Journal of Accountancy articles from June 1996

Journal of Accountancy archives from June 1996

What to Do When Your Computer Network Supervisor Quits
June 1, 1996... Your office manager, who also administered your local area network, quits under less-than-friendly circumstances. Passwords suddenly don't seem to function correctly and files appear to be missing. What should you do to deal with this emergency...

CPAs on Capitol Hill: A Behind-the-Scenes Look at the Passage of Securities Litigation Reform
June 1, 1996... Last December, the House and the Senate voted for the first time to override a veto by President Clinton and pass the Private Securities Litigation Reform Act of 1995. The margin of victory in the House--29 more votes than needed to override a...

Auditing Standards Board Addresses Fraud
June 1, 1996... In May, the American Institute of CPAs auditing standards board issued an exposure draft of a proposed Statement on Auditing Standards, Consideration of Fraud in a Financial Statement Audit. The proposed standard's goals are to help auditors...

SEC selects three new accounting fellows. (Securities and Exchange Commission)(Brief Article)
June 1, 1996... The Securities and Exchange Commission has selected three new accounting fellows to work in the Office of the Chief Accountant. Donna L. Coallier of Coopers & Lybrand, Armando Pimental of Deloitte & Touche and Cody L. Smith of Price Waterhouse...

FASB Offers Compromise on Derivatives
June 1, 1996... By a 5 to 2 vote, the minimum margin needed for approval, the Financial Accounting Standards Board agreed to prepare an exposure draft on derivatives reporting that would require companies to record changes in derivatives value on balance sheets....

FASB issues report on present value-based measurements. (Financial Accounting Standards Board)(Brief Article)
June 1, 1996... The Financial Accounting Standards Board has issued a special report, The FASB Project on Present Value Based Measurements, an Analysis of Deliberations and Techniques, that describes responses to a 1990 FASB discussion memorandum on the issues...

Confusion on Compilations in Texas
June 1, 1996... Both sides are claiming victory in the latest battle between the Texas State Board of Public Accountancy and American Express. Last year, CPAs working for the American Express Tax and Business Services, Inc., unit were allowed to offer tax...

New recommendations on CPE credit measurement. (continuing professional education for CPAs)(Brief Article)
June 1, 1996... The American Institute of CPAs CPE standards subcommittee has recommended recognizing learning situations that involve the actual application of knowledge, such as on-the-job training, professional research and interactive learning. Its draft...

Credit Risk for Banks Holding Derivatives Declined in 1995
June 1, 1996... A report by the Office of the Comptroller of the Currency (OCC) says the credit exposure for banks holding derivatives continued to decline. The credit exposure from derivatives dropped from 336% of risk-based capital in the first quarter of 1995...

GASB Proposes Change from Cost-Based Accounting
June 1, 1996... The Governmental Accounting Standards Board has proposed that governments, including government external investment pools, report investments at fair value. Comments on Accounting and Financial Reporting for Certain Investments and for External...

New Accounting Network Is Based in Moscow
June 1, 1996... The Organization for Economic Cooperation and Development has organized an accounting network for the 12 members of the Commonwealth of Independent States (CIS) to promote accounting reforms and provide information on international accounting and...

IFAC proposes revenue recognition for governments. (International Federation of Accountants)(Brief Article)
June 1, 1996... The public sector committee of the International Federation of Accountants (IFAC) has issued an exposure draft of a proposed study on defining and recognizing revenues in the general purpose financial statements of government entities. Comments...

House Passes Taxpayer Rights Legislation, but Many Provisions Are Already in Practice
June 1, 1996... In April, the House passed a bill (HR 2337) designed to provide taxpayers administrative relief when dealing with the Internal Revenue Service. Last year, Congress added similar legislation to the Revenue Reconciliation Act of 1995, which...

Amid Criticism, Treasury Secretary Defends IRS Modernization Program
June 1, 1996... Treasury Secretary Robert E. Rubin told members of a House Appropriations Subcommittee that the Internal Revenue Service modernization program was essential to better serve taxpayers and improve revenue collection and compliance, but he said he...

IRS Memo on Intrusive Audit Techniques Not Enough, Says AICPA
June 1, 1996... The latest Internal Revenue Service memo to its regional chief compliance officers lists the American Institute of CPAs concerns about the use of financial status audit techniques but does little to change the intrusive methods agents use to...

Regulatory relief law may extend wait for regulations.(Brief Article)
June 1, 1996... The debt limit extension bill signed by President Clinton on March 29 contained provisions intended to ease the federal regulatory burden on small business. The provisions, which are part of P.L. 104-121, apply to most of the regulations and...

Collection agencies, attorneys, to help IRS collect tax debts.(Brief Article)
June 1, 1996... The IRS is seeking bids from both law firms and debt collection agencies interested in helping it collect the billions of dollars in overdue taxes that it is owed by individuals and businesses. A controversial provision in the IRS's 1996 budget...

Split-Dollar Insurance
June 1, 1996... Split-dollar life insurance arrangements may be the best way to plan for early retirement; however a recent private letter ruling may change the way these arrangements are taxed. CPAs should be cautious when recommending them to clients. In a...

Accounting for Credit Card Fees
June 1, 1996... The Tax Court ruled on the proper accounting for annual fees received by credit card issuers in two recent cases: Barnett Banks of Florida Inc. v. Commissioner (106 T.C. no. 4, 1996) and Signet Banking Corp. v. Commissioner (106 T.C. no. 5, 1996)....

Small Business Tax Solutions
June 1, 1996... This series is based on questions from AICPA certificate of educational achievement (CEA) courses. Q: Internal Revenue Code section 2701 can adversely affect the classic estate freeze scenario involving recapitalization of a C corporation with...

Empowerment Zone Employment Credit
June 1, 1996... A tax credit designed to achieve social goals. Congress sometimes tries to use the Internal Revenue Code to achieve social goals. One example is the creation of empowerment zones by the Revenue Reconciliation Act of 1993. Believing that special...

Coping with the New IRS Collection Rules
June 1, 1996... Delinquent taxpayers may find themselves on a government-imposed budget. The Internal Revenue Service tax collection rules that went into effect in September 1995 have had a dramatic impact on individual taxpayers who owe $10,000 or more in...

Perceptions and Expectations of CPA Financial Planners
June 1, 1996... What do clients want and need? In the 1980s, personal financial planning was touted as the future growth area for CPA firms. What some didn't realize was how much depends on marketing. PFP is a crowded field there are so many players CPAs must...

Consumer Attitudes about Accountants as PFP Providers
June 1, 1996... Many practitioners are now seeking advice on how to develop PFP practices. The guidance they receive often addresses the pitfalls to avoid when establishing a PFP practice, marketing strategies, the possible need to register with the Securities...

A Warning to CPAs on Employee Benefit Plan Audits
June 1, 1996... A DOL report on an alarming number of mishandled audits. What happens if employee benefit plan auditors and administrators fail to recognize these plans' uniqueness and the risks associated with them? They could risk failure to comply with...

Employee Benefit Plan Audit Answers
June 1, 1996... Being informed can help CPAs avoid costly mistakes. Given the increasing attention and risks associated With employee benefit plan audits, there is a continuing need for guidance for plan auditors. Some of the questions that members of the...

The Digital Connection
June 1, 1996... The gain and pain of adding an ISDN digital phone system. Scenario 1: You click on your Internet icon. Your computer dials the phone number and after a few rings that telltale hiss indicates your computer is attempting to handshake (connect) with...

The Auditor Change Process
June 1, 1996... Some standards are being applied inconsistently. When a company changes auditors, professional standards specify the successor and predecessor auditors follow certain procedures. Additional procedures have developed through custom. Statement on...

Industry Insight into the Auditor Change Process
June 1, 1996... CASE STUDY What drives the auditor change process from an industry perspective? Robert H. Brewer, director of audits for Praxair Inc., an industrial gas company in Danbury, Connecticut, producing gases such as oxygen, nitrogen and helium, said...

Form 706: The Not-So-Simple Estate Tax Return
June 1, 1996... Knowing the risks of estate tax work may save you from a costly malpractice claim. The old adage that nothing is certain in life except for death and taxes may be the motto for CPAs who choose to do estate tax work. But life's certainties can...