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. 188, No. 2, August

10 Commandments of Mutual Fund Investing
How to separate the top finishers from the also-rans To pick the winning horse in thoroughbred racing involves research into the record of the horse, trainer and jockey as well as into how the horse performs under different weather and track conditions....
Accounting for Sticky Fingers
In the crime of embezzlement, there are tax implications for both the embezzler and the embezzled. Embezzled income is taxable to the person who does the embezzling (revenue ruling 61-185, 1961-2 CB 9; revenue ruling 65-254, 1965-2 CB 50; James...
AICPA Clarifies Concurring Partner Role
"Right now, we'll live with it," said Richard Miller, AICPA general counsel and secretary of the board of directors, when asked about the Supreme Court's denial of Robert D. Potts' petition for review of a federal appeals court's decision. The court...
ASB and SECPS Make Revisions
The SEC wanted professional standards to specifically address concurring partner responsibilities. In response, the ASB prepared an exposure draft that amends Statement on Quality Control Standards (SQCS) no. 2, System of Quality Control for a CPA...
Buyer Beware
Tax-qualified long-term-care insurance may not be client's best bet. Remember the old man who "bumped his head when he went to bed and couldn't get up in the morning?" More elderly than ever before need help getting out of bed in the morning--as...
Eastern Exposure
Companies speak candidly about what it's like to manage risk in Asia. In 1986 on Sumbawa, a remote Indonesian island east of Bali, Newmont Mining Corp. undertook the biggest mining endeavor in its history. Financial executives knew that to mine...
GASB Overhauls Reporting Model
GASB OVERHAULS REPORTING MODEL After a decade of debate, GASB has rewritten the rules for accounting for public entities. In June, the board voted unanimously to implement the dual-perspective reporting model that will change fundamentally the way...
How to Select the Right Accounting Software
A process for evaluating the best packages for your organization. There's an old saying, If you ask the wrong question, you're likely to get the wrong answer. That certainly applies when CPAs ask which accounting software product is the best. The...
IRS Slipping on Enforcement
Will more taxpayers cheat on their taxes as the threat of being audited by the IRS decreases? New data, which shows a steady decline in IRS enforcement activities, begs the question but offers no answers. IRS statistics, published by Transactional...
Learning to Love ABC
Why CPAs stumble on activity-based costing projects. Hard as it is to believe, activity-based costing (ABC) works best with a minimum amount of detail and estimated cost figures. By training and inclination accountants are detail oriented, abhorring...
Loss on Sale to a Commonly Controlled Corporation
As a general rule, taxpayers cannot deduct losses on transactions between related parties. IRC section 267(f) provides a special rule for losses between "commonly controlled" corporations. The loss is deferred rather than denied and is recognized based...
Proposed Omnibus SAS Encourages Managers to Report Errors
In response to SEC concerns and to encourage more transparent financial reporting by companies, the auditing standards board (ASB) issued for exposure guidance that will require corporate managers to inform auditors of the nature of any financial statement...
Rent Inducements
Incentives to attract commercial tenants and the tax ramifications. In today's business environment, prospective tenants of commercial property have many alternatives and options. Given the competition in trying to attract tenants to available space,...
Roth IRAs: Converting, Recharacterizing and Reconverting
Undoing a Roth IRA conversion can make a good thing even better. If Roth IRAs are such a good idea, why undo a Roth IRA conversion? For a better bottom line, of course. Under some circumstances, such "recharacterizing" can result in significant...
Weighing the Risks
Business valuations help your clients--and your firm understand an entity's strengths, weaknesses, vulnerabilities and market share in the event of its sale. In any valuation, it is important to assess financial risk income potential vs. vulnerability...
What Accountants Can Do to Stop Corruption
CPAs may not be able to stop corruption on their own, but they should be leaders of their countries' collaborative efforts to oppose it. In particular, they should do everything they can to encourage organizational controls that expose corruption early--and...
What's in a Name Change?
A time when the future of the profession is being redefined, we've come up with a designation that encompasses what CPAs really do. Over the years, we, as CPAs in public practice and as auditors and as consultants to client management, have had...
Who Says It's a Fair Deal?
What people who write fairness opinions have at stake and what that means for investors and financial managers. Even though almost every SEC filing disclosing a change in corporate control includes a fairness opinion, these documents do very little...
Yes, ABC Is for Small Business, Too
A challenge to conventional wisdom. In the decade since activity-based costing (ABC) was introduced, small and midsize companies were advised to steer clear of it. They were warned, mostly by those who labored long and hard--and often unsuccessfully--to...
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