Launched in late April 2010, CPAbidding.com provides a new way for individuals and businesses to find and retain CPA-related services. This new Web site is free to use and helps connect individuals and businesses with CPAs. The goal of the service is to provide a more efficient and less expensive option for finding and hiring a CPA.
1. Go to the CPAbidding.com website and look under the frequently asked questions (FAQs). What types of services do they show as being provided by CPAs? Which of these are the most interesting to you?
2. What was the website modeled after? Do you think that this service is good idea? Why or why not?
3. What are the three fee structures used for submitting bids?
If the merger is approved, United Airlines and Continental Airlines will also be merging their frequent flyer programs.Â But what is their track record in terms of rewarding the miles versus actual requests?Â Consulting group, IdeaWorks Company, said Continental awarded free tickets 71 percent of the time in response to requests, and United 69 percent of the time. While this might not sound that good, IdeaWorks says that these percentages place the two airlines third and fourth, respectively, among domestic carriers most likely to award free seats to frequent-flyer program members.
1. According the article about the IdeaWorks survey, which domestic airline has the best track record and which one has the worst track record in granting free ticket requests? Based on these statistics, do the ideas from the video make sense in how you use your frequent flier miles? Why or why not?
2. Explain how airlines should account for frequent flier miles and their expiration in their financial records.
3. According to the video, you can donate your frequent flier miles.Â Research who gets the tax deduction from the IRS for this. Do you agree or disagree with this policy?
Accounting firm Grant Thornton is leaving the Hawaiian market this summer after more than 50 years, and selling its practice to two of the firmâ€™s audit partners from the Honolulu office.Â Several Â established Big Four firms have preceded Grant Thornton in this exodus, including PricewaterhouseCoopers, who left in 2006 after 55 years.
1. What is the PKF network?
2. Since PricewaterhouseCoopers (PWC) has a major audit of the Hawaiian Electric Industries (HEI) coming up this year, but no offices in the state, how are they planning to do the work? What is probably the biggest reason that HEI went with PWC over a local accounting firm?
3. What is the reason that large accounting firms have left or are leaving Hawaii?
Joel Jameson, the founder of Silicon Economics, Inc. is suing the FASB.Â He filed for a patent for his invention called â€œEarningsPower Accounting,â€ and claims that the FASB has infringed upon the patent.Â Jameson claims that his invention is a patented method developed by the company to improve the accuracy, validity, and usefulness of financial statements. SEIâ€™s attorney claims that “FASB’s unlawful attempt to appropriate SEI’s intellectual property undermines innovation and competition, and harms the US economy.
1. Look at the actual filing.Â According to the suit, what are the problems with FASBâ€™s standard setting process and how did these cause harm?
2.Â Based on the sources below, what will Mr. Jamesonâ€™s invention address as a significant factor in the recent economic crisis?
3.Â What is your opinion about Mr. Jamesonâ€™s chances to prevail in this action? Support your reasoning.
On May 13, 2010, retailers won a victory over the fees they pay to banks for credit cards. An amendment by Sen. Richard J. Durbin is just one more element of the financial regulation overhaul currently underway the Senate. Â The measure allows stores to give customers discounts for paying withÂ cash or using cards with cheaper fees, and it would permit retailers to set price thresholds for accepting credit cards. It also tasks the Federal Reserve with crafting regulations for determining whether swipe fees for debit cards are “reasonable and proportional.”
1. What is the average amount that retailers pay to credit card companies?
2. Explain how a retailer makes a journal entry for a credit card sale that includes these swipe fees.
3. Explain how you believe retailers will make journal entries for sales with cash discounts, under the new regulations.
On Thursday, May 13, 2010, the U.S. SenateÂ took steps to overhaul the credit-rating agency business, which is widely maligned for its role in the 2007-2009 financial crisis.Â An amendment by Democratic Senator Al Franken passed for a government clearinghouse to be set up to assign debt rating duties to agencies, with federal regulators developing their own standards of credit-worthiness rather than relying solely on credit rating agency assessments. In a subsequent vote, lawmakers approved a separate amendment by Sen. George S. LeMieux (R-Fla.) that would remove the government’s stamp of approval for a select group of ratings agencies as the standard for credit worthiness.
1.Â Who are the main credit agencies that controversial bill was aimed at?
2.Â This bill is being touted as the biggest overhaul of financial regulation since the Great Depression.Â What regulation(s) was enacted during the Great Depression that impacts accountants to this day?
3. Â Briefly explain bond ratings and why it is important for an accountant to understand this concept.
Simultaneous audits mean two separate exams, conducted by different governments, in which those governments share with each other some of the taxpayer’s information.Â Even though you may not have heard of them, they have existed since the 1970s, but are becoming more common today as government tax agencies race to match the level of global coordination practiced by multinational companies and their tax advisers.
1. What does the article point to as â€œthe biggest downside to an unplanned simultaneous audit?â€
2. What is the most common reason(s) for countries to exchange corporate tax information?
3. Explain the statement â€œfirms would do well to understand the difference between the collaborative modes â€” enforcement and service â€” in which tax authorities operate.â€ Briefly explain the difference between the two and why it benefits firms.
Many have debated the cost of Sarbanes-Oxley (SOX) versus its benefits, given the recent accounting scandals that continue to “pile on”. However, according to Harvard Business School professor, Francois Brochet, the little discussed 2002 provision known as Section 403 is actually making a difference for investors and small companies (and with little cost, unlike some costly Section 404 provisions regarding internal controls).Â Â Â
1. What is Section 403 of SOX?
2.Â In Brochet’s review of more than 50,000 filings of insider trades, what was the benefit of Section 403? Why is this important?
3. What is a Form 4 filing?
4. What measures did the article say that some companies are taking to prohibit executives from making trades based on material nonpublic information?
At a recent conference in Orlando, financial executives discussed one of the top reasons for employee fatigue – a continuous stream of regulatory and accounting standard-setting guidance that has been issued in recent years and the promise of more to come over the foreseeable future.
1. Although the article provides little detail, what accounting standard-setters and regulators do you think CFO’s are referring to?
2. What areas will be affected by the six major projects currently under way, which are expected to be revealed next June?
3. Explain why Jay Hanson of McGladrey & Pullen says that “more principles-based rules will require seasoned professionals, not recent graduates.”
4. What particular area of accounting is one that will demand “an army of people”?
When you hear the word “deadbeat,” you automatically think bad things. Â According to former MBNA employee, Jerry Young,Â a credit card deadbeat is the insider term used by credit card company executives, that refers to credit card users who pay off their bills promptly and in full each month. Doesn’t sound too bad, right? By doing so, such customers pay no interest and prevent the bank or creditor from making any profit. Alternatively, what endears you to the credit card folks is to be a “revolver.” A revolver is a credit card user that constantly carries a balance and is charged regular, monthly interest on their charges. Sounds a little bit like Alice in Wonderland?
2. According to Ms. Andrews, ” To be a credit card deadbeat you need persistence, determination, and discipline.”Â If you were doing a cost/benefit analysis of following her advice, what do you think were the costs that the article did not discuss?
3. Â According to Jerry Young, how long did it take on average for a credit card company to develop a revolver?Â Do you think this has changed underÂ the current economic conditions?Â Explain.
4.Â Research Jerry’s old company, MBNA.Â What happened to the firm?Â