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. 173, No. 6, June

Accounting Graduates: Big Changes Ahead
A number of indicators point to important changes that will affect the recruitment of new accountants across the country. Here's an overview of some of the educational trends most pertinent to CPAs. Continued strong interest in accounting. Deans...
AICPA Technical Divisions Accepting Non-CPA Associates
Non-CPAs employed by CPA firms and meeting other requirements may now join the following American Institute of CPAs technical divisions as "section associates" and attain the same benefits as CPA members: * Management consulting services (MCS)....
Attorney Who Prepared Partnership Returns Was "Preparer" of Limited Partners' Returns
Goulding, a CPA and attorney, was legal counsel for three tax-shelter-type limited partnerships. He prepared the partnership returns and the schedules K-1. Goulding had no contact with the limited partners, did not advise them on partnership deductions...
Auditing Audit Committees: An Education Opportunity for Auditors
Following is an adaptation of an article by A. A. Sommer, Jr., that appeared in the June 1991 issue of Accounting Horizons. Sommer is the chairman of the public oversight board of the American Institute of CPAs SEC practice section. Audit committees...
Charitable Gift Yields Taxable Gain, despite Lack of Charitable Deduction
In 1980, the Hodgdons donated a piece of unencumbered realty, worth $800,000, to charity. Later in 1980, they donated a second piece of realty, worth $4 million and subject to liens of $2.7 million, to a second charity. The charity took the property...
Compliance: No Exception for Government Contractors
Commercial suppliers of nondefense products and services must also comply with acquisition regulations. When they think of government procurement, most people picture multibillion-dollar weapons systems. Media coverage of the termination of large...
FASB ED's on Fair Value for GIC, Reinsurance Contracts; Offsetting Interpretation
The Financial Accounting Standards Board issued exposure drafts on fair value for guaranteed investment contracts (GICs) and on accounting for reinsurance contracts as well as an interpretation about offsetting amounts related to specific contracts....
Florida Court Sends Mixed Message on Solicitation Ban
In an opinion that could be of national significance, the Florida Court of Appeals affirmed in part and reversed in part a lower court ruling that Florida statutes prohibiting accountants from soliciting clients were unconstitutional (see Legal Scene,...
Goodwill Accounting: Time for an Overhaul
The U.S. treatment of goodwill is at odds with the practices of many major industrialized nations. On August 8, 1989, Marvin Davis offered $240 per share ($5.4 billion) for United Airlines (UAL) when the stock was trading for $164.50. On September...
Harsh Result for Intra-Family Notes That Cancel at Death
Frane sold stock in his company to each of his four adult children. Each block of stock was worth $140,000. The children signed promissory notes under which the $140,000 principal amount was payable in 20 annual installments, with interest at 12+....
Hassle Free Office Moving
What can a CPA firm member do to get the firm moved to a new location on time, within budget and without mishap? Edward R. Katz, chairman, Peachtree Movers, 1376 Chattahoochee Avenue, N.W., Atlanta, 30318, offers some advice on the best approach....
How One Firm Limited the Risk of Being Small
Can a sole practitioner survive by remaining small and limiting services? One CPA found a way. Ron Stewart doesn't do audits. He also has no interest in having any partners in his six-person CPA firm in Monroe, Louisiana. His intention is to provide...
How to Match Computers and Accounting Software
The key is to uncover the needs of the enterprise. A common but unwise approach to selecting a computer system to handle an organization's accounting and management information is to buy a powerful, expensive computer first and then select an accounting...
Insurance Industry Bill Introduced; Accounting Provisions Criticized
The Federal Insurance Solvency Act of 1992 (HR 4900), introduced by House Energy and Commerce Committee Chairman John Dingell (D-Mich.), for the first time would impose federal regulation on the insurance industry. The bill also includes auditing...
IRS Wins Procedural Issue in Yamaha
The IRS won an important procedural issue recently in Yamaha Motor Corp. U.S. v. Commissioner (T.C.M. 1992-110), a case brought under section 482 of the tax code. The Tax Court denied the taxpayer's motion to shift the burden of proof to the IRS, finding...
LAN Checklist: 12 Tough Questions to Ask a LAN Administrator
12 TOUGH QUESTIONS TO ASK A LAN ADMINISTRATOR While accountants can benefit enormously when their office computers are linked by a local area network (LAN), such a setup demands skillful and attentive administration. Handled incorrectly, a network...
Opportunities in Litigation Services
It's a broad field open to CPAs with a wide variety of skills. Why are more and more CPAs getting involved in litigation services? Ten years ago, only a small minority of CPAs worked in this practice area. Today, many CPAs provide litigation services,...
Planning for a Computerized Accounting System
Selecting accounting software is a major responsibility that takes a considerable amount of careful planning. After all, if the selected program fails to meet the organization's needs or the accounting staff is not adequately trained to operate it,...
Qualified Personal Residence Trusts
Many of the traditional estate planning techniques are no longer viable today, either because they have been legislated out of existence or because, while technically available, they do not make economic sense. One of the remaining techniques that...
Software Revenue Recognition
Certain Financial Accounting Standards Board and American Institute of CPAs accounting pronouncements now have higher authority under generally accepted accounting principles. So, it's more important than ever for accountants to receive timely guidance...
The Financial Accounting Standards Board
The Financial Accounting Standards Board decided not to object to the American Institute of CPAs' plans to proceed with two projects that would amend the AICPA audit and accounting guide Audits of Employee Benefit Plans. A final SOP, Accounting...
The SEC's New Chief Accountant Sets Some Clear-Cut Goals
I think the use of market values for assets and liabilities is very desirable, especially for financial institutions. Walter P. Schuetze, the Securities and Exchange Commission's new chief accountant, is a precise man. He chooses his words carefully...
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