EXECUTIVE SUMMARY CPAs NEED TO BE MINDFUL of ethical issues in performing client services. They must be sensitive to public perceptions and expectations and must use informed judgment as well as adhere to professional standards. THREE OF THE MOST COMMON COMPLAINTS made against small to midsize CPA firms involve
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The Long Arm of the Law In United States v. Craft (S.Ct., 4/17/2002), 89 AFTR2d 2002-2005, a taxpayer owed the government nearly $500,000 in back taxes. To protect its claim, the IRS attached a federal tax lien under IRC section 6321 to “all property and rights to property, whether real
What Drives Women Entrepreneurs
NEWS DIGEST Source: Survey of 800 business owners by Catalyst, Inc., www.catalystwomen.org , and the National Foundation for Women Business Owners, www.nfwbo.org .
Clarifying Unrelated Business Income
TAX CASE Although tax-exempt organizations are exempt from federal taxation on their principal activity, they must pay tax on any unrelated business income. Numerous court cases have considered what constitutes unrelated business income. Recently the Eighth Circuit Court of Appeals clarified the taxation of royalty income. The Arkansas State Police
Mutual Fund Strategies
EXECUTIVE SUMMARY RUMORS OF THE DEATH OF MUTUAL FUNDS ARE GREATLY exaggerated. Funds have grown and adapted over their 80-year history and continue to meet investors’ needs for diversification and professional management. Better tools to analyze and select funds mean CPA/financial planners can make better use of them in
By the Numbers
Women Partners on the Rise Although women now make up about half of the workforce at the 25 largest CPA firms and constitute half of today’s accounting graduates, they still lag behind men when it comes to making partner. However, a survey of those firms revealed that more women are
When Foxes Guard the Hen House
I read “The Rise and Fall of Enron” ( JofA, Apr.02, page 41). As reported in the national media, Arthur Andersen’s apparent “cooking of the books” was created by the firm’s unique policy decision related to final accounting interpretations. That decision—to have local offices override accounting policy decisions made by
Replace the Missing msconfig File
Q. In the January 2002 column you mentioned using msconfig to deselect startup applications when Windows becomes unstable. However, while Windows 98 and XP have the msconfig file, for some reason I can’t find it in Windows 2000. Can you help? A. My apologies. You’re right, for some mysterious reason
Honors Go to AICPA for Its Workplace Practices
In recognition of the effectiveness of the Institute’s System to Accept Responsibility for Job Performance (STAR) Program, which focuses on employee accountability and discipline without punishment, the Employers Association of New Jersey bestowed an Employer of Choice Award on the AICPA, which has an office in Jersey City. The citation
Fraud
A GAO report ( www.gao.gov/new.items/d02676t.pdf ) on the use of purchase cards at the Education, Navy, Agriculture, Interior and Transportation departments reveals internal control weaknesses permitted thousands of unauthorized or questionable transactions between 1998 and 2001, involving potentially millions of dollars in waste and abuse. The watchdog agency discovered failures
Some Severance Not Subject to Employment Taxes
TAX CASE Over the past decade, many businesses have had to downsize their workforce to stay competitive. Severance payments to workers generally are considered wages subject to withholding for Income taxes under IRC sections 3401 and 3402. Federal Insurance Contributions Act (FICA) under IRC section 3121. Federal Unemployment Tax Act
New Break for Teachers
Teachers and professional educators get a tax break for 2002 and 2003 that should ease the pain of many out-of-pocket classroom expenses. The Job Creation and Worker Assistance Act of 2002, section 406, allows teachers and other education professionals to deduct up to $250 of unreimbursed classroom expenses. The deduction
Enlarge the Tiny Text in the Comment and Track Changes Balloon Text
Q. I just upgraded to Word 2002 (in Office XP) and, with just a few exceptions, I find it quite an improvement. But one of those exceptions is literally giving me a headache. If I insert a comment in a document, Word encircles the comment with a balloon off to
Education
The AICPA and NASBA sign an agreement with Prometric, a designer of technology-based testing services, under which CPA candidates will be able to take a computerized uniform examination at more than 300 locations in early 2004 ( www.aicpa.org/news/2002/p052802.htm ). The electronic test will differ from its paper predecessor not only
Starting Salaries Up From Last Year
NEWS DIGEST Source: Winter 2002 Salary Survey, National Association of Colleges and Employers, Bethlehem, Pennsylvania, www.naceweb.org .
Open Multiple E-mails Simultaneously
Key to Instructions To help readers follow the instructions in this article, we use two different typefaces. Boldface type is used to identify the names of icons, agendas and URLs. Sans serif type indicates commands and instructions that users should type into the computer and the names of files. On
Corporate Governance
The Business Roundtable, a trade group representing 150 of the nation’s largest companies, issues Principles of Corporate Governance ( www.brtable.org/pdf/704.pdf ). The publication provides a set of best practices for senior management, the board of directors and others in the corporate hierarchy to ensure companies comply with applicable regulations and
Speed Up the Writing Process
Some accountants dread preparing a written report or letter as much as their clients dread taxes. One reason is the amount of time the process seems to consume. For many practitioners, a single-page missive to a client can become a multihour nuisance. Letters and reports are unavoidable, however, and the
Government Accounting
GASB issues Statement no. 39, Determining Whether Certain Organizations Are Component Units ( www.gasb.org/news/nr052802.html ). Under it state and local governments with certain fundraising organizations, such as not-for-profit foundations that have a relationship with public universities and/or school districts, must include in their financial statements separate presentations of those subordinate
It’s Costly to Comply
TAX MATTERS Source: Tax Foundation, www.taxfoundation.org.
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