Jumat, 20 Januari 2017

assurance audit difference

assurance audit difference

what’s the difference between an accountantand an auditor? basically, accountants keep track of the money, and auditors check theirwork. but there's much more to the work than simply "balancing the books." these financialprofessionals are involved in nearly every area of all types of business, industry, andgovernment. budgeting, planning, cost control...employee compensation, asset management, new productdevelopment...and, of course, taxes--if money's involved, accountants and auditors must betoo. in fact, so many areas need accounting and auditing services that many professionalsopt to specialize. some become tax specialists. others become employee benefits experts. whilestill others concentrate on preparing the income statements and balance sheets everypublicly held corporation must file. to take

full advantage of the many opportunities,you need to have at least a bachelor's degree in accounting. if you hope to become a "certifiedpublic accountant" or "cpa," in many states you will need 150 semester hours of courseworkto be eligible to take the state exam. unlike most professionals, auditors and accountantshave tremendous flexibility in where they work and in the jobs they perform. and, aslong as there is money to spend, there will always be jobs to fill and work to do!

Kamis, 19 Januari 2017

assurance audit report

assurance audit report

hello, my name's paul kirkwood and i'm atutor at kaplan teaching out of our london centre and one of my specialistsubject is acca paper f8. the purpose of this session is to runthrough a syllabus area, i want you to try and get to know your syllabus alittle bit better. the syllabus area that i have chosen today is internal control. so lets run through our session objectives. first of all, i want to understand the key internal control syllabus areas that youwill be faced with in your exam. sometimes i just worry that studentsdon't really fully understand all of the syllabus areas that they will be facedwith or could be faced with in their

examination. this is especially true withthe change in the examination question types. with the introduction of multiplechoice questions and longer time questions, it's important that you have abroad syllabus coverage to be able to answer questions on any syllabus area andsyllabus coverage in our most recent exams has certainly increased. but as well as looking through the syllabus, i also want to build your confidence, build your confidence in yourability to pass this paper paper f8. and finally to do that i'm going to look atsome practical questions. i'm going to look at some multiple choice questionsfrom the past three papers that includes the specimen paper, and i'll also look atsome longer time questions from june

2015. so why have i chosen this session? well for me as a tutor, a key frustration has been that many students don't actually passthis exam when they could and really should, certainly the first attempt. well there are many reasons for this andjust to highlight a few for you, with the recent introduction of multiple choicequestions i do get concerned that students don't take sufficient care withthem. i myself am guilty of that so when i see a multiple choice question thensometimes i just look at the first couple of possible answers see one which i think is right and then

don't spend enough time reading throughthe others, and i make a silly mistake. as well as that i think sometimes peopletake too long over the mcq's. if you've got 4 possible answers and you can'tdecide between two of them as to which is right and which is wrong i've heardback from students experiences that what they tend to do is sit there and almost become paralyzed in the exam trying to work out which is correct. ifyou've just got 2 answers to choose from just choose a or b, you've got a 50/50 chance and you would not be negatively marked. so don't take too long especially inpaper f8 where the absolute majority of questions will be narrative and istruggle to think of many if any that

will be computational in nature. when wethink about the longer time questions, students as well sometimes misinterpretthe question requirement and that can be because they simplymisread it and don't answer the specific question asked. for example, if aquestion said 'identify and explain', too often people simply identify issuesrather than going on and explaining why that is a problem. so we'll think abouthow to read and then answer requirements in a full way. internalcontrols i've often had my students tell me that they find this area quite niceand they're looking to score highly. well if that's the case you've gotta makesure that you do. in this paper the pass

mark is 50%. in some areas i want you toscore highly, score well, in other areas that you find difficult maybe you'll bestruggling around the pass mark or maybe even just below but on averageyou'll have enough to pass. internal controls is often an area where you canscore well but you've got to do it, you can't make silly mistakes and you've gotto give the examiner exactly what she wants. in terms of the how we can build thoseskills, well it's understanding the syllabus and understanding the study guide is asa first point. again with the change mcq's and longer questions i needyou to be able to have a broad coverage

of all syllabus areas because you can draw on any areas of the syllabus to ask your questions. and i do think sometimesstudents have never looked at, certainly my paper, paper f8 syllabus, and more importantly the study guide itself. so let's move on, let's have alook at the syllabus itself. this is the main syllabus framework; five areas, oneof which syllabus section c is internal control. drilling down a little bitfurther we can see that internal control has got four elements. now each ofthose elements doesn't really give us much of a clue as to what is in our detailed syllabus and how it would be examined. but if i drill down one more level, and this is typically known as the 'study

guide', we can start to see a breakdown ofexactly what the examiner has got in your syllabus. so the first point there, point 1a, "to explain why an auditor needs to obtain an understanding ofinternal control relevant to the audit". well with this point we can go back tothe basic planning cycle of an audit itself, to be able to plan to do an audit effectively and efficiently you need to understand the client's internalcontrol systems and its accounting systems. how will you be able to planwhich is the best approach? whether it be tests of controls and substantiveprocedures or substantive procedures on their own.

how could you decide the best approach if you don't fully understand the client's systems? secondly we've got the part b, which isto, "describe and explain the five components of internal control". well for this elementyou need the knowledge, you need to be able to identify and then explain eachof those elements. well first of all, how do you rememberthis knowledge? well as you go through your text books or go through your time with your tutor in class or online, sometimes tutors or sometimes youyourself can come up with innovative ways to remember key data.

for this one the five elements are usingpneumonic, my pneumonic is crime. it would be a crime not to have goodinternal controls. and then i can map each of the crime letters across to oneof the five elements. so the 'c' i can relate to control activities, the 'r' to risk assessment, the 'i' to the information systems, the 'm' to the need for monitoringand the 'e' to the environment. so now i've got them remembered how do i thentake this forward? well you need to be able to not just remember and recall butexplain. take the bottom one, 'environment'; in terms of internal controls they willbe affective if the environment is good. that means that there is a culture andan attitude and an awareness of

management which flows through theorganization that appreciates the importance of internal control in thatorganization. without a strong control environment i'm afraid the otherelements are unlikely to succeed. moving on, the second element of thethe syllabus in detail is, "the use and evaluation of internal control systemsby auditors", and the top one looks at how auditors record the systems usingnarrative notes, flow chart, questionniares and evaluations. now again i'd like you tobe able to explain what each of them does and how they are used, but also lookat the word, "explain how auditors record internal control systems", i think itgoes a little bit deeper, i think here you

would need to be able to explainthe pros and cons, the advantages and disadvantages of each. part b in thissection talks about, "evaluating internal controlcomponents including deficiencies and significant deficiencies". what theexaminer wants you to be able to do is to identify and evaluate. evaluate,looking at strengths and deficiencies of internal control systems. and also in a scenario be able to pullout which are the most important or significant deficiencies. finally ittalks about the limitations of internal control components.

well i'm sure you're aware that no internalcontrol system is 100% foolproof. but why is it? and there are many reasons. some ofthem will be down to the design of the system itself, others are just inherent, the fact thatpeople are involved and people have inherent frailties in their personalitiesis a reason why no internal control system is perfect, but you need to beable to explain why this is. the third area of the syllabus looks at testsof controls, but before it gets into the detail it wants you in part a to be able todescribe computer systems, computer system controls including general andapplication controls. and here you've got to

know the distinction. it's no good justhaving a simple awareness that there's things like passwords, protection thatcould be used, there could be virus checks or backups orbatch controls or check digit controls, you've got to be able to categorize theminto either general or application. general controls are those which managesystem integrity, whereas application controls are around the input of data toensure it's complete and accurate, input into a system. it then moves into part b where you are asked to describe control objectives, procedures, activities, and tests ofcontrol. well, if you are asked about controlobjectives these could be on any of

those areas 1-6, any system that theexaminer chooses. but at a high level if i was asked aboutcontrol objectives i would always start my answer with the words, "to ensure that".control objectives, they are there to ensure something good happens or toensure something bad does not happen. for example; with the sales system to ensurethat we only sell to creditworthy customers, for the purchases system toensure that goods that are orderd are actually needed in the business itself,the payroll to ensure that we only pay our employees for work that they haveactually performed, inventory to ensure that we store inventory in effectivemanners to maintain it's quality, the cash

system to ensure that there is a minimumrisk of cash been fraudulently misappropriated by employees, non-currentassets to ensure that the purchase of any non current assets is authorized byan appropriate person and there is a business need. so again i could gothrough all of those six areas and link it back to the control objectives. interms of control procedures, i've got another pneumonic here, you need to beable to come up with control procedures to manage objectives. 'apips' is a littlepneumonic here, the 'a' stands for authorization controls, the 'p'performance review. well, performance review taking that one specifically, when iworked in industry a lot of my managers

the first thing they did when they camein on the morning, because i worked in retail, was still look at current sales oryesterday's sales compared to budgets and targets. why didthey do that? well they were looking for anomalies that might suggest thatsomething's gone wrong, that there's been a breach in a particular control in aparticular store. so performance review was a really effective control procedureto identify potential anomalies in internal control. we've also gotinformation processing and physical controls as well as segregation ofduties. so 'apips' just gives you some broad categories and

types of internal control proceduresthat a business may implement. coming down to tests of control, well, tests of controls are there for theauditor, the auditor, to ensure that the system the client system is operatingeffectively. tests of control are done by the auditor. if you're asked tocome up with tests of control then i think of two words. there are others thatdescribe the procedures of testing controls but i think if you've gotinspection and observation in your mind in a question which asks you for testsof control you're pretty much half way there to pass on that question but i'llsee that later on when we look at a real

past exam question. so that's section 3,and the final section, section 4, is about communication on internal control. wellfirst of all you need to understand how, when, who, should report back deficienciesin internal control. i'm sure you've all heard of the management letter, i thinkyou need to understand the format and the contents of a typical managementletter as well as what goes into the appendix. but there are other methods tofeedback to management. who would you speak to? would it be directors, would it be the auditcommittee? when? if you found a significant deficiency at the start ofthe audit would you wait till the management letter to highlight that? so ithink you need to be aware of the

broader way we report back internal control deficiencies. part b ofsection 4 talks about your need to be able to explain in a format suitable forinclusion in a management letter significant deficiencies andrecommendations to overcome those deficiencies. now that suggests when iread that two parts to an answer, but remember your examiner may ask youfor three elements; to identify and explain a deficiency, to explain theconsequence as well as giving a recommendation. therefore, your answer may have two columns or three columnsdepending on the requirement itself. now

i hope that what we've seen there byrunning through the syllabus in the more detailed study guide is hopefullyhighlighting areas that you're confident with and areas where perhaps you need tobuild your knowledge. internal control is not the most difficult area of thesyllabus but it's one where you really need, you really need a sound understanding and a sound knowledge on which to base your answers to thequestions set by the examiner. let's move on, i want to move on now to try and buildconfidence even more thinking of what we've just covered in the study guide tolook at some practical aswering of internal control questions. i'm going tolook at two types; were going to look at

some mcq's and we're going to lookat some longer questions. we're going to look at six multiple choice questions,two from each of the specimen paper, the december '14 paper and june '15 paper. we will then look at too long questions from june 2015. so with that hopefully we will beable to look at some basic exam technique as well as applying our knowledge to thequestions. so let's start with the specimen paper, this was question 4in the specimen paper; "application controls are manual or automatedprocedures that operate over accounting applications to ensure that alltransactions are complete and accurate". well, "which two of the following areapplication controls?". well here it links

straight back into the syllabus and studyguide, as i'm sure you can see, but here you need to understand the differentcategories of control. well password protection is the perfectexample, the perfect example, of a general control. so that is definitely not right. batchcontrols are the perfect example of an application control. if you'restruggling to remember what batch controls are as you can see by thepicture there of a calculator with a till roll, i always wanted a calculator with a till roll, ithought only the best accountants would own one of those, but if i had oneand i was entering data into a computer,

what i could do to ensure that i enterthe data accurately, let's say there was sales invoices, well i could add up manually on my calculator all of the invoice totals, involves values, that iwas going to enter into my computer system. i could then sum it and print offthat batch of invoice values. i could then enter the data the individual salesinvoices into the computer, but before i process that data into the computer icould check that the totals of my manual are adding up and what i have entered into thecomputer system itself, agree. that's called a batch control. it can bemanually done or sometimes computer systems themselves do an automated batchcontrol. well, with that in mind i can actually

discount, can't i, answers a and b. well i canactually get to the right answer simply by considering points one and two, becausethe answers must be d. because for a, 1 and 4, well 1's wrong. answer b, 3 and 4, well i know's 2 right. c, 1 and 2, well no no no 1 isn'tright, so the answer must be d. but there is where the risk arises. too often, imyself have made mistakes, i've thought i've got the right answer and then just movedon, it's always worth just checking that your answer is right. let's move throughthe last two points; "one for one checking"? well i've got no idea what that is so let's move on to thenext one; "regular back up of programs". well backups are just general controls. that'sdisplaying my knowledge. i know that

number four is wrong, it gives meconfidence that number three must be right even though i'm not exactly surewhat it is. i'm presuming one for one checking is where you enter a piece of data into acomputer system and either yourself or a colleague checks that you've entered the right data. thatto me is about data input accuracy therefore an application control. let'smove on this number 12 from the specimen paper; "which of the following is not setout as a component of internal control within isa 315?". well here you've got a pneumonic. the pneumonic is crime. these questions are beautiful because you know you're going to get it right. as long as you understand

crime, as long as you can recall theelements then straight away you must know that its part c, answer c sorry, that isnot a component. the control environment is and the information system is. soknowledge is power, it really is, especially in some of these multiplechoice questions. moving on, let's move to december '14. this is question 6; "which of the following procedures are tests ofcontrol", remember the tests of control focus on evaluating the effectiveness ofthe controls implemented by the company at preventing or detecting materialmisstatements. so they focus on the order to evaluating whether the clientsystems are effective. well let's start at the

top and work down shall we? so firstof all number 1; "observe whether the client staff arefollowing the inventory count instructions". well yeah, i think that'smaking sure that the client's controls are operating effectively. if they've gotinstructions in place lets ensure that they are following thoseinstructions. i'd actually have liked to have read those instructions before hand first to makesure the instructions are good enough but i think on its own number 1 isdefinitely a test of control. with that in mind, i can rule in answers b and cand i can rule out answers a and d. so 3 is definitely out, but actually just readthrough c again

don't just rule it out and ignore it, make sure you're comfortable that you've got to the right answer. "obtain asample of the last goods received notes and goods despatched notes and follow through to ensure inclusion in the correct accounting period", is the perfect description of acut-off test, and a cut-off test is a substantive procedure testing theassertion of cut-off. well now i'm left with 2 and 4. let's start with 2maybe; "review inventory present in the warehouse for evidence of damage or obsolescence". well if i'm looking for evidence of damage or obsolescence that's going to impactpotentially the value of the goods,

valuation very much an assertion, so asubstantive procedure. compared to number 4 where, "inspect and reviewmanagement's inventory instructions", that's really what i wanted to dobefore i observed the client, actually following them to make sure the client'scontrols, their inventory count instructions were effective. so it's gotto be 1 and 4, it's got to be answer b. moving on this is again fromdecember '14. now i think this is a tough question. why do i think it's tough? wellbecause we have set, as a tutor i have set this question several times in class andgot the answers in to mark from my students and they get this wrong quitefrequently. remember with mcq's

don't expect to walk into this exam andbe getting 10 or 11 or 12 out of 12. the multiple choice questions are not easy. don't expect to be scoring 90 or a 100 percent. you score 60, 70, 80 percent inyour multiple choice question you're doing fabulously well. remember the passmark is 50%. don't get down hearted if you're scoring in the fifties andsixties that's a pass you then need to follow that up with a strong writtensection and you will pass. so lets look at this question now; "which of the following is adisadvantage of recording accounting and control systems usinginternal control questionnaires?". internal control questionnaires, listsof questions which the client can answer

very easily; have they got a control inplace? they would answer yes, have they not got that control in place, answer no. well if it's long lists of questions, sorry aslong as the questions relating to controls that the client may ormay not have been, then yeah, i think those questionnaires would have a large number of irrelevant controls. that is a disadvantage, there's lots of things thataren't present. what about b; "it can be difficult to identify missing controls". well frankly no. to identify controls all you've got to do as an auditor is look at the responses. "yes's" show a control is present, "no" shows a controlisn't present, so i would say it's easy

to identify missing controls, just lookfor the note. what about c; "they are time consuming to complete". well, you know what, i thought yes. originally my gut reaction was yes, they are time consuming to complete. why?well because there's long list of questions some of which are irrelevant. so i dothink they can be time consuming. so what do i do now ,i've got a and c. obviously, justguess. but no we don't have to guess maybe stand back for a second think for 30seconds see if you can rule out one of theanswers and then move on. well here, when i thought again aboutpart c, well if we didn't do internal control question a's

we may well have to observe processes, writenarrative notes, construct flowcharts. and actually i think that would be far moretime consuming than a questionnaire. so then i changed my mind. no. in comparison to othertechniques, icq's, 'internal control questionnaires', are not time consuming tocomplete. the answer must be s. that allows us to move on to june '15. again another tough question. why? again i give it to my students and theystruggled with this one. in fact i thought, this is my personalopinion, i thought the june '15 questions were the hardest mcq's that i have seenfrom the three papers so far; specimen, december '14, june '15. however, awell prepared candidate should have been

comfortable, comfortably capable ofscoring a solid pass mark. let's look at this first one. number 3; "which of thefollowing is not an inherent limitation of internal control systems?". and i think thewording just threw people; "inherent limitation". well inherent, it's there, it'sgot nothing to do with the controls themselves there's just an inherentlimitation to control systems in their own right. well part a, "insufficient segregation ofduties", well i think that is a problem but i think that is a problem related tothe controls themselves. the control procedures implemented by the clientshave not segregated duties enough.

remember the question asks for, "which ofthe following is not an inherent limitation?'. well i actually think part a isnot an inherent limitation, so a must be the answer. but looking down to b and c, makesure you get it right. well the idea that employees may 'collude'together to commit a fraud or the risk of possibility that errors, sorry, humans make errors in their work, youcan't really legislate against removing that in it's entirety. you can't removethe risk of human error, you can't remove the risk of collusionby humans. so which are just there, which are inherent; b and c. part a is notinherent because we can design the system to

remove the segregation of duty issue. finally number 12. when this came out,myself my other fa tutors in london, we had a right go at this one. we came upwith different ideas, we struggled. we eventually got to what we thought wasthe right answer and then when we saw the examiner's comments the examiner actually put this one inher examiners commentary so we knew we had the right answer, but i think this istough. "which two of the following controls of asales system ensure that all goods despatched are completely and accuratelyinvoiced?". let's start at the top;

"goods dispatched notes are matched tosales invoices", so we're looking for goods that have been completely and accuratelyinvoiced following dispatch. well, if goods despatched are matched to salesinvoices that seems right. by matching goods despatched notes to their corresponding invoices then you'll be proven that all goodshave been completely and accurately dispatched, so i think number 1 is right. soimmediately if i've got no other idea i can simply do a 50/50 guess between aand d. let's look down. well in that case i know that number 3 is wrongbut let's deal with them in order; "sales invoices are sequentially numbered".sales invoices are sequentially numbered. how does that

relate to goods being dispatched? i can'tsee anything at all, so i'm assuming that's wrong, it can't be right. number 3, well i know it's wrongbecause a or d must be the right answers. but "sales invoices matched to customerorders"? again where's the link to goods dispatched? so i'd rule out number 3. myproblem was number 4. even today i struggle a bit to answer this. why woulda regular review of unfulfilled orders ensure the goods despatched are completeand accurately invoiced? this still seems to be a bit of a disconnect. if i stand back and think, i can argue theright answer would be that if goods haven't been fulfilled then it maybecause the order is still outstanding

on the system. it may be the goods havebeen dispatched but they haven't yet been invoiced, so regularly reviewing unfulfilled orders could help ensure that we've got complete andaccurate invoicing at goods despatched. i don't particularly like that questionbut i could have got to the right answer. the right answer b and d. so that concludesmy review of the multiple choice questions. just a final comment, yes very much build on your knowledge and application skills but also there's examtechnique in there, ruling items in, ruling items out to make the best educatedguesses where you don't actually know

the exact answer.

Rabu, 18 Januari 2017

assurance audit

assurance audit

first off all, thank you for taking your time out ofyour lunch to join us here. i appreciate you guys spendingthe time here with us today. my name is ken,this is my colleague om. we come from the office365 trust team. so our team is basically designed toessentially private transparency and view into what we do tomany of our contractual and regulatory obligations thatultimately help you guys deal with your issues around security andcompliance.

and ultimately gain a level oftrust with office 365 with you or your customer's data. so when you think about what wedo here, there are a number of investments that we made in office365 around our trust investments. around transparencyaround our trust. and you should really expectthese from any cloud offering. so while we're really gonnabe talking about o 365 here, a lot of what we talk abouthere applies to azure, it applies to dynamics crmin the cloud.

so this is a very common narrativethat you should be seeing across all of our enterprise cloud properties. so if you think about how youwanna start with your principles, you gotta think about whatwe're trying to protect here. you want principles that are worthyof the data that's actually being stored in the cloud service. you've trusted us with your data,you want us to compute over it. you want us to provideinferences and things on top of that data to giveit back to you in a value state.

so we need to respect that data andhow we handle it. so when you think about sort ofthe pillars of a trust narrative, it first starts with security. all right,how do we secure the system? how is the infrastructureproviding an environment to where your data can be handled properly,safely, and securely? both from internal andexternal forces. then you wanna think aboutprivacy and control. who sees the data, what are thecontrols on top of that data?

and even what are the privacycontrols that you as a tenant or a user have on the system. think about things like, features, like dlp, features like the rmsrights management servers, right? how do you have the controlsin order to, as a tenant or a user, share or not share yourdata in a very appropriate manner? when you think aboutthe term compliance, compliance is a prettyoverloaded term. you can swap out the termgovernance, you could swap out

the term policy, compliance meansa lot of things to a lot of people. the way i look at it is, as a cloud service provider we makea number of commitments just at the infrastructure level that allowyou to build on top of, right. so we go off and obtain our externalcertifications iso, sox, fisma. makes things around hepa commitment,e model clauses. that's the foundation on whichother things can then be built, and the layers upon which the trustnarrative can then be shared. finally, after we do all this

we just need to betransparent about it. right, not a day goes by thata customer doesn't ask somebody, where's my data? how do you handle my data? where does the datago in this scenario? i'm in the middle east buti have a user roaming in europe. what happens to that data? so, there's no end of discussionabout where does the data flow and who has access to it?

what we try to do isthen take all of that and make it transparent to you. right, so you can answerthose questions yourself. when people ask or if it's your question, the resourcesare right there available to you. in order foryou to get the answers you need. so now when you have that sort ofthose pillars, you look at our sort of trust narrative thatwe lay on top of that. when you think about it, againstarting with security, right, and

this goes all the way downto the physical layer, we talk about buildings. we talk about hard drives. we talk about whogets into the cage. when the the network cardgoes off on a machine, how do you get that fixed, right? so all of those have got a securityimplication to the system, right? when you start lookingfurther up that stack, what's the security ofthe application layer?

what's the security ofthe administrative plane that we have into those applications? so every one of thoselayers upon one another. and then again,you take the next step up and go right to the end user experience, the administrator experience,how do you secure your data? data, a sharepoint library,what controls are available for you to make sure that data is onlyseen by the financial controller and the president, right.

there's the salesnumbers are there or maybe it's an hr system thatyou implemented on top. so all of those layers of controlmake sure that your data is secure. we talked a bit about compliance. our layers of compliancefundamentally start with industry standard, internationalcertifications, and regulations, right. so we basically do those thingsin order to answer your chief risk officer or your complianceofficer that says every one of my

cloud service providers need tohave the following certifications. and we layer those up on top andso we run all the way from some very simple ones like the iso,to some very deep ones on the fisma fedramp site forfederal government capabilities. you've heard about some ofthe go-locals that we do. so i think we just announcedthe other day, moving into germany, there was a sessionyesterday on that. well for every one of thoseregions that we go into, we get a laundry list of all thecertifications that have to be met,

by certain verticals, by certainindustries in those countries. and so we start to work on that. and so before we make that stepinto any market, we have to tackle all of the obligations thatcome with that market. in order to make sure that whenthe doors are opened up and we can sell you our first mailbox, your first sharepoint site,it's all set ready to go. then we look at privacy. privacy, the thing thatis dramatically changing.

all right, it changes every day. the primitives that we look at is,who has access to your data, do you know who has collected yourdata and how's it being used? so you're gonna see things likeour privacy statements sprinkled everywhere. there are optional things thatyou can do sometimes where we've integrated little bitsof bing into office 365. you will know when that happens. you will make a conscious choice andyou'll understand what

bing's privacy statement is whenthat data is used in those services. so all of this together means you'llhave a clear vision about what we will do if your data andhow it'll be protected. so take a quick look at security. kind of look at thisconcentric pie shaped model. all right we're not gonna gothrough every one of these, but if you think about it, that innerred circle are all the things that we will do in order toprovide a basis for security. isolate the customer data,it's in one place.

we don't sprinkle it out everywhere,right. the data is encrypted. if you're familiar with,we call it the brad smith memo. about a year anda half ago, brad smith, made a very pronounced announcementsaying all your customer data's going to be encrypted at rest,in transit, and in processing. so, those type of commitments, wherethe data is being fully encrypted. you wind up with a fullmonitoring system. everything about our operationsmodel is monitored 24 hours a day.

intrusion detection,malicious behavior detection, all of those things thatyou layer on top of that, that help you find somethingthat just doesn't look right. it might be okay, but we wanna makesure that it's just an anomaly and not some maliciousactivity happening. you look at all of that and you seethat next sort of darker circle, these are some of the thingsyou can do yourself, right? this is where we begin to lookat what the customer's able to do, right?

you have you owncompliance obligations. if you're a doctor,if you're a dentist, there are things that youare required to do all for yourself. for your own obligationsto report out. we're here to help you support thatwith the underlying feature set. you know you have hygieneactivities, your anti spam, your anti malware activities thatare all part of the service. so, again how you lockdown your work stations, how you're responsible for

managing your side of the compliantequation falls out to there. now when you look at sort of, whenyou put those two pieces together, that's where the third party and industry standardcertifications come in. that's where your isos and your soxand your fismas all come together. they're the frameworks that actuallyguide companies like microsoft and cloud service providers and say, here's what accesscontrol should look like. here's how you evaluate it, here'show you test it, here's the evidence

that you have to prove and showthat it's actually up and working. all right,those third party certifications, independently audited,independently verified. so we just can't say we thinkwe're iso today, all right? we have auditors yearly coming in,validating our processes, validating our people. and so, we obtain thosecertifications year upon year upon year, and they're all validated. so when you think about a defense indepth from a security perspective

think about if we're gonna buildthis up from the bottom up. this is just your standardstack discussion, right? what do we do at the base level? there's a piece of a cement livingout in the desert somewhere that we call a data center, right? how do we protect that? what's the security? what's the physical access? you walk down that hallway,what cameras are on?

what racks? and sort of who can get in? what's the escort policy ofpeople coming into that facility? all of that is just controlledat the facility level, right? network perimeter security. routers, firewalls,malicious behavior detectors, right? so if you're seeing 90,000connections from this one ip address, might be a little butsuspicious do the throttle so the evasive maneuvers,protect the service, right?

there are so many tenants in here wecan't allow a single attack to bring down an entire set of tendencies orthe server itself. now you talk aboutthe internal network. this is our networkinto the service. multifactor off, right? making sure that no oneperson can just get into the service withoutgoing through approvals and providing at least two piecesof authentication to get in. so very, very difficult to get in.

look at the host now,that's the boxes that we run. right, access control monitoring. making sure that our boxes, whichare in our cloud are malware free. don't get polluted by, maybe,sloppy operation code. anything like that gets cleaned out,right? so, we make sure that the boxesthemselves maintain their level of health. now, we're talking one step up. we're talking about o365 now,exchange online,

sharepoint online beingdeployed on these boxes, right? so now we have an entireengineering process that microsoft is famously known for. how do we develop software? what are the processes? every code check-in hasa number of peer code reviews, may even need to go, depending onthe level of the change, may even need a very specific security reviewand/or sign off by a senior manager. so we have this process by whichwe can then assert the code itself

is actually well engineered. now we talk aboutaccount management. this is where essentiallynow we track the users. what is the activity that's goingon with each individual user? do we actually know thatthey've been trained? if you are given permissioninto office 365, you go through background screenings,you go through privacy training. a number of things are contingenton you getting access to the system prior to you gettingaccess to the system.

and finally we get up to the data. you've jammed enoughdata into office 365, this is how we are gonnaprotect that data, right? we do threat vulnerability. how would you do sequelinjection on customer data? every input that youare allowed through o365, we have a threat validatedthat input and the output. real quick, isolated customer data, in a multi tenantservice like office 365,

you've gotta think about that moreas a logical isolation, right? the only way you get toscale is to actually share. so essentially, we have the datain the cloud, in multi-tenant environment it is designed tosupport logical isolation. so, your data is maybe physicallysitting on the ox site next to somebody else. but from an application layer,there's no way those two pieces of data are gonna be co-joinedin any way, shape, or form. so, it's there toprotect the intended and

unintended bleeding of data, right? we don't want a processto come over and say, well, we're doing thiscompute over data but somehow we have two tenant'sdata combined together to count the number of meetings thatsomebody has, for instance, right? so we wanna make sure those twopieces of data are kept separate. and then secure media handling. this goes back to that downto that facility level. what happened when thathard drive becomes old,

needs to be swapped out,showing intermittent failures? how do you determine whenthat needs to happen and the process by which thatcan be done securely, right? all of our systems are bitlockered. so soon as that drive comesout of the server hardware, it's completely encrypted forany other use. so the data in thereis completely dead. but we don't stop there, we havea physical destruction protocol. we have a number of

deprovisioning protocols thatare all part of the certifications that this hardware has togo through on its way out. encryption at rest, in transit,we talked about this briefly. two simple slides here. if you think aboutwhat we do in transit, we do encryption transit in a tls,we have a hierarchy of ciphers, you'll hear us say quite often werequire a fips 140-2 set of ciphers. while we still have a wide range ofciphers that fit into that category, we have a very strict ordering thathave been reviewed by the government

staff which says the highestorder ciphers will be used first. so if you come in with a weakercipher, we can still support it, but it will not be the first of choice. so as we walk down our security, we will hit the highest ciphersfirst and challenge you. so if you do support a higher levelcipher, even though it may not be higher on your side, we will ask forthat first from you. so, in transit and at rest, wetalked a little bit about bitlocker, bitlocker doing the core disk level,but

at the application layer,customer data is also encrypted at the application layer beforeit's committed to storage. you'll also notice that both in transit that encryptionis also from the client. so client to server as well,needs to be encrypted. [blank audio] now that weactually have your data, how do we talk about ouraccess to your data? what we have is thisthing called lockbox. nobody has standing kinetic accessto the production environment.

you have potential access becauseyou've gone through background screenings. you've gone through trainings, and that gives you just the abilityto ask for permission to go in. we have multiple clouds, right? we have a government cloud, we have o365 public,we opened the ones in germany. so each of those could potentiallyhave their own unique requirements. so as those requirementsare absorbed,

that predicates your accessinto that environment. if you're gonna access anythingto do with customer data, you go through our lockbox. a lockbox essentially is somethingthat grants you temporary access into the environment. the environment then says, you'd like to make a requestto go into the data center? logically, you manager approves and potentially your manager's managermay have to approve as well.

there is an offering called customerlockbox, which for an extra add on, as a customer, you can beinserted into that approval path. so if you make a request formicrosoft to look at or fix your pieces of data that mightbe causing problems, you are part of that approval path for us tohandle the data on your behalf. you notice that we come in from the microsoftcorporate campus or the network. that again requires encryption,secure access and multi factor auth. all right, so a couple of modelsthat we have on the security side.

first one is,we try to prevent breach. and this all the way we design anddevelop the system, right? this is the network routings that wedo, this is the data isolations and network isolations, every pieceof code is threat modeled code reviewed, and there's a set ofgames that go on to validate that we've done the best we can from acode and infrastructure perspective. then we assume breach. we just assume that there'ssomeone in the network. we assume that there someone outthere so we're constantly looking.

in fact some on of thosepeople are our own people. we have a red team blue team. people familiar with redteam blue team semantics? we have an internal people,we have attack for some defenders. they represent, essentiallya malicious person in the company who has access to the resourcesof the company, and then they basically,they try to break in. they wind up telling you,hey, there's a guy out there with a password sittingin text file somewhere.

there's a guy out here doing this,so we attack ourselves internally and then we defend, becauseour reaction isn't evaluated. how long did it takeus to find them? what did it take to get thatperson out of the environment? so we play these continual set ofwar games against the servers itself internally. so if you think about whatthe assume breach does, it validates our attack vectors,our penetration ability, it looks at our response times andwe're measured each and

every day against ourability to react. it also measures some ofour isolation techniques. so if you think about an attack, oneof the things that typically happens is you break into the weakestpoint and then you try to pivot. once i'm here, can i get there? and once i'm there can i get there? so we put in multiple layers andlayers of defense and depth that preventthat from pivoting. so for instance, if somebodywere to get into exchange,

they shouldn't get into sharepoint. or if they get into thisserver in exchange, they're locked onto that server. they don't have the abilityto pivot off of it. it's all about a containment model. to minimize any typeof attack activity. that comes at a huge cost tothe engineering development teams, right? there are layers upon layers.

if you want to get into that server, you might need one of 19 accountsto get into there, right? so you don't havea separate identity for every one of these logicalthings in order to get into it. all right, privacy, again,it's all about transparency. we wanna make sure that we alwayshit that high bar that you feel good about, you know thatwhat data of yours we have, what we do with it afterwe collect it, right? so we wanna make sure that whenyou think about microsoft,

you trust us that we are just gonnado the right thing with your data. and that starts withwhere the data is stored. if you look at and orin will showyou this i think a little bit later. on our website we actuallyhave a data map that will say if you are a user inthis region provisioned this way, your planner data is here. your exchange data is here. your sharepoint data is here. so you have a clear visibility todayof where your data lives, right,

who can access it and then againwe make contractual obligations to you and the lockbox and all theother things that we talked about, about who can actually at anygiven time access your data. for the most part no onetouches customer data. it's only upon escalation where yousay, i got a sharepoint problem. this email is not traveling, where we in fact get your permissionand we say, okay, you know, through a support ticket or customersupport engagement, let's go and look at this thing together, and youcan approve our access to that data.

and then how you get notifiedwhen things change, right? we add data centers all the time. we're adding newfeatures all the time. so there's a level of notification that is just ongoing that you needto make sure you're consuming. things like planner just shows up. what does that mean to me? is it on by default,how do i deal with this? if i have certain obligations, maybei'm a hipaa obligated customer.

what does that mean to me,how do i deal with that? so if you look at the privacy inthe service world this is kind of a thing that a lot of peopleask us is what role do we play in data privacy. there's a couple of key terms here. the data subject isactually the person or the user entering their data. so, think of its as the end user. and there is somecalled data controller.

this is the person or the company who decides howthe data will be used, right? so think about like we're going toput excel spreadsheets up there we're gonna put financialinformation in them and this is how we're gonnashare the data out. that is the data controller and then you have this thingcalled the data processor. this is the person thatactually processes that data on behalf of the data controller.

so the data controller only hascertain rights to process and view that data. so as you can obviously see in anenterprise world users are the data subjects the customer, the tenant,is the data controller, and microsoft in this caseis the data processor. which is kind of different whenyou think about what happens in a consumer world. in a consumer world microsoftbecomes both the controller and the processor.

so you are the hotmail mailbox,outlook.com mailbox owner, the onedrive consumer, user. your data, you are essentiallythe admin of yourself. you're a single userof a single tenancy. we then still becomeboth the controller and the processor in order to processthat data on your behalf. so a slight differencebetween the two, more in the weeds about privacylaw and who can do what but key terms if your reallyinterested in privacy concepts

something you should understandthe roles that we play. international privacy laws andregulations iso 2718, microsoft had a huge part in helpingdefine this industry standard. we were reviewed as one ofthe people who had a very stringent privacy program in place and so wewere able to work with the industry standards and help guidethe international version of those. european model clausesnow being replaced by this thing called privacy shieldbut this is actually the ability to bring data from europe into northamerica for storage and processing.

essentially it says wecommit to handling that data the exact same way and to the samestandards as it would be in europe. and if we can do that then it'ssafe to bring that data into the united states for processing. that has gone the way it was struckdown by the eu privacy boards and there's a new one coming outthat's called privacy shield. we may have seen that recently. microsoft was the very firstcompany to actually sign up and a test to meeting privacy shield.

so we're very proud of that. all right,i'm gonna hand this over to al now. he's gonna walk you through the moreof the compliance side of things. and essentially walk you through howwe make that a transparent activity. >> thanks ken and so continuing our discussion, wetalked about security and privacy. in terms of compliance,we are focused on three things. one, we want to make surethat we as a service, are being compliant withregulations that matter to you.

you are almost 90%there to be compliant. there are certain controlsthat you still need to do or implement, butwe will take you there. if you use microsoft cloud services,we will take you up to that point. we are also making sure that we are providing you the features thatwill help you to stay compliant. so i at the end of thisday i've added slides which has various differenttracks that you can look into. into office 365 security andcompliance center.

we have a lot of different featureswhich help you to stay compliant with your regulations. and we will talk more about in ourcurrent session about what are some of the security considerationsworkbook that we are giving you, which you can use to makesure your identity's secured. now, you will say okay, how we manage to complywith all these regulations? so this is our kind of compliancelife cycle, if you will. and let me quicklywalk you through that.

so what we what is withmarket intelligence. what it means that microsoft hasdedicated teams who are focus on looking into what regulationsare upcoming in various regions, various industries. they understand how thoseregulations will impact us as a microsoft,as a service provider. and how it will impact our currentand possible new customers. by doing the deep analysis,they come up with mapping of how those controls aremapped over existing office 365 and

other cloud servicescontrol central. we then define what controlswe may need to add. let's say if we are satisfyingthe new chinese regulation. and those controls are then again,we sit down with the engineering teams and define how thosecontrols will be implemented. we document thoseimplementation details and once we implement those controls wetake those controls as well as our existing controls in two hourrigorous top body all later testing. so, we jog that there isalways some already written in

microsoft or reading us. so with that happens oncontinuous basis and what we do is that out ofthese audit, confidings and we quickly understandwhat those findings are, what is the risk of those findingsand then we prioritize and kind of a remedy those findings andtime demands. and then we continued to workon this compliance life cycle. so this is kind of an eye chart but this will give you a good view ofhow we've evolved over the years.

so if you see we studied just39 security and privacy and compliance controls in 2008. then we quickly scale to morethan hundred controls, and we achieve our iso27001 certification. but at that point we kindof started thinking that even though iso is globallyrecognized standard. we need something which ismuch deeper and detailed. so, we change our control frameworkbased on iso to control framework based on nist 800-53.

and you will see overthe years we have increased our controls implemented to morethan thousand controls now. and what has that done is that, thathas given us the foundational piece of complying with allthe global regulations we have. so when global regulations come,new global regulation come. we do mapping and we find out most of the controlshave already satisfied. there are controls here andthere, let me say four or five controls per year that we needto add but most of our controls

are satisfying all those new andupcoming revelations. so we get one leg up. and then, based on all this work. we have had achieve thisfoundational compliance piece where these are most recognized controlframeworks that we have attested to like fedramp, iso 2701, iso 2718,but we don't stop there, we understand that you who are comingfrom regulated industries, like finance, government, or healthcare,or education, for that matter. we'll also map all the requirementsthat you in your regular industry

have to our work control frameworkand we have certified against those. and then, last, but not least,we also understand that you come from different regions anddifferent countries. and each of those have their ownregular requirements, so we have mapped those regular requirementsinto our control framework, so that vr comply with those as well. so that's kind ofour thought process. now, peering to service assurance. so two years ago we starteddiscussing with our customers that

hey we have done so much security,compliance and privacy investments. but there was a disconnect. in fact if you needed to request onesingle report, you had to contact our support team, then in turncontact our compliance teams. and then complianceteam will contact you, find out whether you have nd or not. and then at end of all these processsend you a one single pdf with the one report. we said we need to stop that.

so we said what we can do,we sat down with 250 plus customers, partners, and regulators. and we started listeningto these questions of, they want to know more details. they want to know more insights, but when we kind of deep dive with themwe came up two distilled questions. one, how microsoft protects my data? they wanted to know that, andtwo, how can i protect my tenant? and we said, okay,we're going to provide you answer

in a self-service model todo these two questions. and that's how we created what wecall service assurance platform. and in service assuranceplatform we have two focus areas. one, we want to gain yourtrust with transparency. all these things thatken talked about and i touched upon securitycompliance and privacy. we want to make sure that youare able to seamlessly see that what we're going to do, so we are makingthose things available to you. and as i talk more as i do the demo,

we want to be best in classin terms of transparency. and also we want to make surethat you get information to stay secure andmake sure your tenant. so after answering these question,in service assurance, one additional thing that you get to do, is thatyou get to give us data feedback. and we really reallywant your feedback, we just started as a feature andi will demo it pretty quick now. but in each of ourservice assurance pages, you get to give us a data feedback,okay.

does this meet your need? do you need something more? we are missing something. whatever, good, bad,ugly whatever feedback you have, we want that becausewe want to improve. and our hope is that,through using service assurance, you're able to performon-demand risk assessment. whether you are evaluatingus as microsoft cloud. whether you have alreadybought seats but

you are not using it because youhave some regulatory needs and you want to do this assessment. or you have your own annual or internal audit thatyou need to satisfy. we want you to able to cometo service assurance and get information very seamlessly. and then combining that with abilityto give information around securing your tenant. we want to make sure that you areable to leverage all the investment

you have done in microsoft cloudwithout worrying about security and compliance and privacy blockers. so how we have providingyou information through service sessions,we have three pillars. one is discovery andservice assurance is delivered through office 365security and compliance center. so, in office 365 security andcompliance center, you will get to see a lot of features that youcan implement like ediscovery, dlp, alerts, anti-malware,anti-phishing, controls.

but at the same time in the serviceassurance you get to know how we are protecting your data. service assurance also knows whatindustry and geography you are from. so let's say if you are fromfinancial service industry, we will provide youcustomized data for that. if you are from healthcare, we provide you customized data forthat. if you are from government, and then most importantly,

even though you are let'ssay office 365 customer. we understand that office 365 ona cloud stack that microsoft has, which is azure, dynamics crm andour data center lm. all those reports you can getit from service assurance. you no longer have to goto three different places to get anything that youneed around microsoft cloud. and then in terms of deep insights, in deep insights we reallystart going more technical. so let's say if youhave a tenant admin,

we have a feature calledcustomer security considerations. that workbook that you can downloadand you get detailed listing of what controls you as a tenantadmin control can implement. we have given you the links to goto those configuration screen and configure those controls. and where available we have givenyou powershell scripts to run those. and then we also have someother faqs and whitepapers that talk about how we do encryption,how we do data isolation. so ken talked about those, but

if you want deep dive onhow actually technically we achieve those things, you are ableto get that information here. and last but not least, as i said we wanted to betransparent beyond our competitors. so we come up with featurecalled audited controls. in this feature not only will tellyou what controls are implemented, but will tell you how weimplemented those controls. and how our third-party auditorshave tested those controls. so for example, let's say if yougo want to dig into standard.

you get to see what controlswe have implemented under the. what each control area has interms of number of controls. and for each of the control, youget to see how we implemented it. and how we tested it, who tested it,when it was tested, and whether it has passed or failed. we also want to give you abilityto just look for a keyword. let's say, if you are interestedin data deletion policies or encryption. you just put that keyword andwe will give you focus

controls around the areathat you are interested in, you can quickly lookinto those controls. but more importantly, we want to betransparent completely with you. so for example, if we havefindings for any of our standards, we will make those available to you,what those findings are. so you can quickly go andunderstand what just findings are. and for each of the findings, alongwith the implementation details and testing plan will also tellyou our management response. and we will tell you three thingsin that management response.

one, what was the riskof that finding? so you understand okay,it is a minor finding or it is a major finding. two, we will tell you what are someof the compensating controls that mitigate that finding? and three, we'll tell youwhat we are doing about it. whether we have mitigated it,whether we have remediated it. or what we are going to do, andwhen we are going to do it. so as you see,we want to be completely transparent

to make sure you get to getinformation that you need. so in summary, we wanted to makesure that service assurance gives you ability to doon-demand risk assessment. it gives you ability to understandwhat controls microsoft has implemented aroundyour cloud services. it gives you ability tounderstand how you can secure and compliant in your tenancy. and it is your one-stop shop toget the information that you need. now i'll go in to quickly the demos,if you will.

so this is the onboarding links forour service assurance and service trust portal. only difference being,if you are office 365 customer or a trial tenant, you're able toget access to service assurance. same information is availablein service trust portal for customers who are from azure ordynamics crm. so let's see how it looks like,i've already logged in here. so let me bring it here. so this is what the office 365security and compliance center looks

like, and one of the featureis service assurance. and i probably have to login again real quick if, okay i'm still logged in. so as you see in compliance reports, you get to see various reportsacross microsoft cloud. so these are the various [inaudible]assessment reports from azure, intune, office 365. then you get to see iso reports,for again, azure, dynamic crm, mcio,which is our data center layer.

and office 365 andyammer at one place. you can download this report. we have soc reports over here, and then what we havecalled trust documents. and trust documents again acrossthe microsoft cloud stack you get to know things like howwe do the encryption. how we do the data resiliency,how we manage privacy in office 365, how we achieve tenant isolation. and i talked about thiscustomer security configuration

preview document. so let me bring that document. so this is the documentthat you can download and we have mapped variouscontrols according to various control considerations,as well as risk assessments. so let's say if you are worriedabout access control, you click here, and you get detailed controls thatyou can implement in your tenant. and you get to seehow you can go and

configure that by directlygoing to those screens. or wherever possible we havepowershell script for to run so you can quicklyimplement those controls. because we understandthat compliance and security is joint efforton cloud service provider. we as a cloud service provider havecommitments and deliver the controls to make sure that our servicedelivery is secure and compliant. but you, as the tenant admins,have some controls that are owned by you andwe want to make sure it's easy for

you understand what those are andhow you go about it. and then i talked aboutaudited controls, right? so this is audited control in live. you can simply download all of ourcontrol set around iso 27001 and iso 27018 andjust in excel sheet and then you can munchthat data as you like. but, then as i said, you can gointo a particular standard and look into what controlswe have implemented. and for each of that controlsyou get to see how these were

implemented by microsoft, how it wastested by our third party auditors and when they were tested,whether they have passed or not. so, we're hoping by providingyou this level of transparency, we can earn your trust. so, going back to the presentation. three things you can do tostay secure and compliant. one, please log in andon-board to service assurance. and again, the links are here. two, you have teamswithin an organization,

like information security team,risk team, compliance team, that you can give accessto in service assurance. and our on-boarding documenttalks about how you can do that. once they get access,if you are admin, you don't have to worry aboutproviding them the reports. they themselves come anddo the self service and get access to all information. and then, we'll go backto the service assurance. each of the page havethis feedback loop.

if you use service assurance,please give us feedback. again, good, bad, ugly, all welcome, because this feedback directlycomes to our engineering teams. and we are obligated tounderstand how we can improve. so having said that, we have some giveaways withsome question and answer. but we will stop here and kind oftake any questions that you have. any questions that we can answer,yes? >> so you went real fast

from slides that i would have likedto have seen, but it doesn't matter. one thing i did not see there, we have a particularchallenge from korea. korea has very stringentpii regulations,etc. and they get down to the levelof seeing read controls. i didn't see on your list ofcertifications anything from korea. is there anything thatyou guys know about and are particularly doingwith regard to korea? >> so in terms of koreancertifications, we are working

closely with our teams who do theregular [inaudible] back analysis. and we are at this point evaluatinghow that standard impacts to us and how we can map it. so that process is ongoing,but if you see in general, our control framework is sobroad that most of the requirements we haveare kind of already baked into it. we continually assess thingslike in korea and others. so in short term, we were able tokind of guide you in terms of more detail about, okay, whether we arecomplying with that standard or not.

but that process is at this point,is ongoing. >> the short answer is not yet. >> not yet, yes. >> we saw that, okay. >> yes? >> i saw that you had the safehardware on one of your slides. >> yep. >> is the privacy shield the onethat's replacing- >> yes. >> yes, yeah.so privacy shield already replaced,

and as ken said,that was one of the, we were one of the first party whokind of worked on privacy shield. so, yes,we are already working on that and we are working on gdpr requirements. those are not due to implement. but we're not only understandingwhat the requirements are, we are working closely with thatworking group so that we can come up with the good gdpr requirements,which will be finalized pretty soon. >> there's a wind down wind upperiod between u-model clauses and

the, [laugh] sowere in the wind down phase. it's still in effect. but the other one is nowbeing ramped up for you. we're already attached to doing it, just all the documentationstill needs to be brought over. >> any other questions? okay, so we have our own questions,we have two giveaways so you have probably one insix chance to get it. so let me ask you a question, whatyou will use service assurance for?

a for risk assessment, b for helping you in your internal audit,or c all of both? here you go. second question. for accessing service assurance,you need to have a paid tenant. true or false? >> false. maybe i will give,try to somebody else. >> false, there you go.

>> [laugh]>> so you can have a trial tenant. >> [laugh]>> so, thank you so much for coming, we really appreciate it. we hope that you will able toon-board to service assurances if you're not already on-boarded. and give us feedback,we like to improve. if you have no other questions,thanks again for coming, and hopefully you will enjoythe rest of the week. >> we'll be happy to meet peopledown here if you wanna ask your

questions privately. >> yeah, thank you. >> [applause]

Selasa, 17 Januari 2017

assurance auditor salary

assurance auditor salary

hello, this is stephanie from ipasstheciaexam.com.this is the new version of my youtube video covering the cia exam pass rate.the iia has decided to release the latest two years of pass rate. the cia exampass rate in 2014, on a global scale, was 42%, and the one in 2015 was 39%. both numbers are lower than our earlier estimate of 45%. is there a regional difference? there is no further breakdown of these twopercentages, but looking at similar certification, we can get a rough estimate on diffrence of pass rates across region. the cma exam, for example, is similar to thecia exam in that there is a large number of non-us candidates. the administrator of thecma exam discloses pass rates by region up

to 2014, and you will see that the level differs greatly by region. in particular, the non-english speaking regions have the lowestperformance in both part 1 and part 2. having said that, the regional differencefor the cia exam is likely smaller due to the fact that: the exam is offered in 17 languages throughout the world. so candidates are tested in theirown language. it is 100% multiple choice questions. candidatesdon’t need to worry about essays which require good writing skills. conclusion and your next step: at 39%, the pass rate isn't too encouraging, but let’s focus on doing our best in the exam

preparation. that’s what you can do:understand cia exam format, pick a good review course, andwork on lots of practice questions to get well prepared. i hope this short video answers your question on the cia exam pass rate. if you haveother questions on the cia exam, feel free to let me know in the comment section below.you may also consider signing up for my youtube channel to get updates and information on this exam. thanks for watching, and see you in the next video.

Senin, 16 Januari 2017

assurance auditor job description

assurance auditor job description

what’s the difference between an accountantand an auditor? basically, accountants keep track of the money, and auditors check theirwork. but there's much more to the work than simply "balancing the books." these financialprofessionals are involved in nearly every area of all types of business, industry, andgovernment. budgeting, planning, cost control...employee compensation, asset management, new productdevelopment...and, of course, taxes--if money's involved, accountants and auditors must betoo. in fact, so many areas need accounting and auditing services that many professionalsopt to specialize. some become tax specialists. others become employee benefits experts. whilestill others concentrate on preparing the income statements and balance sheets everypublicly held corporation must file. to take

full advantage of the many opportunities,you need to have at least a bachelor's degree in accounting. if you hope to become a "certifiedpublic accountant" or "cpa," in many states you will need 150 semester hours of courseworkto be eligible to take the state exam. unlike most professionals, auditors and accountantshave tremendous flexibility in where they work and in the jobs they perform. and, aslong as there is money to spend, there will always be jobs to fill and work to do!

Minggu, 15 Januari 2017

assurance auditor

assurance auditor

>>hi, i'm devin deen, content director, hereat projectmanager.com. [music intro] >>hi, today we're going to talk about howto audit a project. when you go out at a project, you're looking for two things. you're lookingto make sure that the project is doing the right things. secondly, you want to make sure the projectis doing things right. when you go out to that project, you want to make sure that theproject team and the stakeholders, everyone around that project is receiving that auditwith open arms. for example, you don't want to have the projectteam think that they are being put under the

microscope and looked at through a magnifyingglass about all the little bits and pieces that they're doing. instead, you want to havethat project team embrace that audit. it's similar to the way a coach is going tocoach an athlete. that athlete is looking forward to getting the feedback and the pointersfrom their coach, so they can refine and improve their process and be a better athlete. that'sthe kind of culture and environment you want when you go into the audit. if you have the previous culture where peopleare being a little bit scared that they're going to get looked at or asking questionsabout the project, i'd prefer not to actually do the audit at that time and improve theculture. once that's done, get their defenses

down, if you will, and open to hearing anyfeedback that you have, then go ahead and commence the audit. how do you do the audit? first things first.look for the project doing the right things. doing the right things is all about the mechanicsof how that project is operating. go to the project manager a day before you need thefollowing items. first off, you want to ask them for the lastfour to six status reports. next, ask them for the issues, the risks, and the changerequest registers. after you get those registers, ask them togive you the statement of work, with a project charter or terms of reference, whatever thatproject used to initiate the project. it might

be just a kick off presentation. you're lookingfor the starting point, the baseline of the starting point of that project. lastly, what you want to get is also the paymentof their suppliers. get the last three months. if the project has only been running for amonth, get the last month's, ok. basically, you want to get some evidence of the projectpaying the suppliers as it has commenced. when you get these artifacts together, likei said, you should only give the project manager a day's heads up. they should be able to producethese things quickly for you if they're using project management software, like projectmanager.com,for example. they should just give you a login and direct you to where they have these variousartifacts within the software, so you can

view them. if they ask for a week to come back, to giveyou this information, that should actually be a signal to you that there is some trouble,because what they're trying to do is then update those registers and take the week todo it. a project that's operating healthily and doing the right things, should have thisinformation updated on a weekly basis as part of the mechanics of the project. when you get these registers, what you wantto look for is activity. if you have a kick off presentation or statement of work, you'vegot a scope statement of what it's doing, then you actually find out that the project'sdoing something slightly different, you want

to see evidence of that change in a changerequest register or a change control form. if that doesn't happen. if that change requestform or that item of change isn't in the register, then that's an indication that the projectis encountering scope creep, but not documenting that. that's a problem. it's a problem because you'll have stakeholdersthat are expecting one thing from the statement of work or the project charter and actuallythey're getting something different because the project is doing something different.not having that difference be documented or agreed by the stakeholders or the budget holdersof the project. likewise, if you look at an issues registerand there's the entries from the start of

the project, but if the project has movedon in time, let's say it's two months in and there's no change on those issues that wereactually keyed in during the start of the project and project planning, then there'san evidence there that the project actually isn't managing issues actively. likewise with the risks. you should see changesin those registers as compared to when those registers were first put together. if you'renot seeing any evidence of those changes, that's an indication to you that the projectis actually just in a reactionary mode. they're letting the project and the tasks manage themversus the project management team and the team members actually managing the project.

these are the things that project team usesto actively manage a project to make sure they stay on the rail, stay focused on thescope, hit their deadlines and deliver things that are fit for purpose. you're looking for smoke here. if you seeany smokey items, things that look a little bit off, then there is nine times out of ten,there's some fire behind that smoke. it might be cause for you to open up the hood a littlebit more on that project and do a more detailed audit. let's say that you've looked at these registersand the artifacts and the project team is doing the right things. the next thing youwant to look for is, are they doing things

right. doing things right is all about deliveringtheir artifacts or working in a healthy manner, that is, with quality. as an example, when you're looking into doingthings right, there's a couple of things you want to get together. first off, i'd get thelast three deliverables or artifacts. let's say for example, you're developing some softwareand you're in the design phase of the project, go get the requirements document. go get theinterview notes that the team members did when they were interviewing the end usersfor the requirements for that piece of software. if you are building a building, go get theblueprints for the building or go get a code of compliance certificate, if you will, fromthe council, showing evidence that the construction

team has actually passed the plans throughcouncil and they endorse them. you want about three deliverables. go talkto three team members. i find that if you talk to one team member, you'll get one perspectiveof what's going on in the project. if you talk to a second one, you might get two perspectives.really, you want three perspectives or frames of reference to give you more of a roundedview of how that project team is interacting and working together. there's a theme here. go talk to three stakeholders.once you get the view of what the team is doing and you've seen evidence of their work,go get the stakeholders view on that. see what they have to say about how the team iscommunicating and interacting with them and

what they think about the quality of thosedeliverables. when you get those deliverables, you certainlywant to have a look at the acceptance criteria for them and make a judgement call yourselfto see if those deliverables meet the acceptance criteria and if they've been signed off bythe stakeholders. these are the basics of doing a quick auditon a project. it shouldn't take you more than two to three days to conduct this. reallywhat you're looking for in these quick audits is if there are any issues that are sort ofcome to mind that you may want to look at a little bit better. certainly at the back end of the audit, youwant to get the project management together

and the rest of the project team, give themyour feedback and help them hone and refine their skills to make that project work ina more fluid manner. if your project team, your stakeholders andyour client culture is a functional one, they will look at this audit as a part of the qualityassurance process, something that they're all looking forward to doing, not a bit ofdrudgery, but certainly something that they want to do and they need to do, so they canget that feedback. just like an athlete would from a coach and improve the way they're workingand get to a better outcome. for other project management tips and techniquesand to try out our software, come sign up at projectmanager.com.

Sabtu, 14 Januari 2017

audit and assurance aca,

audit and assurance aca,

welcome and thank you for joining thewebinar today. my name is amanda jadro. i'm a portfolio manager with tricom. asan administrative and financial services provider to the staffing and consultingindustry, it is our philosophy to be an active member of the staffing industryby staying abreast of the ever-changing marketplace. for that reason, tricom ispleased to launch the industry insider webinar series designed to share ourexpert knowledge and resources with our fellow staffing industry colleagues. one of our core values is to build relationships and become a leadingresource to staffing and consulting firms nationwide. our presenters todayare bj hoffman, michael kline, and brett

dubin. bj is a tax partner with over 23years of experience in the areas of audit, tax, litigation support. he servesclients in a wide range of industries including closely-held entities in staffing healthcare and franchise, as well as law firms. michael, a tax partner,has more than 30 years of experience providing a wide array of tax andconsulting services. leading the philadelphia offices tax service group,he serves as an advisor to clients in a range of industries including healthcare,manufacturing, distribution, staffing, real estate, and technology. he also heads thefirm's tax quality control committee. brett is a partner in the firm'sphiladelphia office and provides audit,

tax compliance, and consulting servicesto clients and a wide range of industries with a concentration offinancial services, retail, staffing, medical, and legal firms, as well as realestate. he has deep expertise in representing clients in front of the irsas well as state and local government agencies. citrin cooperman is among thelargest, nationally recognized, full service accounting, audit, tax, andbusiness advisory firms in the united states, currently ranked in the top 25.with locations across the northeast, citrin cooperman has steadily built its business serving a diverse and loyal clientelesince 1979. their daily mission is to

help clients focus on what counts. theyenhance the business and personal lives of their clients through a customizedapproach which includes offering a wide range of assistance, assurance, taxand business advisory services, including forensic services across the globe.citrin cooperman has deep experience in a variety of industries includingentertainment, financial services, franchising, health care, private equity,real estate, staffing, and technology. citrin cooperman is an independent firmassociated with moore stephens international limited. appropriateyear-end planning coupled with tailor-made tax strategies should bedesigned with your specific business in

mind to capitalize on tax code laws,reduced tax liability, and maximize business profitability. intoday's industry insider webinar session we will cover: year-end tax planningstrategies in light of recent legislation, prospective business andtax plans for the incoming administration, a briefing on the newdepartment of labor overtime regulations. rest assured by the end of this sessionyou'll be prepared for year-end planning. if you have any questions during thepresentation please utilize the q&a feature, which is located on the righttool bar. after the presentation there will be time for questions and anopportunity for you to give us your

feedback on today's webinar bycompleting a short exit poll. please join me in welcoming bj. thanks a lot amandaand good afternoon to everyone that's joining and many thanks for thatintroduction and to tricom funding in general. you guys are a pleasure to dealwith. we've worked together with many staffing clients over the years andreally just a great firm. so as amanda mentioned, just a quick littleadditional insight on citrin cooperman. we are a full service accounting firmwhich generally means that we provide audit, tax, and business consultingservices. we do have a particular focus on the staffing industry and in fact webelieve that we provide more accounting

services, tax services, and consultingservices to the staffing industry than any other accounting firm in the country.currently we provide service to more than 150 staffing firms of all shapesand sizes, everything from startups to $8, $900 million in revenues,so really across all boards and across geography of the country as well. we doin addition to the tax work, we provide audit services, m&a merger andacquisition, consulting, profitability, benchmarking, consulting. we performindustry surveys and distribute them and we serve on staffing association boardsand are very active in all the conferences and national conferences sowe have a deep understanding of the

staffing industry and we're verycommitted to the industry. today though the focus of our discussion will be onincome taxes, specifically income tax planning and i'm joined of course by mypartners in philadelphia here, michael klein and brett dubin, both tax partners.michael's the head of our tax group here in philadelphia and each of them spendsa great deal of time in the staffing space with me. so with that just a broadoutline we're going to talk about the election and potential tax plans thatcan be taken and brought to bear with the new administration in mind, we'lltalk about some of the actually enacted 2016 tax changes, speak to some year-endplanning ideas, and we're going to also

touch on a slightly unrelated topic ofthe overtime regulations that are coming into play very, very soon that will bekey to many of you. so with that let's start with the election and i meanthis section to certainly be an open session with my colleagues, more of aroundtable. there's a lot of uncertaintyhere with the tax, a plan that's been put forth by the trump administration.the trump plans, which you'll see outlines here, are really just a startingpoint. we contemplate that there will be a lot of give and take between the trump administration and congress. in general terms some of the outlined proposals are unlikely to take

effect but are starting points fornegotiations, but i think that from an overall perspective one might assumethat in a broad sense tax rates will be declining in future years so that shouldbe perhaps our guide for enacting tax planning techniques so with that justsome some points that we can talk about on the trump proposal. the first thingtrump is proposing is a reduction in the number of tax brackets. currently there's7 tax brackets out there ranging from 10% to a low 10% to a high of 39.6%. trump is proposing that we move to 3 brackets,12%, 25% and 33%. so our top rate if trump had hisway would drop from 39.6%

to 33% and that 33% bracket would kick in for married at about $225,000 oftaxable income. so as you can see the rates will drop which should meanoverall tax burdens drop but there's some offsetting provisions also thatmight serve to increase taxpayers' tax liabilities. hey bj so it's michael klein.just wanted to jump in there an interesting fact if you look at thebrackets again you'll notice that for some americans the lower earning taxpayers in america are actually going to have a tax increase ifyou just look at the brackets, under the current plan the highestrates... the lowest rate is 10%.

under the new plan if it were to gothrough the lowest rate would be 12% so there's a potential for a taxrate, a tax increase for lower earning individuals or americans which issort of contrary to what this plan is proposed to be attemptingto do. yeah that's interesting it certainly hasn't been highlighted to date,but that is an interesting nuance here with these brackets. capital gains,currently they're taxed at either 15% or 20% depending onwhere your income level is. trump's proposing that that stay that rate forcapital gains stay constant but the 20% capital gains rate wouldkick in for income in excess of

$225,000 forthose that are married which is a lower threshold, michael, than we're currentlyseeing correct? right now a little over $400,000 to have the 20% kick in... so the higher rate kicks in at a lower levelwhich is essentially would be a tax increase right? yes, another interestingpoint. many of us are used to having their itemized deductions, writing offcharity and taxes and mortgage interest and essentially there's an unlimitedamount that one might deduct under the current tax structure. trump has putout there that itemized deductions would be maxed out at $200,000 for married or $100,000

for singles, so in other words if you hadmore than $200,000 if you're married and have more than $200,000 of itemized deductions you'd be limited to claimingonly $200,000 of itemized deductions. now that doesn't affect most of us butcertainly for the ultra high-income taxpayers that may have huge amounts ofcharitable contributions, that would serve to limit the value of thosemajor, major charitable contributions i suppose. there is some, you know,prior to the trump proposal there was bipartisan support to limit itemized deductions, it was gone... it was previously... congresswas looking at both the republicans and

the democrats had agreed in principle tolimit itemized deductions based on the tax rate or the tax benefits so they weregoing to limit the deductions to 28%. here this is muchmore restrictive because it actually limits it to a dollar amount. sothere's a huge difference here but still in line with the congress'sattempt to limit itemized deductions in some form. on the point of overall taxsimplification, especially for those with lower incomes, the next point is anincrease in the standard deduction from $12,600 to $30,000 for married taxpayerswould ultimately serve to you know simplify the tax preparation for lowerincome taxpayers, they wouldn't have to

worry about itemizing and in fact iftheir taxable income was really before the standard deduction was lower than$30,000 they wouldn't have any tax liability at all so thatpoint speaks to overall tax simplification. there are some otherpoints of simplification, the elimination of personal exemptions which are slightlyover $4,000 currently per individual and other tax simplification proposalsaddress the dreaded amt or the alternative minimum tax, which is forthose of you that don't know, essentially a shadow tax system that lies behind thetraditional tax computation. it certainly serves to make taxpreparation more complicated and tends

to hit those upper middle classtaxpayers who have income in the range of $250,000-$450,000 of income eachyear, it serves currently to limit the value of some of their itemizeddeductions. so trump is proposing with the amt be eliminated but it is a bigrevenue generator for the government so the question remains, if you eliminate the amt and drop some of these tax rates currently atnonpartisan tax foundations estimate that that would increase the federaldebt by $5 trillion over i believe a ten-year period, so it reallyunderscores the notion that you know everyone loves tax reductions but youstill have to pay for tax reductions and

how are you going to get this throughcongress? so there's major questions about this plan.further, the estate tax which really only affects 0.2% of the u.s.population essentially affecting those with estates more than $5.5 million dollars, really for $10 million for those that aremarried, the state tax would be eliminated which would make the superwealthy happy. of course there still may be in-state inheritance taxes that arein play even if the federal estate tax is eliminated but certainly that's beena target for the republicans for a long long time to get rid of the estate tax.now the next point which is more on

point possibly too many of you staffingcompanies is the corporate tax rate, so there's been some a. uncertainty and b. asort of a moving target element here on this point. there's areal lack of clarity. first of all for those of you that are c corporations,which is probably not many of you, the maximum corporate rate is proposed to be15% for c corporations at this point in time. for those of you thatare s corporations or pass-throughs like llc's, initially there was some talk of amaximum tax rate on that business income of 15% and when we allinitially saw that we were looking at each other thinking, wow that's a majormajor tax cut for most business owners.

in reality this has been a pretty vaguepoint and there's now this notion out there from the trump side that the15% tax rate may just apply for earnings that areretained at the business level and that there might be an additional tax imposedon distributions from your business entity to the individual, so that wouldbe more akin to the double taxation that's in existence for c corporations. idon't know, michael, if you want to add any insight to that but certainlyit is a moving target and what we originally thought might be a huge, hugetax break for businesses might in fact not be much of a tax break at all. yeahi think what

trump is attempting to do with thisproposal is which is really to help small businesses that are using profitsto funnel them back into their own business and buy only on taxingundistributed earnings at 15% it allows a small business topay less and conserve cash and be able to continue to fund the growth oftheir company. with a mature business that's distributing almost allof its profits, this won't have much of an effect because of this secondary tax that's being proposed on the actual distribution of the profit, soi mean i view this as you know i was thrilled when i saw because citrincooperman is a partnership and it would

have been a huge tax break for the threeof us for us. right. however, i don't know as i started to read into the proposal ibecame a little less enthused about it than before but it will be slightlymore complicated for people in our profession to be able to track the theseamounts: how much is distributed and how much is undistributed? but clearly iview this is something helping the small business as opposed to the fully matureflow-through that a lot of our clients are already. i think it's goingto benefit more corporations, big c corporations, to be more competitive withthe rest of the world where our top corporate rates are a lot higher thanmost other developed countries. i think

the idea is to kind of lower ourcorporate rate to be more competitive with countries around the world. exactly, soyou know if i am a staffing company owner that is either an s corp or an llcthis is where i want to focus my attention in the coming months,especially when the new congress comes in in january, to see what kind ofmovement there is between trump's proposed plans and what may come through or be approved in congress. again as it stands what we've just outlined to youwould serve to increase the u.s. deficit by $5 trillion or the debt by$5 trillion, so it's hard to believe that congress will really signoff and give a green light to this

plan you know these proposals as writtenhere so i think that this just bears watching and truly is a moving targetmoving forward. so i hate to be overly speculative because we don't knowwhat's going to happen in 2017 but again it is fair to say that tax ratesshould be coming down and tax burdens should be coming down somewhat for most taxpayers, especially i would think business owners, but again a lot ofuncertainty here so with that we can sort of finish speaking to what may beand there are certain things that we do actually know for 2016 so brett if you want to take that and run with the 2016 tax update that would begreat. yeah so there have been some

permanent tax law changes for 2016.these laws were passed by congress at the end of 2015 with the path act andthat's the protecting americans from tax hikes, so what we're going to do is focuson the provisions that are most applicable to staffingcompanies and a big one here is the section 179 expensing. section 179 allowsfor the immediate deduction for purchases of property equipment, sostaffing companies you might buy a lot of furniture, computers, and equipment.before this permanent extension you're only allowed to deductyour first $25,000 of new fixed asset purchases. with thenew path act you're able to deduct $500,000

as long as you spend under $2 million of new purchase and new capital invested duringthe year which most small businesses do. so the strategy here is that if you know you're going to need to buy new computers or early in 2017 new furniture,it might pay to make these purchases in 2016, place them in service and you'llget the full deduction for it now, especially if you think that it lookslike tax rates are going to go up in the coming years, while rates seem to be ashigh as they'll ever be or at any time in the near future it might be worth itto buy furniture and equipment that you know you're going to need in theupcoming year and purchase it now and

get that deduction up front in 2016. andthere's also some other business incentives that were made permanent bythe path act. their first one is shorter recovery period for leaseholdimprovements. leasehold improvements were typically depreciated over 39 years. withthe path act it made it permanent extension that now you can depreciatethese leasehold improvements over a 15-year period of time, so you can take adepreciation expense like twice as fast as you're able to take before. the secondpoint is the recognition period for s corporation's built-in gains tax. this wasa previously a 10-year period and now it's been reduced to 5 years and thisis the period for which an s corporation

must hold its assets following aconversion from a c corporation to avoid this tax, so this really is onlyapplicable if you started out your business as a c corporation and thenlater converted your c corporation to an s corporation. you typically before had to hold on to those assets for at least 10 years or you would have to pay thisadditional built-in gains tax which can be as high as 35%. sothis is an obstacle for a lot of companies but if you were ac corporation that later on became a s corporation, this is something to lookinto and keep in mind. next point is theshareholder's basis reduction for

charitable donations for a s corp. thereused to be a disadvantage in prior years that if you were a shareholder in scorporation and you donated appreciated property, you wouldn't be able to get thefull charitable donation deduction on your personal return due to like at-risklimitations, so this new rule passed in the path act kind of eliminated that so nowshareholders can get a full deduction for this type of charity. andthe last one is the r&d credit. there's many eligible small businesses, you canuse this credit now to offset regular tax as well as payroll tax and in thestaffing world, if you have if you develop your own internal softwarethis will qualify for your r&d credit

for federal purposes. so this is where wesee mostly in our clients that in the staffing industry, any staffing companiesthat develop their own software were eligible for this r&d credit. it wasgoing to expire and with the path act, it extended it permanently so you were stillable to use the r&d credit. so those were some of the key provisions thatwere extended permanently. there are some provisions that they extended for fiveyears and not permanently. the big one for that we see for our clients andstaffing companies is the bonus depreciation. bonus depreciation is theadditional first-year depreciation of purchases of new property and equipmentsuch as computers and furniture, so if

you purchase furniture, equipment in year2016 you would get an immediate 50% deduction on that purchase ofthat equipment. so the 50% rate was... it was going to go to zero and thiswas going to be eliminated, path act extended it for five years but thepercentage goes down. in 2016 and 2017- 50%. in 2018 you only get a 40% deduction and in 2019 it goes down to 30%. and the last one, this slide is the wotc- work opportunity taxcredit. and this has been extended for five years, and this is a big deduction,a big credit for the light industrial staffing companies. this credit wasavailable to employers who hire and

retain veterans and individuals fromother target groups with significant barriers to employment, but what the pathact did was extend this to unemployed workers. so if you hire any unemployedworker they have to have been unemployed for more than 27 weeks to qualify, but ifthey have been unemployed for more than 27 weeks, you're eligible forthis wotc tax credit and this could be as much as $9,600 per employee.that's calculated up to 40% of the first $24,000 ofwages, so you can see if you pay someone $24,000 who's been unemployed, you get acredit for $9,600 against that so it's a huge credit that many lightindustrial staffing companies take

advantage of and that's been extendedfor another five years and this unemployment portion of it has just beenadded for the year 2016. so just to jump in again, to those of you thatmake regular practice of hiring in the light industrial space and other spacesas well, be sure that you are taking advantage of the work opportunity taxcredit. if you're not, you should certainly speak to your accountant aboutit. it's... you know it can be a gold mine and is really important to takeadvantage of if you have a workforce that's eligible. the next thing, the lastslide we have here is just the key business deduction for small businessesstaffing company is the automobile

expense, so we just want to highlight for2016 the standard business mileage rate is 54 cents. it's down a little bit fromthe year before, which was 57.5 cents, so this is whatdeduction you can take on your actual business miles driven during a year oryou can use... if you bought the automobile, you can now take depreciationand with the path act you're allowed to take up to $8,000 bonusdepreciation for a new automobile in the first year, plus with the $3,160 you can take over $11,000 on your automobile in the first year and thatgoes to $5,100 in the second year and in the third year $3,050 and going forward$1,875 for each year, so you see this a lot

in smaller businesses and also a lot ofstaffing companies the vehicle deduction. so these are all items that have beenenacted in law for 2016 and from here we can talk about some planning techniquesand tactics and michael, you can take it from here. thanks bj. this will be theinteresting part of this presentation. so many of our staffing clients, nomatter what size they are, are allowed to be on the cash-method of accounting andjust briefly, cash method of accounting allows you to pick up income whenthe cash is actually received from your customers as opposed to the other methodof accounting, which would be accrual method, where you are forced to in reportincome when you actually send out the

invoice. so as many of you know thedifference between when you send out the invoice and when you receive the cash,can be either a small amount of time or if you're like any of my clients itcould be a long amount of time, so there is some deferral there that youcan take advantage of if you are allowed to be on the cash method and many of ourclients and our staffing clients, fairly large ones, are on the cash-method ofaccounting. so i'm going to speak to those of you that are on the cash-methodof accounting because there's a tremendous amount of flexibility there,what went on the accrual basis is not that much and i'll address some of theplanning techniques for them as well.

so clearly in any time we do taxplanning for anybody and on any method of accounting, in a normal year we always... the golden rule is to defer income and accelerate deductions. the only time thatthat would not be the golden rule is if we are anticipating a tax increase forthe next year and in that case we would want to accelerate income and pay the lower tax in the current year as opposed to deferringit into the future year where the taxes are going to be higher. so based on thebeginning of our presentation where we see there are already taxproposals out for next year to lower income, the income tax rate, we are goingto employ the standard planning which is

defer income and acceleratedeductions. so for those of you on the cash-method of accounting, we alwayslook to try methods of deferring income and so some things we like totalk to our clients is... towards the end of the year... is if you'reable to and if your cash flow allows you to, is to slow down your billing andmaybe instead of billing at the beginning of the month and having peoplepay you at the end of the month and reporting that income, if you set outinvoices towards the end of december fully knowing that any cash that wouldcome in would most likely be in january. so that's one way to do that, however, some businesses need the cash flow and

it doesn't allow for that but certainlysomething that we try to always implement with our clients, and it'ssomething to look at starting now, i don't think it's too early right now tostart looking at invoicing and you pretty much know how your clientsare, their pay schedules, and so if you know a client pays within 15days then you may not want to bill them until late december, so that's somethingto look at. so that's the deferring income piece, now on the otherside you can accelerate deductions and that's very easy because that's totallyunder your control because under the cash-method of accounting you get todeduct expenses when you actually pay

them. on the accrual method it's betterbecause you get to deduct when you receive the invoice, so it's sort ofthe reverse but when the controls are ours, assuming we have the cash topay expenses so here what we would like to do is accelerate our deductions andthat would entail as trying to get our accounts payable as close to zero aspossible every year, fully knowing that we've paid every potential or possibleexpense we could. other things that you may want to lookat is some january expenses that you could pay right at the end of the yearsuch as rent, utilities, anything that you normal monthly expenses to try to takeadvantage of the acceleration the

deductions, definitely would do it thisyear because of the tax again because of the tax rate decrease. so that's sortof how we work with method you know with the cash-method of accounting and so ifwe go to the next slide these are additional tax planning techniques thatwe employ no matter what basis of accounting you're on. so the firstthing is bonuses. now many of you are already on a flow-through type entitywhether you're a partnership, llc, or s corporation, so bonuses to yourselveswon't really make a difference because that's the same income coming to you aswages, as opposed to flow-through income, but you should also... you should look atpaying bonuses to your staff. i'm sure

many of you do that already. if you'redoing it early in 2017 you may want to push it into '16 to get, again, takeadvantage of the higher rates and the better tax benefit in 2016, but for someof you and especially here in philadelphia it's an issue because ofthe city taxes. it's more tax advantageous for us to bonus out profitsto the shareholders or to the partners than it would be to leave it in there asprofit, so even though it's the same income the city treats it differently. iwould hope that you would consult with your tax advisor to make sure there's nothingyou can do with bonuses that could... it may not reduce your federal tax but itcertainly can be advantageous to reduce

state taxes and many local taxesand... i'm sorry, on the bonus sideespecially for staffing firms, many of you with big temporary staffingpractices have a multijurisdictional issues. you cross state lines and youhave many states where your temporary employees are, so by bonusing out yourincome with maybe with w-2 salary and zeroing out your corporate entities' income, youreduce the likelihood, at times, that your overall income will be subjected toother states tax which may or may not be beneficial depending on your individualcircumstances, so i just want to emphasize that bonusing... thenotion of bonusing and tax planning is

more than just the federal tax andpayroll taxes, it really incorporates the state taxes that many of you are subjectto in a variety of states. correct, yeah absolutely true. brett spoke aboutdonating appreciated property, that's always... and that's more at the individuallevel that's always a good technique if you have... especially if you havepublicly traded stock, it's very easy, most organizations willaccept it. the benefit of donating appreciated property is that thededuction that you get is the fair market value of the property that youcontribute and you don't recognize the gain on the difference between what youpurchased the property at and what the

value of it is at the time ofcontribution, so it's a double positive, we don't get many of those in the taxcode so when you see them and they're appropriate for youyou should take advantage of them. recognizing capital losses, that'sa very common technique. i mean that would be something that you wouldlook at your individual level. if you have capital gains either frominvestments or running through from your businesses by the end of the year orduring now, towards the end of the you, should look at your otherholdings. if there's unrealized losses in those holdings certainly think aboutharvesting them and selling and taking

the losses and they'll be able to offsetthe gains. keep in mind that you have to wait 30 days from the sale in order torepurchase that stock if you so desire. if you want to purchase the stock within 30 days, you won't be able to take the loss but a common technique is to either buy acompany that is similar to the one you sold or you know look at etfs or mutualfunds in that industry. retirement contributions are my favorite deduction because you get a deduction and it goes to... and you get the money in most casesand now i know its staffing it's difficult because of the amount ofemployees that are usually

on staff, but to the extent thatthere is a vesting, if you have a tremendous amount of turnover, this mightbe beneficial so this can be a very complicated area for those of you in thestaffing industry, although you should visit... you should look at it becausethere may be ways, methods, and ways to limit the amount of contribution yougive to your employees and the majority of the contribution, if not significantlyall the contribution, could go to you. so something to look at. and then timing of medical expenses, you know that's simply just trying to bunch yourexpenses into one year as opposed to spreading it out over two years and notbeing able to get any deduction at all,

and i think for most of us, includingthose of you or that are on the phone, that's a very difficult deduction to get.i always tell my clients you don't want that deduction because you're either reallysick or you're not making much income because there's a floor there, you haveto have a certain amount of expenses to get a deduction, so ialways hope that nobody gets that deduction because it's bad news eitherway. and then state and local taxes, again you know if you can acceleratedeductions now, you would look at your estimated payments, and for many of youthe fourth quarter estimated payment for states is due january 15th. if you can push it into

december and pay it, you can get thatdeduction in the current year as opposed towaiting till next year. however, as usual, nothing in life is free. for those of youthat are in the amt, we're paying amt that deduction is not good because foramt purposes, that deduction is not allowed and even though you may make the payment you won't get any tax benefit for it, so before you go ahead and do ityou might want to talk to your tax guy and see if there's any benefitfor you at all. if you live in the northeast of the country probably notbut take a look at it anyway. and then you know, just to touch on this lastslide for me just you know we always

tend to view tax planning for one year,however, you know, given what's going on now with the new proposals you reallyshould take a look at your tax strategy or tax planning over a two-year periodbecause you know the aggregation of the two years may be more telling than justlooking at one year at a time, so we always tend to take a broader view atsomebody's tax situation when we're planning and it doesn't always in everycase prove that we should be accelerating deductions and deferringincome. there are situations where it could be reversed but only if you lookout more than one year will you be able to see that, so again and thenlastly, i said it maybe five or seven or

eight times that because there's goingto be a rate decrease in '17 as anticipated, you know again see what youcan do in order to defer income into that year, into '17 and then acceleratedeductions into '16. so with that i'll shoot it over back to you bj.okay, so our last point here that we want to discuss isn't quite a taxplanning or tax related, but it's so critical especially for our staffingclients, we really wanted to cram this in. hopefully you are all aware thatthere are new overtime regulations coming online as of december 1st so ina couple of weeks. i actually did a webinar presentation on the overtimeregulations yesterday. it is beyond the

scope of this presentation to get intothe real minutia of this but i really need you to know a couple ofthings here. first of all, the basics. the new overtime regulations areeffective december 1st and what that means is is that many, many more of youremployees, and not just your temp employees, your internal salaried staffmay very well become eligible for overtime to the extent that they areworking more than 40 hours in a workweek. the basics are to theextent that your employees make less than $47,000 and change annuallyor $900, which breaks down to $913 a week in terms of aweekly salary, if they are below that

threshold in compensation. in alllikelihood, if they work more than 40 hours in a week, you owe them overtimeand that extends again beyond your temporary staff, it extends yourrecruiters, your hr staff, your sales staff. now there's a lot of nuances hereand some exemptions but rule of thumb is is for your internal corporate staff, ifthey're making below $47,000 a year, you need to monitor this closely. now the question is is whether this comes into play. december1st is the the start date for the regulation that was published by thedepartment of labor, however there is a small chance that there's an injunctionbrought... ruled on... there will be a

motion, there's lawsuits on this, thatwill be ruled on out of texas. next week there will be a ruling as to whetherthat these new regulations are postponed orsuspended. it's very unlikely that there's an injunction. there is a chancethat either the new congress in january or trump may set aside these regulationsbut even if that's the case, you'll still need to comply with the regulations fromdecember 1st through the date of any tweaks to this, which could extend 8, 10,12, or more months into 2017, so best be prepared for this and what does it meanessentially? what we're recommending is that you set forth... you get down intothe weeds with either your cfo or your

external accountant, lay out in aspreadsheet all your work force, predominantly your internal work forcesince you're probably paying overtime to your temps where required, but lay outhow often, how many hours typically your employees are working, what their rolesand responsibilities are, what their compensation is, and then you need tofigure out what their hourly rate is. you need to convert their salary to anhourly rate so as to determine what you're going to end up paying them forany hours worked over 40. the major change here is that you need recordsthat capture the time of your salaried employees and many of you are not usedto doing that. you need to have records,

a record-keeping system in place for yoursalaried staff so that you know whether people are working more than 40 hours ornot. now you may say, hey my salaried workforce works from 9-5, fivedays a week over and done with, they work 40 hours, it's rare that they go over, endof story. but what you don't realize is that the department of labor is nowconsidering any time spent by your employees outside of work as potentiallycompensable time, meaning that if you have employees that are answering emailsor phone calls or making sales calls, following up, monitoring activities fromhome, that's compensable time and if that crosses the employee over 40 hours youowe them over time, so this is a really

deal. and if you don't have records, i cantell you that that's a really... time keeping records, that's a really bad factin the event of either a department of labor investigation or a class-actionworkforce lawsuit which have become more prevalent also. you need to have recordsand you need to really address your policies and procedures for yourworkforce so as to delineate whether and how over time will be... whether it'sacceptable or not. for instance, some staffing companies are consideringchanging from a 40-hour typical work week to maybe a 38 or 39 hour work weekso that there may be a built-in hour or two a week for employees that typicallydo work from home. that may shelter

you from exposure to overtime. certainlyyour policies and procedures should indicate to your workforce that anyovertime must be pre-approved. now that's you know, even if the employee goes over40 hours and it's not approved you still have to pay them the overtime but atleast you can hold their feet to the fire and determine how you want todeal with chronic offenders to that policy but really there's a tonof information associated with these regulations that goes beyond the scopeof this presentation, but you need to be aware of this, you need to check withyour accountant, your cfo, and potentially your labor attorneys to help younavigate this really important topic.

with that, that brings to a close the actual presentation that we have for you today. we're certainly happy to answerany questions you may have and amanda if you would like to take it from here andcoordinate that would be fine. sounds good, so if you have anyquestions please go ahead and enter your question into either the chat or the q&asection and then we'll answer the questions as they come in. i do havea question that has come in: if an employee is paid on an hourlybasis, are they automatically eligible for time and a half overtime? welltypically the answer would be yes, although it depends on what thatemployee is doing, again it gets this...

becomes more of a legal question thananything else so before i give you an affirmative answer to that, i'd want toknow more and i'd want to probably rope in, loop in your employment attorney, buttypically the answer is yes. another important piece to that newovertime regulation is the bonuses and the percent of commission salary cancount towards that total $47,000 figure too. is that correct?yeah, so if you look at it on a weekly basis your target compensation is $913of gross pay a week that you want to try and exceed so that you'renot having to pay overtime. you can pay on an ongoing basis, 90%of that figure, so doing the math real

quick, 99% times $913, if youpay at least $821 in gross pay a week but there is a non-discretionarybonus commissions, but it must be non-discretionary and it's paid at leastquarterly, that can get you over that threshold as well, so that's an importantpoint as as well. wonderful. so what should my first step would be withregard to compliance to the overtime regulations? a first step is absolutelylaying out, in a spreadsheet format, your workforce, the typical average hoursworked per person, their roles and responsibilities, and their compensation.you need to convert their salary to at least in an hourly rate so that you canat least make some meaningful decisions

as far as your exposure to overtime.there are tactics that can be taken to sort of minimize that exposure, thatability, in the costs associated with these new regulations, but yourstarting point is getting into the weeds and laying out your workforce and yourcpa or your cfo should be able to help you with this. for accrual and cash-method for the deductions that you spoke about earlier, what is thethe determining factor as if you are on accrual basis or cash-method? so on accrual basis, i'm not sure exactly what the question is, but ifyou're on an accrual basis you would be able to deduct expenses when you receivethe invoice from your vendor, if you're

on the cash basis you woulddeduct the deduction, you would take the deduction when you actually pay the cash,so big difference there. if the question was, how you know whatdetermines whether i'm on the cash basis or accrual basis, you should generally know that most staffing companies are eligible for the cashbasis of accounting, regardless of size, and that is a good fact. and we do see staffing companies that are on the accrual basis of accounting for taxesand that's usually a major error and costs the staffing company or causes thestaffing company to be paying more on an annual basis than they need to be payingfor taxes because you're paying taxes

on receivables instead of yourcollections. i'm not sure again, like michael said, i'm not sure that that wasthe focus of the question but hopefully that answers. i think it does answer that...that looks like that was the question, so thank you. okay, what information should ibe providing to my accountant now to help with year-end tax planning? certainly, you know, clearly if what ialways ask for is a current year profit and loss statement and a current yearbalance sheet and from that point you know that's agreat starting point. what would be very helpful is if you had a good idea as towhat your invoicing is going to be

for the remainder of the year, youranticipated cash collections, as well as a list of expenses you plan on payingfor the remainder of year, and some potential expenses that could beaccelerated into 2016 that are due in early '17. if you gothrough this every year, you start to get a hang of what's needed and itbecomes a fairly easy to start to plan but certainly thoseare the keys to looking at the situation and making the best decisions. and howlikely is it that trump's tax cuts are fully enacted? can you repeat that? howlikely is it that trump's tax cuts are fully enacted? oh i mean, i'll answer, imean those are proposals, i think you

know certainly i would seriously doubtthat a 100% of them will be enacted and if they areenacted, they won't be enacted as proposed, so this is his opening salvo. ithink there's already some resistance from congress as to the extent ofthe tax cuts but it's certainly a starting point and i'm sure they'll betremendous amount of negotiations between the legislative branches untilthey finally come up with something that works but i know there's some seriousconsideration of how much this is going to add to the national deficit andtherefore you know that's why i believe and others believe that this is just astarting point. in your experience, is

there a best practice technique thatstaffing companies should be considering in the tax planning? well iwould say certainly as mentioned before that wotc, that work opportunity tax credit, is a big miss for many staffing companies. they just aren'taware of it or their accountants haven't made them aware, it really is... it can be agold mine. staffing companies also are really... as those with a lot of temps,contract workers, tend to have workers spread over many states and localjurisdictions so i think beyond the federal planning you really need to lookat the state income tax planning element of the whole picture. also the state compliance is an issue

too. we see a lot of companiesthat are in states and not paying taxes in those states so it's a good idea toget an estimate of what your exposure is. now some stateshave... it's rare, but some states have sales tax that applies to staffingrevenues, pennsylvania being one of them, and for those that are operating, youknow, dipping their toe in the water in a particular state, you may not knowexactly what those regulations are in that state and they can be verydifferent. and wotc tax credits, if you have a larger tax creditavailable than you owe in taxes, is it true that you can continue to take thatdeduction the following year and the

remaining amount that you are unable torealize in the current year? yeah, they carry over so you don't lose them, you mightnot get the full credit for it in the current year but you don't lose it, itwill carry forward to eventually when you can use it, when you have the rightbalance of taxable income to use the credits. which is nice that you don't useit or lose it you actually get the chance to take advantage of it and tricom has a great wotc program here too that we can certainly help anystaffing company get started on. if they're interested in doing it, i have a lotof information about the different categories and you can certainly reach out to you

know any of us here on the webinar today. i put my contact information as well as citron's up on the screen now. you can getmore information on how you can take advantage of those tax credits with thatprogram. is there anything else that you'd like to share with the audience beforewe wrap up today? not specifically, just understand again it's a moving target onthe tax rates, watch these overtime regulations in the next week to see ifthere's an injunction. i don't think there will be one. you have a lot of workto do with your cfos and your accountants on these issues but withsome proactive tax planning and some recognition of the new regulations thatare floating out there you should be

well taken care of. and again if you have any questions we're always happy to answer your questions, if youshould come up with something at a later time. absolutely, don't fearreaching out to us. we're happy to...gratis to give you a hand. wonderful. well again, aswe wrap up today i'd like to thank our participants for joining usand bj, michael, and brett, your time today in preparing a year-end planning, a 2016 update for businesses. we will have a recording of the webinarpresentation available on our website under tricom.com and under our resources, industry insider webinars tab. thank you again for your participation and watchfor information on our next webinar

session. have a great afternoon. thank you. thanks a lot. thank you everyone.