September 2000

Breaking News

A Better Way to Gauge Profitability

EXECUTIVE SUMMARY Return-on-equity (ROE) is the correct profit metric to evaluate the performance of a business. However, the primary emphasis on financial ratio analysis must be on operating performance. The “advanced” version of the DuPont model remedies the original model’s failure to cleanly separate the effects of operating and financing...

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Exhibit 3: How Respondents Handled Electronic Filing

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Exhibit 2: How Users Rate Their Tax Software

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Exhibit 1: Tax Software Vendors

WORTH REPEATING

The Public Oversight Board

here is a lot of talk these days about a new regulatory and self-regulatory structure for the accounting profession. SEC Chairman Arthur Levitt recently gave a speech at New York University in which he spoke of the importance of the Public Oversight Board’s receiving greater authority to oversee parts

PRACTICE DEVELOPMENT

Making It—As a Consultant.

EXECUTIVE SUMMARY NOT EVERY CPA FIRM that tries its hand at consulting can report financial success, and although there’s no such thing as a single universal cure for an unhealthy consulting business, the one that comes closest is strategic planning. IF CONSULTING FIRMS WITH LOW PROFITS have one thing

ESTATE PLANNING

Facing a Hobson’s Choice.

EXECUTIVE SUMMARY MANY MARRIED COUPLES FACE A CLASSIC ESTATE planning dilemma. They have combined estates large enough to require them to pay estate taxes, but each spouse has insufficient separate assets—other than retirement plans—to fund the bypass trust that could cut their estate tax bill. Funding a bypass trust

SOFTWARE

Expanding Into Cyberspace

EXECUTIVE SUMMARY PRACTICALLY EVERY ASPECT OF THE tax preparation field is changing, evolving into a totally new market and business. The number of tax software brands on the market is shrinking, leaving thousands of CPAs tax software orphans with fewer replacement products to choose from. WHILE THE NUMBER OF

AUDITING

Best Practices for Audit Efficiency

EXECUTIVE SUMMARY SOME CPA FIRMS HAVE DISCOVERED that by working smarter they can maintain—and even improve—quality while enhancing profits by cutting back on the hours they invest in audit engagements. A new survey spotlights some of these best practices at firms known for their excellent controls. THE FIRST STEP

TAX

Accounting for LLC Conversions

EXECUTIVE SUMMARY THE IRS ISSUED REVENUE RULINGS 99-5 AND 99-6 to address issues related to the conversion of single-member LLCs to multi-member LLCs and the conversion of multi-member LLCs to a single-owner entity. REVENUE RULING 99-5 PROVIDES CPAs WITH GUIDANCE on proper accounting when a single-member LLC converts to