The CPA Journal

The CPA Journal is a monthly refereed accounting journal. It has been published by the New York State Society of CPAs since 1930.Subjects for The CPA Journal inlcude accountants and accounting. Carolyn Morrisroe is the managing editor and Anthony H. Sarmiento is a contributing editor.

Articles from Vol. 69, No. 4, April

10-Point Plan to Improve Oversight of Financial Reporting Progress
The New York Stock Exchange (NYSE), the National Association of Securities Dealers (NASD), and the Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees have released their report of 10 far-reaching recommendations intended...
Accounting for the Issuance of Convertible Securities
WHEN CONVERTIBLE DEBT IS ISSUED with a beneficial conversion feature, a portion of the proceeds should be allocated to the conversion feature. By Joel Steinberg, CPA, American Express Tax and Business Services of New York, Inc Convertible preferred stock...
An Application of the Theory of Constraints
FOR COMPANIES THAT EMPLOY SKILLED WORKERS the constraint is often the time of one or a few key employees. The theory of constraints (TOC) is a management philosophy developed by Eliyahu M. Goldratt in a series of books and articles. TOC is a systems...
Auditor Responsibilities Related to the Year 2000 Issue
AN AUDITOR IS NOT RESPONSIBLE for detecting current or future effects of Y2K on operational matters that do not affect financial statements. As the year 2000 fast approaches, companies all over the world are scrambling to update their computer systems...
Background on the Euro
Editor's note: This article, which focuses on the euro's history, is presented as a companion to "The Euro Is Born," appearing on page 14. The euro is the name of the European Union's new single currency, which came into existence on January 1, 1999,...
Captive Insurance Companies: Your Risk Management Angel
In Brief Doing Your Own Thing Companies are always evaluating the options available to meet their insurance needs, and more and more organizations are seeking alternatives to traditional coverage. A captive insurance company offers a nnmber of advantages...
DOL Requires SOP 92-6 Disclosures
The Department of Labor (DOL) has decided to end its nonenforcement of SOP 92-6, and to let the accounting profession set accounting standards without the confusion of conflicting DOL enforcement (or nonenforcement) policies. The SOP changed accounting...
Dress-Down Days: Benefit or Burden?
But What Do I Wear? The issue of dress-down days and acceptable casual business attire in a public CPA firm is relevant to many CPAs, as indicated by their responses to a recent survey. Nearly three-fourths of the respondents work in firms that have...
Ethics and the CPA: Building Trust and Value-Added Services
ETHICS AND TIE CPA: BUILDING TRUST AND VALUE-ADDED SERVICEs By Charles H. Calhoun, Mary Ellen Oliverio, and Philip Wolitzer John Wiley & Sons, Inc., 1999, 257 pp., $85, cloth Reviewed by Charles H.. Zwicker, CPA Newspapers these days are full of...
Exclusion on Sale of Principal Residence Still Available without Two-Year Ownership
By now, every accountant knows that the Taxpayer Relief Act of 1997 (TRA '97) changed the rules with regard to sales of residences. IRC section 121 now allows a taxpayer to exclude up to $250,000 ($500,000 for couples filing jointly) of gain on the sale...
Getting New Clients and Keeping Old Ones
As part of a study of the importance of marketing in public accounting, a survey questionnaire was mailed to 383 randomly selected corporate senior accountants nationwide, using a directory of firms obtained from Dunn & Bradstreet. Corporate respondents...
IFAC Convenes Worldwide Lending and Development Groups to Advance Accounting Development
The International Federation of Accountants (IFAC), the World Bank, the Inter national Monetary Fund, and various inter national lending and development agencies have agreed to form the International Forum on Accounting Development. This new forum will...
Insurance and the Three-Year Rule
Beginners to estate planning are often surprised that the tax-free life insurance investment that they have made will be included in their taxable estate. A way to avoid estate taxation (with its high marginal rates) is to irrevocably transfer legal...
IRS Issues Guidance on Payment of Employment Taxes for Disregarded Entities
The IRS recently issued Notice 996, soliciting comments from and providing guidance to taxpayers and practitioners regarding issues related to employment tax reporting and payment by qualified subchapter S subsidiaries (QSSS) and other entities that...
Old Wine in a New Bottle: Is It Enough?
In January, the AICPA issued a document, "Audit Issues in Revenue Recognition," in response to the September 28, 1998, speech by SEC Chair Arthur Levitt where he singled out five undesirable practices often used to achieve "earnings management." Among...
One Judge's Perception of CPAs
Why one firm lost a court case In Brief But It Was Only a Review! In a recent court case, a judge found a CPA firm responsible for thefts perpetrated by the client's bookkeeper despite the fact that the firm had only been engaged to review the client's...
Potential Sales Tax Traps for Disregarded Entities
The introduction of the single member limited liability company (SMLLC) and the qualified subchapter S subsidiary (QSSS) has created a myriad of Federal and state tax planning opportunities. Generally, for Federal tax purposes, the separate existence...
Public Oversight Board Issues Annual Report
The Public Oversight Board (POB), chaired by AA. Sommer, Jr., recently issued its 1998 annual report. In many ways the report takes a "state of the profession" tone as part of the POB's role in upholding the integrity of the financial reporting process...
Research on Accounting Ethics, Volume 4, 1998
RESEARCH ON ACCOUNTING ETHICS, VOLUME 4, 1998 Edited by Lawrence A Ponemon, PricewaterhouseCoopers, LLP JAI Press, Inc.: Stamford, Conn., and London, England Reviewed by Joseph Schachter, CPA, member, NYSSCPA Professional Ethics Committee This volume...
Savings Clauses
In Brief The Right Subject Matter Savings clauses in documents are designed to prevent an adverse result that otherwise might arise. Although the IRS generally views tax savings clauses with disfavor, there are circumstances where a savings clause should...
SEC Current Developments: 1998 AICPA National Conference
In Brief Learn by Interacting Each December the AICPA sponsors a national conference to spotlight matters of topical importance to the accounting profession, registrants, and the SEC. The program features both lecture-type presentations by commissioners,...
Tax Court Decides Bank's Loan Origination Expenditures Are Capital
In the recent ruling of PNC Bancorp, Inc v. Comm'r (T.C. No. 16002-95, 110 T.C. No. 27, 6/8/98), the U.S. Tax Court has held that loan origination expenditures incurred by a bank are not currently deductible as business expenses but are capital expenditures...
The Euro Is Born: Why CPAs Need to Know about It
Will it grow up to challenge the dollar in the world's financial markets? C is the symbol designed to denominate the euro. Born January 1, 1999, the euro had a gestation period of about six years. But the dream for a common csurrency as a means to unify...
The Need for Training in Business Appraisals
Many CPAs have expanded their practices to include business valuation services in situations such as bankruptcy, divorce, casualties, taxation, corporate dissolutions, and mergers and acquisitions. It is not uncommon for fees on valuation engagements...
The Value of Long-Term Care Insurance
Vast improvements in medicine and science have enabled Americans to enjoy longer and longer lives; however, this increased longevity is a double-edged sword. Many older Americans already suffer from physical and mental impairments, or can expect to before...
Wealth Transfer Planning System from RIA
WEALTH TRANSFER PLANNING maintains client data and provides access to the Estate Planning System research materials and an array of state-specific forms. RIA Group's Wealth Transfer Planning System combines estate planning search materials with a logic-based...