Part II of III This is Part II of a three-part series discussing the basic components of a professional liability lawsuit brought against an accounting firm and its partners and the factors a firm’s managing partner should take into consideration before and during this type of litigation for utilizing applicable insurance coverage, maximizing effectiveness of defense and, where possible, bringing the controversy to conclusion by settlement. Part I covered the current litigation environment for accounting firms, relevant provisions in engagement letters, responding to subpoenas, professional liability insurance, and the risk of instigating a professional liability counterclaim in a fee-collection action.…
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Looking Beyond the 401(k) to Save for Retirement If proposals to curb the size of individual retirement accounts and 401(k)s take effect, clients with large IRAs and 401(k)s will need to consider alternate methods of saving for retirement. Darla Mercado, Personal Finance Writer, discusses a few options including, deferred compensation plans, health savings accounts, and after-tax contributions to 401(k)s. To read the full article in the CNBC click: Big IRAs and 401(k)s are at Risk: Where Else to Save?
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Startup Ecosystems Allow Entrepreneurs to Help One Another Almost all of the more than 360 major metropolitan areas in the U.S. have an ecosystem in which startups support one another through funding and other types of assistance, according to the Kauffman Foundation. These networks may help entrepreneurs receive psychological and social support as well as monetary backing. John F. Wasik of The New York Times, explains. To read the full article in The New York Times, click: An Ecosystem Where Start-Ups Help Other Start-Ups
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It is clear that the DOT/IRS are attempting, through Proposed Changes to Section 2704 of the Internal Revenue Code, to eliminate minority interest discounts and marketability discounts (DLOMs), even though those terms are not mentioned at all. To address the valuation side of things, Chris Mercer, founder and CEO of Mercer Capital, wrote a whitepaper outlining his thinking on valuation implications in some detail. To read the full article and download the whitepaper on Chris Mercer’s blogsite, click: Valuation Implications of the Proposed Changes to Section 2704: Good News or Bad News? Maybe Not so Bad. This article is republished…
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Part I of III This is Part I of a three-part series discussing the basic components of a professional liability lawsuit brought against an accounting firm and its partners; and the factors a firm’s managing partner should consider before and during this type of litigation for utilizing applicable insurance coverage, maximizing effectiveness of defense and, where possible, bringing the controversy to conclusion by settlement. Part I focuses on the current litigation environment for accounting firms, relevant provisions in engagement letters, responding to subpoenas, professional liability insurance, and the risk of instigating a professional liability counterclaim in a fee-collection action. Part…
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What to Ask and Look for When You Need a Forensic Expert In today’s legal environment, it is not sufficient to present unsubstantiated evidence. Many subject matter experts do not properly substantiate their findings. When hiring a subject matter expert, careful screening is crucial to choose an expert with superior skills and credibility. This article presents methodologies by which you can perform proper due diligence on your prospective subject matter expert.
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When Employees Ask for Promotions Before They’re Ready Eager, ambitious employees sometimes ask for promotions or raises before they are ready. Rebecca Knight discuses that managers should handle these requests with transparency and should coach their employees to help them reach the next level. To read the full article in the Harvard Business Review, click: What to Do When Your Employee Asks for a Raise Too Soon.
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Life Insurance Loan Can Have Tax Consequences When life insurance is surrendered or lapses, its remaining value is used to repay any loans that have been taken out on the policy—a situation that can create unexpectedly large tax bills, as the taxable gain on the policy is calculated without considering the presence of the loan. Michael Kitces explains that clients can avoid this “tax bomb” by holding on to a policy until death. To read the full article in Nerd’s Eye View, click: How Lapsing a Life Insurance Policy With a Loan Can Cause a Tax Bomb.
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Corporate finance does not need to be a mystery, states Travis Harms, Mercer Capital’s Financial Reporting Valuation Group lead. The goal of this whitepaper is to give directors and shareholders a vocabulary and conceptual framework for thinking about strategic corporate finance decisions, allowing them to bring their perspectives and expertise to the discussion. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Corporate Finance in 30 Minutes. This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. To subscribe to the blog, visit: http://mercercapital.com/category/financialreportingblog/.
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Recognize and Gain the Competitive Advantage Firms in the accounting and financial consulting arena tend to have more commonalities with each other than differences. In many cases, their services, processes, and even benefits are essentially the same. Fortunately, there is a proven way for your firm to develop a strong differentiation strategy—and it is based on the expertise your people already have. In this article, Dr. Frederiksen discusses how expertise can be used to develop and maintain a competitive advantage.
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“I Should Have Known!” When you hear the news that someone was just arrested for committing fraud at their work, it is usually accompanied by fellow employees or managers saying one of two things. Either, “I never thought they were capable of stealing” or “I should have seen it coming.” Why do employers say that they “should have known” and how exactly is it that they should have known? In my experience, there are some common characteristics of people who perpetrate a fraud. And if business owners are aware and vigilant about their business, they might never have to say,…
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No matter what your fees are, there’s always the worry that you’re either too expensive and giving up work, or too cheap and leaving money on the table. Ingrid Case explains how these four questions can help you determine whether to give yourself a cut—or a raise. To read the full article in FinancialPlanning, click: Should I…Raise my Fees?
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Federal Agencies Plan Amendments to Form 5500 Employee benefit plans would face new reporting requirements under extensive changes to Form 5500, Annual Return/Report of Employee Benefit Plan, proposed by the federal government last month. The federal agencies are also proposing to require all group health plans to file Form 5500 along with a new Schedule J. Sally P. Schreiber, Tax Adviser senior editor, explains. To read the full article in The Tax Adviser, click: Agencies Propose Amendments to Employee Benefit Plan Reporting.
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Wall Street generally does not like MOEs unless the benefits are utterly obvious and/or one or both parties had no other path to create shareholder value. In some instances, MOEs may be an intermediate step to a larger transaction that unlocks value. Jeff Davis, managing director of Mercer Capital’s Financial Institutions Group, explains. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Fairness Considerations for Mergers of Equals. This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. To subscribe to the blog, visit: http://mercercapital.com/category/financialreportingblog/.
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Valuation and Planning Impacts This article outlines the major provisions of the proposed regulations. If the proposed regulations are adopted in their current form, they only apply to transfers made after the final regulations are promulgated, and the most pervasive provisions of the proposed regulations, apply only to transfers made at least thirty days after the restrictions become final.
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Can Effect the Outcome of a Case One of the most critical decisions practicing attorneys have to face is the selection of a forensic accountant. The specialized training and expertise of forensic accountants and the role they play, either as consultants or as expert witnesses, can make the difference in the final outcome of a case. However, it is critical that the right person with the right expertise, training, and background be selected. This article will describe the various areas of specialization in which a forensic accountant performs, how to select the right professional for the job, and the benefits…
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Many Americans Suffer From Financial Anxiety Americans are becoming steadily more worried about their finances, and 85% of those participating in a recent Northwestern Mutual study said they are experiencing some kind of financial anxiety, explains Sean Williams. About two-thirds of those surveyed said the problem has reached the point that anxiety is hurting their health. To read the full article in The Motley Fool, click: The 13 Biggest Financial Fears of Americans.
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Worker Classification in the Gig Economy With one-third or more of Americans working as freelancers, the traditional factors for classifying workers as employees or independent contractors are becoming obsolete. Here’s what tax practitioners need to know about changing employment relationships in the gig economy. To read the full article in The Tax Adviser, click: Worker Classification and the Evolving Service Delivery Model.
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Part 1 of this series offered an overview of observed transaction premium data (from the 2016 Mergerstat Review) for acquisitions of public companies. That post also deliberated on one of five common avenues to incremental economic benefits that motivate market participants to transact. Part 2 walks through the four remaining variations on the incremental economic benefits theme, and offers some concluding thoughts on how to incorporate this sort of analysis into fair value measurements. Travis W. Harms, Mercer Capital Financial Reporting Valuation Group lead, explains the analyses and discusses his views. To read the full article in Mercer Capital’s Financial…
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Add Value and Differentiate Your Business Valuation Practice In this article, Dr. Sheeler issues a personal challenge to credentialed business valuation professionals. Dr. Sheeler challenges credentialed professionals to be more introspective and become more relevant in a market where commoditization does not enable clients and end users to understand the value professionals can and should bring. Dr. Sheeler adds that this realization has led him to write a Wiley Finance book called Equity Value Enhancement (EVE) and dig deep into the acronym GRRK. GRRK stands for Governance, Relationships, Risks, and Knowledge. Each is intangible, but their influence is very concrete…