Audit

Article Dean Dorton

Construction companies face unique financial complexities that make audits both essential and challenging. From job costing to revenue recognition, even well-run firms can face audit findings that affect bonding, financing, and compliance. Understanding the most common issues and how to prevent them can help contractors remain audit-ready and financially strong.

1. Inaccurate Work-in-Progress (WIP) Schedules 
WIP schedules are critical for tracking project profitability and revenue recognition. Common errors include outdated cost estimates, unapproved change orders, and inconsistent application of percentage-of-completion methods. These mistakes can distort financial results and mislead stakeholders. To avoid this, ensure regular updates, involve project managers in forecasting, and implement standardized WIP review procedures. 

2. Improper Revenue Recognition 
Revenue recognition under generally accepted accounting principles (GAAP), requires careful alignment between contract terms and accounting treatment. Auditors often find inconsistencies in how revenue is recognized across projects or misclassification of contract modifications. Contractors should document performance obligations clearly and maintain consistent policies for recognizing revenue based on progress and milestones. 

3. Weak Internal Controls 
Construction firms—especially growing ones—may lack segregation of duties or formal approval processes. This can lead to errors or even fraud. Strengthening internal controls through documented procedures, role-based access, and periodic reviews can reduce risk and improve audit outcomes. 

4. Inadequate Documentation 
Missing or incomplete documentation—such as subcontractor agreements, change orders, or timecards—can raise red flags during an audit. A centralized document management system and regular internal reviews can help ensure records are complete and accessible. 

5. Misclassified Costs 
Auditors frequently identify costs that are incorrectly allocated between jobs, overhead, or general expenses. This affects job profitability and financial reporting. Training accounting staff and using construction-specific accounting software can improve accuracy. 

Avoiding these common audit findings starts with proactive planning, strong internal processes, and industry-specific expertise. Regular internal reviews, collaboration between accounting and operations, and guidance from a CPA firm familiar with construction can make a significant difference. 

Want to strengthen your audit readiness and reduce risk? Contact the construction assurance team at Dean Dorton to learn how our tailored audit services can help you stay compliant, improve financial reporting, and build trust with lenders, bonding agents, and stakeholders. 


Article Autumn Hines

High-profile fraud cases tied to federal funding continue to surface, not because rules are unclear, but because oversight too often prioritizes compliance over insight. The Uniform Guidance establishes clear expectations, yet fraud persists when monitoring becomes a checklist exercise rather than a risk-focused discipline. 

The problem with checkbox oversight 

Traditional monitoring frequently focuses on desk reviews, policy confirmation, and audit reports. While necessary, these steps rarely reveal whether controls are functioning in practice. Fraud typically thrives in the gap between documented compliance and actual operations. 

Monitoring requires presence, not just reports 

Effective oversight means understanding how programs operate day to day. Risk-based monitoring, informed by COSO principles, defines “normal” operations and flags deviations. In many of the largest fraud cases, basic verification such as capacity checks, operational observation, and participant validation could have surfaced concerns years earlier. 

Risk should drive rigor

Not all recipients present the same level of risk. Oversight resources are most effective when aligned to risk profiles, with more intensive monitoring for organizations experiencing rapid growth, limited controls, or leadership transitions, and streamlined approaches for mature organizations with proven control environments. 

The case for showing up 

Site visits, whether planned or unannounced, remain one of the most powerful fraud deterrents. Seeing operations firsthand provides insight that documentation cannot provide and reinforces accountability for both funders and recipients. 

Accountability requires investment

Strong internal controls are not free. Expecting organizations to manage complex federal requirements without adequate administrative resources invites failure. Fraud prevention is not overhead; it is an essential infrastructure.

A better path forward

Preventing fraud does not require new regulations. It requires disciplined implementation: risk-based monitoring, adequate resourcing, operational visibility, and cultures where concerns are raised early. Organizations that treat oversight as stewardship rather than bureaucracy are better equipped to protect public funds and sustain trust. 

Dean Dorton helps organizations move beyond compliance toward practical, effective oversight. Contact your Dean Dorton advisor to learn more about strengthening your monitoring and fraud prevention approach. 

Article Nikki Gilland

The nationwide injunction on beneficial ownership information (BOI) reporting that was lifted on December 23, 2024, appears to be back in place as of December 26, 2024.

Our recommendation remains that reporting companies be prepared to do their BOI reporting before December 31, 2024, so that the companies can comply with the law on a moment’s notice.

Here is a brief recap of the events of this month.

Recall that the Corporate Transparency Act (“CTA”) and its implementing regulations, require certain business entities to report stakeholder information to the Treasury Department’s agency called FinCEN. The CTA, enacted as an anti-money laundering measure, required reporting entities that existed before 2024 to disclose the identities of their beneficial owners—individuals who own or control the business—by Jan. 1, 2025.

  • On Tuesday, December 3, 2024, in a case called Texas Top Cop Shop, Inc. v. Garland, a federal judge in the Eastern District of Texas issued a “nationwide” injunction saying beneficial ownership information reports did not have to be filed until the issues in the case were decided.
  • On Monday, December 23, 2024, a panel of judges from the Fifth Circuit Court of Appeals struck down the nationwide injunction, which meant that reporting companies once again had to file BOI reports. FinCEN issued an alert extending the deadline for reporting by about two weeks.

Now, a different panel of judges from the Fifth Circuit Court of Appeals reinstated the nationwide injunction, through an order issued yesterday, December 26, 2024. This panel will consider the constitutionality of the CTA, and it’s ruling appears to supersede the ruling of December 23, 2024. Thus, once again, it seems BOI reporting is not required by January 1, 2025.

Our recommendation remains that reporting companies be prepared to do their BOI reporting before December 31, 2024, so that the companies can comply with the law on a moment’s notice. There is a chance that the government will seek emergency relief from the U.S. Supreme Court and a ruling could be issued before year-end.

Where can I find more information?

For more information about BOI reporting and access to guidance issued by FinCEN, you can refer to our previous article on the topic here:

What is “Beneficial Ownership Information” reporting, and why do I care?

Article Autumn Hines

These days, we seem to be bombarded with data everywhere we look. It can be hard to know what to do with it and how to measure its impact. In a previous post, we discussed using operational and financial data to develop Key Performance Indicators (KPIs) to serve as an operational dashboard for your organization. In this post, we want to introduce a concept that will allow you to use data to track progress made toward large-scale organizational goals. 

Introducing…OKRs! (more acronyms – sorry)

Objectives and Key Results (OKRs) is a goal-setting framework that aims to bridge the gap between performance and future goals. OKRs consist of ambitious, qualitative Objectives paired with specific, measurable Key Results. Unlike KPIs, which are ongoing measurements, OKRs are typically set and evaluated quarterly, encouraging regular reflection and adjustment. Said differently, KPIs are focused on trees, and OKRs are focused on the health of the forest ecosystem. This approach helps organizations align efforts, foster transparency, and push for continuous improvement. While KPIs tell you where you have been, OKRs help chart the course for where you want to go and help ensure alignment across the team. 

The key components of an OKR are as follows: 

  •  Objectives: These are qualitative, inspirational, and time-bound goals. They describe what you want to achieve and should be short, motivating, and easy to memorize. 
  •  Key Results: These quantitative metrics measure progress towards the objective. Typically, an objective has 3-5 key results. 

Consider the following characteristics when designing your OKRs: 

  • Set quarterly or annually 
  • They should be ambitious and slightly out of reach 
  • Transparent and visible to the entire organization 
  • Not tied directly to compensation or performance reviews 
  • Scored on a scale (typically 0-1 or 0-100%) at the end of the cycle 
  • Provide the opportunity for honest assessment at the end of the cycle 

How About Some Examples

OKRs should be developed to reflect your organization’s culture and goals. Here are some examples to help you see the connection between Objectives and Key Results. 

Software Company:
Objective: Launch our new mobile app to disrupt the market. 
Key Results: 
– Achieve 100,000 app downloads in the first month 
– Maintain a 4.5-star rating on app stores 
– Reach a daily active user count of 50,000 		Accounting Team
Objective: Streamline the month-end close process 
Key Results: 
– Reduce month-end close time from 10 days to 5 days 
– Implement automated reconciliation for 80% of high-volume accounts 
– Achieve zero post-close adjustments for two consecutive months 
Sales Team
Objective: Dramatically improve our customer acquisition process 
Key Results: 
– Increase lead-to-customer conversion rate from 10% to 15% 
– Reduce the average sales cycle from 45 days to 30 days 
– Implement and train team on new CRM (Client Relationship Management) system with 100% adoption 		Marketing Department
Objective: Establish our brand as a thought leader in the industry 
Key Results: 
– Publish 12 high-quality blog posts that generate at least 5,000 views each 
– Secure speaking engagements at 3 major industry conferences 
– Increase social media engagement rate by 25% across all platforms 
Human Resources
Objective: Create a more diverse and inclusive workplace 
Key Results: 
– Increase representation of underrepresented groups in leadership positions by 20% 
– Achieve a 90% completion rate for unconscious bias training among all employees 
– Improve employee satisfaction scores related to inclusion by 15 points 		Product Team
Objective: Significantly enhance the user experience of our core product 
Key Results: 
– Reduce customer-reported bugs by 50% 
– Improve app load time by 30% 
– Increase Net Promoter Score (NPS) from 30 to 50 

In future posts, we will continue to explore how you can implement OKRs within your organization. However, if you think implementing a system of KPIs and/or OKRs into your organizations would be beneficial and would like to brainstorm what that looks like, please contact Justin Hubbard. 

Article Autumn Hines

The U.S. Department of Education has recently announced updates to the deadlines for institutions to report necessary information under the Financial Value Transparency and Gainful Employment (FVT/GE) regulations. Institutions have until January 15, 2025, to meet the reporting requirements and review their Completers Lists. 

This extended deadline is particularly beneficial as it allows educational institutions to focus on finalizing critical tasks related to the 2024-2025 FAFSA while also preparing for the launch of the 2025-2026 FAFSA. 

Key Updates

  • FVT/GE Reporting Deadline: All required reporting related to Financial Value Transparency and Gainful Employment must be submitted by January 15, 2025. 
  • Completers List Review Deadline: The same January 15, 2025, deadline applies to reviewing Completers Lists, which play a vital role in measuring and reporting graduate earnings. 

These adjustments offer institutions additional time to ensure compliance with the FVT/GE rules while managing other priorities. Proper reporting under these rules is essential as it impacts the measurement of graduate outcomes and helps assess the value institutions provide to their students. 

Why This Matters

The FVT/GE rules are designed to offer greater transparency around the financial value that higher education institutions provide to their students. By extending the deadlines, the Department of Education is giving colleges and universities the flexibility needed to navigate both the financial aid cycle and the complexities of the new regulatory requirements. 

Institutions must remain proactive in reporting and review processes to avoid penalties or compliance issues. The updated timeline underscores the importance of aligning internal processes to ensure all required information is submitted accurately and on time. 

What to Do Next

Higher education administrators should: 

  1. Prioritize FAFSA Preparations: As the FAFSA deadlines approach, ensure that your institution is ready for both the 2024-2025 and 2025-2026 cycles. 
  1. Complete FVT/GE Reporting: Prepare and submit all necessary reports by the January 15, 2025 deadline. 
  1. Review Completers Lists: Ensure your Completers Lists are reviewed, as they are critical to measuring graduate earnings and institutional outcomes. 

For more detailed information, refer to the Department of Education’s official announcement here. 

If you have any questions or need further assistance, don’t hesitate to reach out to your Dean Dorton advisor or Megan Crane, the Higher Education team leader. 

Article Dean Dorton

Success in the equine industry boils down to a simple formula. You need healthy animals; you need qualified people to train and care for them; and you need robust equine accounting software to keep the whole operation funded and organized. 

Any equine business is set for success with all three in place—but success becomes elusive or impossible with any missing piece. 

Many people who enter this industry have a deep equine background, so they know how to pick horses and trainers. For that same reason, however, they have less experience selecting accounting software. That might cause some to pick less-than-ideal solutions without realizing the mistake. 

Later, when business issues arise, the accounting software is the likely culprit. It causes more chaos and consequences than most realize, making it a potential problem to be worried about…and a possible solution to be excited about.  

Indicators You Have the Wrong Equine Accounting Software

  • Overwhelming Chart of Accounts: The scale becomes unmanageable yet keeps growing.
  • Lengthy Month-End Close: It takes hours of manual data manipulation every single month. 
  • Painful Multi-Entity Management: There’s no easy way to get everything in one place.
  • Insufficient Reporting Capabilities: Reporting takes too much time and reveals too little. 
  • Outdated Financial Metrics: Data is days or weeks old because updates are take too much time and effort.

Put Success in the Saddle with Sage Intacct

Whether it’s Microsoft Dynamics GP or QuickBooks, some of the biggest accounting solutions on the market are also the wrong choice for equine businesses. They make accounting more difficult than lean and agile operators want it to be. Despite the complexity, they don’t have the necessary features. 

Sage Intacct reverses that equation, making sophisticated accounting simple and streamlined for equine businesses of any breed. 

This cloud-native financial management platform brings all financial data and every accounting tool together on one platform that’s accessible anywhere—farm, office, racetrack—with Internet access.  Coordination, visibility, and efficiency all multiply with a cloud accounting such as Sage Intacct.

Business intelligence amplifies as well thanks to Sage Intacct’s dimensional chart of accounts, which makes data easier to input and extract from the general ledger. Accountants save massive amounts of time on routine accounting tasks that they can redirect towards reporting using Sage Intacct’s powerful and intuitive tools. So much data management gets replaced with financial analysis, forecasting, and planning instead. 

With the ability to collect, consolidate, and consider all financial activities in one place, Sage Intacct gives equine businesses what few have but all need: real-time insights into financial and operational performance. Dashboards track and update key metrics automatically to give business leaders at all levels the numbers they need to make informed decisions more likely to have the intended outcome. 

Sage Intacct doesn’t guarantee success—but it puts all the pieces in place (besides the horses and trainers).

Put another important piece in place by partnering with Dean Dorton: a Sage Intacct implementation provider with deep expertise in accounting and decades-long experience serving the equine industry In Kentucky and around the world. 

Make the transition to Sage Intacct as smooth and successful as possible. Contact us.