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International Accounting

 

NEWS REPORT

 

INTERNATIONAL

Calls Heard for More Independent IASC

FASB does not believe the International Accounting Standards Committee (IASC) is ready to issue accounting standards that will be accepted worldwide. In a letter to the IASC, FASB and the trustees of the Financial Accounting Foundation said the IASC must do more to improve its structure and process to ensure that future standards are of the highest possible quality. Specifically, FASB said the IASC should be structured as a self-sustaining standard setter with an independent decision-making body, an independent oversight body, secure funding and a single, technically competent and centrally located staff.

The letter was written in response to the IASC discussion paper, Shaping IASC for the Future , published in December, outlining proposals that would modify the IASC's internal structure and role in international accounting standard setting.

The AICPA seconds the motion

In a separate response, the AICPA, too, provided its vision of the IASC's role and structure. Many of its proposals for improvement paralleled the views expressed by FASB and the FAF. Signed by Olivia Kirtley, chairwoman of the AICPA, and AICPA President Barry Melancon, the letter said the IASC should acknowledge the goal of an independent standard-setting structure. And if the IASC is unable to adopt an independent structure immediately, "it should consider additional changes through a formal structure review within five years," the AICPA letter said.

The IASC has come a long way...

The IASC recently made final the last of its core set of international sta ndards—IAS no. 39, Financial Instruments: Recognition and Measurement , and many international governments and companies have already adopted them. In April, Dresdner Bank in Germany and Iscor, Ltd., in South Africa announced they would prepare their financial statements in accordance with the IASs, while the parliament in Austria enacted a law allowing all Austrian companies to follow IASs.

According to the discussion paper, the IASC is planning a restructuring to replace its steering committees with an 11-member standards development committee (SDC). The SDC would develop IASs that would be approved by the IASC board, and it would be advised by the standards development advisory committee.

The IASC also proposed replacing its current advisory council with 12 trustees who would appoint members of the SDC, the IASC board and the standing interpretations committee. The trustees would monitor and finance the IASC.

...but the journey is not over

Nonetheless, the IASC still has a lot to do before all the major international financial markets are sufficiently encouraged to adopt IASs for their listings. According to FASB chairman Edmund L. Jenkins, the IASC proposal "doesn't go far enough in creating a high-quality, independent standard setter that would be acceptable worldwide."

FASB and the FAF said the SDC should be more independent than the IASC is proposing. According to the two groups' letter to the IASC, the following changes are needed:

  • The standards development committee (SDC) should have full and final authority to set its own agenda and to approve exposure drafts and standards.
  • The IASC board should work closely with the SDC but have no authority to override SDC decisions.
  • The IASC board of trustees should appoint members of the SDC and the IASC board, exercise oversight responsibilities over both entities and raise funding.

Such changes, said FASB and the FAF, would create a structure that preserves the most important elements of both an independent expert model and a constituency-based model. Also according to the letter, a more independent international standard setter would generate confidence in world markets that would foster participation, as well as a commitment to provide resources and sources of funding to support IASs.

The AICPA letter commended the IASC for its efforts to improve its structure. The AICPA agreed that the IASC's primary objective should be developing accounting standards "that provide transparency and comparability of information useful to investors and lenders."

The IASC discussion paper is available online at www.iasc.org.uk and the FASB/FAF comment letter is online at www.fasb.org . The AICPA letter can be found at www.aicpa.org .





FYI

FYI

Information Express
  • The Independence Standards Board has implemented a Document Express feature at its Web site. After registering at cpaindependence.org and choosing the category of information they want (meeting notices and minutes, exposure drafts, final standards and press releases), users will receive e-mail updates of new site postings.

Professor to Be SEC Fellow

  • The SEC's Office of the Chief Accountant selected J. Richard Dietrich, professor of accountancy at the University of Illinois at Urbana-Champaign, as an academic accounting fellow for a one-year term beginning in August.

Academic accounting fellows are selected by the SEC each year to interpret research, assist in rule making and act as liaisons with professional standard-setting entities. Dietrich has published numerous articles on the interrelationship of accounting information and decision making in securities trading.

Service Has a Heart of Gold

  • The IRS received a 1999 Golden Heart Award for its role in assisting in the collection of child support payments from deadbeat parents. Through an agreement with the Department of Health and Human Services, the IRS has acted as the national collection agent for state agencies in this federally mandated program. Under the program, the IRS withholds all or part of a delinquent parent's income tax refund and applies the amount against the amount that the parent owes for child support.

The IRS collected over $1 billion of child support in 1997, and has collected more than $7.4 billion since the program began in 1981. The award was presented to the IRS by the Association for Children for Enforcement of Support.

IMA Launches New Monthly

  • The Institute of Management Accountants (IMA) recently began publishing Strategic Finance , a monthly magazine for finance and accounting professionals. The IMA's Management Accounting , which it had published as a monthly since 1969, has been redesigned as a quarterly journal that will feature scholarly work, case studies and descriptions of current practices.

Not a Bad Job

  • According to Jobs Rated Almanac , accounting makes the short list of great jobs. Accounting ranked seventh in a survey of 250 jobs. Using information from the Department of Labor, the census and telephone surveys, almanac author Les Krantz rated the jobs according to income, stress level, physical demands, potential growth, job security and work environment. Web site manager topped the list as the best job; oil field roustabout bottomed out with a ranking of 250.

Treasury Overpaid Funds

  • Between 1980 and 1998, the Treasury Department overpaid the Social Security trust fund to the tune of $1.4 billion. The culprit was a computer glitch that incorrectly calculated interest payments to all the government trust funds including Social Security, Medicare, the Civil Service Retirement and Disability Fund and the Thrift Savings "G" Fund. Treasury has corrected the problem. Its new methodology to determine investment returns for government trust funds will be more consistent with that used in the private sector.





Government Accounting

GOVERNMENT ACCOUNTING

New Y2K Disclosure Options

State and local governments no longer have to include Y2K disclosures in the notes to their financial statements. According to GASB Technical Bulletin no. 99-1, Disclosures about Year 2000 Issues , released in March, governments can include such disclosures as "required supplementary information."

The publication revises Technical Bulletin no. 98-1, issued last October, which specifically required governments to disclose Y2K information in the financial statement notes. According to GASB Chairman Tom L. Allen, the 1998 bulletin led many auditors—concerned about the uncertainty surrounding the year 2000—to issue qualified opinions.

Linda J. Blessing, CPA, director of the Arizona Department of Economic Security, the state's largest agency, told the JofA she was very disappointed that, for the first time in five years, her agency received a qualified opinion even though it had performed the necessary due diligence for Y2K readiness. "Requiring the disclosures in the notes made it impractical to receive a clean opinion on our 1998 financial statements," said Blessing.

The revised bulletin clarifies that the disclosures are meant to provide information about what the government is doing to address the Y2K issue, rather than to provide assurance of compliance. Required supplementary information has a far lower level of assurance than the information included in the notes to financial statements. The option to report the Y2K disclosures as required supplementary information likely will reduce the number of qualified opinions on financial statements.

The AICPA had worked closely with the GASB to resolve auditors' concerns about the earlier guidance. In its comment letter on the exposure draft of the 1998 bulletin, the AICPA had said it did not believe the proposed disclosures belonged in the basic financial statements, adding that the disclosures contained requirements that were neither assertable by the management nor verifiable by auditors.

The provisions of Technical Bulletin no. 99-1 are effective immediately and will terminate for financial statement periods ending after December 31, 1999, unless systems and other equipment are not Y2K-compliant as of the balance sheet date.





Pensions and Benefits

PENSIONS AND BENEFITS

The Profession's New Voice at the DOL

So complex is ERISA that the Secretary of Labor appoints a 15-member advisory council to make recommendations to the DOL on the act's myriad implementation issues. The council always has at least one representative from the accounting profession, and for the next three years that will be Rebecca J. Miller, a partner of McGladrey & Pullen and a former member of the AICPA employee benefit plans committee. The JofA spoke with her about her thoughts and concerns on technical issues—and the tangled politics of pensions.

Gordian knots

"As the sole CPA," said Miller, "I see one of my tasks as advising the council on the tax and financial statement implications of its recommendations—things that would have corporate managers screaming if they were passed." Miller is also the de facto defender of the profession. "I've heard so much criticism of FASB Statement no. 106, Employers' Accounting for Postretirement Benefits Other Than Pensions , because it's a common belief that this rule encourages companies to drop medical benefits for retirees since these benefits would now seriously affect financial statements. To which I say, 'No! These expenses were always there—Statement no. 106 just forced employers to face reality.'"

Like the other members, she can make one agenda recommendation a year; the council then votes on several to address over a 12-month period. For accountants, she said, a current key agenda item was clarifying the definition of an employee under ERISA. "Not only do clients have trouble with this, but firms do as well. Think of all the temporary help a firm may hire during tax season. Are these employees covered by ERISA provisions?"

During her tenure, Miller hopes to challenge the complexities of the current law. She cited the current "controlled group" rules that determine when several entities are considered one entity for discrimination testing. "The joke is that if you have to ask, then you're an affiliated entity. It is such an easy error for companies to make and the consequences are enormous," she said.

Track record

Although the council only makes recommendations and cannot set policy by itself, Miller pointed out its ability to make a difference for CPAs and their clients and companies. "Last year a big issue was small companies who found it too complicated and expensive to set up qualified plans. Proposals to give a tax credit to small businesses with such plans and to eliminate some complexities are already incorporated in bills before Congress. We have high hopes!"

Other members of the ERISA Advisory Council, all of whom work part-time on council business, include representatives from employee and employer organizations, the insurance industry, a corporate trust and the general public, as well as an actuary, an investment manager and an investment counselor.





Financial Accounting

FINANCIAL ACCOUNTING

FASB Revisits Present Value in Accounting

Two years after exposing a proposed concepts statement on this topic, the Financial Accounting Standards Board (FASB) has released a revised proposal, Using Cash Flow Information and Present Value in Accounting Measurements .

The proposed concepts statement provides a framework for using future cash flows as the basis for an accounting measurement and sets forth general principles governing the use of present value (especially when the amount of future cash flows, their timing or both are uncertain). It also offers a basis for the objectives of present value in accounting.

Wayne Upton, a senior project manager with the FASB, said the original exposure draft had been modified to reflect clarifications and suggestions made by constituents. (For more on the June 1997 exposure draft, see "Measurement: The Big Picture," JofA , Aug.97, page 14.)

"There are two big changes from the 1997 draft," Upton said. "The previous document determined that there were two possible objectives for present value measurements," he explained. "One is clearly to get fair value at initial recognition and the other—"entity specific" measurement—attempts to capture the value of an asset or liability in the context of a particular entity." Because FASB members could not identify any situations in which they would use the entity-specific notion, FASB omitted the entity-specific objective from the revised draft, Upton said.

The second change deals with measuring liability, said Upton. In the 1999 draft, an entity's credit standing should always be considered in that measurement.

The deadline for written comments on the revised draft (product code E150) is August 1, 1999. For copies, call the FASB order department at 800-748-0659. The proposal is also available on the FASB Web site, www.fasb.org .





Professional Issues

PROFESSIONAL ISSUES

FASB Names New Member

The Financial Accounting Foundation has appointed Edward W. Trott to a five-year term as a member of FASB. Trott, a partner of KPMG, replaces Joseph V. Anania, who completes his term at the end of this month.

Trott has headed the accounting group of KPMG's department of professional practice in New York since 1992. He joined the firm in 1968. Currently a member of FASB's emerging issues task force, Trott was a member of the AICPA accounting standards executive committee from 1992 through 1994. He chaired AcSEC's environmental accounting task force, which developed SOP 96-1, Environmental Remediation Liabilities .

Trott will assume his new responsibilities at FASB on July 1.

 

Vice-Chairwoman Nominee From Local Practice

The AICPA has nominated Kathy G. Eddy as the Institute's vice-chairwoman for 1999-2000. She will take office in October at the Institute's annual meeting in Seattle when mem bers will elect the slate of officers headed by Robert K. Elliott, as chairman of the AICPA board of directors.

Eddy's position on next year's ballot will make her the second woman to chair the AICPA board, following Olivia F. Kirtley, who is the 1998-99 board chairwoman. A member of the AICPA council, Eddy recently completed a three-year term on the board of directors. She was a member of both the AICPA special committee on regulation and structure of the profession and the joint AICPA/NASBA committee on regulation of the profession, which drafted the most recent language for the Uniform Accountancy Act. She currently cochairs the national steering committee for the regulation of the profession, which is charged with assisting states in implementing the UAA.

Eddy is a shareholder in McDonough, Eddy, Parsons and Baylous, A.C., in Parkersburg, West Virginia. A CPA since 1978, she has spent her entire career in public accounting. She is a past president of both the West Virginia Society of CPAs and the state board of accountancy.

Speaking of her nomination, Eddy said "It's a dynamic time in the profession. With so many changes coming about, I'm pleased with the incredible opportunity I have to become part of the leadership."

 





Index

 

Index

Index to volume 187

January 1999 to June 1999

 

Subject Headings in the Index

Assurance Services

Attestation

Auditing

Banking

Bankruptcy

Business and Industry

Career Development

Consulting

Corporate Finance

Corporate Governance

Disaster Recovery

E-Commerce

Education

Employee Benefits

Financial Accounting

Financial Reporting

Fraud Detection

General Interest

Government Auditing and Accounting

In My Opinion

Inside AICPA

International

Investments

Legal Issues (Includes Liability Issues)

Letters

Marketing

Official Literature

Official Releases

Pensions and Benefits

Personal Financial Planning

Practice Management

Professional Ethics

Professional Issues

Profile

The Small Practitioner

Tax (Includes Corporate Tax)

Technology

Washington Update

Women and Family Issues

 

AUTHORS

Arthur, Louis C.
One-Year Rule Confusion. (Letters) January, p. 88.

Baliga, Wayne
Auditor Loses Privity Appeal. (Legal Scene) January, p. 22.
Court Rules on Accountant's Expert Testimony. (Legal Scene) March, p. 20.

Bean, James W. Jr.
The Audit Committee's Roadmap. January, p. 47.

Beasley, Mark S.; Carcello, Joseph V.; Hermanson, Dana R.
COSO's New Fraud Study: What It Means for CPAs. May, p. 12.

Beek, Craig M.; Rexroad, W. Max; Ostrosky, Joyce A.; Leinicke, Linda
The CPA As Sleuth: Working the Fraud Beat. April, p. 20.

Beresford, Dennis R.
It's Time to Simplify Accounting Standards. March, p. 65.

Bobo, Stephen T.; Goodheart, Kenneth J.
When Your Customer Goes Belly-Up. April, p. 73.

Boggs, Scott M.
Accounting—The Digital Way. May, p. 99.

Borinsky, Daniel H.
CPE: A Fundamental and Compelling Need for Prosperity? (Letters) March, p. 84.

Britton, Robert D.
Additional Technology Tips. (Letters) June, p. 97.

Bunce, Kenneth R.
It's Time to Implement Segment Disclosures. January, p. 43.

Burgess, Deanna Oxender
Buy or Lease: The Eternal Question. April, p. 25.

Carcello, Joseph V.; Hermanson, Dana R.; Beasley, Mark S.
COSO's New Fraud Study: What It Means for CPAs. May, p. 12.

Carlozzi, Catherine L.
Make Your Meetings Count. February, p. 53.

Chazen, Charles
Right on Target. (Letters) June, p. 95.

Cohen, Eric E.
How to Get Well Connected. June, p. 65.

Comes, Wendy; Riley, Anne Curtin
Federal Financial Statements: The Revolution Is Here! June, p. 53.

Cumming, John; Rankin, Larry J.
150 Hours: A Look Back. April, p. 53.

Danziger, Elizabeth
Just Say No to Costly Clients. June, p. 45.

Davidson, Wilma; Kline, Susan
Ace Your Presentations. March, p. 61.

Dennis, Anita
Getting Health Clubs Into Shape. (The Financial Manager) January, p. 57.
Consulting to Lawyers and Families. (The Small Practitioner) March, p. 68.
Translating the Standards. June, p. 29.

Ditman, Catherine M.
CPE, Prosperity and the Public's Stake. May, p. 132.

Donnelly, William; O'Callaghan, Susanne; Walker, John P.
Top Ten Tax Claims. February, p. 57.

Doucet, Mary S.; Hooks, Karen L.
Toward an Equal Future. June, p. 71.

Doyle, Robert K.; Spoor, F. Gordon.
How to Start an Investment Advisory Practice. (Case Study) January, p. 33.

Droms, William G.; Wilson, James H.
Don't Put All Your Eggs in One Basket. January, p. 24.

Duran, Gabriel A.
Wants More Investment-Services Articles. (Letters) January, p. 89.

Earles, Melanie; Maples, Larry
Filing and Accounting for Your Brand. May, p. 45.
When Should Advertising Be Capitalized? May, p. 49.

Estrada, Annette; Wechsler, Sander S.
Are You Euro-Fluent? June, p. 22.

Fiore, Nicholas
Financial Hardship as Reasonable Cause for Failure to Pay. (From The Tax Adviser) January, p. 76.
Federal Tax Aspects of Political Organizations. (From The Tax Adviser) February, p. 64.
Sanctioning Public Charities for Improper Dealings. (From The Tax Adviser) March, p. 28.
Deducting Entertainment Expenses. (From The Tax Adviser) April, p. 88.
Rescinding Transactions. (From The Tax Adviser) May, p. 122.
Tax Aspects of Global Expansion. (From The Tax Adviser) June, p. 90.

Fleischman, Gary M.; Payne, Thomas H.
The New and Improved Home Office Deduction. March, p. 30.

Gianninoto, Robert
Spotlight Remains on CPE: Another Approach. (Letters) June, p. 94.

Godfrey, Howard
Capital Loss vs. Ordinary Loss. (Tax Briefs) February, p. 61.

Goodheart, Kenneth J.; Bobo, Stephen T.
When Your Customer Goes Belly-Up. April, p. 73.

Haberman, Louise Dratler
NASBA Speakers Focus on Ethics. (Special Report) January, p. 14.

Hagedorn, Thomas W.
More Art than Science. (Letters) April, p. 93.

Hamilton, John A.
Praise From a Kentuckian. (Letters) June, p. 96.

Hanson, Randall K.; Smith, James K.
A New Chapter in Bankruptcy Reform. February, p. 47.

Hart, Allen M.
Proposes "Double Flat Tax." (Letters) May, p. 134.

Hasnani, Raza
Insurance and Reinsurance Without Risk Transfer. March, p. 49.

Hayes, David C.; Hunton, James E.
What You Better Know About Databases. January, p. 61.
Choose the Database for You. January, p. 67.

Henry, Brian
What Constitutes Control? June, p. 39.

Hermanson, Dana R.; Beasley, Mark S.; Carcello, Joseph V.
COSO's New Fraud Study: What It Means for CPAs. May, p. 12.

Herz, Stanley
Age Factor in the Job Market—Another Look. (Letters) June, p. 96.

Hoffman, Charles; Kurt, Christopher; Koreto, Richard J.
The XML Files. May, p. 71.

Honey, Jennifer M.; McDaniel, James R.
Gimme Shelter. June, p. 79.

Hooks, Karen; Mary S. Doucet
Toward an Equal Future. June, p. 71.

Hunton, James E.; Hayes, David C.
What You Better Know About Databases. January, p. 61.
Choose the Database for You. January, p. 67.

Jarrow, Sidney F.
Applicability of an Incentive Compensation System. April, p. 94.

Jenkins, J. Gregory
A Declaration of Independence. May, p. 31.

Kelly, Janet M.
Frills Today—Essentials Tomorrow? (Letters) January, p. 88.

Kliegman, Edwin J.
Disturbed by Editor's Note. (Letters) January, p. 89.

Kline, Susan; Davidson, Wilma
Ace Your Presentations. March, p. 61.

Koreto, Richard J.
It's a Small-Firm World After All. May, p. 23.

Koreto, Richard J.; Hoffman, Charles; Kurt, Christopher
The XML Files. May, p. 71.

Kurt, Christopher; Koreto, Richard J.; Hoffman, Charles
The XML Files. May, p. 71.

Lee, Andrew C.
The Final Frontier. June, p. 33.

Leinicke, Linda M.; Beek, Craig M.; Rexroad, W. Max; Ostrosky, Joyce A.
The CPA As Sleuth: Working the Fraud Beat. April, p. 20.

Lichty, John A.
Comments on Future CPA Exam. (Letters) April, p. 93.

Limbert, Bradley E.
More on CPE—Get Back to the Basics. (Letters) April, p. 93.

Lukey, Robert
Many Specialty Areas for CPAs. (Letters) June, p. 94.

Lynch, Michael
Incomplete Gifts. (Tax Briefs) January, p. 74.
New Roth IRA Conversion Rules. (Tax Briefs) March, p. 24.
Line Items. (Tax Matters) March, p. 24.
Taxpayer Penalties. (Tax Briefs) April, p. 84.
Defining the Temporary Workplace. (Tax Brief) May, p. 117.
Line Items. (Tax Matters) May, p. 118.
Line Items. (Tax Matters) June, p. 88.

Lynch, Michael; Schnee, Edward J.
Line Items. (Tax Matters) January, p. 72.
Line Items. (Tax Matters) April, p. 87.

Manfull, Jeffrey W.
More E-Mail Etiquette. (Letters) April, p. 94.

Maples, Larry; Earles, Melanie
Filing and Accounting for Your Brand, May, p. 45.
When Should Advertising Be Capitalized? May, p. 49.

McAllister, John P.
Less Detail and Better Quality in Financial Reporting. June, p. 94.

McCarthy, Ed
Revisiting Corporate Pension Fund Allocation. February, p. 39.
Stock Buybacks: The Rules. May, p. 91.

McDaniel, James R.; Honey, Jennifer M.
Gimme Shelter. June, p. 79.

Meduna, Bill
A Compliment. (Letters) May, p. 134.

Melancon, Barry C.
Modernizing the CPA Exam. (Letter From the AICPA President) January, p. 4.
A New Initiative for Accreditations. (Letter From the AICPA President) February, p. 4.

Moller, Edward N.
More on Ethics Rulings' Language. (Letters) March, p. 85.

Moore, Robert D.
Impact of Sale of Small Firms to Chains. (Letters) March, p. 84.

Nichols, Nancy B.; Street, Donna L.
Segment Information: What Early Adopters Reported. January, p. 37.

Nigrini, Mark J.
I've Got Your Number. May, p. 79.

O'Callaghan, Susanne; Walker, John P.; Donnelly, William
Top Ten Tax Claims. February, p. 57.

Ostrosky, Joyce A.; Beek, Craig M.; Rexroad, W. Max; Leinicke, Linda M.
The CPA As Sleuth: Working the Fraud Beat. April, p. 20.

Ottenheimer, Jack L.
How Are We Doing? February, p. 35.
Cutting Financial Reports Down to Size. March, p. 45.

Pacini, Carl; Sinason, David
The Law and CPA WebTrust. February, p. 20.

Parish, John T.; Thomas, C. William
Co-Sourcing: What's in It for Me? May, p. 85.

Paul, Michael E.
A Replacement for CPE. (Letters) March, p. 84.

Payne, Thomas H.; Fleischman, Gary M.
The New and Improved Home Office Deduction. March, p. 30.

Piturro, Marlene
Ask Your Health Plan to Say "Ahhh." March, p. 37.
Get Into E-Commerce Without Betting the Store. May, p. 56.

Podolin, Leonard
Taxes Ignored As Key Operating Information. (Letters) May, p. 133.

Quinn, Tina Steward
Limits to Tax Court's Power. (Tax Briefs) June, p. 86.

Quinn, Tina Steward; Smith, Keith W.
You Can't Have Cake and Eat It, Too. (Tax Briefs) March, p. 25.

Rankin, Larry J.; Cumming, John
150 Hours: A Look Back. April, p. 53.

Reeb, William L.
CPA Firms: Future Alliances. May, p. 27.

Rexroad, W. Max; Leinicke, Linda M.; Ostrosky, Joyce A.; Beek, Craig M.
The CPA As Sleuth: Working the Fraud Beat. April, p. 20.

Riley, Anne Curtin; Comes, Wendy
Federal Financial Statements: The Revolution Is Here! June, p. 53.

Roberto, Karen A.; Yardley; James A.
Helping Clients Grow Old Gracefully. April, p. 43.

Rodetis, Susan
Can Your Business Survive the Unexpected? February, p. 27.

Ross, Allen F.
Are VEBAs Worth Another Look? May, p. 35.

Rowbotham, Brian
Favors New Rules for Expert Testimony. (Letters) June, p. 95.

Royal, Weld
Making Granite Solid as a Rock. May, p. 111.

Schnee, Edward J.
Deducting the Cost of Business Expansion. (Tax Case) January, p. 72.
Lease Cancellation Expenditures. (Tax Case) February, p. 62.
New Rule on Stock Transactions. (Tax Briefs) April, p. 83.
Recognizing Income on Foreclosures. (Tax Case) April, p. 85.
Spin-off to Permit Employer Stock Purchases. (Tax Case) May, p. 119.
Involuntary Conversions With Multiple Payments. (Tax Case) June, p. 86.

Schnee, Edward J.; Lynch, Michael
Line Items. (Tax Matters) January, p. 72.
Line Items. (Tax Matters) April, p. 87.

Sinason, David; Pacini, Carl
The Law and CPA WebTrust. February, p. 20.

Smith, James K.; Hanson, Randall K.
A New Chapter in Bankruptcy Reform. February, p. 47.

Smith, Keith W.; Quinn, Tina Steward
You Can't Have Cake and Eat It, Too. (Tax Briefs) March, p. 25.

Spoor, F. Gordon; Doyle, Robert K.
How to Start an Investment Advisory Practice. (Case Study) January, p. 33.

Street, Donna L.; Nichols, Nancy B.
Segment Information: What Early Adopters Reported. January, p. 37.

Thomas, C. William; Parish, John
Co-Sourcing: What's in It for Me? May, p. 85.

Tongate, Darrel E.
State Laws Trump AICPA Regs. (Letters) May, p. 132.

Van Dame, Lesly
Finds Software Evaluations Valuable. (Letters) January, p. 89.

von Brachel, John
Make Your Firm a Household Name. (Marketing Clinic) May, p. 43.
Walker, John P.; Donnelly, William; O'Callaghan, Susanne
Top Ten Tax Claims. February, p. 57.

Waller, Karyn M.
Filling the Knowledge Gap. April, p. 60.
Wechsler, Sander S.; Estrada, Annette W.
Are You Euro-Fluent? June, p. 22.

Weinstein, Stephen
Solo, But Not Alone. April, p. 35.

Wilson, James H.; Droms, William G.
Don't Put All Your Eggs in One Basket. January, p. 24.

Woodroof, Jon
How to Link to Web Data. (Technology Workshop) March, p. 55.

Yardley; James A.; Roberto, Karen A.
Helping Clients Grow Old Gracefully. April, p. 43.

Zarowin, Stanley
What You Really Need. April, p. 65.
www.yourcompany.com. May, p. 65.

 

SUBJECTS


Assurance Services
The Law and CPA WebTrust. Pacini, Carl; Sinason, David. February, p. 20.
----
Helping Clients Grow Old Gracefully. Roberto, Karen A.; Yardley, James A. April, p. 43.
----
E*Trade Puts Its Stock in WebTrust. (News) May, p. 9.

Attestation
ASB Okays Direct Attestation. (News) March, p. 11.
----
Compilations: The Story Goes On. (News) May, p. 10.

Auditing
ASB Okays Direct Attestation. (News) March, p. 11.
Big 5 Show No Quarter. (News) March, p. 11.
Former AICPA Vice-President Honored. (News) March, p. 11.
----
ISB Lays Down the Law on Discussions With Audit Committees. (News) April, p. 12.
----
Compilations: The Story Goes On. (News) May, p. 10.
Co-Sourcing: What's in It for Me? Thomas, C. William; Parish, John T. May, p. 85.
A Declaration of Independence. Jenkins, J. Gregory. May, p. 31.

Banking
Your Friendly Neighborhood Banker. (TrendWatch) January, p. 82.

Bankruptcy
When Your Customer Goes Belly-Up. Bobo, Stephen T.; Goodheart, Kenneth J. April, p. 73.

Business and Industry
Getting Health Clubs Into Shape. (The Financial Manager) Dennis, Anita. January, p. 57.
Your Friendly Neighborhood Banker. (TrendWatch) January, p. 82.
----
Acquisitions of In-Process R&D. (Checklist) February, p. 8.
Can Your Business Survive the Unexpected? Rodetis, Susan. February, p. 27.
How Are We Doing? Ottenheimer, Jack L. February, p. 35.
Make Your Meetings Count. Carlozzi, Catherine L. February, p. 53.
Revisiting Corporate Pension Fund Allocation. McCarthy, Ed. February, p. 39.
----
Ask Your Health Plan to Say "Ahhh." Piturro, Marlene. March, p. 37.
Cutting Financial Reports Down to Size. Ottenheimer, Jack L. March, p. 45.
IMA to Levitt: No More Rules, Please. (News) March, p. 14.
----
CPA Leads Financial Execs. (News) April, p. 12.
Jobs in Finance Still Looking Good. (Graphic) April, p. 14.
New Rule on Stock Transactions. (Tax Briefs) Schnee, Edward J. April, p. 83.
When Your Customer Goes Belly-Up. Bobo, Stephen T.; Goodheart, Kenneth J. April, p. 73.
----
Accounting—The Digital Way. Boggs, Scott M. May, p. 99.
Co-Sourcing: What's in It for Me? Thomas, C. William; Parish, John T. May, p. 85.
Get Into E-Commerce Without Betting the Store. Piturro, Marlene. May, p. 56.
Golden Business Ideas. May, p.152.
I've Got Your Number. Nigrini, Mark J. May, p. 79.
When Should Advertising Be Capitalized? Maples, Larry; Earles, Melanie. May, p. 49.
www.yourcompany.com. Zarowin, Stanley. May, p. 65.
The XML Files. Hoffman, Charles; Kurt, Christopher; Koreto, Richard J. May, p. 71.
----
Are You Euro-Fluent? Estrada, Annette; Wechsler, Sander S. June, p. 22.
The Final Frontier. Lee, Andrew. June, p. 33.
Golden Business Ideas. June, p. 116.
Translating the Standards. Dennis, Anita. June, p. 29.
What Constitutes Control? Henry, Brian. June, p. 39.

Career Development
Filling the Knowledge Gap. Waller, Karyn M. April, p. 60.

Consulting
Tougher Rules for Expert Witnesses. (News) February, p. 11.
----
Buy Or Lease: The Eternal Question. Burgess, Deanna Oxender. April, p. 25.
The CPA As Sleuth: Working the Fraud Beat. Beek, Craig M.; Rexroad, W. Max; Leinicke, Linda M.; Ostrosky, Joyce A. April, p. 20.

Corporate Finance
Stock Buybacks: The Rules. McCarthy, Ed. May, p. 91.

Corporate Governance
The Audit Committee's Roadmap. Bean, James W. Jr. January, p. 47.

Disaster Recovery
Can Your Business Survive the Unexpected? Rodetis, Susan. February, p. 27.

E-Commerce
Get Into E-Commerce Without Betting the Store. Piturro, Marlene. May, p. 56.
www.yourcompany.com. Zarowin, Stanley. May, p. 65.
The XML Files. Hoffman, Charles; Kurt, Christopher; Koreto, Richard J. May, p. 71.

Education
150 Hours: A Look Back. Cumming, John; Rankin, Larry J. April, p. 53.

Employee Benefits
Ask Your Health Plan to Say "Ahhh." Piturro, Marlene. March, p. 37.
----
Are VEBAs Worth Another Look? Ross, Allen F. May, p. 35.

Financial Accounting
SEC Lowers the Boom. (News) January, p. 14.
Securities Litigation Reform Revisited. (News) January, p. 20.
----
It's Time to Simplify Accounting Standards. Beresford, Dennis R. March, p. 65.
Registration Process Due for Overhaul. (News) March, p. 15.
----
FASB No. 75 Sails Into the Sunset. (News) April, p. 12.
What's Hot, What's Not. (News) April, p. 11.
----
FAF Stops the Bleeding. (News) May, p. 11.
Second Try at Tough Issue. (News) May, p. 9.
----
FASB Revisits Present Value in Accounting. (News) June, p. 13.

Financial Reporting
It's Time to Implement Segment Disclosures. Bunce, Kenneth R. January, p. 43.
Segment Information: What Early Adopters Reported. Nichols, Nancy B.; Street, Donna L. January, p. 37.
----
Insurance and Reinsurance Without Risk Transfer. Hasnani, Raza. March, p. 49.
----
When Should Advertising Be Capitalized? Maples, Larry; Earles, Melanie. May, p. 49.
----
What Constitutes Control? Henry, Brian. June, p. 39.

Fraud Detection
I've Got Your Number. Nigrini, Mark J. May, p. 79.
COSO's New Fraud Study: What It Means for CPAs. Beasley, Mark S.; Carcello, Joseph V.; Hermanson, Dana R. May, p. 12.

General Interest
How About a Company Car? (Graphic) January, p. 11.
Time and Tide Wait for No Manager. (Graphic) January, p. 21.
Work vs. Family. (By the Numbers) January, p. 18.
Workers Lack Necessary Skills. (Graphic) January, p. 12.
----
Burning Holes in Their Pockets. (Graphic) February, p. 11.
Glass Ceilings and Other Problems. (TrendWatch) February, p. 74.
More On Social Security Reform. (News) February, p. 12.
Poor Old Social Security. (By the Numbers) February, p. 16.
Techie Salaries. (Graphic) February, p. 11.
----
Age Still a Factor in Job Market. (By the Numbers) March, p. 16.
AICPA Revisits Revenue Recognition. (Highlights) March, p. 4.
Behind Every Great Manager Is... (Graphic) March, p. 11.
More Businesses Try E-Filing. (Graphic) March, p. 25.
Most Enrollees Are Happy With Health Insurance. (Graphic) March, p. 14.
Not Talking the Talk on 401(k)s. (Graphic) March, p. 18.
Strategies for New Job Success. (Checklist) March, p. 8.
Things Are Looking Up—Aren't They? (TrendWatch) March, p. 74.
----
Blue Ribbon Panel Issues Its 10 Commandments. (Highlights) April, p. 4.
CFOs Rate Luxury Cars. (Graphic) April, p. 15.
Jobs in Finance Still Looking Good. (Graphic) April, p. 14.
Organizing a Business Retreat. (Checklist) April, p. 8.
The Gravy Train Is Slowing Down. (By the Numbers) April, p. 16.
Welcome to the Company. (Graphic) April, p. 18.
----
Accounting Is Not Their Strong Suit. (By the Numbers) May, p. 14.
In Search of the Right Niche. (Checklist) May, p. 6.
Investment 101. (Graphic) May, p. 11.
Women Seen to Make Gains As Managers. (Graphic) May, p. 18.
----
Companies Opt for Options. (Graphic) June, p. 12.
The Eight Universal Laws of Leadership. (Checklist) June, p. 8.
Everyone Agrees: Tech Expertise Is Key. (Graphic) June, p. 11.
I'm OK, You're Not. (Graphic) June, p. 12.
On Top of Salary. (Graphic) June, p. 14.

Government Auditing and Accounting
CPA Named Comptroller General. (News) January, p. 12.
GASB Stirs Hornet's Nest With Y2K. (News) January, p. 12.
----
Y2K x 50. (News) April, p. 14.
----
GASB Goes West for New Member. (News) May, p. 18.
----
Federal Financial Statements: The Revolution Is Here. Comes, Wendy; Riley, Anne Curtin. June, p. 53.
New Y2K Disclosure Options. (News) June, p. 15.

In My Opinion
It's Time to Simplify Accounting Standards. Beresford, Dennis R. March, p. 65.
----
CPA Firms: Future Alliances. Reeb, William L. May, p. 27.

Inside AICPA
Members Don Traders' Colors. January, p. 78.
PCPS Launches Ad Campaign. January, p. 78.
S&P Is AICPA's Newest Affinity Partner. January, p. 78.
Texan Takes Gold Medal. January, p. 78.
----
AICPA Issues Revised Roth Guide. February, p. 70.
AICPA Quits Software Business. February, p. 69.
SDSU Wins AICPA/AAA Award. February, p. 69.
Star Ads Promote the Profession. February, p. 69.
----
AICPA Names CFO. March, p. 80.
Innovator Gets the Gold. March, p. 78.
New Call Flow for the AICPA "One-Stop Shopping" Menu. March, p. 79.
Update: Fall Council and Annual Meeting. March, p. 78.
----
AICPA Acquires CPE Provider. May, p. 127.
Shambo Rewarded for PFP Service. May, p. 127.
WebTrust Media Kit Wins Award. May, p. 127.

International
Show Me the (New) Money. (News) March, p. 18.
----
Assurance Service Goes Global. (News) May, p. 20.
----
Are You Euro-Fluent? Estrada, Annette; Wechsler, Sander S. June, p. 22.
Calls Heard for More Independent IASC. (News) June, p. 11.

Investments
Revisiting Corporate Pension Fund Allocation. McCarthy, Ed. February, p. 39.

Legal Issues (Includes Liability Issues)
Auditor Loses Privity Appeal. (Legal Scene) Baliga, Wayne. January, p. 22.
----
The Law and CPA WebTrust. Pacini, Carl; Sinason, David. February, p. 20.
----
Court Rules on Accountant's Expert Testimony. (Legal Scene) Baliga, Wayne. March, p. 20.

Letters
Disturbed by Editor's Note. Kliegman, Edwin J. January, p. 89.
Finds Software Evauations Valuable. Van Dame, Lesly. January, p. 89.
Frills Today—Essentials Tomorrow? Kelly, Janet M. January, p. 88.
One-Year Rule Confusion. Arthur, Louis C. January, p. 88.
Wants More Investment-Services Articles. Duran, Gabriel A. January, p. 89.
----
CPE: A Fundamental and Compelling Need for Prosperity? Borinsky, Daniel H. March, p. 84.
Impact of Sale of Small Firms to Chains. Moore, Robert D. March, p. 84.
More on Ethics Rulings' Language. Moller, Edward N. March, p. 85.
A Replacement for CPE. Paul, Michael E. March, p. 84.
----
Applicability of an Incentive Compensation System. Jarrow, Sidney F. April, p. 94.
Comments on Future CPA Exam. Lichty, John A. April, p. 93.
More Art than Science. Hagedorn, Thomas W. April, p. 93.
More E-Mail Etiquette. Manfull, Jeffrey W. April, p. 94.
More on CPE—Get Back to the Basics. Limbert, Bradley E. April, p. 93.
----
A Compliment. Meduna, Bill. May, p. 134.
CPE, Prosperity and the Public's Stake. Ditman, Catherine M. May, p. 132.
Proposes "Double Flat Tax." Hart, Allen M. May, p. 134.
State Laws Trump AICPA Regs. Tongate, Darrel E. May, p. 132.
Taxes Ignored As Key Operating Information. Podolin, Leonard. May, p. 133.
----
Additional Technology Tips. Britton, Robert D. June, p. 97.
Age Factor in the Job Market—Another Look. Herz, Stanley. June, p. 96.
Favors New Rule for Expert Testimony. Rowbotham, Brian. June, p. 95.
Less Detail and Better Quality in Financial Reporting. McAllister, John P. June, p. 94.
Many Specialty Areas for CPAs. Lukey, Robert. June, p. 94.
Praise From a Kentuckian. Hamilton, John A. June, p. 96.
Right on Target. Chazen, Charles. June, p. 95.
Spotlight Remains on CPE: Another Approach. Gianninoto, Robert. June, p. 94.

Marketing
Are You Ready to Hire a Marketing Pro? (Checklist) January, p. 8.
----
Ace Your Presentations. Davidson, Wilma; Kline, Susan. March, p. 61.
----
Make Your Firm a Household Name. (Marketing Clinic) von Brachel, John. May, p. 43.

Official Literature
Exposure Drafts Outstanding. January, p. 95.
----
Exposure Drafts Outstanding. February, p. 80.
----
Exposure Drafts Outstanding. March, p. 88.
----
Exposure Drafts Outstanding. April, p. 100.
----
Exposure Drafts Outstanding. May, p. 136.
----
Exposure Drafts Outstanding. June, p. 102.

Official Releases
SOP 98-8— Engagements to Perform Year 2000 Agreed-Upon Procedures Attestation Engagements Pursuant to Rule 17a-5 of the Securities Exchange Act of 1934, Rule 17Ad-18 of the Securities Exchange Act of 1934, and Advisories No. 17-98 and No. 42-98 of the Commodity Futures Trading Commission. January, p. 97.
----
Interpretation 101-14 Under Rule of Conduct 101: The Effect of Alternative Practice Structures on the Applicability of Independence Rules. February, p. 82.
----
Ethics Notice. March, p. 90.
SOP 98-7— Deposit Accounting: Accounting for Insurance and Reinsurance Contracts That Do Not Transfer Insurance Risk. March, p. 90.
SOP 98-9— Modification of SOP 97-2, Software Revenue Recognition, With Respect to Certain Transactions. March, p. 95.
----
Independence Standards Board Standard no. 1— Independence Discussions with Audit Committees . April, p. 102.
SSAE no. 9— Amendments to Statement on Standards for Attestation Engagements Nos. 1, 2, and 3 . April, p. 102.
----
Ethics Interpretations and Rulings. May, p. 142.
FASB Statement no. 135, Rescission of FASB Statement No. 75 and Technical Corrections . May, p. 138.

Pensions and Benefits
The Profession's New Voice at DOL. (News) June, p. 14.

Personal Financial Planning
Don't Put All Your Eggs in One Basket. Wilson, James H.; Droms, William G. January, p. 24.
How to Start an Investment Advisory Practice. (Case Study) Doyle, Robert K.; Spoor, F. Gordon. January, p. 33.
----
A New Chapter in Bankruptcy Reform. Hanson, Randall K; Smith, James K. February, p. 47.

Practice Management
The "Miner" Accountant. (News) January, p. 21.
----
Make Your Meetings Count. Carlozzi, Catherine L. February, p. 53.
----
150 Hours: A Look Back. Cumming, John; Rankin, Larry J. April, p. 53.
Solo, But Not Alone. Weinstein, Stephen. April, p. 35.
----
CPA Firms: Future Alliances. Reeb, William L. May, p. 27.
----
Just Say No to Costly Clients. Danziger, Elizabeth. June, p. 45.

Professional Ethics
Ethics Keeps Up With New World Order. (News) February, p. 12.

Professional Issues
Modernizing the CPA Exam. (Letter From the AICPA President) Melancon, Barry C. January, p. 4.
NASBA Speakers Focus on Ethics. (Special Report) Haberman, Louise Dratler. January, p. 14.
----
Coca-Cola CEO Speaks to Georgia CPAs. (News) February, p. 13.
A New Initiative for Accreditations. (Letter From the AICPA President) Melancon, Barry C. February, p. 4.
----
The State of the States. (News) April, p. 14.
----
COSO's New Fraud Study: What It Means for CPAs. (News) May, p. 12.
Running the Numbers. (News) May, p. 20.
----
FASB Names New Member. (News) June, p. 19.
Vice-Chairwoman Nominee From Local Practice. (News) June, p. 19.

Profile
Making Granite Solid as a Rock. Royal, Weld. May, p. 111.

The Small Practitioner
Consulting to Lawyers and Families. Dennis, Anita. March, p. 68.
----
It's a Small-Firm World After All. Koreto, Richard J. May, p. 23.

Tax (Includes Corporate Tax)
Bill Prevents Internet Taxes. (Tax News) January, p. 71.
Deducting the Cost of Business Expansion. (Tax Case) Schnee, Edward J. January, p. 72.
Dixon Award Given to Friedman. (Tax News) January, p. 71.
Financial Hardship as Reasonable Cause for Failure to Pay. (From the Tax Adviser) Fiore, Nicholas. January, p. 76.
Getting You Where You Live. (Graphic) January, p. 71.
Incomplete Gifts. (Tax Briefs) Lynch, Michael. January, p. 74.
Line Items. (Tax Matters) Lynch, Michael; Schnee, Edward J. January, p. 72.
----
Capital Loss vs. Ordinary Loss. (Tax Briefs) Godfrey, Howard. February, p. 61.
Down on the Farm. (Graphic) February, p. 60.
Federal Tax Aspects of Political Organizations. (From the Tax Adviser) Fiore, Nicholas. February, p. 64.
Lease Cancellation Expenditures. (Tax Case) Schnee, Edward J. February, p. 62.
Most Serious Problem? Complexity! (Tax News) February, p. 60.
One Million Sign to Scrap Tax Code. (Tax News) February, p. 61.
Top Ten Tax Claims. Donnelly, William; O'Callaghan, Susanne; Walker, John P. February, p. 57.
----
IRA Distributions. (Tax Case) March, p. 26.
IRS Begins Its Metamorphosis. (Tax News) March, p. 23.
Line Items. (Tax Matters) Lynch, Michael. March, p. 24.
The New and Improved Home Office Deduction. Fleischman, Gary M.; Payne, Thomas H. March, p. 30.
New Roth IRA Conversion Rules. (Tax Briefs) Lynch, Michael. March, p. 24.
Sanctioning Public Charities for Improper Dealings. (From The Tax Adviser) Fiore, Nicholas. March, p. 28.
Tax Pros Say Simplify Code. (Tax News) March, p. 23.
You Can't Have Cake and Eat It, Too. (Tax Briefs) Quinn, Tina Steward. March, p. 25.
----
As Audits Decline, Concern Rises. (Graphic) April, p. 84.
Deducting Entertainment Expenses. (From The Tax Adviser) Fiore, Nicholas. April, p. 88.
IRS Takes Aim at Family Partnerships. (Tax News) April, p. 83.
Line Items. (Tax Matters) Lynch, Michael; Schnee, Edward J. April, p. 87.
New Rule on Stock Transactions. (Tax Brief) Schnee, Edward J. April, p. 83.
Poor Bear Brunt of Excise Taxes. (Graphic) April, p. 83.
Recognizing Income on Foreclosures. (Tax Case) Schnee, Edward J. April, p. 85.
Taxpayer Penalties. (Tax Briefs) Lynch, Michael. April, p. 84.
----
Defining the Temporary Workplace. (Tax Briefs) Lynch, Michael. May, p. 117.
High-Income Taxpayers. (Graphic) May, p. 117.
IRS Unveils New Performance Measures. (Tax Matters) May, p. 117.
Line Items. (Tax Matters) May, p. 118.
Rescinding Transactions. (From The Tax Adviser) Fiore, Nicholas. May, p. 122.
Spinoff to Permit Employer Stock Purchases. (Tax Case) Schnee, Edward J. May, p. 119.
When Should Advertising Be Capitalized? Maples, Larry; Earles, Melanie. May, p. 49.
----
AICPA Takes Stand on Shelters. (Tax Matters) June, p. 85.
The Final Frontier. Lee, Andrew. June, p. 33.
Gimme Shelter. McDaniel, James R.; Honey, Jennifer M. June, p. 79.
Involuntary Conversions With Multiple Payments. (Tax Case) Schnee, Edward J. June, p. 86.
Limits to Tax Court's Power. (Tax Briefs) Quinn, Tina Steward. June, p. 86.
Line Items. (Tax Matters) Lynch, Michael. June, p. 88.
Tax Aspects of Global Expansion. (From The Tax Adviser) Fiore, Nicholas. June, p. 90.
Tax Gross-Ups Make Parachutes More Golden. June, p. 85.
Tax Revenue From U.S. Subsidiaries Grows. (Graphic) June, p. 86.

Technology
Choose the Database for You. Hayes, David C; Hunton, James E. January, p. 67.
Give Your Personnel Scheduler the Personal Touch. (The Goods) January, p. 86.
Looks Like a Disk Drive, Works Like a File Manager. (The Goods) January, p. 86.
Smart Stops on the Web. (News) January, p. 13.
"Sweep" Unwanted Internet Files From Your Hard Drive. (The Goods) January, p. 86.
Upgrade Your Windows 98 Backup and Data-Protection Program. (The Goods) January, p. 86.
What You Better Know About Databases. (Technology Workshop) Hayes, David C.; Hunton; James E. January, p. 61.
Y2K Tops Tech Issues List. (News) January, p. 16.
----
Smart Stops on the Web. (News) February, p. 15.
----
DupliDisk Hardware Ensures Data Security. (The Goods) March, p. 76.
How to Link to Web Data. (Technology Workshop) Woodroof, Jon. March, p. 55.
One Step Duplication. (The Goods) March, p. 76.
Save Yourself the Expense of a Binder. (The Goods) March, p. 76.
Smart Stops on the Web. (News) March, p. 15.
Top 10 Technologies: The Applications. (News) March, p. 12.
Winzip Offers Fast File Compression. (The Goods) March, p. 76.
----
The Rise of IT. (Graphic) April, p. 11.
Smart Stops on the Web. (News) April, p. 13.
What You Really Need. Zarowin, Stanley. April, p. 65.
----
Accounting—The Digital Way. Boggs, Scott M. May, p. 99.
Linux: Tomorrow's Windows or Fad-of-the-Year? (News) May, p. 18.
Smart Stops on the Web. (News) May, p. 19.
Top 10 Technologies—Plus 5 for Tomorrow. (News) May, p. 16.
The XML Files. Hoffman, Charles; Kurt, Christopher; Koreto, Richard J. May, p. 71.
----
How To Get Well Connected. Cohen, Eric. June, p. 65.
The More Things Change... (By the Numbers) June, p. 16.
Smart Stops on the Web. (News) June, p. 13.

Washington Update
AICPA Initiates Debate on Social Security Reform. (News) January, p. 11.

Women and Family Issues
Toward an Equal Future. Doucet, Mary S.; Hooks, Karen L. June, p. 71.
Women and Social Security: Are Private Accounts the Answer? (News) June, p. 12.





By the Numbers

 

BY THE NUMBERS

The More Things Change...

Although more business executives log onto the Internet for pleasure
than ever before, most still turn to traditional sources for financial news.

 

Source: RHI Management Resources, Robert Half International Inc. and OfficeTeam, Menlo Park, California.





Women and Family Issues

WOMEN AND FAMILY ISSUES

Women and Social Security: Are Private Accounts the Answer?

A study published by the Center on Budget and Policy Priorities, a research and policy analysis institute in Washington, D.C., confirmed what many observers of the Social Security reform debate already believe: Social Security helps to keep one of every three elderly Americans above the poverty line, and women rely more heavily on it than men for retirement income.

This policy group's report corroborates the findings in the AICPA study Understanding Social Security: The Issues and Alternatives (see "AICPA Initiates Debate on Social Security Reform," JofA, Jan.99, page 11). That study, published at the end of last year, revealed older women were twice as likely as men to live in poverty. It also showed that elderly single women (including widows and divorcees) were the worst off; their poverty rate was more than five times that of married women.

"Clearly, women are the most at-risk group if Social Security runs into trouble," said Judyth A. Swingen, CPA and professor at the College of Business, Florida Gulf Coast University. "Poverty rates for women are double the rates for men," said Swingen, who served as a member of the 1998 AICPA task force on Social Security reform.

With the goal of closing the gap between the sexes, panels of experts discussed the benefits and drawbacks of private Social Security accounts during a recent hearing of the Senate's Special Committee on Aging.

"A critical question in the Social Security debate is how we can improve the income security of current and future American women," said committee chairman, Senator Chuck Grassley (R-Iowa). "I believe individual accounts are part of the solution."

Senator John Breaux (D-Louisiana), also a member of the Special Committee on Aging, said, "Individual accounts will give women, many for the first time, flexibility and access to the equity market to help them retire with financial independence."

Grassley enumerated the ways in which women might benefit from private accounts:

  • Individual accounts could provide flexibility and ownership of tangible assets to older women.
  • Such accounts could lessen the disparity between families in which both spouses work outside the home and families in which only one spouse works outside the home.
  • Individual accounts would allow women who temporarily leave the workforce to continue to increase their account balances through the investment earnings on their accounts.

For Swingen, however, individual accounts are not a panacea for Social Security's problems. Not only would individual accounts be riskier than the current system, but they also would result in higher administrative costs.

"When I started working on the task force, I was convinced private accounts were the way to go," she said. "But the more we got into it, the less sure I was that private accounts were the solution for women or anybody."

Swingen outlined some of her concerns about private accounts:

  • Equity markets are risky. What happens if the market takes a downturn? Would the federal government be required to prop up retirement savings in private accounts?
  • What would happen to the market overall? Huge amounts of money would be transferred from government bonds into the stock market. What would be the effect of that investment infusion on the market?
  • What impact would private accounts have on the cost of government borrowing? Right now the government has a very good deal. It can borrow money from the Social Security fund at fairly low rates. If money were diverted into private accounts, it would raise the cost of capital for government borrowing.
  • Would there be restrictions on investment? Would there be a list of approved and nonapproved stocks for investment by the private accounts? Would investment of private accounts be restricted to U.S. stocks?

Private accounts might produce higher returns than the current system, Swingen said, but administering such accounts would be difficult, and heavy investments in the equity market could become a political football.

Moreover, she observed that private accounts would not necessarily correct the disparity in retirement income between men and women. Such accounts would not change the fact that many women will have fewer retirement contributions on which to earn a return.

"Inequities exist," she said, "because of imbalances in pay scales. If you've earned less in your lifetime you will receive less in your retirement. If you took time off to raise a family, there was a period you were not making contributions."





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