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. 215, No. 3, March

Avoid Audit Deficiencies
[ILLUSTRATION OMITTED] Fair value measurements (FVMs) and asset impairment testing were among the most prevalent deficiencies found in audits in the wake of the economic crisis of 2008. Consulting firm Acuitas Inc. gives tips on how to mitigate...
Boards Are Hungry for CFO Talent
The appetite for CFOs to participate on corporate boards is increasing--a demand that, if met, could help not only companies, but also the financial professionals who end up in board roles. They stand to gain a new perspective on running an organization,...
Clarifying the Standard for Group Audits: Impact of New Standard on Individual Engagements Will Depend on the Manner in Which the Practitioner Has Performed Group Audits in the Past
EXECUTIVE SUMMARY * Clearer requirements and guidance for group auditors are contained in a new standard developed as part of the AICPA Auditing Standards Board's Clarity Project. The standard, AU-C 600, Special Considerations--Audits of Group Financial...
Clients: The End Is Near
Evaluating clients annually is good practice management for a professional services firm. A firm's strategies, areas of practice, and risk profile change over time. As a result, certain clients may no longer be a desirable fit for the firm. Similarly,...
Donating and Sharing Paid Time Off
Hurricane Sandy highlighted the role of programs that allow employees to donate the value of their unused paid time off (PTO) from work or share it with fellow employees. Following are the main types of programs and their tax treatment. STANDARD...
File Now or File Later
The U.S. District Court for the District of Massachusetts held that an estate was liable for a late filing penalty since its reliance on an accountant's advice to file a late estate tax return rather than a timely estimated return was not reasonable...
Home Concrete Decision Offers Limited Guidance: The Supreme Court Ruled against a Six-Year IRS Examination Window for Understated Basis, but Questions on Judicial Deference to Regulations Remain
EXECUTIVE SUMMARY * The normal three-year statute of limitation to contest most fax filings was reaffirmed by the Suprema Court in Home Concrete & Supply, LLC in April 2012. The taxpayers did not "omit" income when they artificially inflated...
How to Do Business in India
[ILLUSTRATION OMITTED] India remains a market with rapid-growth potential despite the inflationary pressures and fallout from the euro-zone crisis that have slowed economic growth substantially since the end of 2011. The country, the world's second-most...
IRS Regulation of Tax Return Preparers Struck Down
[ILLUSTRATION OMITTED] A U.S. district court ruled that the IRS's registered tax return preparer program exceeds its statutory authority and enjoined it from enforcing the regulations (Loving, No. 12-385 (D.D.C. 1/18/13)). In 2011 the IRS issued...
Mandatory Language for Consents to Disclose, Use Taxpayer Information Modified
In Rev. Proc. 2013-14, the IRS provided guidance to tax return preparers about the format and content of taxpayer consents to disclose and consents to use tax return information and modified the mandatory language required on each taxpayer consent....
Proving Fraud Proves Difficult for IRS
The Tax Court determined that the IRS was time-barred from assessing tax against the owner of several bankrupt entities for all but the last of several years at issue. Aside from the one year for which the taxpayer consented to extend the limitation...
Rules on Use, Disclosure of Taxpayer Information Finalized
The IRS issued final regulations under Sec. 7216 that govern the circumstances in which tax return preparers can disclose or use certain limited tax return information (T.D. 9608). The regulations finalize with minor changes rules that were issued...
The Basic Framework of Cross-Border Taxation
U.S. citizens are taxable on their worldwide income, with a credit or deduction for taxes paid on foreign income. The United States makes no distinction between earnings from business or investment activities within the United States and those outside...
The Benefits of Captive Insurance Companies
EXECUTIVE SUMMARY * Captive insurance companies are often used by large corporations to lower their insurance costs and are often created in offshore tax havens. * However, small, closely held companies can take advantage of a number of tax and...
The Last Word
After college, I was a teacher for a few years, and I was accepted to a hospital administration program. I was required to take an accounting course, and I was bartending on weekends at a restaurant where the owner's son-in-law was a CPA. He knew me...
Voluntary Classification Settlement Program Expanded
The IRS significantly modified its Voluntary Classification Settlement Program (VCSP). In Announcement 2012 -46, in effect until June 30, 2013, the IRS is temporarily permitting employers who have not filed Forms 1099 for their workers to participate...
What Are the Risks? Self-Assessment Tool Can Help Small Businesses Evaluate Fraud Controls
EXECUTIVE SUMMARY * Small businesses often possess limited resources for preventing and detecting fraud. CPAs who serve small business owners can use this self-assessment tool to help the businesses determine whether their controls are appropriately...
What's Your Fraud IQ?
Recent scandals at Olympus, Barclays, and Wal-Mart, among others, illustrate the ongoing need for organizations to continually review and strengthen their corporate governance practices. CPAs play a key role in this process. Do you know the best practices...