AccountingWEB Weekly News Wrap-Up - Issue 140
1. Andersen Developments This Week
2. Survey - The Impact of Enron: How Far Will It Go?
3. FTC Cracks Down on Spam and Web-Based Scams
4. IRS Explores Feasibility of E-Filing for Exempts
5. IFAC Names Members of New Auditing Standards Board
6. "Shed Those Pounds, Shed Your Tax Bill," Says the IRS
7. AICPA CEO Bows to Controversy Over CPA2Biz Stake
8. Andersen Reneges on Baptist Church Settlement
9. Business Week Rankings Drop Companies with Accounting Issues
10.IRS Catches Up on EINs, Learns Valuable Lessons
This week, AccountingWEB launches "The Impact of Enron: How Far Will It Go," a nationwide survey co-sponsored by Sommella Market Strategies that addresses many issues surrounding the aftermath of Enron, Andersen and audit reforms.
AccountingWEB wants to know how recent developments are affecting you and your practice, and we would like your input.
Your feedback will provide insight as to what is really happening "in the trenches" and can help shed some light on techniques that others are using to combat client, staff, and prospect questions. Please take a few moments and take our survey today. Your opinion counts, and your input is appreciated!
Go to the survey now:
1. Andersen Developments This Week
A number of significant developments have emerged in the
continuing Andersen story this week. Among the top headlines:
For a complete perspective of the entire Andersen story since the Enron saga broke, go to:
As the accounting profession experiences the aftershocks of the Andersen/Enron affair, it is difficult to know how to plan for the future. Preliminary information indicates that partners, staff, support personnel, vendors and consultants to the industry agree that the event will forever change the profession. "The Impact of Enron: How Far Will It Go?" is a comprehensive survey on the affects of Enron on CPA firms across the United States. This anonymous poll affords all accounting professionals an opportunity to express thoughts and opinions in a structure that will benefit both professionals and firms in planning for the future. Please take a moment and complete the survey today.
As businesses seek to turn information into knowledge, CPAs will move from the backroom to the boardroom. Demand for forensic accountants will continue to rise. The number of women accountants in management-level positions will grow in the next five years. These are just a few of the findings of the Next Generation Accountant research project. For the complete results and to request your FREE copy of our research guide, call your local Accountemps office or visit us on the Web
At a press conference on April 2, the Federal Trade Commission announced its participation in Netforce, an international law enforcement initiative targeting deceptive spam and Internet fraud. Together, the Canadian and U.S. state governmental agencies from the Pacific northwest that comprise Netforce have already achieved stunning results in some areas, and they are planning ground-breaking activities in others.
Determined to involve its stakeholders in the planning and development stages of its new systems, the Internal Revenue Service has announced that it is seeking comments by April 18 from exempt organizations, state regulators, research and oversight organizations, practitioners, software vendors, and others on the proposed development of an electronic filing system for tax-exempt organizations.
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The International Federation of Accountants has named the members of its new International Auditing and Assurance Standards Board. The board replaces the International Auditing Practices Committee and will be responsible for setting international standards on auditing.
Dieters can delight to the news that the IRS has ruled that it now recognizes obesity as a disease and will therefore allow medical deductions for certain weight loss expenses prescribed by a doctor. The deduction for weight loss treatment is retroactive to 1998, so get out those 1040X forms and start exercising your rights to a tax deduction.
On March 29, The New York Times reported that Barry C. Melancon, president and chief executive of the American Institute of CPAs has agreed to donate his shares of CPA2Biz to charity. The decision came in the wake of considerable controversy over the appearance of a transaction nearly two years ago in which Mr. Melancon was given an opportunity to purchase a personal stake in the dot com that serves as AICPA's marketing and distribution arm.
AuditWatch, the premier training and consulting firm to the audit profession, has brought its unparalleled expertise in audit efficiency to over 300 local and regional firms since 1992. We are delighted to help them celebrate this week as they mark their 10th anniversary in business. AuditWatch continues to develop innovative training programs to help auditors at all levels be more productive, more efficient and more profitable. To Tom Houck and the team - congratulations from all of us at AccountingWEB!
In case the fallout from the Enron situation isn't enough to keep Big Five firm Andersen busy, this week Andersen had to tell Arizona state officials and others involved in the firm's settlement relating to the bankruptcy of the Baptist Foundation of Arizona that it will not be able to meet its obligation to pay $217 million for its role in the demise of the religious organization.
The crisis of confidence in accounting numbers has grown so severe that it is even affecting the annual rankings published by the business press. When Business Week published its annual ranking of the top 500 companies by earnings and revenues, it left some companies unranked because their financial statements had raised accounting questions, often accompanied by an investigation by the Securities and Exchange Commission.
In a recent letter to Larry R. Levitan, chairman of the Internal Revenue Service Oversight Board, IRS Commissioner Charles O. Rossotti said the IRS is well on the road to recovery, following some fairly significant delays in the processing of employer identification numbers earlier this year. He also said the IRS learned some valuable lessons along the way.
Visit our Q&A Forum to post your questions and share your ideas with the members of AccountingWEB! Simply click on the "Add Comments" option at the bottom of any question to add your response and comments.
Here is a sample of the questions that have been posted this week. Post your own questions or see if you can lend a hand to others looking for help.
1. Conversion of C-Corp to S-Corp: The conversion took place three years ago. Client was told that funds in bank account were not available for 10 years after conversion. The C-Corp had business and rental property income; S-Corp has only rental income and interest from investments. Assistance would be appreciated in locating information that will enable a consultant to understand and advise on this activity.
2. Rules for Sale of Main Home: A mother and three children owned and lived in the property as their main home for over five years. The ownership is tenancy in common - 25% for each. The house was sold, and the capital gain is $1 million. Can each one of them claim the exclusion of $250,000? The three children are adults. They are not dependents of their mother.
3. Liability for Medical Reimbursement Plans: Should the deductible portion that a company plans to pay to participants for a medical reimbursement plan be accrued as a liability on the balance sheet? Should it be accrued when it is probable that the company will be paying the deductible? Would that be when a participant has had enough claims for the deductible to kick in, and then the total amount for that person would be accrued?