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. 182, No. 3, September

Assurance Services: Where We Are; Where We're Going
The market for traditional accounting and audit services is flat, and the future will hold even greater challenges to the profession if it is unwilling or unable to embrace new services. While the demand for traditional services is not expected to...
College and University Bookstores
How to tax what alma mater sells. As exempt organizations, schools, colleges and universities constantly deal with unrelated business income problems. And as some colleges and universities grow and provide a multitude of goods and services to their...
Conference without a Room, Speaker without a Podium
The American Institute of CPAs held the its first online conference for two hours on June 19; the occasion was an auditing standards board panel discussion on fraud. The more than 80 attendees needed only a computer and a Compuserve account. Anyone...
Court Raises Standard for Expert Testimony against Accounting Firms
The U.S. District Court for the District of New Mexico ruled that an expert witness for the plaintiff in a case against an accounting firm could not render an opinion on the legality of a transaction and could not render testimony that would confuse...
Court Upholds Privity Defense in Illinois
CIV 93-0406, U.S. Dist. Ct., District of New Mexico) The U.S. District Court for tile Northern District of Illinois ruled that under Illinois law unless the plaintiff is in privity of contract with an accountant, the accountant generally will not...
House Cuts IRS Modernization Funding; Practitioners and Clients Could Feel the Effects
The House Appropriations Committee approved legislation that would cut fiscal 1997 funding for the Internal Revenue Service and its tax systems modernization (TSM) program. The committee allocated the TSM program only $424.5 million in 1997, a $270.5...
Independent Contractor Legislation: Opportunity Knocks for Small Businesses
When is a worker an employee, and when is he or she an independent contractor? For small businesses, worker classification is a tax matter of huge significance. Currently, making the proper determination requires wading through a 20-factor common-law...
Internal-Use Only Questionnaire Examined
At its May meeting, the accounting and review services committee (ARSC) discussed responses to a questionnaire it had sent to supporters of its proposed Statement on Standards for Accounting and Review Services (SSARS), Assembly of Financial Statements...
IRS Hires Private Debt Collection Agencies
The Internal Revenue Service awarded five contracts to private collection agencies to collect delinquent federal taxes from individuals and businesses. In 1996, Congress earmarked $13 million and mandated an IRS pilot program to test the use of private...
IRS Seeks to Expand Extraordinary Dividend Rules
Under Internal Revenue Code section 356(a)(1), when a shareholder receives both stock and boot in a reorganization, the shareholder's gain is recognized in an amount not more than the boot's value. Under section 356(a)(2) and revenue ruling 93-61,...
Is There a Doctor in the House?
By seeking out medical practice clients, one CPA has built a successful and expanding niche. If you really enjoy management consulting and you're as comfortable with computers as you are with people, there's a group of high-earning professionals...
New DOL Ruling Eases PFP Worries
The Department of Labor's Interpretive Bulletin 96-1, Participant Investment Education, released June 11, removes roadblocks for companies that provide financial guidance to their employees on 401(k) and other pension plans. For years, those providing...
Open Your Eyes
Robert Half, CPA, founder of Robert Half International Inc. and author of six books on the workplace, advises CPAs to expand their horizons. A journalist recently was given a tour of the bridge of the ocean liner Queen Elizabeth 2, where he got...
Planning for College Education
As students head back to school, it's time to revisit the question of how to meet soaring college costs. Today, a child's ability to go to the college of his or her choice involves more than just getting good grades or writing the perfect application...
President Signs Single Audit Act of 1996
President Clinton signed into law an act that changes certain audit requirements for not-for-profit organizations and state and local governments that receive federal assistance. S 1579, the Single Audit Act Amendments of 1996, will save millions of...
Skills Used in Litigation Services
CPAs need to develop special expertise to succeed in a challenging niche. A CPA providing litigation services contributes professional assistance to lawyers in the litigation process. These services may include damage computations, financial analysis...
Starr Testifies in Washington
Randi L. Starr, chairwoman of the American Institute of CPAs employee benefit plans committee, testified before the House Subcommittee on Employer-Employee Relations on a variety, of pension reform issues. Starr, a former member of the Labor Department's...
Tax Software Buyers' Guide
This is the year the tax software industry committed itself to Windows. With few exceptions, vendors that have not already taken the Windows plunge are working overtime to prepare their first Windows products in time for this tax year. The nearly universal...
The Check-the-Box Proposal: Simpler Classification for Both Foreign and U.S. Companies
The Internal Revenue Service has proposed regulations that would replace the current rules for classifying entities as either partnerships or corporations. The proposed regulations would implement the "check-the-box" system in Treasury Department notice...
The Reform Act: What CPAs Should Know
A detailed look at the new regulations. Three aspects of the Private Securities Litigation Reform Act of 1995 directly affect CPAs: the reform of joint and several liability, the safe harbor for forward-looking statements and the auditors' responsibilities...
The Virtual Institute
The American Institute of CPAs now has a World Wide Web site, http:// www.aicpa.org. Visitors can access information about the AICPA and its products, state CPA societies and state boards of accountancy, conferences and professional standards. Other...
Tort Reform Revolution
The federal victory and the battle in the states. On December 22, 1995, thanks to an intensive four-year effort by business, investor and professional groups and strong bipartisan support in Congress, the Private Securities Litigation Reform Act...
Twisters, Gains and Involuntary Conversions
A taxpayer's principal residence was destroyed by a tornado in September 1991 in an area later declared a disaster area by the president. The taxpayer had a combined basis of $100,000 in the land and the house. Later that year, the taxpayer received...
Weighing the Costs of Outsourcing
Many companies unhappy with the steep costs of data processing technology are outsourcing their information systems (IS). However, thorough cost-benefit analysis may show that outsourcing is not financially sound for every company. For example, Avon...
What Should Governments Include in Their Financial Reports?
The International Federation of Accountants released a study that examines the definition of the government financial reporting entity and the variety, of ways governments construct financial reports. IFAC Study no. 8, The Government Financial Reporting...
When Clients Hire Household Help: CPAs Can Offer Valuable Compliance Guidance
CPAs can offer valuable compliance guidance. The nanny tax problems that derailed several early Clinton administration nominees brought to national attention the tax issues involved when hiring household help. Some assume such problems are confined...

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