Journal of Accountancy

A monthly publication of the American Institute of Certified Public Accountants focusing on the latest news and developments related to the field of accounting, and written for CPAs and other accounting professionals.

Articles from Vol. 194, No. 5, November

Accounting for Trade Dress: Companies Need to Accurately Value Their Product's Unique Packaging or Appearance
As a result of rule changes by the Financial Accounting Standards Board, "trade dress" has become an important concept for CPAs to understand. Statement no. 141, Business Combinations, requires companies entering into such combinations after June...
AICPA Launches Assault on Fraud.
This month the AICPA auditing standards board (ASB) took a major step forward in the fight against fraud by releasing Statement on Auditing Standards (SAS) no. 99, Consideration of Fraud in a Financial Statement Audit, superseding SAS no. 82. The...
Begin Process to Restore Public Confidence. (Letters)
As a longtime member of the AICPA, I am appalled at the recent actions and inactions of our fellow CPAs. We are supposed to be the rock-solid figures of integrity and truth--to provide users of financial statements the independent assurances that reported...
CEOs and Fraud: A Solution. (Letters)
With the spate of high-profile, multi-billion-dollar frauds, the responsibility and focus must be shared by CEOs and CFOs, as well as outside auditors. First, let's look at the environment and mind-set in which public companies are viewed and measured...
Deducting Tuition and Related Fees as Medical Expenses: Easing the Cost of Special Education
Many schools and programs provide education and treatment to students with learning and other disabilities, including emotional and behavioral disorders. Insurance rarely covers such costly programs. CPAs can assist parents in determining the deductibility...
Differences between Mergers and Acquisitions: A CPA Valuator Can Help Clients Decide Whether to Merge or Acquire
Business owners need valuations for many reasons--a divorce distribution, shareholder actions, financial and tax planning, estate and gift tax calculations and mergers and acquisitions (M&A), for example. Although companies that merge with or...
Exposure Drafts Outstanding
(This list was compiled as of October 1, 2002. For exposure drafts issued after that date, consult The CPA Letter. Note: The policy for updating the list of exposure drafts is that a document should remain on the list until a final document has...
Golden Business Ideas
Here are a few tips to remember and pass along to fellow travelers: * In an airport, if someone accidentally spills food on you and then offers to help you clean it up, be especially alert. An accomplice may be nearby waiting to slip away with your...
How to Respond to Policy Changes: Coping with Rising Premiums and Decreasing Death Benefits
Insurance companies can alter policy terms as often as they wish. Sometimes the changes benefit the carriers; sometimes they benefit the policyholders. Interest, mortality (the probability a given individual will die) and expenses are the most common...
It's Time to E-File: CPAs Can No Longer Postpone Signing Up for the IRS Electronic Filing Program.
Change, in the words of British theologian Richard Hooker, does not come without inconvenience--even when it is to better from worse. CPA firms that see themselves as anchors of fiscal stability and project an image of timeless continuity often...
Nondeductible Alimony
Divorce can create a host of personal and financial problems for the parties involved. A misunderstanding about the tax consequences of a settlement agreement can exacerbate these difficulties. John Lovejoy instituted divorce proceedings against...
NYSE Sets Audit Committees on New Road: It's No Longer Business as Usual for Audit Committee Members and Auditors
Headline, grabbing accounting scandals such as the ones at WorldCom, Adelphia Communications, Global Crossing and, of course, Enron, cost investors hundreds of millions of dollars and thousands of employees their jobs. Corporate financial executives,...
Official Releases: SAS No. 98 ... SSAE No. 12 ... SQCS No. 6 ... Auditing Interpretation ... Ethics Interpretation and Ruling
SAS No. 98--Omnibus Statement on Auditing Standards--2002 (Amendment to Statement on Auditing Standards No. 95, Generally Accepted Auditing Standards, AICPA, Professional Standards, vol. 1, AU sec. 150.05; amendment to SAS No. 25, The Relationship...
Signed, Sealed, Delivered: BV 101: Learn How an M&A Valuation Engagement Develops to See If BV Is for You
A CPA/valuator familiar with merger and acquisition (M&A) transactions can be a tremendous asset to a client, bringing into focus facts that help bridge the needs of both buyers and sellers. To perform business valuation in M&A, you work...
Smart Stops on the Web. (the Internet)
BUSINESS VALUATION SITES Definitions, Discussions and Downloads www.bvresources.com CPAs involved in business valuation (BV) can obtain free information and purchase books and software here. The forums online section features various discussion...
Tax Notes. (Tax Matters)
* The IRS proposes regulations (www. access.gpo.gov/su_docs/fedreg/a02080 2c.html) requiring certain financial institutions to report interest payments made to nonresident aliens who reside in specified countries and maintain deposits in the U.S. offices...
Technology Q&A
Linux vs. Microsoft ... Display a Word revision date ... How to trump call-waiting ... Some reasons why Excel 2002 is worth the investment ... Customize the number of days Outlook calendar displays ... Refresh Explorer ... Fast way to select text in...
Ten Steps to a Top-Notch Interview: It's More Than Just the Questions You Ask
It takes a combination of careful observation and inquiry to conduct an effective audit. Although auditors are adequately trained to be alert at a client site, most learn on the job how to ask questions to elicit specific information. This is a...
The Constitutionality of the Parsonage Allowance
Constitutionality became a much discussed issue when the Ninth Circuit Court of Appeals decided reciting the Pledge of Allegiance in a public school was unconstitutional. In a less publicized opinion, the Ninth Circuit also questioned the constitutionality...
The New GAO Independence Standard: What Auditors Need to Know: Maintain Auditor Independence While Performing Nonaudit Services.
In January the GAO amended Government Auditing Standards (the yellow book), significantly tightening its auditor independence provisions. In issuing the new standard, the comptroller general stated that protecting the public interest and ensuring...
The Surprising Benefits of Nexus: Multistate Taxation Actually Can Lower a Company's State Income Tax Bill
The U.S. economic landscape consists mostly of small businesses. In 1997, of the 5,541,900 businesses in the United States, 98.3% had fewer than 100 employees. To keep abreast of the constantly changing tax rules in the 50 states where these companies...
Tips to Make That Merger Work
The current economic downturn and market focus on the quality of corporate earnings highlight the problems of companies that overpay for assets. Recent studies have shown that more than half the mergers and acquisitions during the 1990s actually...
Work Smarter with Smart Tags: This Office XP Feature Acts as Your Very Own Personal Robot.
Picture this: You type a name into a document and a tiny icon instantly appears next to it. When you pass your cursor over the icon, a menu unfolds that offers you options such as' Insert the person's address and phone number, send him or her an...