The founder and chairman of the Association of Certified Fraud Examiners, Joseph Wells, wrote an insightful series, The Fraud Beat, for the JofA on the basics of fraud investigation in small businesses. “Sherlock Holmes, CPA,” ( www.aicpa.org/pubs/jofa/aug2003/wells.htm and www.aicpa.org/pubs/jofa/sep2003/wells.htm ) explains what it takes to gather evidence, interview witnesses and
Valuation Services
A BV/FLS Profile
What is the primary focus of your practice? What is the size of your practice? Note : Multiple answers permitted. Source: December 2005 AICPA BV/FLS Membership Section survey. Practitioners can obtain guidance from many sources. The AICPA is currently developing valuation standards for its members; the other organizations already publish
Fair Value: Challenges to the Private Equity Industry
The private equity (PE) market (including venture capital, buy-out, mezzanine and similar longer-term, illiquid investments) has expanded exponentially over the past 10 years. U.S. GAAP requires private equity (PE) investments be stated at fair value. Given the nuances inherent in PE, there can be significant challenges in determining the fair
Alternative Dispute Resolution: Collaborative Law Works
Is having an opponent our way of life? Is litigation an efficient and responsible means of resolving disagreements? Is advocating for a client, to the detriment of the “other” side, acceptable? Or, is there a recipe for peaceful resolution of differences? What if the disagreeing parties agree to engage in
Collaborative Divorce: Better for Everyone
When it comes to divorce, emotions and the desire to be litigious often run high. The toll on a divorcing family is both emotional and financial—and it can be devastating to both children and parents. An alternative to litigation in family breakups is called “collaborative divorce,” a process begun by
Commitments to Private Equity
Note : Includes venture capital, LBO, mezzanine, turnaround and recapitalization-focused funds. Source: Thomson Venture Economics/National Venture Capital Association; Goldman Sachs for 2005 buyout data. Determining fair value requires managers to exercise judgment. While each manager’s judgment may result in different but supportable views on valuation, using common guidelines consistent with
BV Engagement Research
Gathering data is a key element of a business valuation analysis—and you must assemble enough to analyze your subject company from all sides. Client data. Once you’ve gathered the audits, the tax returns, the business descriptions and marketing materials, you will realize—with apologies to Joni Mitchell—that “you’ve looked at the
Discovery: Retrieving Electronic Documents
Electronic evidence often can provide vital information about the activities, motives and intent of individuals and businesses. Electronic documents thought to be deleted or lost by the user often can be recovered. In the case of electronic mail, casual and candid correspondence may be frozen in time. Additionally, the background
Alternative Routes to the ABV
In just a few short years “CPA/ABV” has become synonymous with competent, credible valuation service. The market recognizes practitioners with the credential as leaders in the valuation community. The AICPA’s new ABV Sponsor Program allows CPAs to obtain the ABV credential without taking the ABV examination. The CPA must be
Employee Benefits News You Can Use
Here are some of the more important developments CPAs need to make their clients and employers aware of for 2006. Executive compensation rules under IRC section 409A. The American Jobs Creation Act’s new IRC section 409A makes sweeping changes to the tax rules governing nonqualified deferred compensation arrangements such as
Business Bookshelf
Business Valuation and Taxes: Procedure, Law, and Perspective by David Laro and Shannon P. Pratt 450 pages; hardcover; $85.00 John Wiley & Sons, Inc. Hoboken, New Jersey, 2005 ny CPA/ABV preparing a business valuation (BV) has undoubtedly heard of U.S. Tax Court Judge David Laro and valuation pioneer Shannon Pratt.
Protect Retirement Assets
EXECUTIVE SUMMARY THE NEW BANKRUPTCY LAW protects tax-qualified retirement plans—pensions, profit-sharing and 401(k) plans—from creditors in bankruptcy. SEP AND SIMPLE IRAs ARE excluded from bankruptcy estates under the new law, even if they qualify as ERISA pension plans. TRADITIONAL AND ROTH IRAs that are created and funded by an individual
New Fraud Guidance
EXECUTIVE SUMMARY SSARS NO. 12, Omnibus Statement on Standards for Accounting and Review Services—2005, amended SSARS no. 1, making specific changes regarding the practitioner’s consideration of fraud and illegal acts in compilation and review engagements. ALTHOUGH COMPILATION AND REVIEW performance standards don’t require CPAs to assess the risk of fraud,
No Privacy in Bankruptcy
EXECUTIVE SUMMARY LAWS AND REGULATIONS PROHIBIT CPAs from disclosing clients’ personal financial information, but bankruptcy statutes require that very same information to go into the public record. CPAs can’t change the law, but they can help clients get through the bankruptcy process. THERESA HOLT, JD, is an attorney and associate
Bankruptcy Reform Is Here
EXECUTIVE SUMMARY LAWRENCE S. CLARK, JD, LLM, is dean of the Cameron School of Business at the University of North Carolina (UNC) in Wilmington and lead author of the McGraw-Hill Law and Business textbook series. His e-mail address is clarkl@uncw.edu . RANDALL HANSON, JD, LLM, chairman of the department of
Medical Practices: A BV Rx
EXECUTIVE SUMMARY CPA/ABVs NEED TO BE AWARE that a market-data approach to valuing medical entities is easy to follow but may yield less meaningful data than an income approach. INCOME-APPROACH METHODS include capitalization of cash flows (CCF) and discounted cash flow (DCF). CPA/ABVs must identify a normalized net cash flow
Get Your BV Niche Out There
EXECUTIVE SUMMARY CPAs WHO SEEK TO DEVELOP A BV NICHE should first determine the areas in which the firm can demonstrate expertise to referral sources. Prospects want to know that a firm understands their business. CPAs need technical training and specific valuation credentials to become credible providers of BV services.
Smart Stops on the Web
BUSINESS EVALUATION SITES Springboard for Searches www.business.com In addition to listing the most popular user searches and an option to download a free version of its toolbar, this search engine and business directory provides news stories by industry–financial services, human resources and small business, for example. Visitors also can find
Financial Literacy
The AICPA Personal Financial Planning Membership Section, state societies and the U.S. Department of Labor are offering free seminars to educate employers and service providers about their fiduciary responsibilities under the Employee Retirement Income Security Act (ERISA) ( www.dol.gov/opa/media/press/ebsa/ebsa2004898.htm ). Small business owners and CPAs are invited to attend sessions
Accounting
The SEC released Staff Accounting Bulletin (SAB) no. 107, Share-Based Payment ( www.sec.gov/interps ). Its purpose is to help public companies implement FASB Statement no. 123 (revised 2004), Share-Based Payment ( www.fasb.org/pdf/fas123r.pdf ), which addresses transactions in which entities exchange their equity instruments for goods or services. The SAB does
Features
SPONSORED REPORT
Preparing clients for new provisions next tax season
As the 2025 filing season approaches, H.R. 1 introduces significant tax reforms that CPAs must be prepared to navigate. These legislative changes represent some of the most comprehensive tax updates in recent years, affecting both individual and corporate taxpayers. This report provides in-depth analysis and guidance on H.R. 1.