May 2002 - Journal of Accountancy

EXECUTIVE SUMMARY HEDGE FUNDS ARE SUCCESSFUL ONLY IF THEY MAKE money in both up and down markets. To do this, they employ some creative and risky investment strategies—selling short, using leverage, trading put and call options, trading futures and investing in emerging markets. SINCE HEDGE FUNDS ARE NOT RIGHT FOR

EXECUTIVE SUMMARY SAVVY BUSINESSES ARE RESPONDING to the huge property and casualty insurance premiums prompted by September 11 by forming their own captive insurance companies so they not only get reduced premiums but also access to economy-priced reinsurance. ONE ADVANTAGE OF A CAPTIVE is that it offers its corporate owner

n many ways, the attributes you want in enterprise resource planning (ERP) accounting software resemble those you’re likely to seek when choosing a spouse. You want a faithful (accurate) helpmate who grows with you (capable of being scaled up). You want someone you can cherish through sickness (financial loss) and

ccountants would never advise clients to go without car insurance. Yet rarely do CPAs recommend their clients purchase long-term-care insurance when, in fact, the probability of needing LTC insurance is much greater than the likelihood of being in a car accident. The American Council of Life Insurers says less than

   May 2002 > Let Them Know Someones Watching THE FRAUD BEAT   From the boardroom to the mailroom, all fraudsters think alike. Let Them Know Someone’s Watching BY JOSEPH T. WELLS he recent failure of Enron—even though fraud charges have yet to be proven—has renewed the hue and cry

EXECUTIVE SUMMARY THE TRANSFORMATION OF THE CORPORATE FINANCE function, driven in part by technological advances that have freed CFOs from routine information-gathering chores, means today’s finance professionals must be big-picture thinkers, excellent communicators and skilled managers and motivators who can widen their staffs’ horizons. THE CFO’s JOB HAS BEEN BROADENED

EXECUTIVE SUMMARY AN AUDIENCE UNDERSTANDS AND REMEMBERS numerical information more easily when a CPA presents it visually as well as verbally. TO SELECT THE PROPER CHART OR GRAPH to add to a written or oral report, a CPA needs to consider the message, the nature of the information comparison and

EXECUTIVE SUMMARY THE OBJECTIVE OF ANY INVESTMENT STRATEGY CPAs recommend to clients should be to preserve capital and build on it at a consistent rate in both bull and bear markets. The key to doing this is to look beyond stocks and diversify into alternative investments. A PORTFOLIO CONSISTING ENTIRELY

EXECUTIVE SUMMARY THE ASB ISSUED AN EXPOSURE DRAFT designed to expand audit procedures to address material financial statement fraud. Comments on the proposed changes are due by May 31, 2002. THE ED EMPHASIZES CONSIDERING A CLIENT’S susceptibility to fraud, regardless of the auditor’s past experience with the entity or prior