Journal of Accountancy articles from September 2006

Journal of Accountancy archives from September 2006

CPA2Biz update. (president and CEO Erik Asgeirsson) (Interview)
September 1, 2006... Recently, the Journal of Accountancy's Geoffrey Pickard and CPA2Biz President and CEO Erik Asgeirsson chatted about the continued growth of the AICPA2s majority-owned subsidiary and what's on the drawing board for the coming months. Here's what...

Financial valuation and business valuation emerge.
September 1, 2006... Business valuation is a relatively new discipline. Financial valuation--the process of determining the value of a financial asset or liability--belonged first to those on Wall Street who focused on trading securities; the concept of business...

A four-pronged approach to understanding the data.
September 1, 2006... Gathering data is a key element of a business valuation analysis--and you must assemble V enough to analyze your subject company from all sides. Client data. Once you've gathered the audits, the tax returns, the business descriptions and...

Challenges to the private equity industry.
September 1, 2006... The private equity (PE) market (including venture capital, buy-out, mezzanine and similar longer-term, illiquid investments) has expanded exponentially over the past 10 years. U.S. GAAP requires private equity (PE) investments be stated at...

Small business clients at risk.
September 1, 2006... Small businesses are the most vulnerable to occupational fraud and abuse and suffer disproportionately larger losses as a result, according to the 2004 "Report to the Nation on Occupational Fraud and Abuse" prepared by the Association of...

Retrieving electronic documents.
September 1, 2006... Electronic evidence often can provide vital information about the activities motives and intent of individuals and businesses. Electronic documents thought to be deleted or lost by the user often can be recovered. In the case of electronic...

Collaborative law works.
September 1, 2006... Is having an opponent our way of life? Is litigation an efficient and responsible means of resolving disagreements? Is advocating for a client, to the detriment of the "other" side, acceptable? Or, is there a recipe for peaceful resolution of...

Better for everyone.(collaborative divorce)
September 1, 2006... When it comes to divorce, emotions and the desire to be litigious often run high. The toll on a divorcing family is both emotional and financial--and it can be devastating to both children and parents. An alternative to litigation in family...

Substantial equivalency: practice privileges: the 55 U.S. CPA licensing jurisdictions are embracing change slowly.
September 1, 2006... EXECUTIVE SUMMARY * Work and people now move easily across geographic lines, and qualified, licensed CPAs in good standing should be able to practice in more than one state or jurisdiction without undergoing a time-consuming, redundant...

The best use of spare cash: tax-savvy strategy for extra dollars.
September 1, 2006... EXECUTIVE SUMMARY * When individual clients receive an income tax refund, a bonus, an inheritance or another windfall or other extra cash, they have a number of options. The most prudent choices are investing, putting money in college...

Rating 529 college savings plans: use Morningstar ratings to determine the long-term performance of these programs.
September 1, 2006... EXECUTIVE SUMMARY * Section 529 college savings plans offer numerous advantages and have few disadvantages compared with other options. Their benefits include tax savings, estate planning benefits, high contribution limits and no income...

Click ... and the database loads into Excel: an easy way to import data into a spreadsheet.
September 1, 2006... If you're like most CPAs, you're more proficient with an Excel spreadsheet than a database. So when you're faced with the challenge of analyzing database information, you probably reluctantly bite the bullet and go through the tortuous steps of...

Account reconciliation: an underappreciated control: this procedure has become even more important since Sarbanes-Oxley's passage.
September 1, 2006... EXECUTIVE SUMMARY * Since the advent of the Sarbanes-Oxley Act, companies no longer can rely on their external auditor as an internal control. They must report most errors the auditor finds as material misstatements and material weaknesses...

Cash advances to a corporation: loan or capital contribution?
September 1, 2006... When cash is transferred to a closely held corporation, is the transfer a loan or a capital contribution? The transfer is treated as a loan if there is an unconditional obligation to repay it. When there is a dispute, the courts look at factors...

Refining the definition of a personal service corporation.(Ron Lykins, Inc. v. Commissioner)
September 1, 2006... In 1987 Congress amended the tax law to provide that a personal service corporation (PSC) is not eligible for graduated corporate tax rates. Pursuant to IRC section 11(b)(2), PSCs pay tax at the flat rate of 35% on their taxable income....

Can capital losses be carried back for the AMT?(Merlo v. Commissioner)
September 1, 2006... Taxpayers pay an additional tax when their alternative minimum tax (AMT) liability exceeds their regular tax liability In some cases, regular tax deductions and exclusions of income are not allowed for the AMT. Differences between the two tax...

Courts try to distinguish debt from equity: the age-old question continues.(from The Tax Adviser)
September 1, 2006... Federal income tax law treats debt and equity differently; primarily, interest payments on debt are deductible, while dividend payments are not. Whether a corporate investment (despite its formal label) is debt or equity for tax purposes is a...

Directory of AICPA selected services.(Directory)
September 1, 2006... Address and employment information can be changed online through www.aicpa.org/about/dues.htm. Or, members can e-mail, mail or fax the information to the Member Service Center in New Jersey (see Member Service Center for additional services...