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. 68, No. 1, January

A Survival Guide for Road Warriors
BOOK REVIEW: A SURVIVAL GUIDE FOR ROAD WARRIORS By Daniel Coolidge and J. Micbael Jimmerson Published by the American Institute of Certified Public Accountants, 163 pages Reviewed byJohn F. Burke, CPA, The CPA Journal Road warrior appears to be the nom...
CPA Perspectives on ISO 9000: The Pros and Cons of Offering This Service
The ISO 9000 series is having a dramatic impact on quality assurance practices around the world. What do CPAs think about the ISO 9000 quality assurance program? Once considered a marketing ploy, ISO 9000 has become a practical necessity for many businesses....
Earned Income Credit-Strategies for Self-Employed Taxpayers
Historically, the earned income credit (EIC) has been associated with low-income taxpayers. Significant post-Revenue Reconciliation Act of 1993 (RRA93) increases in EIC percentages, and dollar amounts, have created tax planning opportunities for certain...
Engagement Letters as a Risk Management Tool
Many lawsuits are the result of a communication breakdown between CPAs and their clients. A well-drafted engagement letter can prove helpful to a CPA in preventing-or defending against-a negligence or breach of contract claim. The breakdown in communications...
EPS-Computational Wrinkles and Contingent Shares
In February 1997 the FASB issued SFAS No. 128, Earnings per Share, which supersedes APB Opinion No. 15 Earnings per Share. The complexity and diversity of financial instruments had increased since the issuance of APB No.15 in 1969. As a result, both...
Exclusion for Family-Owned Businesses
The Taxpayer Relief Act of 1997 (TRA '97) adds a new estate tax exclusion for interests in qualified family-owned businesses, effective for decedents dying after December 31, 1997. However, since the exclusion is limited to $1,300,000 reduced by the...
IRS Estopped from Asserting Open-Ended Extension of the Statute of Limitations
Mr. and Mrs. Barry Fredericks filed their 1977 tax return in a timely fashion in 1978. In 1981, the IRS sent the Fredericks a Form 872-A, which they signed and returned to the IRS. A Form 872-A is an open-ended extension of the statute of limitations,...
Make the MD&A More Readable
Right now, accounting teams at countess corporations across the country are wrapping up "the back of the books" -the financial section of their companies' or clients' annual reports. Management's discussion and analysis (MD&A) is arguably the most...
NASBA's Outgoing Chairman Reports on the Status of Regulatory Matters
John M. Green, CPA, gave a state of the "state boards of the state" accountancy report at the annual meeting of the National Association of State Boards of Accountancy in Maui, Hawaii, held in September 1997. The following excerpts from his address highlight...
New Internet Domain Categories Planned for February Launch
The Council of Registrars (CORE), an international group which oversees Internet domain registration, expects seven new Top Level Domains (TLDs), the file extensions which denote the address of an Internet site on the network, to be available for a mid-February...
New Jersey Treatment Differs from Federal Treatment on Sale of Principal Residence
The Taxpayer Relief Act of 1997 (1997 Tax Act) made significant changes to the treatment of gain from the sale of a principal residence. The new law applies to sales of principal residences on or after May 7, 1997, with certain transition rules. The...
Not All Partners Are Created Equal
Essential elements of an effective partner compensation system Partner compensation is an art form. I think Thomas Jefferson intuited that when he said, "There is nothing more unequal than the equal treatment of unequal people"even though when he made...
Offsetting Capital Gains and Losses under the Taxpayer Relief Act of 1997
The Tax Technical Corrections Act of 1997 (HR 2645, as reported by the House Ways and Means Committee on October 9, 1997) makes numerous corrections to the Taxpayer Relief Act of 1997, including substantive changes to the capital gains rules. Because...
Second Circuit Finds for the Government in the Tenzer Case
The Second Circuit Court of Appeals recently reversed a U.S. District Court holding that the government could not criminally prosecute a tax practitioner who had relied on the IRS' nonfiler program. The criminal investigation began as a suspicion that...
Sexual Harassment Committed by Clients, Consultants, and Contractors
Female associates and employees at CPA firms are often required to work with clients, consultants, and contractors away from the relative tranquility of the firm's office. What is the firm's responsibility when potential sexual harassment questions arise...
Six Pack of Services
The AICPA Special Committee on Assurance Services developed business plans for six assurance services with potential revenues of over $1 billion each. Each business plan assesses market potential and identi ies the steps that CPAs must take to begin...
Software Update Review-QPLAN
By Pat Hamel, CPA, and Pamela Rafferty, CPA, Hamel Associates, Inc. In the January 1997 issue of The CPA ournal, we reviewed QPLAN Since that time, many interesting changes have taken place in this fascinating product. Before discussing the changes,...
State Taxes Attributable to IRC Section 68 Phase-Out
IRC section 68 reduces certain itemized deductions by the lesser of three percent of the excess of adjusted gross income over the threshold amount for that year or 80% of the amount of the itemized deductions otherwise allowable for that year. NYS Tax...
Survival of the Fittest
In a competitive, free market system, success comes to those who are the most innovative and the best prepared to deal with change. The signs are there that CPAs can no longer expect to achieve and maintain a successful career or practice on the basis...
Taxation of Internet Commerce
The battle between Federal and state and local governments According to Jupiter Communications, a new-media research company that specializes in emerging consumer online and interactive technologies, Internet commerce will grow from the current $30 billion...
The CPA Vision Project Positioning CPAs for Tomorrow
Through an intensive and collaborative process, the CPA profession is developing a vision for the future. At the heart of the CPA Vision Project is the participation of members of the profession in developing scenarios, or stories, that describe how...
The Employee Benefit Provisions of the Taxpayer Relief Act of 1997
A response to complaints about the complexity of the rules Under the Taxpayer Relief Act of 1997 (the act) signed into law by the President in the summer of 1997, a number of changes were made that impact retirement and savings plans maintained by employers....
The Internal Auditor's Responsibility for Fraud
With the recent issuance of SAS No. 82, Consideration of Fraud in a Financial Statement Audit, the external auditor's responsibility for financial statement fraud has received much attention. Though not as publicized, a professional standard on fraud...
Traditional Corporate Accountant to Become Extinct, Says IMA
CPAs in public accounting are not the only ones who need new survival skills to survive in the next century, according to Project Millennium, a study from the Institute of Management Accountants. A new model for corporate management accounting and financial...
Unconscionable Separation Agreements Held to Be Alimony
The Richardsons were married in 1983 and separated in 1983. Pursuant to the separation agreement, Mr. Richardson was to pay his wife $10,000 per month. In 1987, Mr. Richardson filed for divorce. During the divorce proceedings, Mrs. Richardson claimed...
Welcome Guidance on Hedges
By James Gregory, Esq., and Viva Hammer, Esq, Price Waterhouse LLP In PLR 9706002, dated October 24, 199h, the IRS considered whether certain "Treasury Lock" agreements entered into by taxpayer were hedging transactions within the meaning of section...
Will the Derivatives Project Go the Way of Stock Options?
The very survival of accounting standard setting in the private sector is at stake if the project on derivative financial instruments and hedging activities becomes overridden by political activities like the stock option project. The derivatives and...
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