The CPA Journal

The CPA Journal is a monthly refereed accounting journal. It has been published by the New York State Society of CPAs since 1930.Subjects for The CPA Journal inlcude accountants and accounting. Carolyn Morrisroe is the managing editor and Anthony H. Sarmiento is a contributing editor.

Articles from Vol. 68, No. 3, March

A Conceptual Framework for Independence
Will the new Independence Standards Board provide a breakthrough in the approach to auditor independence, an essential break with tradition and old ways of thinking, or will it be an ephemeral cure-all-a fleeting remedy for all the ills and difficulties...
Avoiding Entrapment
Organizations often have multiphase projects involving serial decisions, such as RD projects, joint ventures, or new product launches. For example, R&D projects require fairly extensive planning as well as reassessment of direction. The decision...
Bar Association Poised to Sue Federal Government for Latest Assault on Medicaid Eligibility
The New York State Bar Association's (NYSBA) House of Delegates, at its November 1, 1997, meeting, called for the commencement of litigation aimed at nullifying that portion of section 4734 of the Balanced Budget Act of 1997, which criminalizes advising...
Business Planning
How does planning work? Place yourself for the moment in the pilot house of a merchant freighter alongside the pier in Naples. You are the captain. Your ship has just unloaded its cargo, and you have been given orders to deliver a load of marble to Southampton...
Converting a Corporation to an LLC
Until a few years ago, if a company desired to have the protection of limited liability, the company either operated as a limited partnership with a corporate general partner or as a corpo ration. Companies that chose the corporate format basically received...
Court of Appeals Decides Disparate Treatment of Alimony for Nonresidents Is OK
New York allows a full deduction from gross income of alimony paid by a resident of the state [Tax Law, section 631 (b)(6)]. The State denies residents of other states any deduction for alimony from gross income earned in New York. A lawyer who lived...
Court Rejects RSI Statute of Limitation Appeal by Plaintiffs
In a ruling rejecting key arguments by plaintiff attorneys, New York's Court of Appeals issued a long-awaited decision affecting hundreds of repetitive strain injury (RSI) cases. Plaintiffs in the case, Blanco v. AT&T et al, had argued that RSI injuries...
How Well Do You Really Know Whom You Hire?
Imagine you are this executive: A former employee calls you at home. In between profanities, she demands you keep up her health benefits. If not, she implies, things will happen to you and your family. "How could this happen?" you ask yourself. You know...
IFAC Issues New Ethical Guidance on Confidentiality, Low-Balling
The International Federation of Accountants, (IFAC) has released a revised edition of its Code of Ethics for Professional Accountants, modifying ethical guidance on disclosure of confidential information, the practice of "low-balling," employing services...
In-House Dispute Resolution Programs
Being knowledgeable about in-house dispute resolution programs is important for CPAs because such programs can result in substantial savings for their firms and additional consulting fees for those in public practice. Corporations have discovered that...
IRS Releases Proposed Regulations on Unlawful Collection Practices
Some 18 months after the Taxpayer Bill of Rights 2 (TBOR2), Public Law 104-68, was enacted on July 30, 1996, the IRS has finally published the proposed regulations concerning taxpayer civil actions for unlawful collection practices required by sections...
New Ruling on the Character of Payments under Swaps
There has been controversy over the tax character of swap payments ever since swaps became a popular financing tool. In July last year, the IRS released a technical advice memorandum outlining its position regarding the character of payments under a...
Payments to Former Spouses
The tax treatment of payments to former spouses differs greatly depending on whether the payments are categorized a property settlement or alimony. Property settlements are nontaxable events to both parties; alimony is taxed to the recipient and deductible...
Popular Financial Reports for Citizens
Making government financial reports suitable for public consumption Hand a copy of your city's audited Comprehensive Annual Financial Report (CAFR) to a local citizen and see what response you get-perhaps laughter or confusion. Why? They find the CAFR...
Recent Developments
Retroactive Allocation Formula Change Disallowed Although many practitioners would disagree, IRS recently ruled that an amendment to a profit sharing plan that changed the formula for allocating the contribution to participants violated anti- cutback...
Remote Access: On the Road or at Home
Never out of touch No discussion of remote communications can begin without examining modems and speed as they relate to computer-to-computer communications. When sitting at your desk and communicating with your local area network (LAN), odds are that...
Reporting Financial Performance: An Analysis of IASC's and Other International Views
The International Accounting Standards Committee (IASC) recently published, together with the accounting standards boards in Australia, Canada, New Zealand, the United Kingdom, and the United States of America discussion paper, "Reporting Financial Performance:...
Ripley's Believe It or Not
The story begins with a partner in a West Coast office of a multinational accounting firm. For purposes of this story, I will call the partner, John Smith. Mr. Smith is a conscientious CPA-hardworking, dedicated, bright. Smith is a credit to his profession....
Stock-Based Compensation Issues
SFAS No. 123, Accounting for StockBased Compensation, provides a choice between two acceptable accounting methods for measuring compensation cost in transactions with employees. Companies can measure compensation cost using the intrinsic value model...
Task Force Issues Recommendations to Improve State and Local Government Budgeting
The National Advisory Council on State and Local Budgeting recently gave final approval to a set of recommendations to enhance state and local government budget practices. The council is a cooperative undertaking on the part of associations representing...
Taxes Can Be Discharged in Bankruptcy
Individuals who find their "backs against the wall" because of unexpected financial problems, including IRS assessments, may find that their best solution is to file for bankruptcy in the U.S. Bankruptcy Court. This writer has encountered numerous unfortunate...
The AICPA National Conference on SEC Developments
The American Institute of Certified Public Accountants (AICPA) held its 25th National Conference on Current SEC Developments on December 9 and 10, 1997. The program provides a forum for auditors and registrants to discuss accounting and auditing issues...
The Latest on 401(k) Fees
The Department of Labor has commenced an overall examination of 401(k) plan fees. The department is concerned that high returns in recent years as a result of the robust economy and booming stock market may be obscuring the fees paid for plan asset investment....
The New Tax Law in a Nutshell
Taxes, taxes, taxes-so the beat goes on for an imposing new array of new and revised tax breaks. It seems like each year the Federal government, fearing that the practitioners and general public will actually start to become familiar with the same old...
The New York State School Tax Relief (STAR) Program
One of the major provisions of the 1997-1998 budget legislation is the School Tax Relief (STAR) program. The STAR program was designed to reduce residential school taxes. The legislature recognized the fact that the size of a homeowner's school tax has...
The Quality of ERISA Audits
Last year, the Office of the Chief Accountant, Pension, and Welfare Benefits Administration (PWBA), U.S. Department of Labor (DOL), issued its report, Assessment of the Quality of Emplee Benefit Plan Audits. This report was a follow-up to one prepared...
The SEC Comments on White Paper
Under cover of a letter dated December 11, 1997, from then-chief accountant, Michael H. Sutton, to the chairman of the Independence Standards Board, the SEC presented its comments on the white paper submitted by the AICPA. There are two main points made...
The Unitary Concept for State Income Tax Purposes
The key point in determining the state income tax for a company conducting interstate commerce is how the unitary business concept applies to the computation of taxable income. For example, the apportionment of income between business and nonbusiness...
White Paper on Auditor Independence
The newly constituted Independence Standards Board has begun the process of self-education and issue identification as part of its formative period. The ultimate purpose of the board is the establishment of standards for auditors of public companies...