Journal of Accountancy articles from August 2004

Journal of Accountancy archives from August 2004

Institute spreads financial literacy.(AICPA Special Report)
August 1, 2004... Individuals of all socioeconomic classes are spending too much and saving too little. So when a Roper consumer poll commissioned in May by the AICPA found that "Americans generally do not show great familiarity with a range of things that can...

'Cheap stock' questions can plague growing companies: a rule of thumb or management's best estimate aren't good enough anymore. But the a new AICPA Practice Aid unravels some of the mysteries and exposes the pitfalls.
August 1, 2004... The AICPA has issued a Practice Aid entitled Valuation of Privately-Held-Company Equity Securities Issued as Compensation, in large part to deal with what is often called the "cheap stock" issue. If you are with a private company issuing...

It's a matter of privacy.
August 1, 2004... Consumers have grown increasingly concerned about the misuse of their personal information, and regulatory bodies have been cracking down on offenders. You can see the many complaints filed against corporations on the FTC Web site at...

Cost segregation applied: a taxpayer can substantially increase cash flow by segregating property costs.
August 1, 2004... Purchasers of real estate can gain tremendous tax benefits by using a popular asset depreciation technique called cost segregation. Using this method, buyers view a real estate acquisition as consisting not only of land and buildings but also...

Optimizing luxury-auto deductions: the ultimate goal is to maximize the total automobile deduction while minimizing the use of IRC section 179 expense.
August 1, 2004... Recent tax changes have affected taxpayers' options for depreciating luxury automobiles. As a result CPAs will find the process for such depreciation more complex, requiring careful and thoughtful analysis. There now are six categories of...

Who will take the reins? Some tips for solving the partner-admission crisis.
August 1, 2004... The dreaded alert "We've got a problem" applies in more realms than NASA command control. For the CPA profession it pertains to a looming predicament: finding and developing strong entrepreneurial young partners so established firms can...

Carry your office in the palm of your hand; a pocket-size device is your computer when you're on the road.(personal digital assistants)
August 1, 2004... With today's technology, not only can you take your "office" with you when you travel, but you also can stash it conveniently in your pocket or purse. Welcome to the world of PDAs--personal digital assistants. These handheld devices can perform...

E-mail and the law: how to manage privacy issues using the AICPA/CICA framework.(Canadian Institute of Chartered Accountants)
August 1, 2004... Companies that market their products and services through e-mail face a new challenge the need to comply with privacy and spare (often defined as unsolicited bulk e-mail) regulations. Those that invest in building and preserving consumer trust...

Are you spamming your clients? How firms can make sure their e-mails don't violate the law.
August 1, 2004... CPAs who use e-mail to market and develop their accounting practices may find themselves labeled "spammers" under a new federal law. The Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM), which took...

An update on review engagements: SSARS no. 10 amends the guidance covering reviews of financial statements.(Statement on Standards for Accounting & Review Services)
August 1, 2004... In issuing Statement on Standards for Accounting and Review Services (SSARS) no. 10, Performance of Review Engagements, the AICPA accounting and review services committee (ARSC) has introduced the most significant changes in review engagement...

Social Security number not enough for EIC.(earned income credit)
August 1, 2004... The Internal Revenue Service often includes worksheets along with form 1040 instructions. However, these worksheets and instructions of ten are ambiguous, leaving the potential for taxpayer error. Such is the case with Schedule EIC, Earned...

Nonelecting innocent spouse rules.(US Court of Appeals for the 2d Circuit decision in Maier v. Commissioner)
August 1, 2004... In 1984 Congress expanded the protection from joint and several liability it provided to innocent spouses. Recently, an appeals court affirmed a Tax Court decision that there is a glitch in the law. John and Judith Maier were divorced in...

Shareholder guarantee to S corporation creditors doesn't increase basis.(Tax Court memo Luiz v. Commissioner)
August 1, 2004... According to IRC section 1366(d) the aggregate amount of losses and deductions an S corporation shareholder may take into account for any taxable year may not exceed the sum of the adjusted basis of the shareholder's stock in the S corporation...

IRA rollovers after 60 days; the IRS can be lenient in certain circumstances.(from The Tax Adviser)
August 1, 2004... Since the dawn of individual retirement accounts (IRAs), taxpayers could roll over distributions tax-free into another IRA within 60 days of the date the distribution was received. However, the IRS had consistently argued that it could not...