The construction industry faces many unique challenges to survive and remain profitable. These include specific aspects of accounting and reporting for construction contracts and estimating project costs and profitability. Analyze revenue recognition under the percentage of completion method (including comparing current standards to the new FASB revenue standard) by exploring the underlying details. Reduce potential errors made using established concepts, including the shortfalls of the "cost to cost" method. Take a focused look at construction contractors' accounting, reporting and auditing. Discuss techniques and examples that provide a realistic audit approach for the contractor, including detailed auditing procedures for many types of contracts.
Learning Objectives
• Recognize and handle the basic accounting and auditing issues peculiar to the construction industry
• Identify financial statement presentation and disclosure issues
• Be aware of the specific bonding requirements and objectives
• Explore the components of revenue recognition and costing using a risk-based perspective
• Address the common pitfalls for error, and learn to apply the principles for all types of general and specialty contractors
• Develop an audit approach for specific identified risks
• Address the viability of project site visits
Major Topics
• Illustrative computations for revenue recognition
• Analysis of FASB revenue recognition standard and the anticipated impact on the construction industry
• Application of "risk-based" audit model to contractors
• The "Lookback" analysis and the contractor's estimating reliability
• Practical approach to auditing contracts completed and in progress
• Numerous computations and alternative approaches
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