May 2001 - Journal of Accountancy

hen companies get desperate to show earnings or reduce losses, sometimes they resort to fraudulent timing differences to show phony profits. By recognizing these often simple schemes CPAs can usually detect material financial statement frauds early, before they become catastrophic. There are five basic methods companies use to create bogus

   uditors need to understand a client’s corporate governance structure and management control philosophy and how these factors affect their preplanning (for example, client acceptance, business risk) and planning judgments (such as extent and timing of testing). In this study, we asked 96 practicing auditors to evaluate a hypothetical case

SPECIAL REPORT T en years ago, many CPAs would have considered any emphasis on issues such as work/life balance and women’s initiatives overly trendy. Today, these concerns are viewed as mission-critical by a profession that believes people are its primary competitive advantage. To meet the challenge of attracting and retaining

Employers will pay more this year for their workers’ health insurance. The cost of prescription drug coverage is expected to increase nearly 20%. Dental insurance premiums, however, will rise only moderately.   Medical coverage*     Prescription drug coverage*     Dental coverage‡ * For active employees and retirees under

EXECUTIVE SUMMARY THE CONCEPT OF A NEW GLOBAL CREDENTIAL grew out of the AICPA’s efforts to uncover opportunities to help members continue to excel in a competitive marketplace. STUDENTS SEE XYZ AS A COMPLEMENT to existing professions, rather than as a replacement. The concept of a combined XYZ and CPA

EXECUTIVE SUMMARY THE IRS RELEASED REVENUE PROCEDURE 2000-22 and revenue procedure 2001-10 to give small businesses some much needed guidance on choosing or changing their accounting method for tax purposes. REVENUE PROCEDURE 2000-22 ALLOWS ANY COMPANY —sole proprietorship, partnership, S or C corporation—that meets the sales test to use the

EXECUTIVE SUMMARY THE RENEWED FOCUS ON AUDIT COMMITTEE OVERSIGHT of the financial reporting function can assist outside auditors in preventing financial statement irregularities. Auditors now have an opportunity to develop a relationship with the audit committee that may promote frank communication in a way that their usual relationship with management

EXECUTIVE SUMMARY THE IRS SAYS DISTRIBUTIONS of customer-based intangibles to shareholders are taxable. When a firm or corporation distributes to its shareholders all of its assets, both tangible and intangible, and ceases doing business, the IRS says there is a taxable distribution of its intangible goodwill. THE CRITICAL ISSUE FOR

Business taxpayers can now benefit from yet another alternative tax issue resolution approach offered by the IRS. The new tool is the pre-filing agreement (PFA) program, which lets a taxpayer request an advance IRS examination of specific issues before filing a tax return. Revenue procedure 2001-22, dated January 22, 2001,

EXECUTIVE SUMMARY EACH YEAR, THE AICPA’s INFORMATION TECHNOLOGY team assembles a group of tech-savvy CPAs to identify the topics it believes will most affect the profession, its clients and employers. SECURITY AND PRIVACY are two of the group’s top technology issues for 2001, reflecting concern that existing measures are not