Journal of Accountancy articles from July 2009

Journal of Accountancy archives from July 2009

Due diligence on a QI: as the financial press focuses on Bernard Madoff and other Ponzi schemes, recent investor losses approaching $1 billion by the failure of qualified intermediaries have gone relatively unnoticed. Qualified intermediaries, or QIs, facilitate tax-deferred exchanges of like-kind property under section 1031 of the Internal Revenue Code.
July 1, 2009... Some QIs have made allegedly imprudent investments in recent years, while others have allegedly siphoned off funds to related parties and are facing criminal charges. Investor/taxpayers in these cases often not only lose the proceeds from...

Economic optimism improved in Q2 among C-suite CPAs.
July 1, 2009... Optimism about the U.S. economy's prospects improved sharply in the second quarter, but compensation freezes, layoffs and capital spending cuts were still on the horizon for about half of companies, according to a survey of CPA financial...

A fresh approach for compilation and review.
July 1, 2009... EXECUTIVE SUMMARY * The AICPA's Accounting and Review Services Committee has proposed the most significant changes to the professional literature for compilation and review engagements in more than 30 years. * The primary change in the...

Valuation discounts for estate and gift taxes: recent court decisions offer guidance on interests in closely held businesses.
July 1, 2009... EXECUTIVE SUMMARY * Unintended estate and gift tax consequences can arise from valuations of interests in closely held entities. Because these interests often lack any readily available market value, their values at transfer are usually...

Accounting for emissions: emerging issues and the need for global accounting standards.
July 1, 2009... EXECUTIVE SUMMARY * Concerns over the environmental, economic and health risks posed by greenhouse gas emissions have become a frequent topic of discussion. Recent events and initiatives suggest that climate change ranks high on the U.S....

Tom Ridge: dive deep to anticipate enterprise risks.(Ridge Global CEO)(Interview)
July 1, 2009... [ILLUSTRATION OMITTED] At the AICPA's national CFO Conference in May, Tom Ridge, former Pennsylvania governor and secretary of Homeland Security, spoke to CPA financial executives about risk management in the current economic environment....

Supercharge your excel sum operations: add data by up to 30 criteria.
July 1, 2009... [ILLUSTRATION OMITTED] Many CPAs, frustrated by rind and inadequate reports from their general ledger or other enterprise systems, turn to Microsoft Excel. Nimble but powerful, Excel often manipulates data faster and more effectively than...

Password management strategies for safer systems: foil hackers. Strengthen and protect your systems' passwords.
July 1, 2009... [ILLUSTRATION OMITTED] EXECUTIVE SUMMARY * A business system's users, managers and auditors share responsibility for its safety under the principle of due care. Proper management of system passwords is critically important to system...

Self-employment or other income?
July 1, 2009... [ILLUSTRATION OMITTED] Taxpayers frequently have income reported on Form 1099-MISC. It may represent earnings from a trade or business that should be reported on Form 1040, Schedule C. If not, it generally is reported as other income on...

Time limit for equitable relief struck down, de novo standard applied.
July 1, 2009... In a trio of cases this spring, the Tax Court widened the availability of equitable relief under IRC [section] 6015(f) for taxpayers with innocent spouse claims. In two cases, the court invalidated a Treasury regulation provision limiting...

QI no cure for related-party deal.(qualified intermediary)
July 1, 2009... The Tax Court reaffirmed its 2005 holding that use of a qualified intermediary in a section 1031 exchange of like-kind property does not bypass restrictions on such exchanges between related parties. In evaluating whether tax avoidance was a...

FBAR disclosure questions answered.(Report of Foreign Bank and Financial Accounts)
July 1, 2009... The IRS answered 30 "frequently asked questions" (FAQs) about its voluntary disclosure and settlement option for previously unreported offshore financial accounts and entities and income from them. The six-month window for making disclosures...

Correcting FICA errors. (Federal Insurance Contribution Act)
July 1, 2009... Correcting an employment tax error that is discovered in the year in which the error occurs is generally a simple process. However, employers often discover such errors after the close of the calendar year in which they paid the wages to an...

Nichols and JPMS Cox receive public service awards.(certified public accountant Beverly R. Nichols)
July 1, 2009... [ILLUSTRATION OMITTED] Beverly R. Nichols, CPA, of New Orleans, and JPMS Cox PLLC, of Little Rock, Ark., each received the AICPA'S 2008 Public Service Award. Olivia Kirtley, chair of the AICPA Awards Committee, presented the awards at the...

Statement No. 56 of the Governmental Accounting Standards Board - codification of accounting and financial reporting guidance contained in the AICPA statements on auditing standards.
July 1, 2009... SUMMARY The objective of this Statement is to incorporate into the Governmental Accounting Standards Board's (GASB) authoritative literature certain accounting and financial reporting guidance presented in the American Institute of...

The last word.(managing business success)
July 1, 2009... Being a successful financial adviser requires a good understanding of people. After I became a personal financial specialist (PFS), I noticed that although people would ask for advice about finances, often they wouldn't change how they managed...