A public company determined that engaging Wolf & Company, P.C. would result in better service at a better price. However, when Wolf observed an error in the company’s previous year’s deferred tax asset calculation, there was significant concern over how to communicate that finding with the previous auditors. After all, the engagement partner wasn’t accessible when they were at the client.
With guidance from Wolf, the company’s management examined the history of their deferred tax assets, identified when the error occurred, and quantified the impact on their financials. They forwarded the worksheet to the predecessor and used it as a road map in addressing the issue.
The prospect and the auditor were able to agree on an adjustment and disclosures to the satisfaction of all parties. The DTA was properly stated going forward, and the issue was resolved without any ongoing angst.