This second installment in a series of columns on accounting research summarizes results from the field of management and cost accounting. The 2006 through June 2007 issues of five top-tier journals in management and cost accounting research were examined. Those publications included, alphabetically, Accounting, Organizations and
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Management accounting
The Human Element: The Weakest Link in Information Security
EXECUTIVE SUMMARY Social engineering attacks involve the use of deceptive or manipulative tactics on an individual to gain a result—often to gain unauthorized access to information assets. The practice sometimes is referred to as soft hacking and often is used to gather intelligence for a subsequent hacking
Tools for Financial Analysis
What do you do when a client asks you to look beyond the standard financial statements and help develop financial goals, forecasts and what-if scenarios? If you’re like many accountants, you’d hunker down with a spreadsheet and begin cobbling together an array of custom worksheets. Then you’d probably spend several
Building Long-Term Value
EXECUTIVE SUMMARY To maximize the long-term financial performance and value of a business, CPAs should help management focus on two key components of value creation: revenue growth and achieving a return on invested capital (ROIC) in excess of the weighted average cost of capital (WACC). A lower WACC
Accounting for Gift Cards
EXECUTIVE SUMMARY The accounting for gift card sales presents an emerging reporting dilemma for retailers. Unresolved reporting issues stemming from the reporting treatment of gift card sales and “breakage” (gift cards that consumers fail to redeem) potentially involve several accounting regulations, including standards for revenue recognition and the
An Ounce of Prevention
Sarbanes-Oxley programs that address both compliance and business objectives can help companies trim the costs of section 404 compliance. The 404 Institute’s third annual Benchmark Study found that companies with low compliance costs and more effective outcomes reported a: Higher degree of centralized transaction processing and control. Higher percentage of
Assessing Fraud Risk
Every organization faces some risk of fraud from within. Fraud exposure can be classified into three broad categories: asset misappropriation, corruption and fraudulent financial statements. Answering the following 15 questions is a good starting point for sizing up a company’s vulnerability to fraud and creating an action plan for lessening
Headaches and Stretched Agendas for Audit Committees
A survey of 282 audit committee members—sponsored by KPMG’s Audit Committee Institute (ACI) and the National Association of Corporate Directors—reveals that while oversight of accounting judgments and estimates and SOX 404 compliance remain the top priorities of audit committees, the panels are increasingly focused on information technology risks. Only 15%
Best Practice: Continuation Plans
What would happen if you were unable to work for an extended period of time? Practice continuation plans are essential for CPAs. They ensure clients are taken care of and preserve the value of a practice, especially for small to medium-size firms, if an owner or sole practitioner falls ill.
Eight Habits of Highly Effective Audit Committees
EXECUTIVE SUMMARY To ensure that your committee is up to its mission, you must first define the mission by drafting a strong charter that identifies audit committee functions, authority and responsibilities, along with the skills and experience its members must possess. Success is not automatic. Specify critical
A Bid for Fair Value
EXECUTIVE SUMMARY Zions Bancorporation developed Employee Stock Option Appreciation Rights Securities (ESOARS) as a market-based pricing technique for expensing stock options under FASB Statement no. 123(R). ESOARS auctions may be able to achieve a lower expense for Statement no. 123(R) purposes than other option-pricing models such
ABCs of Batch Processing
EXECUTIVE SUMMARY In batch processing, if costs are not isolated, high-volume customers and products tend to subsidize lower-volume ones. This article reviews different types of batch activities and how they would be handled under traditional costing and two different variations of activity-based costing (ABC). Traditional costing
Buy-Sell Agreements: Ticking Time Bombs or Reasonable Resolutions?
by Z. Christopher Mercer, ASA, CFA Peabody Publishing LP, 2007, 324 pp. Predicting the future is practically impossible. For businesses, that uncertainty makes planning crucial. Z. Christopher Mercer offers a granular look at one method of applying present tense solutions to future decisions and transitions. Mercer examines the world of
Workshop Focuses on Future
Workshop Focuses on Future T he Institute’s Minority Initiatives Committee hosted the 13th annual AICPA Accounting Scholars Leadership Workshop in June in Peachtree City, Ga. About 90 accounting students from across the country attended the workshop, which had the theme “CPAs: Leaders in Action.” The committee was established in 1969
Smart Stops on the Web
HUMAN RESOURCES EASY DOES IT www.simplyhired.com Many of us may not consider a job search “a simple yet effective, enjoyable journey,” but that’s exactly what the creators of this vertical employment search engine strive to provide. The site features millions of positions fed from thousands of
Technical Education a Must for CAEs
Chief audit executives reported relatively high competency levels in the technical areas important to internal audit but said there’s still room for improvement. The top responsibilities needing improvement were: “Need to Improve” Rank General Technical Knowledge Competency 1 COSO Enterprise Risk Management Framework 3.2 2 Enterprise Risk Management 3.6 3
Tune Up for High-Performance Wealth
Each year, individuals and business owners should evaluate their wealth management initiatives to make sure they have the appropriate portfolio for their age and investment goals. Practitioners should emphasize the following key points to help clients maximize their saving potential. Maximize retirement plan contributions. The 401(k)/403(b) maximum
Auditing
The AICPA’s Private Companies Practice Section created an online toolkit devoted to Statement on Auditing Standards no. 112, Communication of Internal Control Related Matters Identified in an Audit. SAS 112 is effective for audits of periods ending on or after Dec. 15, 2006. The toolkit includes talking points, sample client
An Antidote to Excess
A recent study by Institutional Shareholder Services found CEO succession planning, which many public company boards have adopted over the past three years, to be a key practice in reducing excessive executive and golden parachute payments. The study suggests that without a succession plan in place, a board can become
Data Point: 84
The percentage of financial institutions with a chief risk officer on staff. Another 8% plan to add this position. Source: Deloitte & Touche USA LLP’s Accelerating Risk Management Practices , www.deloitte.com .
Features
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