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. 75, No. 5, May

Accounting Standards Setting: Inconsistencies in Existing GAAP
In October 2002, the Financial Accounting Standards Board (FASB) issued a proposal to adopt a principlesbased approach to setting accounting standards. FASB's proposal is a reaction to the complexity of the "rules-based" or "cookbook" approach to setting...
Are Accounting Programs Providing Fundamental IT Control Knowledge?
Auditors often provide assurance on computerized controls, where electronic transactions are processed without a paper audit trail. Section 404 of the Sarbanes-Oxley Act (SOA) requires auditors to evaluate a company's internal controls. SAS 94, The Effect...
Blueprint for a Successful Business
Entrepreneurs often attempt to build a business without a blueprint-a comprehensive financial forecast or financial projection. A financial forecast assumes the business' operations will continue on a set course, with no major changes. The operative...
Catching Fraudsters with Their Hands in the Till
Dishonest employees are increasingly getting caught with their hands in the till. A 2003 KPMG survey found that 75% of respondents had experienced at least one instance of employee theft, a 13% increase over its 1998 survey. The Association of Certified...
Conscience of the Profession: A Personal Journey
Conscience of the Profession: A Personal Journey By Eli Mason Softcover edition published by the author in 2004. $19.95 (s/h included); mail check to Eli Mason; 1212 Avenue of the Americas, 24th floor; New York, N.Y. 10036.Eli Mason, during testimony...
CPAs Go Slow in Adoption of ElderCare/PrimePlus Practices
The projected aging of the United States population was among the "megatrends" identified by the AICPA Special Committee on Assurance Services. According to the U.S. Census Bureau, the size of the population age 65 and older is projected to increase...
Effective Governance in an Ethicless Organization
Can an organization whose tone at the top is either nonexistent or far removed from the norm have effective governance? If it is possible to have effective governance in what might be called an "ethicless" organization, what does this say about the factors...
Exploring PCAOB Auditing Standard 2: Audits of Internal Control
The Sarbanes-Oxley Act of 2002 requires public accounting firms that audit public companies to register with the Public Company Accounting Oversight Board (PCAOB) and to adhere to professional standards established by the board for audits of public companies....
Facing Reality about Social Security
The future of the Social Security program is probably one of the most important challenges that will confront our nation over the next century. Some claim that those who say Social Security requires an immediate fix are just crying wolf, and that any...
Factors Affecting Juror Perceptions in Liability Cases
A 2004 Wall Street Journal article pointed out that the rising cost of arbitration proceedings has some disputants considering whether they would be better off in the court system. Furthermore, various surveys that compare verdicts favoring plaintiffs...
FAQs about Internal Audit and New Regulatory Requirements
Issues Arising from the SEC's Approval of NYSE Listing StandardsThe SEC approved updated New York Stock Exchange (NYSE) listing standards in November 2003. According to the NYSE, "Listed companies must maintain an internal audit function to provide management...
Improving Negotiation Skills
Although negotiation is a basic skill, practiced almost daily in all walks of life, very few have studied it. Last year, the CityBar Center for Continuing Legal Education and ALI-ABA sponsored a program, "Negotiation: Bargaining for Better Results,"...
Improving Professional Ethics
The Case of the Texas State Board of Public AccountancyIn the June 2004 CPA Journal, Jane B. Romal and Arlene M. Hibschweiler present insightful steps for implementing changes directed toward "Improving Professional Ethics." This timely and thought-provoking...
Inbox: Letter to the Editor
Consequences of the 150-Hour RequirementIn his article "150 Hours and the Market" (The CPA Journal, February 2005), John Yelvington asserts that the market must move to raise salaries for five-year graduates in order for the profession to attract a sufficient...
Monetary-Unit Sampling Using Microsoft Excel
Monetary-unit sampling (MUS) is a method of statistical sampling used to assess the amount of monetary misstatement that may exist in an account balance. The method, also known as dollar-unit sampling or probability-proportional-to-size sampling, has...
Net Operating Losses, S Corporations, and Shareholder Bankruptcy
A bankruptcy estate is created when an individual files a Chapter 7 or Chapter 11 petition. The estate is a separate entity for purposes of both bankruptcy law and tax law. According to IRC section 1398, the estate succeeds to all legal and equitable...
New Rules for Reporting Book-Tax Differences
Over the last several years, the IRS has promulgated extensive new regulations requiring taxpayers to disclose "reportable transactions," in an effort to curb abusive tax shelter activity. One area targeted by the IRS has been transactions that produce...
Nonpublicly Accountable Entities
In my last two columns, I made fundamental points about financial accounting's conceptual framework. The March column contained a plea for rational discourse rather than posturing about beliefs. The April column laid the groundwork for a rational discourse....
Tax Planning for Establishing Principal Residence Status
IRC section 121 allows a taxpayer to exclude $250,000 ($500,000 for joint filers) of gain on the sale or exchange of a home if it was owned and used as the taxpayer's principal residence for two of the five years preceding the sale. To qualify for the...
Technology's Expanding Role in SEC Compliance
Meeting SEC compliance requirements has never been easy. But since the advent of mandated electronic filing in June 1996, SEC registrants have witnessed a steady increase in the role technology plays in the disclosure process.This technical progression...
The 'Solo K' Retirement Plan
A "Solo K" retirement plan is a flexible and easy way to maximize retirement savings for small, single-owner businesses. This plan adds profit sharing to existing 401(k) plans. Business owners can not only maximize their 401(k) contribution ($13,000...
Top 10 Misconceptions about Bankruptcy
Bankruptcy law is complex and takes time to master. A basic understanding of the Bankruptcy Code and its principles is essential for effective management of the financial affairs of individuals and businesses. There are many misconceptions about bankruptcy.1....
Understanding and Motivating Volunteers
When involved in a nonprofit organization, board members, committee chairs, and volunteers have individual behavioral styles that differ from their other work environments. To form more effective relationships, nonprofit leaders should adapt their behavioral...
Website of the Month: SEC Historical Society
The Securities and Exchange Commission Historical Society (www.sechistorical.org) provides a virtual museum available to the public. The website is a great tool for educators and students, as well as for anyone interested in history. The website provides...
Working-Condition Fringe Benefits
Eighth Circuit Ruling Allows Exclusion of Employer-Paid Fishing TripsMany employers provide fringe benefits as noncash compensation. If specific guidelines are met, the benefits are generally not taxable to the employees, and their cost is deductible...
XBRL and Financial Information Assurance Services
Because of recent financial reporting scandals, investors have become increasingly skeptical of company-released information. The reporting and reviewing of financial information is fraught with problems and inefficiencies. According to Forrester Research...
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