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. 192, No. 4, October

Audit Committee Appointments
Is independence the only factor that counts? Does the emphasis on not appointing to an audit committee corporate board directors who have significant relationships to a company obscure consideration of other characteristics that also may be important?...
Bring the Real World to the Classroom
CPAs can share experiences that connect with young imaginations and aspirations. CPAs are the unsung heroes of finance. As advisers to enterprises that range from mom-and-pop shops to worldwide financial markets, they function as "referees" in the...
Congress Takes Aim at "Aggresive" Tax Planning
Two proposed pieces of legislation--one a discussion draft from the staff of the Senate Finance Committee, the other a bill written by a member of the House Ways and Means Committee--reflect bipartisan congressional interest in tightening restrictions...
Debt Discharge Allocation Lacks Substantial Economic Effect
Under IRC section 761(c), partners are allowed to amend their agreements as long as such changes are made by the time the partnership information return is due (not including extensions). Furthermore, under section 704(b), allocations of items such...
Expanded Innocent Spouse Relief
IRC section 6015 allows certain taxpayers to claim relief from joint tax liability if they qualify as an innocent spouse. There are strict qualification rules. Recently the Tax Court allowed a taxpayer to raise the issue even though she failed to meet...
Exposure Drafts Outstanding
(This list was compiled as of September 1, 2001. 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 been...
Future Cash Flow Measurements
FASB Concepts Statement no. 7 provides new guidance. Accountants use present value and cash flow information as a surrogate for fair value whenever an entity pays or receives a future stream of cash. Because this happens frequently in business,...
Golden Business Ideas
Put an End to Surprises This is a memo to the boss: Surprise! Isn't that the last thing you want to hear--especially if it's bad news? Yet, as you probably know, most bad news surprises aren't surprises at all --except to you. They are...
Inside AICPA
www.aicpa.org AICPA assurance products win support ... CPA2Biz tells its story ... XYZ group spreads to Europe ... Directory of member services Technology Users, Manufacturers Back AICPA Assurance Products The PKI Forum, Inc. (www.pkiforum....
Letters
On Clients and Their Files After reading "... And Nothing But the Truth: Uncovering Fraudulent Disclosures" (JofA, July01, page 47), I take exception to the implications regarding clients who resist allowing auditors open access to files. The...
Minimize Parachute Penalties
Techniques are available to soften the impact of parachute payments. When executives at United Airlines began calculating what they would have to pay to acquire rival US Airways if the merger had been completed, due diligence took them on an eye-opening...
New Value in Old Policies
Clients can recover significant wealth that may be trapped in unneeded life insurance. Many clients have life insurance policies they view as unnecessary because they no longer meet their original need. As estate tax rules change and the policies...
Ranking the Products
Electronic filing services are gaining. Tax preparation software products continue to get high marks from the professionals who use them, with 83% reporting that they are sufficiently satisfied with the products they use that they do not plan to...
Sham Transactions
What constitutes a "sham transaction" for tax purposes? U.S. case law has evolved to incorporate business purpose and economic substance as critical elements in determining what constitutes a sham. Under the subjective business purpose test, the court...
Smart Stops on the Web
COMPENSATION SITES Plan for Tomorrow Today www.adp401k.com This retirement services site offers detailed explanations of various plans--defined contributions, 401(k) safe harbors, SIMPLE IRAs and executive deferred compensation. It also provides...
Stock Option Pitfalls and Strategies Du Jour
Companies scramble to remedy ailing incentive compensation plans. As the stock markets have slumped, the use of stock options as the ideal form of employee compensation has lost some of its luster. Companies may choose to redesign their compensation...
Sunk by Options
How to avoid stock option tax catastrophes. Only a little more than a year ago it seemed that stock options were the quick path to riches. After all, the stock market seemed to be defying the laws of gravity: Everything was going up--and staying...
Taking the Temperature of Health Care Valuations
Valuators must use a broad picture approach. The health care industry has undergone significant change over the last decade, which has affected delivery of services, payment mechanisms and the organizational structure of providers. It's no secret...
Tax Issues for Nonresident Aliens
Inadvertent consequences for unwary foreign nationals. Many foreign nationals working in the United States may have a problem: They inadvertently could become resident aliens. This change in status can have serious tax ramifications--a resident...
Technology Q&A
Should you invest in a flat-panel monitor? ... Put a 10-key calculator in Excel ... Remove floppy or CD in an emergency ... Replace a lost Desktop icon ... Make an Excel formula constant ... Best way to put pictures in Word Q. I've been seeing lots...
The Right Way to Start a Practice
Deciding to strike out on your own isn't easy, but if you've already made up your mind to take the plunge, consider the following recommendations. Gleaned from practitioners' experience, they could tip the scales in your favor. FIND THE RIGHT CLIENTS...
The Uncertainty of Death and Taxes
The new tax bill promises a 10-year estate planning roller coaster. Congress once again has passed a complex piece of legislation that will make estate planning, as well as general tax planning, even more problematic for CPAs and their clients....
The XYZ Credential
An opportunity to lead the professional services industry in the 21st century. Editorial written by Jim Emerson, president, The Emerson Company, which has been the leading analyst for the larger professional service firms for nearly 20 years. Emerson's...
Valuing a Decedent's Closely Held Stock
A contentious issue in estate taxation is the valuation of stock in a closely held corporation. The fair value of such stock at the valuation date may be difficult to determine since no market quotations are available. Treasury regulations section...
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