CPA Journal, The

Time for Change in State Government

The machinery of New York State's government has broken down and is badly in need of repair. To be fair, New York is not the only state with such problems. California, for instance, is plagued by initiative and reform issues gone wild, leading to a lack of accountability by legislators. In New York, they have a tradition of incumbency gone wild. The debacle that occurred this summer following the political power play in Albany only reinforces the need for a constitutional convention. If there...

Fair Value Is Here to Stay

The fair value guidance in SFAS 157, Fair Value Measurements, does not represent, as many perceive, a radical departure from previous accounting rules. SFAS 157 is the result of a natural evolution that has been taking place for more than 30 years. When it was introduced in 2007, SFAS 157 amended, deleted, or otherwise affected more than 40 areas of accounting guidance. SFAS 13, issued in 1976, introduced the fair value concept when it described an asset being sold in an arm's length transact...

Growing Peo Industry Continues to Raise Its Standards

With 400 member-companies operating in 50 states, the National Association of Professional Employer Organizations (NAPEO) has successfully fostered the growth and development of the PEO industry. As this $68 billion industry has gained momentum, operational requirements and standards have risen as well. In this era marked by high-profile corporate malfeasance, PEOs can help companies comply with tax regulations and ever-expanding workplace legislation. The PEO industry's accreditation program...

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The Long Arm of the Law: The Regulatory Reach of New York's Accountancy Reform

On Jan 27, 2009, Gov David A. Paterson signed into law a sweeping reform to the law regulating the CPA profession in the state of New York. These changes, which became effective Jul 26, 2009, have far-reaching effects both inside and outside the state. The new law requires that any out-of-state CPA whose principal place of business is within New York State must obtain a New York license and therefore register with the state if using the professional skills and competencies of a CPA under an e...

Planning Ahead for Ifrs 1

On Nov 14, 2008, the SEC issued its proposed road map addressing when and under what circumstances US public companies might be permitted or required to adopt International Financial Reporting Standards (IFRS) when preparing their financial statements with the SEC. The discussion in this article will instead explore several of the important technical and practical considerations for a US public company adopting IFRS for the first time. The focus is on the issues deriving from applicable accou...

Small Businesses: Know Thy Enemy and Their Methods

The 2008 Association of Certified Fraud Examiners' (ACFE) Report to the Nation on Occupational Fraud and Abuse (www.acfe.com/documents/2008-rttn.pdf) demonstrates that small-business owners continue to worry about fraud. The biennial study reported that, on average, a company could add approximately 7% to its bottom line if it could eliminate pilfering from the business, up from 5% in the 2006 ACFE report. This article covers some of the reported perpetrators and methods of fraud being commit...

Measuring Financial Stress On State and Local Governments

A recent GASB exposure draft (ED) proposes that government accountants disclose in the comprehensive annual financial report any substantial doubt about the ability of a government entity to continue as a going concern. The ED uses the approach/methodology introduced by the AICPA's Statement on Auditing Standards 59. A financially troubled government entity normally goes into a financial stress phase before reaching bankruptcy. A financial stress prediction model for state and local governmen...

Like-Kind Exchanges of Mixed-Use Property

Under IRC section 1031, a taxpayer's exchange of real property used in a trade or business or held for investment for other like-kind property will generally result in nonrecognition of gain. In some situations, a taxpayer may exchange mixed-use property, in which a portion of the property is either used in a trade or business or held for investment. Bed and breakfast (B&B) inns, farms with principal residences, and principal residences with home offices are all examples of mixed-use prop...

New York Criminal Tax Investigations

As many tax professionals are by now aware, the New York State Department of Taxation and Finance has been reorganized to include a new bureau called the Office of Tax Enforcement. This new bureau is composed of the previously existing Audit Division, the Collections and Civil Enforcement Unit, as well as the new Special Investigations Unit. The Office of Tax Enforcement is becoming more sophisticated in identifying and investigating potential fraud and now has more resources to carry out its...

Can Early Harvests Reap Greater Gains?

When asked what the stock market would do, JP Morgan famously asserted, "It will fluctuate." The same is true of tax rates, and, as with the markets, their fluctuations can have a sizable impact on individual wealth. The 1987 increase in capital gains rates must have seemed like a locomotive coming down the line: many investors simply leapt oil the tracks to avoid it. Under current tax law, the long-term capital gains tax rate will increase five percentage points, from 15% to 20%, in January ...

Liability Exposures in Providing Accounting Services to Contractors

Many industries have the potential to expose accountants to unique liability risks. The contracting industry has traditionally been subject to the following conditions, which have created economic hardships for the contractor and liability exposure for the accountant. These are: 1. seasonality, 2. labor shortages and transient workers, and 3. erratic revenue patterns, and others. These conditions act as a catalyst in many professional liability claims against accountants. To help reduce the e...

Replacing Retiring Partners

The gap between accounting firm owners' need for successors and the available pool of partner-level talent will continue to widen due to demographic changes as baby boomers age and retire to be replaced by a smaller cohort. This is probably the single most important long-term issue facing small and medium-sized firms. Many of the mergers occurring in today's market are driven by firms' inability to find successors for their partners internally. The following are the critical factors in determ...

Teaching: A Win-Win Opportunity for Practitioners

For practicing accountants who have considered returning to academia to teach, now may be the ideal time to make the jump. Current economic conditions and job pressures are luring many people hack to the classroom. Accounting program enrollments are growing, and there is a looming shortage of accounting faculty at all levels of higher education. The faculty shortage brings opportunities for teaching positions to individuals who have sufficient academic preparation and professional experience,...

20 Questions About Tax Resources On the Internet

Questions about tax resources on the Internet are answered. Fee-based tax research sites offer extensive law libraries; those available to paid subscribers include the following: 1. BNA Tax & Accounting (www.bnatax.com), 2. CCH (tax.cchgroup.com/default), 3. LexisNexis (www.lexis.com), 4. PPC (ppc.thomson.com/sitecomposer2/), 5. RIA (ria.thomsonreuters.com), 6. Tax Analysts (www.taxanalysts.com), and 7. Westlaw (www.westlaw.com). Tax professionals have developed a number of forums for int...

Website of the Month: Casualty Actuarial Society

The Casualty Actuarial Society's (CAS) Web site, at www.casact.org, is a good source of information on risk management, as well as other current topics such as valuation. In addition to broad ERM coverage, the Web site's resources should be of particular interest to CPAs in the insurance, banking, and healthcare industries. Many materials are accessible for free, without registration. The CAS Web site contains several user friendly features. The search feature allows users to narrow their sea...

Coap: My Summer Experience

In 1987, the NYSSCPA started the Career Opportunities in the Accounting Profession (COAP) program to attract young talent into the CPA profession. The program is hosted by colleges in New York State and generally consists of a three- to six-day agenda for high-school students. This summer, the author agrees to launch the COAP program at York College of the City University of New York. The Society was committed to the success of this venture and provided invaluable support -- in terms of finan...