Journal of Accountancy articles from May 2004

Journal of Accountancy archives from May 2004

How many audit traps can you spot? CPAs must be able to spot the possible early warning signs and risks of accounting chicanery, fraud, inaccurate financial reporting, and business failure.
May 1, 2004... Financial managers and auditors alike can learn valuable lessons from accounting scandals and audit failures. These lessons serve to improve the quality of financial statement audits by helping CPAs identify possible early warning signs and...

Top tools for CPAs: technology products that make your work go faster and smoother.
May 1, 2004... Today's technology buyers face a unique challenge. Just a few years ago buyer beware was the universal watchword for CPAs buying computer equipment. Hardware reliability was so questionable that many cost- and quality-conscious accountants...

Tap into XBRL's power the easy way: the Microsoft Office Tool for XBRL benefits all financial reporting participants.(extensible markup language)
May 1, 2004... XBRL--a specialized form of XML (extensible markup language)--is becoming more familiar to creators and users of electronic financial statements, but few people have actual hands-on experience with it. So, to bring XBRL to a wider business...

The best-laid plans: a firm should make sure its disaster preparedness efforts will really work.
May 1, 2004... You learn about it on the morning news: Overnight, a fire at the restaurant next door spread to your CPA firm's building. The offices escaped the flames, but water and smoke damage will make them unusable for several weeks. Your firm is...

Section 404 opens a door: the requirement to evaluate a company's internal controls has created a service niche.(Sarbanes-Oxley Act of 2004)
May 1, 2004... The Sarbanes-Oxley Act of 2002 has ushered in a new era of reporting accountabilities for public companies, it requires management of such entities to certify the effectiveness of the internal controls that are the underpinning of financial...

The move to wealth management: it should come as little surprise by now that tremendous opportunities exist for.(Special Section: Wealth Management)
May 1, 2004... CPAs to expand their offerings beyond traditional accounting and tax services and into the greater financial services world. However, these opportunities still remain largely untapped. Research by our firm, CEG Worldwide, shows less than one in...

The wealth management solution.(Special Section: Wealth Management)
May 1, 2004... So the question is no longer one of whether CPAs in significant numbers will offer financial services to their clients, but rather one of how they will do it. Fortunately, this is one area where we can follow the lead of successful...

The wealth management platform.(Special Section: Wealth Management)
May 1, 2004... As you contemplate the wealth management model and how you might incorporate it into your business, you'll find that it's useful to break it down into its three major components. 1. Brokerage. This is the transaction side of investments,...

Creating a wealth management team.(Special Section: Wealth Management)
May 1, 2004... As a wealth manager, you will not need to have the ability to personally deliver all of these varied services. Instead, you must have access to a team of experts who can devise and deliver the optimal solutions. You'll find there is a...

Evaluate the control environment: documentation is only a start; now it's all about asking questions.(Sarbanes-Oxley compliance)
May 1, 2004... Beginning with the first yearend on or after November 15, 2004, many companies will have to comply with the internal control reporting requirements of the Sarbanes-Oxley Act of 2002. The control environment is one of the key components of an...

The case of the pilfering purchasing manager: one way to deter dishonest employees: make vacations mandatory.
May 1, 2004... "Chris, we have a problem," said the voice on the other end of the line. "Our purchasing manager, Bruce, is on vacation and we think we have discovered some irregularities." Chris Kosetti, CPA, swung into action. Rosetti--a partner with...

Taking account of history: how much and how little have changed in a century.(accounting profession through the 20th century)
May 1, 2004... In 1904 an international Congress of Accountants took place in St. Louis. This first "world congress" drew representatives not only from across the United States but also from England, Scotland, Holland and Canada. This congress "was a major...

Independent contractor or not? Companies should beware of service-provider-initiated classification changes.
May 1, 2004... The IRS is responsible for determining whether an individual who provides services to a business is an independent contractor or an employee. Although many independent contractor relationships begin at the request of the service provider, this...

Deductible education expenses.
May 1, 2004... The costs of attending college and graduate school continue to rise faster than the rate of inflation. However, if such expenses are tax deductible, this significantly reduces the net cost. A recent case explored the deductibility of education...

Contingent fee awards - a different approach.
May 1, 2004... For many years there have been disputes between taxpayers and the IRS concerning the taxable amount of court awards or settlements taxpayers receive from wrongful termination claims under a contingent fee arrangement. Some courts have held the...

Neighbors' hostility allowed partial gain exclusion on residence sale: the IRS offers guidance on "unforeseen circumstances".(from The Tax Adviser)
May 1, 2004... IRC section 121(c) allows a partial exclusion of gain from the sale of a principal residence for taxpayers who fail to meet the ownership, use and frequency-of sale tests to qualify for the maximum exclusion under section 121(b) ($250,000 if...