By Michael Baum, CPA

While the external auditor has a responsibility to maintain objectivity and independence during an audit, the audit committee is also charged with several responsibilities. Overall, the audit committee must oversee the external auditor and the quality of the auditor's work. Specifically, only the audit committee can negotiate and agree upon audit fees, determine the scope of the audit work to be performed, and make recommendations and appointments of auditors. Audit committees should also report results of quality inspections of the auditor performed during the period. Finally, the audit committee should disclose and document its assessment of the effectiveness of the external audit process. This is an important aspect of corporate governance and can help ensure that the auditor is held accountable for the work performed.

When selecting an external auditor, it is important that the audit committee or those charged with governance consider factors such as: the auditor's experience and technical expertise, how the audit report will meet needs of the shareholders, and the timing of the audit. During the audit, the committee should consistently communicate with management and the auditors as this will help influence the overall efficiency and effectiveness of the audit. The auditor will communicate items such as auditing and accounting issues that arise in reports to those charged with governance.

After the audit, the audit committee should assess the quality of the auditor's work. The committee can inquire with management or key employees that worked with the auditor to assess performance. Also, the audit committee can measure quality based on the delivery date of the final audit report. Finally, the committee can assess quality based on how the final audit report will add value to the company. For example, industry-specific metrics and supplementary information could be beneficial to stakeholders and other interested parties. In many cases, the auditor may offer additional services or resources for future transactions.

For more information or questions on this topic, please contact your professional at UHY LLP in Detroit 313 964 1040, Farmington Hills 248 355 1040 or Sterling Heights 586 254 1040, or visit us on the web at www.uhy-us.com.

By Lori DiLisio, CPA

Back in August 2014, Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern was issued by the Financial Accounting Standards Board (FASB). The standard establishes management's responsibility to evaluate whether there is substantial doubt about the organization's ability to continue as a going concern and provides related footnote disclosures under US generally accepted accounting principles (GAAP). Going concern guidance was not officially codified under US GAAP prior to issuance of No. 2014-15. The standard is effective for years ending after Dec. 15, 2016 with early adoption permitted.

The required time period for evaluating conditions that may raise substantial doubt about an entity's ability to continue as a going concern is one of the most significant changes included in the new guidance and requires consideration within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). Under current auditing standards, consideration ends one year from the date of the financial statements being audited.

GAAP requires financial statement disclosures for the following:

1. Substantial doubt is raised but is alleviated by management's plans (substantial doubt does not exist)
2. Substantial doubt is raised and is not alleviated (substantial doubt exists)

The standard defines substantial doubt as the following, "substantial doubt about an entity's ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or within one year after the date that the financial statement are available to be issued when applicable.) The term probable is defined as "the future event or events are likely to occur."

Join us at The Detroit Athletic Club for Manufacturing Outlook: "Built To Compete": Embracing Risk For a Sustainable Future, featuring keynote Cindy Pasky of Strategic Staffing Solutions. The schedule of events is as follows:

7:30AM-8:00AM Registration, breakfast and networking
8:00AM-8:10AM Opening commentary
8:10AM-8:35AM Washington's roadmap for American manufacturing sustainability
8:35AM-9:05AM Business conditions as the cycle is maturing
9:05AM-9:35AM Governance options to gain access to experience
and expertise
9:35AM-9:45AM Refreshment break
9:45AM-10:15AM Sustainability through accountability
10:15AM-10:45AM Family-owned business sustainability
10:45AM-11:15AM Attracting talent to build a competitive sustainable organization
11:15AM-11:30AM UHY Cares supporting The Empowerment Plan

CPE credit available. Shinola watch to be auctioned off to benefit
The Empowerment Plan.

Pre-registration for this complimentary program is required. Breakfast will be provided. Space is limited. Multiple registrations are welcome. To RSVP contact Jessica Dalessandro.

11/6 PLANNING FOR YOUR TAX EXEMPTION IN 2016
Take advantage of the substantial savings your company is eligible for beginning January 1, 2016 as a result of the August 2014 MMA-led successful ballot campaign to eliminate the Personal Property Tax (PPT). Learn the steps you need to take to file for your exemption and start saving on the local manufacturing PPT. Join Mike Johnston, MMA Vice President of Government Affairs, on Friday, November 6 plus experts from the Michigan Department of Treasury and Honigman, Miller, Schwartz, and Cohn, LLP. Attendees will learn necessary filing deadlines, coming early 2016, and the required information to qualify for exemption.

Who should attend? Manufacturing owners and managers, controllers, tax managers, accounting and tax staff, CFOs and others interested in state tax.

To register contact Sarah Pytel or 517 487 8521. This program is co-hosted by Michigan Manufacturers Association and the Sterling Heights Regional Chamber of Commerce. The cost is $75 for MMA members and $125 for non-members. UHY LLP is located at 12900 Hall Road in Sterling Heights. The training facility is on the fourth floor.

11/12 UHY LLP ANNUAL CONSTRUCTION OUTLOOK
Save the date for Construction Outlook 2016! Join us at UHY's training center in Farmington Hills to learn more about developing industry trends including employee retention through compensation and long-term incentives, management and union relations, current tax updates you need to know and the latest on the Affordable Care Act.

Thursday November 12
7:00AM-9:30AM

CPE credit will be offered. Pre-registration for this complimentary program is required. Breakfast will be provided. Space is limited. Multiple registrations are welcome. To RSVP contact Drew Matthews. Formal invitation to follow.

SAVE THE DATE! MORE UHY EVENTS ARE JUST AROUND THE CORNER...
12/2 UHY LLP Annual Accounting and Regulatory Update

Jerry Grady, a partner from UHY LLP's Michigan practice, was recently recognized as 'Volunteer of the Year' from the Canton Community Foundation in participation with the Plymouth Chamber of Commerce. Jerry received the State of Michigan certified award from State Representative Kurt Heise. The award was presented to Jerry at the Annual Volunteer Recognition Ceremony at the Plymouth Community Chamber of Commerce event. He has served on the Canton Foundation Board for the past six years as well as having served multiple committees in the Foundation which included help with development, finance, governance, golf and fundraising events, etc.

"The past three years I had overseen our Foundation losing our director of 20 plus years who resigned suddenly and I took over as acting director for a year running the Foundation and the staff. We put a new director in place and she lasted six months and thus I had to throw my hat back on again. The Foundation was told by many in the community that it would not survive when we lost our long serving director and obviously when the next one left they thought for sure the lights would go out. Well they never heard the phrase 'There is no Q in Grady'," jokes Jerry. "We actually have become a stronger and more solid Foundation during this turmoil and have done some amazing things since obstacles were removed and we could focus on impacting the community. In addition, it allowed us to take a step back and create a vision and strategy with a clean white board to work on."

During his time served on the board, the Foundation has created and impacted the community by awarding $500,000 to the community. "I have led a board of 15, an executive committee of four, and a staff of three for the past three years and they told me that without my leadership, my dedication, my service hours, and my vision, the Foundation would have had to fold with another or have just collapsed. I guess with all the hundreds, if not thousands of hours I have put into this over the past six years, they felt I was deserving," he explains. "I was taught at a young age that when you are blessed, you should give back to the community in any way you can. I have always seen that the more I gave of my time, the more blessed I find myself, not just in monetary ways, but in ways you only feel when the impact is felt by others. My family has always lived the Three T's model... time, talent and treasure."

Congratulations, Jerry!

UHY ADVISORS MI, INC. EARNS MBPA 'BEST & BRIGHTEST COMPANY' HONOR FOR 12TH STRAIGHT YEAR
UHY Advisors MI, Inc. has been voted by the Michigan Business & Professional Association (MPBA) as one of 2015's best and brightest companies to work for in Metropolitan Detroit for the 12th year in a row! Only companies that distinguish themselves as having the most innovative and thoughtful human resources approach can be bestowed this honor.

"We are honored to recognize the efforts of this year's 'Best and Brightest' companies. These companies have created impressive organizational value and business results through their policies and Best Practices in human resource management. This award has become a designation sought after by hundreds of Metropolitan Detroit area companies and is a powerful recruitment tool in the drive to attract and retain exceptional employees," said Jennifer Kluge, President and CEO of MBPA.

The Best and Brightest Companies to Work For� is a program of the Michigan Business and Professional Association that provides the business community with the opportunity to gain recognition, showcase their best practices and demonstrate why they are an ideal place for employees to work. This national program celebrates those companies that are making better business, creating richer lives and building a stronger community as a whole. It is presented annually in several markets including Atlanta, Boston, Chicago, Dallas, Detroit, Houston, Milwaukee, San Diego, San Francisco Bay Area, and Nationally. Nominations are now being accepted for 2016. Visit www.101bestandbrightest.com to obtain an application.

CAREERS AT UHY
Are you ready to take charge of your career path? Be sure to visit our careers page for the most up-to-date listings or contact Yolanda Rountree. Current opportunities in our Michigan offices include:

• Audit Manager, 7+ years of experience, manufacturing experience is highly preferred
• Audit Manager, 7+ years of experience, SEC experience is highly preferred
• Audit Senior Accountant, 5-7 years of experience, CPA required
• Internal Audit Risk & Compliance Manager, 7+ years of experience
• R&D Tax Specialist, 7+ years of experience
• Tax Manager, 7-10 years of experience
• Tax Senior Consultant, 4-5 years of experience, Big 4 experience is required
• Tax Senior Accountant, 5-7 years of experience, CPA required
• Director of Litigation, testifying experience required municipalities
• Senior Associate (Corporate Finance), 2-4 years of Big 4 experience highly preferred