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. 73, No. 2, February

A New Era of Member Involvement
Publisher's Column People often tell me how much the NYSSCPA has changed over the last several years. That's natural, because when the accounting profession is going through major upheaval, change should be expected. A recent indication of how different...
Asset Allocation Where There Are Discounted Assets
Asset allocation can be difficult if there are value-discounted estate This is so for a number of reasons. First, estate tax valuation discounts will apply to the value of family partnerships, corporate stock, and other assets in which the recipient...
Building Public Trust: The Future of Corporate Reporting
BUILDING PUBLIC TRUST: THE FUTURE OF CORPORATE REPORTING By Samuel A. DiPiazza, Jr., and Robert G. Eccles John Wiley & Sons, Inc., 2002; $24.95; ISBN: 0-471-26151-3 Reviewed by Robert Kawa In their prologue, the- authors state that Building Public...
Cause Marketing: Opportunities for Assisting Exempt Organizations and Sponsors
Cause marketing is the fastest-growing segment in advertising. Also known as strategic philanthropy, cause marketing is defined as "the process of formulating and implementing marketing activities that are characterized by contributing a specific amount...
Death, Divorce, and Taxes
Contingencies for when the knot comes undone In Brief Planning Can Avoid Unforeseen Distributions A separation or divorce can have a large impact on an individual's estate or inheritance rights. Without insight and planning, unanticipated consequences...
Demonstrating Leadership in the Public Interest
Small and medium-- sized businesses are the strongest growth engines in our economy but are limited by the current tax structure. When the Bush administration announced that one of its major legislative goals is to change the tax laws to encourage economic...
Digital Data and the Meaning of 'Audit'
THE CPA AND THE COMPUTER DATA FOR THE AUDIT PROCESS IS NOW GENERATED ELECTRONICALLY, but digital data's malleability makes it uniquely susceptible to shifts of reality. Individual investors, mutual funds, and retirement funds (individual, corporate,...
Document Management and Corporate Governance: What to Do When the Pressure Is On
When integrated with accounting systems, document management offers many benefits, including reduced risk of error and lowered related costs, improved information sharing, and, most importantly, electronic audit trails. According to business analyst...
Economic Census 2002 Features Many 'Firsts'
the U.S. Commerce Department's Census Bureau mailed millions of 2002 Economic Census forms in December to capture new information on U.S. businesses. Next to the decennial census of population and housing, the Economic Census is the biggest project carried...
FASB Charts a New Course
Great challenges and great opportunities In Brief Principles, Convergence, Reorganization, and Integrity The CPA Journal's Editor-in-Chief discussed a wide range of issues affecting the accounting profession with new FASB Chairman Robert H. Herz late...
'GAAP Is Not Enough.In Theory'
According to an online survey of 1,321 U.S. general and finance managers conducted during the second half of 2002, 56% of respondents think that companies should report more than is required by GAAP in order to provide visibility into their operations...
Gender and Accountants' Use of Technology
E3 GENERATION OVERALL, THE STUDY FOUND little difference between male and female CPAs. Accounting journals and other business publications have high-- lighted concerns about the position of women in the accounting profession, including lower retention...
Home Mortgage Interest Deductibility
REFINANCED GRANDFATHERED DEBT QUADS AS grandfathered debt if the mortgage proceeds do not exceed the balance of the old mortgage prior to refinancing. Home mortgage interest expense is deductible if certain requirements are met. In general, mortgage...
Lawsuit Awards and Settlements Audit Guide
THIS GUIDE WAS DEVELOPED TO PROVIDE LISTS OF ISSUES, explanations of applicable terminology, suggestions for conducting the examination, synopses of related court cases, and exhibits of pertinent forms. The IRS audit guide on lawsuit awards and settlements...
Letter to the Editor
ANALYZING FAILURES Like most CPAs I am dismayed, embarrassed, and perplexed by the recent series of audit failures. I started with Haskins & Sells in May 1965 and retired from Deloitte & Touche in May 1991. Since 1992, I have practiced as a sole...
Litigation Support Best Practices
ACCOUNTANT'S LIABILITY Many commercial and even domestic disputes involve accounting issues, and CPAs are increasingly being retained by lawyers to provide consulting services and expert testimony on such issues. According to AICPA membership data, litigation...
New Jersey Supreme Court Rules That Erroneous Refund Must Be Returned
THE COURT FOUND NO MERIT IN THE TAXPAYER'S ARGUMENTS and stated that the concept of waiver is one of "voluntary and intentional" relinquishment of a known existing right or such conduct that warrants an inference of such right. A corporate taxpayer found...
Providing Notice When an Employee Uses FMLA
The federal Family and Medical Leave Act (FMLA) provides employees up to 12 weeks of unpaid leave in a 12-month period for certain medical conditions. The employer must maintain an employee's health benefits during the leave and must restore the employee...
SECPS Member Perceptions of the Exposure Draft on Fraud: The ASB Is on the Right Track, but Will It Make a Difference?
In 1988, Statement on Auditing Standards (SAS) 53 defined the auditor's responsibilities for detection of errors and irregularities in a financial statement audit. A successor statement, SAS 82, was released in 1997 to clarify the auditor's responsibilities...
Starting Salaries to Remain at Same Levels
On average, starting salaries for accounting and finance professionals this year should remain little changed from 2002, according to the 2003 Salary Guide from Robert Half Finance & Accounting (www.roberthalf finance.com) and Accountemps. The guide...
Surveys Find Corporations Increasing Transparency, Boards Becoming More Assertive
According to a Barometer survey conducted by PricewaterhouseCoopers in late 2002, senior executives in the United States and Europe rank customers and employees as their most important stakeholders, but say their corporate reporting is light on information...
Tax Implications of Providing Cash Buyout Options
A taxpayer is generally required to include an item of income no later than the time of its actual or constructive receipt, unless the item is properly accounted for in a different period. If a taxpayer has an unrestricted right to demand the payment...
The Dangers of Pro Forma Reporting
REPORTING PRO FORMA EARNINGS OUTSIDE OF THE CONTEXT OF GAAP EARNINGS can be a deliberate attempt by management to manipulate investor perception and, hence, stock price. The use of pro forma earnings statements in press releases issued by publicly held...
The Mortgage Refinancing Decision: Updated Spreadsheet
This article updates the spreadsheet model described in "The Mortgage Refai na Decision: A Break-Even Approach" (The CPA Journal, February 1996). Exhibits I and 2 depict the structure of the spreadsheet and Exhibit 3 illustrates the solver parameters....
The New Regulations on IRA Required Minimum Distributions
IRA PLANNING IF THE BENEFICIARY OF THE IRA IS SOMEONE OTHER THAN THE SPOUSE, one or more beneficiaries could disclaim their interest so that the IRA flows to a younger person, thus stretching out the distributions over a longer period. An IRA owner must...
The Price of 'Free' Retirement Plans
PROVIDERS ARE ALLOWING PLAN SPONSORS TC OPT OUT OF THE PROPRIETARY PRODUCT LINEUP and expand to outside funds. Plan sponsors must ask for this flexibility. Retirement plan sponsors often believe they are getting their retireanent plan for "free." The...
The Relation-Back Doctrine Revisited
CHECKS MAILED OR UNCONDITIONALLY DELIVERED TO CHARITABLE DONEES prior to the donor's death, but not paid until after death, relate back to the date of delivery. Under the relation-back doctrine, checks mailed to charitable donees prior to the donor's...
The Road Taken
GUEST EDITORIAL A message from the Editor-in-Chief In his May 2001 column, Editor-inChief Robert Colson asked readers whether they would still become an accountant if they started their career over. Because of recent accounting failures, "shades of outrage,...
Three Voices, One Message
The appointment, direction, and work of the Public Company Accounting Oversight Board (PCOAB) will be a major focus of the accounting profession for the coming years. Former SEC Chief Accountant Lynn Turner shared with The CPA Journal the following letter...
Transforming Government, by Example
Improving the government's accountability In Brief Making the GAO a World-Class Organization David M. Walker is the seventh Comptroller General of the U nited States. lIe was nominated by President Clinton in 1998 and that year confirmed unanimously...
Using and Protecting Trademarks
In Brief How to Safeguard a Valuable Intangible Asset Buyers depend upon brand names to differentiate product and service preferences in the marketplace; sellers depend upon brand names to serve as a repository for customer goodwill. Trademarks link...
Website of the Month: Thomson Ria
WEBSITE OF THE MONTH: THOMSON RIA By Susan B. Anders, PbD, CPA, St. Bonaventure University Thomson RIA's website, www.RIA home.com, is well designed and easy to use, providing RIA's customers with quick access to its products. Two of its best features,...
When Are Prepaid Expenses Deductible?
In Brief Deducing Deductibility As long as the clear-reflection-ofincome standard is satisfied, taxpayers in the Seventh Circuit, regardless of their accounting method, now have authority for deducting fixed, one-year recurring items whose benefit extends...
Zero Investment Allocation Percentage Allowed for New York State Franchise Tax
A recent New York State Department of Taxation and Finance Advisory Opinion [TSB-A-02(10)C] has stated that, for New York corporate franchise (income) tax purposes, a taxpayer eligible to treat its cash on hand and on deposit as investment capital may...

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