![New Tax Laws in 2021: 5 Changes that Taxpayers Should Know About](https://windrootcorp.com/wp-content/uploads/2021/10/New2021TaxLaws-e1634300163873.jpg)
Find out all professional services offered at Windroot and how we can help your business grow.
Leveraging best-in-class technology to provide comprehensive accounting and advisory services.
High-quality audit services to help your plan sponsor meet regulatory requirements.
Dedicated team focused on your business. On-time financials. Keeping you compliant and tax ready.
Start, build, and grow your own for-profit, small business or non-profit organization.
Identify Strengths and Weaknesses, Strategic Planning, Financial Health Check, Risk Management
Maximize Tax Savings, Compliance and Risk Management, Strategic Planning, Comprehensive Solutions
Address challenges and uncover opportunities with consultants focused on protecting and enhancing your Business value.
Payrolls, employee setup, salary changes, payroll filings, W2 and 1099 processing, time tracking and more.
Stay tax-ready all year long. Expert CPAs for you to make informed decisions and save on taxes.
Comprehensive financial planning to maximize your wealth. We make wealth management simple, easy, and affordable.
Cloud and hybrid technology solutions to help digitalize your business.
Send request for a proposal
Click any of the items listed above to jump to that section.
An audit is a form of investigation. Auditors may be hired to examine financial statements, management accounts and reports, accounting records, operational reports, revenue reports, and expense reports. In many types of audits, a certified public accountant (CPA) is engaged to obtain “reasonable assurance” that the records are presented fairly and accurately and comply with certain standards.
The audit team reports their findings to shareholders and other internal stakeholders of the company in the form of an audit report. Sometimes, audit reports are submitted to external stakeholders, such as banks, creditors, the public, or the government.
A common misconception is that audits are bad – it’s not true. The process can be time-consuming, but businesses can benefit from audits! They can use audit findings to improve finances and internal controls, expose fraud risks, and help stakeholders make more informed decisions.
In this post, we outline 11 different types of audits, who conducts them, and share some common, real-world examples.
Internal audits assess internal controls, processes, legal compliance, and the protection of assets. The internal audit process can be a helpful tool for businesses to evaluate risk and identify actionable ways to improve performance.
Internal audits are performed by individuals within the organization. While these individuals aren’t independent of the organization, they should be independent of the activities they’re auditing.
Reports are sent to management, the board of directors, or the organization’s audit committee. An internal audit can be beneficial to your business operations, but it doesn’t replace an audit performed in accordance with generally accepted auditing standards (GAAS).
If your business undergoes an external and internal audit, the external audit team will communicate with your internal audit team throughout the auditing process. Internal audit committees should be prepared to share information gathered from their audit procedures with the external auditors.
A third party – such as an independent CPA firm – conducts external audits. Once the audit is complete, a report is distributed to shareholders and stakeholders outside of the organization. While external audits may vary in what they audit (financial statements, usage of federal funds, etc.), the main benefit is the independence and objectivity of the audit team. This gives shareholders and external stakeholders more confidence in the audit process and report.
Example: A manufacturer of car parts is a publicly-traded company. Publicly traded companies and corporations that sell their shares to the public are required to have an external auditor audit their financial statements.
Next, learn about specific types of audits that can be performed internally, externally, or both.
Financial statement audits involve independent auditors who will report on whether a company’s financial statements align with the applicable financial reporting standards. Auditors are required to accomplish three things:
According to the AICPA, these audits are “typically appropriate and often required when seeking high levels of financing or outside investors, or when selling a business.” The report can help other businesses, investors, stakeholders, etc., make informed decisions about the company.
Example: If a small business holds a loan or line of credit with a bank, the bank may require the business to undergo a financial statement audit.
Performance audits cover a wide variety of assessments. An entity may request or require a performance audit to evaluate any of the following objectives:
These objectives aren’t mutually exclusive. If an auditor is evaluating program effectiveness, he may need to audit internal controls too. Performance audits are beneficial because they can help management and those charged with governance and oversight improve program performance and operations, reduce costs, facilitate decision-making, and contribute to public accountability.
Performance audits are typically associated with government agencies because they receive federal funding and need to show they use the funds appropriately. But non-governmental performance audits are common too!
Auditors must follow generally accepted government accounting standards (GAGAS) – aka Yellow Book – when conducting government performance audits. According to the AICPA, performance audits conducted under GAGAS can provide the highest levels of assurance, as the auditor determines the scope based on these requirements.
Examples of performance audits include:
Operational audits review an organization’s activities in relation to specific objectives. An auditor will analyze processes, procedures, and systems; and evaluate operational effectiveness, efficiency, and productivity. Benefits of an operational audit include finding opportunities for improvement and developing recommendations.
Many companies conduct operational audits internally. However, companies may hire an external specialist. Organizations can benefit from working with a CPA, as they have expert knowledge, training, and experience in performing audits. Some accounting firms also have management advisory service (MAS) specialists or Certified Management Accountants (CMA) that can offer their expertise.
Example: A business may have an auditor review its human resources department. The auditor will investigate department procedures and how efficiently it uses resources. The final report should include a full department review and identify opportunities for improvement.
An employee benefit plan (EBP) audit analyzes and evaluates your benefit plan’s financial statements. This type of audit can highlight opportunities for improvement within plan operations, efficiencies, controls, and how well the plan complies with select regulations. Independent public accountants are the only professionals qualified to perform employee benefit plan audits.
Example: If your company offers a benefit plan (including 401(k), 403(b), and employee stock ownership plans), a defined benefit pension plan, or a health plan to more than 100 eligible participants, you may need an audit.
To learn which plans are subject to audit requirements, click here.
Single audits are report cards. They inform federal agencies if there are problems with how grantees use federal funds. Single audits are highly complex as auditors must perform the audit in accordance with GAAS and GAGAS. Plus, the auditor must review the entire entity’s compliance and internal controls, not just a specific division or program.
A single audit is required when a non-federal entity spends $750,000 or more of federal awards (either direct or indirect awards) in their fiscal year (Single Audit Fundamental Series Part 1: What is a Single Audit? page 17).
Non-federal entities include states and local governments, nonprofit organizations, indigenous American tribes, and institutions of higher education. If an entity is a recipient or subrecipient of grants, contracts, loans, endowments, insurance, etc., it may be required to have a single audit performed annually.
A compliance audit is when an entity is audited to determine if it complies with a government’s rules, standards, and requirements. A government sets the requirements and hires an auditor to evaluate the entity’s compliance with them.
This type of audit determines whether the entity is complying with local laws, regulations, rules, and provisions of contracts or grant agreements. According to the AICPA, compliance audits are typically performed in conjunction with a financial audit (Compliance Audits, page 2,463).
Example: A compliance audit can determine if a mill is following the Environmental Protection Agency (EPA) guidelines for waste disposal. The EPA would send their internal auditor or hire an audit firm to assess the business and report their findings.
Information system audits evaluate the management controls within a company’s information technology (IT) infrastructure. An audit will determine if the systems are safeguarding assets, maintaining data integrity, and operating effectively. Businesses can benefit from this type of audit because it can help identify opportunities and risks, align assessment and strategy, and improve business procedures. Businesses can choose to have these audits conducted independently or during a financial statement or internal audit.
Certified Information Systems Auditors (CISA) are qualified to conduct this type of audit. Audit activities include interviews with business users and staff, documentation analysis, and software controls checks.
IT systems are complex. Most information system audits are customized to fit the needs of the organization. Audits may focus on IT processes, specific areas of the business, or data privacy.
Payroll audits review payroll processes and reports. An audit can help identify errors, improve compliance, and protect the business from fraud. An internal auditor or a third-party auditor – like a CPA – can perform payroll audits.
The auditor will review your company’s payroll records and determine if they’re accurate, timely, and complete. If they find errors, the auditor will look to identify gaps in procedures that led to or could lead to inaccuracies. Discovering any vulnerabilities will allow you to make corrections and maintain or improve compliance.
For most companies, annual or semiannual payroll audits are recommended. Regular payroll audits can help your company maintain compliance and strengthen your financial controls.
A forensic audit examines a company’s financial records to identify illegal finance activity. The auditor – a forensic accountant – will look for evidence that may be used in court or for conflict resolution among shareholders.
Your organization may need a forensic audit if individuals suspect fraud, theft, or inaccuracies (both positive and negative) in account balances.
Example: Company A enters into a contract with Company B. However, Company B isn’t authorized to do business because its license is suspended due to irregular tax payments. Company A’s CFO knew about this but moved forward with the deal because the CFO received direct compensation from Company B. Forensic audits can detect this type of fraud and provide evidence if fraud does occur.
Even in a normal year, there may be small changes in the ways that people file their taxes. But the COVID-19 pandemic has caused the tax code to change more than usual this year. For this reason, there are several tax law changes in 2021 that taxpayers should know about.
Investing in payroll services takes the stress out of keeping up with these changes. Having a tax and accounting professional take responsibility for ever-changing rules guarantees nothing goes overlooked.
Reasons To Outsource Payroll · Consider the Cost of Your Time · Payroll Taxes Are Complicated · Tax Laws Change All the Time. Read more.
If you are a small business owner looking for tips to being efficient, read to learn about the top 5 tasks that should be outsourced.
Windroot Business Services
We firmly believe that the internet should be available and accessible to anyone, and are committed to providing a website that is accessible to the widest possible audience, regardless of circumstance and ability.
To fulfill this, we aim to adhere as strictly as possible to the World Wide Web Consortium’s (W3C) Web Content Accessibility Guidelines 2.1 (WCAG 2.1) at the AA level. These guidelines explain how to make web content accessible to people with a wide array of disabilities. Complying with those guidelines helps us ensure that the website is accessible to all people: blind people, people with motor impairments, visual impairment, cognitive disabilities, and more.
This website utilizes various technologies that are meant to make it as accessible as possible at all times. We utilize an accessibility interface that allows persons with specific disabilities to adjust the website’s UI (user interface) and design it to their personal needs.
Additionally, the website utilizes an AI-based application that runs in the background and optimizes its accessibility level constantly. This application remediates the website’s HTML, adapts Its functionality and behavior for screen-readers used by the blind users, and for keyboard functions used by individuals with motor impairments.
If you’ve found a malfunction or have ideas for improvement, we’ll be happy to hear from you. You can reach out to the website’s operators by using the following email
Our website implements the ARIA attributes (Accessible Rich Internet Applications) technique, alongside various different behavioral changes, to ensure blind users visiting with screen-readers are able to read, comprehend, and enjoy the website’s functions. As soon as a user with a screen-reader enters your site, they immediately receive a prompt to enter the Screen-Reader Profile so they can browse and operate your site effectively. Here’s how our website covers some of the most important screen-reader requirements, alongside console screenshots of code examples:
Screen-reader optimization: we run a background process that learns the website’s components from top to bottom, to ensure ongoing compliance even when updating the website. In this process, we provide screen-readers with meaningful data using the ARIA set of attributes. For example, we provide accurate form labels; descriptions for actionable icons (social media icons, search icons, cart icons, etc.); validation guidance for form inputs; element roles such as buttons, menus, modal dialogues (popups), and others. Additionally, the background process scans all the website’s images and provides an accurate and meaningful image-object-recognition-based description as an ALT (alternate text) tag for images that are not described. It will also extract texts that are embedded within the image, using an OCR (optical character recognition) technology. To turn on screen-reader adjustments at any time, users need only to press the Alt+1 keyboard combination. Screen-reader users also get automatic announcements to turn the Screen-reader mode on as soon as they enter the website.
These adjustments are compatible with all popular screen readers, including JAWS and NVDA.
Keyboard navigation optimization: The background process also adjusts the website’s HTML, and adds various behaviors using JavaScript code to make the website operable by the keyboard. This includes the ability to navigate the website using the Tab and Shift+Tab keys, operate dropdowns with the arrow keys, close them with Esc, trigger buttons and links using the Enter key, navigate between radio and checkbox elements using the arrow keys, and fill them in with the Spacebar or Enter key.Additionally, keyboard users will find quick-navigation and content-skip menus, available at any time by clicking Alt+1, or as the first elements of the site while navigating with the keyboard. The background process also handles triggered popups by moving the keyboard focus towards them as soon as they appear, and not allow the focus drift outside it.
Users can also use shortcuts such as “M” (menus), “H” (headings), “F” (forms), “B” (buttons), and “G” (graphics) to jump to specific elements.
We aim to support the widest array of browsers and assistive technologies as possible, so our users can choose the best fitting tools for them, with as few limitations as possible. Therefore, we have worked very hard to be able to support all major systems that comprise over 95% of the user market share including Google Chrome, Mozilla Firefox, Apple Safari, Opera and Microsoft Edge, JAWS and NVDA (screen readers).
Despite our very best efforts to allow anybody to adjust the website to their needs. There may still be pages or sections that are not fully accessible, are in the process of becoming accessible, or are lacking an adequate technological solution to make them accessible. Still, we are continually improving our accessibility, adding, updating and improving its options and features, and developing and adopting new technologies. All this is meant to reach the optimal level of accessibility, following technological advancements. For any assistance, please reach out to
Fill in your details and we’ll get back to you in no time.
The is a complimentary resource that allows clients to exchange important documents and information with Windroot CPAs.
Need Help? Contact us here.
Something isn’t Clear?
Feel free to contact us, and we will be more than happy to answer all of your questions.
"*" indicates required fields
"*" indicates required fields