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. 181, No. 2, February

Condo Owners Fail Material Participation Test
In private letter ruling 9543003, the Internal Revenue Service ruled that a couple's participation in a hotel condominium activity did not constitute material participation for purposes o the passive loss rules. Their interest was treated as a passive...
Court Enforces Limitation-of-Liability Provision
The Oregon Court of Appeals upheld the validity of limitation-of-liability provisions in a contract for professional services. Although this case involved an engineer, its rationale could be applied to an accountant's service contract. The case began...
FASB 124 Attempts to Resolve Inconsistencies in NPO Reporting
The Financial Accounting Standards board has issued Statement no. 124, Accounting for Certain Investments Held by Not-for-Profit Organizations, the fourth statement growing out of the FASB's project to resolve inconsistencies in accounting and reporting...
Florida Court Favors AMEX Employee in Holding-Out Case
An employee of American Express Tax and Business Services was granted summary judgment in the latest round in the ongoing court skirmishes between Amex and state boards of accountancy seeking to enforce their right to regulate the practice of public...
How Objective Are outside Auditors?
In a speech in early 1994, Walter Schuetze, then chief accountant of the Securities and Exchange Commission, questioned the objectivity and independence of outside auditors. His comments triggered a wave of reaction from the accounting profession. The...
IRS Clarifies Frequent Flier Ruling
The Internal Revenue Service has issued a technical advice memorandum ruling that an employer's travel expense reimbursement plan that allowed an employee to retain frequent flier miles was taxable. Although the IRS said it had no special enforcement...
Making Partners Super Marketers
Partners in accounting firms need to market regularly but often become too entangled in the day-to-day business of serving clients to do this. Our midsized accounting and consulting firm in Minneapolis, Boulay, Heutmaker, Zibell & Co., found that...
Nanny Tax Implications
One area of the law that has proven to be troublesome for many taxpayers (and not just high-income individuals) has been the tax treatment of housekeepers, babysitters, cooks and other domestic workers. In an effort to clarify the rules and simplify...
New Fed Guidelines Rate Banks' Risk Management
Edward W. Kelly Jr., a member of the board of governors of the Federal Reserve System, announced new Federal Reserve guidelines that instruct bank examiners to give a rating for risk management, including internal controls, that will weigh heavily in...
Painless Tax Deferral When Selling a Subsidiary
A corporation that sells a subsidiary can defer the tax on its gain by structuring an installment sale that consists of a debt instrument issued by the purchaser. However, in these instances Internal Revenue Code section 453A requires the seller to pay...
Partners for Growth Awards Grants to Entrepreneurs
Partners for Growth, an alliance between the American Institute of CPAs and AT&T Capital Corp. to promote small business and social responsibility, has awarded a total of $100,000 to entrepreneurs in Baltimore and Detroit whose fledgling businesses...
Pilot Program Will Examine Auditor-Examiner Cooperation
A new pilot program to test the coordination of oversight activities of bank examiners and CPAs is intended to reduce the regulatory burden on banks by developing guidelines for cooperation between practitioners and examiners. Comptroller of the Currency...
SAS 79: Reporting on Uncertainties
Statement on Auditing Standards' no. 79, Amendment to Statement on Auditing Standards no. 58, "Reports on Audited Financial Statements", drops a requirement without adding any new ones. It amends SAS no. 58 to delete the requirement that when certain...
Securities Litigation Reform Bill Is Now Law
The House voted 319-100 and the Senate voted 68-30 to override President Bill Clinton's veto of a bill that will reduce the number of frivolous class action securities lawsuits. The Private Securities Litigation Reform Act of 1995 was drafted to reshape...
Shareholders May Sue Firm for Constructive Fraud
A North Carolina court of appeals ruled that shareholders of a corporation could maintain a constructive fraud action against an accounting firm. Fraud claims are not covered in most professional liability policies. This case was significant because...
Small Business Tax Solutions
Q. How does the structure of the sale of an S corporation's stock affect the allocation of income between the buyers and the sellers? A. There generally are three ways to structure the "sale" of an S corporation: * A sale of all of the corporation's...
Surprise Built-In Gains Taxes
Small businesses that change their status from C to S corporations can be subject to "surprise" built-in gains taxes. According to Internal Revenue Code section 1374, a built-in gains tax is applied to die appreciation of assets due to a corporate status...
The Competitive Advantage
Isn't it fascinating, and informative, that only 15 years ago an of us--including women--believed that women couldn't do math--and today, more than half those entering the CPA profession are women. I believe accounting is one of the most difficult fields...
The FASB and the IASC Redeliberate EPS
The Financial Accounting Standards Board has been redeliberating earnings per share with the objective of issuing new accounting rules that would simplify EPS calculations and enhance international comparability. The International Accounting Standards...
The Public Interest Must Come First
The following is adapted from the Gold Medal address by Philip B. Chenok, past president of the American Institute of CPAs, presented at the AICPA fan council meeting, on October 23, 1995. CPAs must continue to be concerned about "the public interest,"...
The Use of Analytical Procedures
Auditors facing competitive market pressures for audit services continually reassess the efficiency of audit procedures while maintaining the overall effectiveness of the audit plan. Current guidance for the application of analytical procedures as part...
Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.