CPA Journal, The

Paved with Good Intentions

Accounting rules for derivatives and hedging transactions were put forth by the FASB in SFAS 133, Accounting for Derivative Instruments and Hedging Activities. This standard was initially issued in June 1998. It has been amended twice since then, with relatively minor adjustments, but in 2008 the FASB issued a more substantive exposure draft with significant proposed changes. The proposed amendment would require reporting entities to offer a "qualitative assessment" which demonstrates that an...

Industry Cpas Fully Join the Profession

Since the New York State legislature passed the accountancy reform law last December, the NYSSCPA has sprung into teaching mode. The Society has conducted numerous educational sessions regarding the new law at various businesses, governments, and schools so that CPAs throughout the state know what they must do to protect their licenses. It's been NYSSCPA's duty and pleasure to give free educational sessions to entities. So far, it has spoken to more than 2,500 people, either live or on webcas...

Turning Payroll Pains Into Payroll Gains

Today, having to wait 30 minutes for a file from a client can feel like having to wait 29 minutes too long. Accountants are using the Internet to virtually work from anywhere, which is amazing progress for an industry that historically has been so deeply rooted in the physical exchange and retention of paper. The advancements made in the engineering of online payroll services technology have opened doors for accounting professionals. Accountants can rely on guaranteed calculations, secure ele...

Mastering Accounting Research for the Cpa Exam, Second Edition

Mastering Accounting Research for the CPA Exam, Second Edition, by Anita L. Feller, is reviewed.

Accountants' Liability in the Madoff Scheme: A Cpa Journal Symposium

Several accountants shared their views about the fallout of the estimated $65 billion Ponzi scheme perpetrated by Bernard L. Madoff. Robert E. Sohr, a retired partner at Deloitte & Touche, said that if you're the auditor of a broker-dealer, or any other specialized industry, it's important to know the industry and the specialized auditing procedures that need to be applied. Looking at an audit of a feeder fund, it's important to know your client. David A. Lifson, a partner at Crowe Horwar...

Fair Value's 'How' Meets 'When'

In the midst of the the worst financial crisis since the 1930s, Federal Reserve chairman Ben Bernanke laid out his vision for a total overhaul of the US' financial system at a March 10, 2009, meeting with the Council on Foreign Relations. One issue explicitly addressed in his speech is that accounting standards need to be revised so that they don't exacerbate the downward spiral in the current crisis. Clearly, the FASB believed there was an emergency that required further implementation guide...

A Comparison of Cfos' and Cpas' Perceptions of the Sarbanes-Oxley Act and the Pcaob

The Sarbanes-Oxley Act of 2002 (SOX) has been in effect now for over half a decade, and the Public Company Accounting Oversight Board (PCAOB) has been issuing auditing standards and guidance on how to implement those standards for nearly as long. Yet, William J. Dodwell notes that the question remains "Are we better off?" since the implementation of SOX. The first survey was conducted in 2002 and the second in 2006. The first two studies surveyed CPAs engaged in public accounting, while the c...

Sec Comment Letters Related to Internal Control Disclosures

The SEC notes that disclosure filings made with the commission are in certain eases selected for staff review. If the staff at the SEC Division of Corporation Finance has questions or concerns related to a filing, or if the staff believes that the filings are incomplete or need to be improved, the registrant is sent a comment letter. These comment letters can provide insight into the SEC's thinking on problem areas. There were 60 SEC comment letters in 2008 related to internal control disclos...

Congressional Plan for Economic Recovery: Overview of Recent Tax Acts

During the 15-month period from December 2007 to February 2009, Congress enacted an amazing eight pieces of legislation containing major tax relief and spending measures. The primary aim was to jumpstart a stagnant, if not collapsing, US economy. For 2009 only, the American Recovery and Reinvestment Act of 2009 (ARRA) provides a one-time payment of $250 to individuals on fixed incomes. The Worker, Retiree and Employer Act of 2008 waives the required minimum distribution rules for 2009 for emp...

New York Raises Taxes to Cover Plummeting Receipts

On Apr 7, 2009, Governor David Paterson signed the New York State Budget Act for fiscal year 2009/2010. The act appears to be an attempt to close a large projected multiyear gap by raising taxes and fees. High-income taxpayers will bear the brunt of the personal income tax increases. The 2009/2010 Budget Act has several provisions that will increase taxes for wealthy New York taxpayers. The 2009/2010 Budget Act once again increases the amount of the mandatory first installment required for ce...

Cancellation of Debt Income Can Be a Surprise for the Borrower

Income from the cancellation of debt (COD) is a glowing problem for many American taxpayers because the volume of defaulted debt is increasing. The current economic downturn was triggered by an unprecedented number of subprime home mortgages that began to go into default in late 2007. As the asset bubble continues to deflate, debt defaults will spread to commercial real estate markets. The same faulty decision making that led taxpayers with good credit ratings to take on large amounts of debt...

What If Congress Reneges On Roths?

Roth IRAs have been a popular retirement investment vehicle since their introduction in 1998. Taxpayer interest in Roth accounts has increased further in recent years due to the 2006 changes that made Roth 401(k) and 403(b) plans available regardless of a taxpayer's adjusted gross income (AGI), and the scheduled 2010 repeal of the $100,000 AGI limitation on traditional-to-Roth IRA conversions. This article analyzes the decision to invest in a Roth IRA versus a traditional IRA, given the possi...

Monitoring Financial Performance: An Approach for Forensic Crime Labs

In difficult financial times, it becomes all the more important for managers to seek continuous improvements in the performance of their organizations. Forensic laboratories are not unlike other service organizations in this regard and must continually find ways to improve performance with limited resources. Applying metrics to key areas is a method for gauging success, for recognizing areas for improvement, and for identifying potential risks. Both auditors and CPA consultants can benefit th...

Testing the Financial Literacy and Expertise of Audit Committee Members

In recent years, several laws and regulations have set new requirements for the financial literacy and expertise of members of audit committees. Current NYSE and Nasdaq rules rely heavily on SEC Rule 10A-3(b), which sets required standards of independence, prohibiting an audit committee member from accepting directly or indirectly any consulting, advisory, or other compensatory fee from the issuer or any subsidiary under most cases. Current regulations and laws vary as to the meaning of finan...

Website of the Month: Sarbanes-Oxley Compliance Journal

Sarbanes-Oxley Compliance Journal, at www.s-ox.com, provides information on up-to-date strategies, tools, and techniques for gaining and maintaining compliance with the Sarbanes-Oxley Act (SOX). The Web site offers an extensive number of short news, stories and longer features, as well as a handy collection of links to relevant Web sites. All Web-site-related resources are free, and no registration is required. The Web site has a fairly simple format and basic navigation. Instead of a main me...

Accounting: A Profession or an Industry?

CPAs and others have alternately referred to accounting as a profession and as an industry. Some take offense at the notion that accounting is an "industry," believing that term to be a slap in the face to those who have worked so hard to bring respect and prestige to accounting as a "profession." Depending upon whether you are referring to CPAs or non-CPAs, accounting is currently both a profession and an industry. While thinking about this issue during a conference hosted by West Virginia U...