October 2001 - Journal of Accountancy

SPECIAL TO THE JOURNAL OF ACCOUNTANCY Editorial written by Jim Emerson, president, The Emerson Company, which has been the leading analyst for the larger professional service firms for nearly 20 years. Emerson’s Opinions on Professional Services is a publication issued periodically by The Emerson Company and serves as a forum

EXECUTIVE SUMMARY CONGRESS HAS APPROVED SIGNIFICANT TRANSFER tax changes as of January 1, 2002. The act repeals estate and generation-skipping transfer taxes in 2010. In the interim, it phases in lower rates and higher exemptions. However, the full estate tax repeal applies only in 2010. Additional legislation will be needed

EXECUTIVE SUMMARY THE HEALTH CARE INDUSTRY HAS UNDERGONE significant change over the last decade, affecting delivery of services, payment mechanisms and providers’ organizational structure. Throughout a company’s lifecycle, certain events or business necessities—such as ownership transition, compliance with legal and regulatory issues and strategic planning—may require an independent appraisal of

EXECUTIVE SUMMARY STOCK OPTIONS, OFTEN A QUICK path to riches, can become a costly burden if the stock market tumbles and the instruments are handled incorrectly—a combination of events that both executives and rank-and-file workers have recently experienced. MANY OPTION RECIPIENTS are blissfully ignorant of the investment and tax-related perils

EXECUTIVE SUMMARY AS THE STOCK MARKET SLUMPED , the use of stock options as the ideal form of employee compensation lost some of its luster. To fill the breach, companies are scrambling to find remedial compensation strategies to protect their employees from market losses. These alternative methods include repricing, reissuing

verybody has a favorite color and season—preferences that seem innate, always defying reason. Auditors are no different when it comes to haphazard sampling, a process in which—ideally—they choose samples without regard to size, shape, location or other physical characteristics. Experts have expressed concern about bias in such sampling and, as

oes the emphasis on not appointing to an audit committee corporate board directors who have significant relationships to a company obscure consideration of other characteristics that also may be important? Independence aside, a director’s ability and willingness to perform well may ride on whether he or she has equity investments

Tax preparation software products continue to get high marks from the professionals who use them, with 83% reporting that they are sufficiently satisfied with the products they use that they do not plan to switch this year. That’s the conclusion of a survey conducted by the National Association of Tax

     For news from the AICPA and state societies, visit www.cpa2biz.com , which also offers online CPE, AICPA professional literature, practice management aids and links to state society Web sites.   AUDITING Before dissolving itself on July 31, the Independence Standards Board approves issuance, as a staff report, of

any clients have life insurance policies they view as unnecessary because they no longer meet their original need. As estate tax rules change and the policies clients purchased to pay these taxes become unnecessary, this trend is likely to increase. JE McGowan Consulting estimates the potential secondary market for life

EXECUTIVE SUMMARY COMPANIES SHOULD NOT ENTER into golden parachute plans without careful consideration. CPAs called in to help draft these agreements can, through prudent planning, save their employers and clients significant sums. GOLDEN PARACHUTES CAN ENCOMPASS A VARIETY of benefits, including not just extended salaries and cash payouts but also

EXECUTIVE SUMMARY FASB ISSUED CONCEPTS STATEMENT NO. 7 TO HELP CPAs who use present value and cash flow information as the basis for accounting measurements. Using Cash Flow Information and Present Value in Accounting Measurements includes general principles governing accountants’ use of present value, particularly when the amount of future

   BUSINESS VALUATION Valuators must use a broad picture approach. Taking the Temperature of Health Care Valuations BY LOREN GARRUTO AND OLIVER LOUD EXECUTIVE SUMMARY THE HEALTH CARE INDUSTRY HAS UNDERGONE significant change over the last decade, affecting delivery of services, payment mechanisms and providers’ organizational structure. Throughout a company’s

EXECUTIVE SUMMARY SOME PROFESSORS ARE BRINGING practitioners into the college classroom to talk to their students about the profession and its opportunities. Here are some tips about how such exposure can double as tailor-made recruiting. CPA GUEST SPEAKERS CAN demonstrate professional diversity and encourage students to stay with an accounting