Heightened IRS Scrutiny A look into recent Tax Court cases brings to light several issues that are on the IRS’ “radar screen.” Past QuickRead articles have highlighted some of the cases, including Section 2036, or “bad facts” cases. Another hot-button issue for the IRS is the proper treatment of conservation easement charitable contributions. Since 2010, courts have published at least 60 opinions addressing issues relating to conservation easements. Practitioners with clients considering conservation easement contributions, or who are defending conservation easement cases must keep current with the influx of rulings and have a good understanding of how these rulings fit…
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Visualized Financial Statement Analysis The use of Excel and graphics, commonly referred to as data visualization, can provide a fuller or more holistic view of changes in an entity. Does the traditional audit or report that is devoid of data visualization serve the client? In this article, the author “propos[es] not a replacement for ratios…but rather that financial statement analysis should return to a more holistic analysis of a set of financial statements.” The author showcases how Excel can be used to present a more holistic picture.
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A Meaningful New Year’s Resolution Why is compliance so important to business? What are the reasons and consequences for failing to have a compliance program? In this article, Peter J. Comodeca, Esq. with the law firm of Calfee, Halter & Griswold, LLP discusses the legal reasons to comply and costs of failing to comply.
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Obviously, every equity compensation plan is different and the particular tax treatment of a given security depends on the facts and circumstances of the arrangement. Samantha L. Albert, senior financial analyst with Mercer Capital, examines equity-based compensation and the tools available when examining these arrangements. To read more about the results of this report in the Mercer Capital’s Financial Reporting Blog, click: The IRS Equity Compensation Audit Guide. 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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The Annual Audit Does not Identify Operational and Financial Risks According to the Association of Certified Fraud Examiners’ (ACFE) 2014 Report to the Nations on Occupational Fraud and Abuse, an estimated 5% of revenues each year are lost to fraud. What processes can management put in place to identify financial and operational risks? In this article, the author shares his experience and thoughts on that question.
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The International Forum of Independent Audit Regulators (IFIAR) recently released its second annual Survey of Inspection Findings for the year 2013. The report includes findings from IFIAR members’ (international audit regulators independent of the audit profession) inspections of audit firms, primarily those associated with the largest international audit firm networks. Findings from audit firm activities were reported from three categories: audits of listed public interest entities (PIE), audits of systemically important financial institutions (SIFI) and global systemically important banks (G-SIB). The highest number of findings for PIEs included, fair value measurement, internal control testing, and adequacy of financial statements and…
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Beginning this year, the PCAOB is making it a priority to examine whether or not firms that offer non-audit service lines are compromising the quality and accuracy of their audit services by doing so. In yet-to-be-scheduled roundtable discussions with audit firm leaders, regulators are expected to delve into the potential implications for such consulting arrangements. According to PCAOB chairman, James Doty, the review will focus on: 1.) how firms avoid having their best talent work in consulting at the expense of audit expertise and competence 2.) the risks associated with non-audit business lines 3.) how non-audit activities affect resource allocation…
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In an opinion piece for The New York Times, M.I.T economics professor, Michael Greenstone, examines the parallels between Enron, the corporate accounting scandals of the early 2000’s and the sub-prime mortgage crisis/Great Recession of present day. Greenstone points out that the biggest similarity and ethical hurdle in both scenarios is the fact that auditors were hired and paid for by the very firms they were being asked to audit. Naturally, this created an enormous conflict of interest on the part of the auditors to present truthful findings, while at the same time, feeling the pressure to please their clients. Although…
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In 2011, after a six-year pilot program, the IRS made the Compliance Assurance Process (CAP) a permanent fixture. The intention was to give large corporate taxpayers a pre-filing period where discrepancies or contentious issues could be ironed out to simplify examination after filing. The goal was to provide each side with more confidence in the contents at the time it was officially filed. The problem: CAP agreements are taking a long, long time to settle. You can find the details in a succinct article originally posted by complianceweek.com. [button link=”http://www.complianceweek.com/irs-takes-heat-over-large-corporate-pre-filing-process/article/313664/” color=”silver”] View Full Article[/button]