TAX BRIEF Substantial Compliance No Substitute for Filing Election A taxpayer’s sale or exchange of investment securities generally does not qualify for nonrecognition of gain as a like-kind exchange. However, when taxpayers (other than C corporations) sell securities that they have held for at least three years in a
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TOPICS / TAX
IRS practice & procedure
Are You Spamming Your Clients?
EXECUTIVE SUMMARY WITH THE ADVENT OF FEDERAL LAWS controlling spam e-mail, CPAs must exercise caution in their communications with clients and prospects. In so doing they can improve the look and effectiveness of their e-mail marketing programs. THE CAN-SPAM ACT OF 2003 INCLUDES civil and criminal penalties for predatory and
E-Mail and the Law
EXECUTIVE SUMMARY SPAM IS A BUSINESS PROBLEM companies now must address because of domestic and international laws. Companies need to adopt Internet marketing privacy policies to comply with various privacy and spam regulations. CPAs can use the AICPA/CICA Privacy Framework to help organizations accomplish these goals. THE AICPA/CICA PRIVACY FRAMEWORK
Smart Stops on the Web
COMPLIANCE SITES Sarbanes-Oxley Act/PCAOB Implementation Central http://cpcaf.aicpa.org/Resources/Sarbanes+Oxley/ The+Changing+Regulatory+Landscape.htm Auditors and CPAs looking for background material and implementation guidance on the 2002 act will find documents including “How the Sarbanes-Oxley Act of 2002 Impacts the Accounting Profession” at the Institute’s Web site. Visitors also can download “Key Internal Controls for Management”
Evaluate the Control Environment
EXECUTIVE SUMMARY MANAGEMENT IS RESPONSIBLE FOR EVALUATING and reporting on a company’s controls. The external auditors are responsible for auditing management’s assertion and independently coming to their own conclusions about the company’s internal control effectiveness. They must evaluate management’s assessment and also perform their own, independent tests in many areas,
Disclosure
TThe SEC changed—and proposed further modifications to—its mutual fund rules and forms ( www.sec.gov/news/press/2004-16.htm ). In one action, to improve funds’ disclosure of costs, investments and performance, the commission amended provisions pertaining to shareholder reports and quarterly portfolio disclosures. These new requirements will apply to reporting periods ending on or
The Importance of IRD
EXECUTIVE SUMMARY CPAs MUST EXERCISE CAUTION TO CAPTURE CORRECT income in respect of the decedent (IRD) deductions on clients’ returns. Since clients typically don’t understand the issue well enough to volunteer the existence of IRD, CPAs must make sure they ask clients the right questions to elicit the information they
Privacy
The AICPA assurance services executive committee and the Canadian Institute of Chartered Accountants’ assurance services development board jointly issue a privacy framework ( www.aicpa.org/innovation/baas/ ). CPAs and chartered accountants—in both industry and public practice—can use it to help the organizations they serve implement privacy programs. The framework incorporates concepts from
Estate Planning
The Federal Deposit Insurance Corp. (FDIC) in January changed its insurance rules for deposits held in connection with a living trust ( www.fdic.gov/deposit/deposits/deposit/index.html ). Under the new provisions, if a bank fails, the FDIC will insure up to $100,000 of deposits for each beneficiary entitled to a living trust’s assets
Government Accounting
The Federal Accounting Standards Advisory Board (FASAB) issues Statement of Federal Financial Accounting and Auditing Technical Release 3 (revised), Auditing Estimates for Direct Loan and Loan Guarantee Subsidies under the Federal Credit Reform Act and Technical Release 6, Preparing Estimates for Direct Loan and Loan Guarantee Subsidies under the Federal
Compliance
A January 2004 Financial Executives International (FEI) survey of more than 300 of its members who work in public companies of all sizes revealed those entities expected to spend more time and money to comply with the section 404 internal-control requirements of the Sarbanes-Oxley Act of 2002 than anticipated in
Professional Issues
The AICPA releases the results of its annual survey to assess the supply of new accounting graduates and public firms’ demand for their services ( www.aicpa.org/members/div/career/edu/sagdpar.htm ). Conducted in 2003 the poll found the number of bachelor’s degrees awarded had dropped while the level of master’s degrees had increased, matching
Banking
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. In February the Office of the Comptroller of the Currency, the Federal Reserve Board, the Federal Deposit Insurance Corp.
Ethics
The AICPA professional ethics executive committee (PEEC) defers until December 31, 2004, the effective date of its recently established requirement—originally effective September 30, 2003—that a member document in writing his or her understanding with a client regarding all nonattest services to satisfy general requirement no. 3 of Interpretation 101-3, “Nonattest
Financial Planning
The AICPA and five other organizations joined forces to sponsor the Project for Financial Independence, which offers free financial planning advice to individuals in need ( www.consultaplanner.org ). Also participating are the Certified Financial Planner Board of Standards, the Financial Planning Association, the National Association of Personal Financial Advisors, the
Financial Reporting
The Institute, in cooperation with industry experts, has updated and revised illustrative financial statements for banks, savings institutions, credit unions and mortgage companies (in separate versions), which members can find online at www.aicpa.org/members/div/acctstd/illustrative_fs.asp . These illustrative statements also are available in the AICPA publication, Checklists and Illustrative Financial Statements for
FYI
The board of trustees of the Financial Accounting Foundation (FAF) appoints Robert H. Attmore chairman of the Governmental Accounting Standards Board (GASB). He succeeds Tom L. Allen, who served as GASB chairman since 1995. Attmore is president of Attmore & Associates, Albany, New York, a consulting firm serving government agencies
International
The International Accounting Standards Board (IASB) publishes an exposure draft, ED 6, Exploration for and Evaluation of Mineral Resources, which proposes guidance for extractive-industry entities required to comply with international financial reporting standards (IFRS) beginning in 2005 ( www.iasb.org/uploaded_files/ ). Because there is no related guidance in place and the
The Toughest Compliance Requirements
Source: Insights on Today’s Sarbanes-Oxley and Corporate Governance Challenges, Protiviti, Inc., www.protiviti.com , 2003.
Choose the Right Tools for Internal Control Reporting
EXECUTIVE SUMMARY CPAs CAN PROVIDE A VALUABLE service to their employers or clients by helping them plan their strategic approach to compliance with section 404 of the Sarbanes-Oxley Act of 2002. NEW SOFTWARE PRODUCTS CAN IMPROVE corporate governance and external communications about financial performance. They also can enhance the efficiency
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