices
and procedures. Avoid firms that are
consistently missing deadlines for
publishing financial reports.
Industry specific
There are certain things that you
expect to see in the financial presentation
and footnotes of a construction
company. If they are not there,
change accountants. An important
caveat is that just because they are
there doesn't mean the statements
are solid or that the CPA is right for
the risk you are taking.
FIRM VS. CLIENT
SERVICE TEAM
A CPA firm may have a number of
contractor clients, but the business is
spread among various partners and
accounting staff such that no one
in the firm has significant industry
experience. The bottom line is that
best practice would be that the audit
is staffed with partner, manager,
senior and associate accountants that
annually perform multiple audits of
contractors and do not bounce from
industry to industry. The surety
should assess both the firm and the
service team within the firm.
Turnover within the team makeup
should be a red flag. While it is common
for staffing changes to occur
within the CPA profession, wholesale
changes in a service team from year
to year may be indications of other
problems within a firm and should be
evaluated by the bond producer and
the surety. More emphasis should
be on turnover in the manager and
senior roles, as these are the CPAs
that are getting dirty hands in the
audit process. The partner and manager
are the critical decision-makers,
and turnover in these areas can result
in different risk tolerances within the
contractor's financial statements.
AWARENESS OF FRAUD
In the conduct of an audit, CPAs are
required to make inquiries about the

Surety Bond Quarterly - Fall 2014

Table of Contents for the Digital Edition of Surety Bond Quarterly - Fall 2014

2014-2015 NASBP Executive Committee
NASBP Upcoming Meetings and Workshops
From the CEO: Successful construction relationships require the right relationship
Practical Insights: What you need to know - bond and lien notice pitfalls
SuretyLearn.org: An invaluable resource
Advocacy update
Nov. 12-3 Conference addresses the twists and turns of best value selection - and other timely topics
Surety Bond Guarantee Program changes for the better
Front Line Underwriting: Choosing a quality construction CPA
Getting in the weeds: Requirements of marijuana surety bonds
Encrypting email
It’s Finally Here: The new revenue recognition standard
CPAs standing in the GAAP
Resource Directory
Index to Advertisers
Surety Bond Quarterly - Fall 2014 - cover1
Surety Bond Quarterly - Fall 2014 - cover2
Surety Bond Quarterly - Fall 2014 - 3
Surety Bond Quarterly - Fall 2014 - 4
Surety Bond Quarterly - Fall 2014 - 5
Surety Bond Quarterly - Fall 2014 - 6
Surety Bond Quarterly - Fall 2014 - NASBP Upcoming Meetings and Workshops
Surety Bond Quarterly - Fall 2014 - From the CEO: Successful construction relationships require the right relationship
Surety Bond Quarterly - Fall 2014 - 9
Surety Bond Quarterly - Fall 2014 - Practical Insights: What you need to know - bond and lien notice pitfalls
Surety Bond Quarterly - Fall 2014 - 11
Surety Bond Quarterly - Fall 2014 - SuretyLearn.org: An invaluable resource
Surety Bond Quarterly - Fall 2014 - 13
Surety Bond Quarterly - Fall 2014 - Advocacy update
Surety Bond Quarterly - Fall 2014 - 15
Surety Bond Quarterly - Fall 2014 - Nov. 12-3 Conference addresses the twists and turns of best value selection - and other timely topics
Surety Bond Quarterly - Fall 2014 - 17
Surety Bond Quarterly - Fall 2014 - Surety Bond Guarantee Program changes for the better
Surety Bond Quarterly - Fall 2014 - 19
Surety Bond Quarterly - Fall 2014 - 20
Surety Bond Quarterly - Fall 2014 - 21
Surety Bond Quarterly - Fall 2014 - Front Line Underwriting: Choosing a quality construction CPA
Surety Bond Quarterly - Fall 2014 - 23
Surety Bond Quarterly - Fall 2014 - 24
Surety Bond Quarterly - Fall 2014 - 25
Surety Bond Quarterly - Fall 2014 - Getting in the weeds: Requirements of marijuana surety bonds
Surety Bond Quarterly - Fall 2014 - 27
Surety Bond Quarterly - Fall 2014 - Encrypting email
Surety Bond Quarterly - Fall 2014 - 29
Surety Bond Quarterly - Fall 2014 - 30
Surety Bond Quarterly - Fall 2014 - 31
Surety Bond Quarterly - Fall 2014 - It’s Finally Here: The new revenue recognition standard
Surety Bond Quarterly - Fall 2014 - 33
Surety Bond Quarterly - Fall 2014 - CPAs standing in the GAAP
Surety Bond Quarterly - Fall 2014 - 35
Surety Bond Quarterly - Fall 2014 - 36
Surety Bond Quarterly - Fall 2014 - 37
Surety Bond Quarterly - Fall 2014 - 38
Surety Bond Quarterly - Fall 2014 - Resource Directory
Surety Bond Quarterly - Fall 2014 - 40
Surety Bond Quarterly - Fall 2014 - 41
Surety Bond Quarterly - Fall 2014 - 42
Surety Bond Quarterly - Fall 2014 - 43
Surety Bond Quarterly - Fall 2014 - 44
Surety Bond Quarterly - Fall 2014 - 45
Surety Bond Quarterly - Fall 2014 - 46
Surety Bond Quarterly - Fall 2014 - 47
Surety Bond Quarterly - Fall 2014 - 48
Surety Bond Quarterly - Fall 2014 - 49
Surety Bond Quarterly - Fall 2014 - 50
Surety Bond Quarterly - Fall 2014 - 51
Surety Bond Quarterly - Fall 2014 - 52
Surety Bond Quarterly - Fall 2014 - 53
Surety Bond Quarterly - Fall 2014 - 54
Surety Bond Quarterly - Fall 2014 - 55
Surety Bond Quarterly - Fall 2014 - 56
Surety Bond Quarterly - Fall 2014 - 57
Surety Bond Quarterly - Fall 2014 - Index to Advertisers
Surety Bond Quarterly - Fall 2014 - cover3
Surety Bond Quarterly - Fall 2014 - cover4
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