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. 199, No. 5, May

African American Students and the CPA Exam: Mentoring, Internships and Scholarship Programs Can Draw Students into the Profession
EXECUTIVE SUMMARY * DESPITE DECADES OF EFFORT by organizations such as the AICPA and NASBA to bring more minority candidates into the profession, the numbers are still small. Still, there were 5,731 African American candidates for the CPA exam in...
Contingent Attorney Fees
Taxpayers often hire an attorney on a contingent fee basis. If the recovery is taxable, the attorney fee is deductible. Because of the interaction between regular tax and alternative minimum tax rules, however, these taxpayers can owe significant amounts--sometimes...
CPAs Confident about Their Careers: They're in Demand and despite the Hours, Pay and Satisfaction for Most Are Higher Than Ever
In the midst of a surge of demand for the talents only CPAs can offer, AICPA members are finding fresh professional challenges, ever-greater career achievements and new opportunities to balance work/life priorities. More than at perhaps any time...
Dumb and Dumber: Even More Proof That Truth Is Stranger Than Fiction
Did you hear the one about the bank robber who wrote a holdup note on the back of his own utility bill? We've come to expect that the garden-variety crook may not be the sharpest knife in the drawer, but fraudsters are supposed to be smarter, aren't...
Executive Roundtable
We caught up recently with Paul MacDonald, Executive Director, Robert Half Management Resources; John F. Hudson, CPA, President, Hudson Consulting Group; James C. Metzler, CPA CITP, AICPA VP Small Firm Interests and Mark Fuchs, Chief Accountant, Google,...
Exiting a Partnership
Limited partners generally are not responsible for partnership debts; nonetheless, creditors often demand they guarantee them. When a limited partner who has guaranteed a debt wants to leave the partnership, he must satisfy the guarantee or have it...
Exposure Drafts Outstanding
Exposure Drafts Outstanding (This list was compiled as of April 1, 2005. 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...
FICA Taxes for Medical Residents
Payments to students for services they provide to a school, college or university are exempt from FICA taxes under IRC section 3121(b)(10) if the students are enrolled and regularly attend classes. Mount Sinai Medical Center of Florida Inc., Miami...
Golden Business Ideas
Become a Super-Networker A no-growth business and a static career often have one thing in common: ineffective networking. Successful business managers and professionals don't keep puny Rolodexes or stacks of old business cards. They formulate a...
Knock, Knock: It's the IRS
Are you ready to produce the records and documents you need under the law? Adapted from the A/CPA's Accountant's Business Manual Record retention is a must, whether for personal, business or tax reasons. However, record retention is necessary...
Looking Back: The Journal in 1917
How did the profession first begin to regulate who could become a CPA? An article from the July 1917 issue of the JofA describes the first steps in the efforts toward uniformity of examination. In the age of the computerized CPA exam, it's clear that...
More Talk, More Action: A Changing Role for Corporate Boards and CPAs
EXECUTIVE SUMMARY * THE INCREASING FOCUS ON ETHICS HAS CREATED an opportunity for CPAs to help their companies foster a corporate culture that promotes ethical decision making. It also has encouraged more boards of directors to be involved with...
Opportunity and Balance: Is Your Organization Ready to Provide Both? Which of Your Valued Professionals Will Be Moving Up - and Which Moving Out?
Take this simple test. Rank these items from most to least important to the accounting profession: increased competition, rising prices, regulation, personnel issues and corporate scandals. Did you put personnel issues in last place? With so many...
Outrageous Employee Benefits: A Strategy to Keep Your People Happy Is Sound Business
EXECUTIVE SUMMARY * THE PARTNERS AT VITALE CATURANO & CO. (VCC) have listened carefully to what employees and potential hires say matters to them in the workplace--growth, intellectually stimulating and diverse projects, and a sense of being...
Prepare Data for Excel: Make Information Spreadsheet-Readable
If you feed correctly formatted data to Excel, it can handle a multitude of calculations flawlessly. But feed it a piece of "indigestible" information--that is, data not formatted to its liking--and the calculations will generate error messages that...
Protect against Snoops Reading "Erased" Track Changes and Comments
Q. I recently read about someone who sent a client a sensitive Word document that had been edited many times using Track Changes and Comments. Even though the changes had been erased before the memo was sent, the recipient was able to recover them...
Six Steps to Better Marketing
Loyal clients are the most important source of referrals there is, so if you want to get more business, concentrate on the ones you already have. That means giving clients the attention they deserve. Here are six steps you can take to improve your...
Substantiate Travel and Entertainment Costs: Writing off a Corporate Fishing Trip
In Townsend Industries, Inc., 342 F3d 890 (2003), the Eighth Circuit ruled that the cost of a company's annual fishing trip was a working-condition fringe benefit and a deductible business expense. CPAs should study Townsend to help business clients...
Synchronize Files between Desktops and Laptops
Q. I use a desktop computer in my office and a lightweight laptop when I travel on business. It takes 30 minutes or so to synchronize files between the two machines, so I'm always afraid I'll end up with a file that is not current. Is there some convenient...
Tax Relief, Chapter 2004: Tips for Implementing the New Rules
EXECUTIVE SUMMARY * THE WORKING FAMILIES TAX RELIEF ACT OF 2004 extends the alternative minimum tax exemption of $58,000 (married filing jointly) and $40,250 (single) through 2005. * THE WFTRA PROVIDES A UNIFORM DEFINITION OF "qualified child"...
The Case for Private Company GAAP
GAAP has high value--for the most part--say a growing number of external users of private company financial reports, CPAs and other financial professionals working in or serving private companies, which represent more than 99% of the nation's incorporated...
The Dollars and Cents of Green Construction: Being Environmentally Friendly Brings Financial as Well as Social Benefits
EXECUTIVE SUMMARY * WHEN PLANNING CONSTRUCTION PROJECTS, consider the tax implications, rebate offers and soft benefits associated with environmentally friendly construction. Construction companies may not be eligible for these on buildings they...
The New Importance of Materiality: CPAs Can Use This Familiar Concept to Identify Key Control Exceptions
EXECUTIVE SUMMARY * THE SARBANES-OXLEY REQUIREMENT FOR COMPANIES to develop key control processes has brought new attention to the well-known concept of materiality. CPAs need to be able to identify key control exceptions and apply materiality to...
The Tax Is Assessed, Not the Taxpayer
No tax can be collected without first being properly assessed. Under IRC section 6501, the IRS has three years from the filing of a return to assess any additional tax liability, and the method of assessment is dictated by IRC section 6203. Once a...

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