n 2003 small companies made up 99.7% of the 23.7 million businesses in the United States, according to the federal government, and research shows CPAs are among the top professionals to whom small businesses turn for professional and personal financial advice. AICPA members long have maintained important relationships with small
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TOPICS / AUDIT & ASSURANCE
Audit
Renewing a Great Profession
Robert L. Bunting, CPA, became chairman of the AICPA board of directors in October 2004. His acceptance speech, delivered at the Institute’s annual meeting, appears in these pages. A JofA interview with him appeared in the November issue (see “ Managing Change ,” page 27). n preparation for the coming
So You Want to Be an Expert Witness
EXECUTIVE SUMMARY THE RANGE OF ACCOUNTING ISSUES involved in court disputes today covers so many aspects of finance that CPAs of all types may be qualified to offer expert witness services in one or more areas. CPA LITIGATION SERVICES ENCOMPASS several roles: expert witness (who renders an opinion before a
Financial Reporting Goes Global
EXECUTIVE SUMMARY THERE IS A CLEAR TREND toward adopting IFRS as the single body of internationally accepted financial reporting standards. In the next few years, thousands of companies will move to IFRS as a primary basis of financial reporting. THE IFRS MANDATE WILL AFFECT U.S. COMPANIES. Some may be required
IRS Allows Statistical Sampling for M&E Costs
here is very good news for CPAs whose clients face the often burdensome administrative costs of claiming allowable expense deductions for meals and entertainment (M&E)—the IRS now will permit the use of statistical sampling to account for such expenses. OVERVIEW Although most M&E expenses are subject to a 50% limit,
Help Companies Assess Their Internal Audit Needs
Now that the SEC has approved the November 2003 New York Stock Exchange rule that listed companies must have an internal audit function, clients and employers are asking their CPAs how it might affect their businesses and exactly what it requires. Here’s a list of frequently asked questions and responses
Attorney-Client Privilege: CPAs and the E-Frontier
EXECUTIVE SUMMARY ATTORNEY-CLIENT PRIVILEGE EXTENDS to accountants under the Kovel rule when a CPA acts at the direction of the lawyer to provide information for the client. Inadvertent disclosure of confidential information may lead to loss of the privilege. A PRACTITIONER WHO DOES LITIGATION CONSULTING should document the circumstances of
Legal and Ethical Considerations Regarding Outsourcing
EXECUTIVE SUMMARY THE AICPA HAS RECEIVED A NUMBER of inquiries regarding practitioners’ responsibilities in outsourcing engagements. The applicable guidance is found in the AICPA’s Code of Professional Conduct, the Gramm-Leach-Bliley Act and certain Internal Revenue Code provisions. THE CODE OF PROFESSIONAL CONDUCT STATES that a member remains responsible for ensuring
Tax-Planning Services for Clients or Employers
EXECUTIVE SUMMARY THE AICPA ISSUED INTERPRETATION NO. 1-1, “Tax Planning,” of Statement on Standards for Tax Services no. 1, Tax Return Positions , partly in response to congressional inquiries about how the AICPA Code of Professional Conduct disciplines members who are involved with abusive tax shelters. It is effective December
Rules for the Written Record
hile some may consider report writing one of the more mundane aspects of conducting a fraud examination, documenting the case is every bit as important as investigating it. This article looks at how to record the results so end users receive the information they need and, equally essential, the report
Institute Proposes Auditing Standards Changes to PCAOB
In response to a Public Company Accounting Oversight Board (PCAOB) request for comments (PCAOB release no. 2003-05), the auditing standards board recommended amendments to standards included in the PCAOB’s interim professional auditing standards ( http://cpcaf.aicpa.org/Resources/Sarbanes+Oxley/Archive+-+AICPA+Submits+Recommendations+on+Auditing+Standards+to+PCAOB.htm ). The ASB also proposed issuance of a new auditing standard, Retention of Records Relevant
AICPA Comments on IRS Currency Transaction Proposal
The Institute’s tax executive committee submitted recommendations on IRS-proposed revisions to section 987 of the Internal Revenue Code that require a taxpayer to recognize exchange gain or loss—upon receiving a remittance from a qualified business unit (QBU)—by apportioning its basis in the QBU to each remittance and then recognizing exchange
Accounting Students Win Competition
The winners of the 2003 Accountemps/AICPA student scholarships are Molly Garvin of the University of Texas at Austin and Jeffrey Koga of the University of Wisconsin, Oshkosh—each of whom will receive $2,500 grants. Douglas Reese of Northern Illinois University won honorable mention and a $1,000 award. Representatives from Accountemps and
Materiality Considerations
EXECUTIVE SUMMARY FEW ISSUES INVOLVING THE PREPARATION of financial statements in conformity with generally accepted accounting principles have been more elusive and difficult to address and resolve—or of greater importance—than materiality. It also has proved challenging in planning and conducting financial statement audits in accordance with generally accepted auditing standards.
California Municipal Official Named Best Government CPA
Gerald A. Silva, San Jose city auditor, accepts the AICPA’s 2003 Outstanding CPA in Government Award from Costa Triantaphilides, chairman of the AICPA government performance and accountability committee, as AICPA project manager for new finance Pamela Green looks on. Since 1985, when Silva became the California city’s chief auditor, his
Investment Adviser Advertising
EXECUTIVE SUMMARY THE SEC REGULATES THE ADVERTISEMENTS investment advisers create to promote their services under rule 206(4)-1 of the Investment Adviser Act of 1940. The goal is to prevent advertisements that are false and misleading. RULE 206(4)-1(a) INCLUDES FIVE RESTRICTIONS advisers must follow. They can overcome two of these restrictions
Start a BV Engagement the Right Way
EXECUTIVE SUMMARY EACH VALUATION ASSIGNMENT IS UNIQUE, and often there’s more than one way to answer a question, interpret a fact or approach a problem. How the valuator prepares the client for the BV engagement sets its direction and becomes the foundation of the engagement letter and, ultimately, a responsible
The Auditor’s Approach to Fair Value
EXECUTIVE SUMMARY STATEMENT ON AUDITING STANDARDS (SAS) NO. 101, Auditing Fair Value Measurements and Disclosures, gives auditors guidance on understanding how an entity’s management calculates fair value and on determining whether that measurement conforms with GAAP. THE SAS’s PROVISIONS ARE EFFECTIVE FOR AUDITS of financial statements for periods
Socially Responsible Investing
EXECUTIVE SUMMARY AS CONCERN FOR THE ENVIRONMENT, SOCIAL ISSUES and corporate governance increases, CPAs may find more interest among their clients in investment strategies and mutual funds that emphasize social responsibility. SOCIALLY CONSCIOUS INVESTORS MAKE DECISIONS by screening for positive and negative issues, shareholder advocacy, community investing and providing social
Rebuilding Trust
illiam F. Ezzell—a partner of Deloitte & Touche LLP—assumed the AICPA chairmanship in October at the Institute’s annual meeting, which was held this year in Hawaii. Like all incoming chairmen, Ezzell faces a host of urgent priorities. But in the wake of the Enron scandal he has singled out
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