AICPA Proposes Peer Review Standards Changes

From Neikirk, Mahoney & Smith, according to the Journal of Accountancy the AICPA has proposed changes to the peer review standards "to help audit firms increase their focus on the proper design and operating effectiveness of their systems of quality control."

The AICPA peer review program monitors the quality of reviewed firms’ accounting and auditing engagements and evaluates the systems under which those engagements are performed. Participation in the peer review program is mandatory for AICPA membership, and peer review is required for licensure in nearly every state.

For more details on the specific changes that have been proposed to the peer review standards, check out the full article at The Journal of Accountancy 

You can also contact Neikirk, Mahoney & Smith PLLC at 502-896-2999, or through our website contact form.

Tax Laws Slowing Growth of Small Business

In a recent testimony before Congress, Troy Lewis, CPA, CGMA, and chair of the American Institute of CPAs’ (AICPA) Tax Executive Committee, claimed that that compliance with federal tax laws can act as a road block in the growth of small businesses, according to Seth Fineberg, writing in Accounting Web.

 “It is imperative that small businesses and their tax return preparers have the ability to communicate with the IRS when preparing their taxes and addressing compliance issues,” Lewis told committee members. “However, there has been increasingly limited access to the agency. Taxpayer service must remain a high priority in order for small businesses to receive the assistance they need on tax issues.”

Click here to read the complete article.

Accounting News Weekly Wrapup

As we prepare to wrap up the end of Q2 of 2014, here's a recap of the week's top stories and articles.

Businesses are cutting back on supplying cell phones to employees

Do you feel a tad screwed when your employer calls you on your personal cell phone and doesn't offer to reimburse you? Well, get used to it because, according to the Sage Mobile Device Survey, its not happening much these days.
Fewer businesses are supplying their employees with mobile devices this year over last, according to the second annual mobile device survey from Sage, with a little more than half of responding companies (54 percent) giving their staff devices, down from 69 percent in 2013.

Respondents are seeing the positive effects of mobile technology, however, with the biggest impact in customer service, according to 70 percent of the 1,090 U.S. small businesses polled. They also reported devices to be helpful for performing business in bad weather (32 percent), bringing more work to the company (21 percent) and enabling them to conduct meetings remotely (20 percent).

Despite these benefits, most businesses (more than three quarters) report they are not budgeting for mobile devices and instead purchasing them as the need arises. Five percent said that their business sets an annual budget for mobile items and sticks to it and 12 percent set an annual budget and adjust expenditures as needed.
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Congress working to simplify education tax credits

The legislation, H.R. 3393, the Student and Family Tax Simplification Act, emerged from one of the 11 tax reform working groups that Ways and Means chairman Dave Camp, R-Mich., set up last year to study ways to improve areas such as education tax credits. Rep. Diane Black, R-Tenn., chaired the committee’s Education Tax Reform Working Group and she applauded passage of the bill Wednesday.

“It’s a well-known fact that the cost of education is climbing, and that for too many, the ability to save and pay for college without ending up under a mountain of debt is simply out of reach,” Black said in a statement.

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CPA pleads guilty in Madoff corruption scheme

Peter Konigsberg, an accountant and lawyer who provided services to numerous clients of Bernard Madoff’s investment firm, and who was a personal tax and business adviser to Madoff, pleaded guilty Tuesday in a Manhattan federal court to various charges and faces up to 30 years in prison.

Konigbserg pleaded guilty to a three-count superseding information charging him with one count of conspiracy to falsify the books and records of Madoff Securities and to obstruct the administration of the tax laws, as well as two substantive books and records counts. In addition to pleading guilty, Konigsberg has agreed to cooperate with the government in its ongoing investigation of the fraud at Madoff Securities.
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IRS hard drive failure ignites more furor in halls of Congress

(Bloomberg) U.S. lawmakers argued late into the night over a computer hard drive that crashed in 2011, taking the controversy surrounding the Internal Revenue Service to a new level of acrimony.

Republicans said the broken device that belonged to former IRS official Lois Lerner is crucial evidence in their investigation of the agency and said the IRS was covering up its misdeeds. Lerner headed the IRS office that gave extra scrutiny to small-government groups seeking tax-exempt status.

“I’m sick and tired of your game-playing in response to congressional oversight,” Representative Darrell Issa, chairman of the House Oversight and Government Reform Committee, said to IRS Commissioner John Koskinen at a hearing last night.

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AICPA nixes IRS' Voluntary Tax Preparer Program

The American Institute of CPAs has sent a letter expressing strong concern with the Internal Revenue Service’s proposed voluntary certification program for tax return preparers, saying it “would cause significant legal problems that may ultimately frustrate the IRS’s goals, confuse the public, and lead to litigation.”

The AICPA expressed its concerns to IRS commissioner John Koskinen in a meeting and letter last month, but has increased its level of concern in the latest letter (see AICPA Opposes IRS Voluntary Tax Preparer Certification).

In a letter Tuesday to Koskinen, AICPA chairman Bill Balhoff and AICPA president and CEO Barry C. Melancon wrote, “We have repeatedly expressed to you and your colleagues that our members have very significant concerns regarding a voluntary certification program...

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Lerner is alleged to have targeted Sen. Grassley for audit

House Republicans are accusing Lois Lerner, the former director of the Internal Revenue Service’s Exempt Organizations unit, of emailing a colleague about subjecting Sen. Charles Grassley, R-Iowa, the former chairman of the Senate Finance Committee, to an IRS examination.

House Ways and Means Committee chairman Dave Camp, R-Mich., has been among those investigating the scandal that erupted after Lerner revealed that the IRS had been using terms such as “Tea Party” and “Patriot” to screen applications from groups applying for tax-exempt status. 

He revealed a series of emails Wednesday between Lerner and a colleague over an invitation that had been sent to Grassley to speak at a seminar to which Lerner had also been invited to speak. The unidentified group offered to pay for both Grassley and his wife to attend the event. In the email messages, Lerner says...

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Regions Bank hit hard by fraud charges

Regions Bank plans to pay $51 million to resolve charges related to the intentional misclassification of loans and accounting fraud.

The Securities and Exchange Commission said Wednesday it has filed fraud charges against three former senior managers of Regions Bank for intentionally misclassifying loans that should have been recorded as impaired for accounting purposes

The SEC said the scheme resulted in the bank’s publicly-traded holding company overstating its income and earnings per share in its financial reporting.

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IRS apparently ignoring AICPA and proceeds with program

The Internal Revenue Service is moving ahead with a voluntary tax preparer education program after legal challenges derailed an earlier mandatory testing and continuing education program.

The IRS said Thursday that guidance will soon be issued outlining the new voluntary program to encourage education and filing season readiness for paid tax return preparers. The program will be in place to help taxpayers during the 2015 filing season. It does not include a testing component, although the IRS hopes to add it in future years.

“Today we’re announcing a new program that will help taxpayers by improving the tax know-how and filing season readiness of paid tax preparers,” said IRS commissioner John Koskinen in a conference call with reporters. 

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ObamaCare could benefit from tax season enrollment

A new study suggests that tax filing season could be the best time to sign up clients for health coverage under the Affordable Care Act rather than the current open enrollment period.

The study, by Katherine Swartz of Harvard University and John Graves of Vanderbilt University, published Wednesday in the journal Health Affairs, offers strong evidence for why the ACA open enrollment period should be changed to align with tax season. Currently, Americans who are eligible for tax credits for assistance with paying health insurance premiums only have from until February 15 to apply. The open enrollment began last October 1 during a botched rollout that quickly revealed technical glitches in the federal government’s HealthCare.gov health insurance exchange, along with many state-run exchanges.

The study evaluates the misalignment of the financial calendar of average low-income Americans with the open enrollment period for ACA health coverage, along with the impact that financial stress has on purchasing decisions. The researchers used data on Google search engine queries to evaluate when people were using search terms such as “health insurance.”

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Startups concerned about US tax structure

Nearly two times as many startup business owners cite the U.S. tax structure over health care reform as the issue they anticipate having the biggest impact on their business this year, according to a new survey by the payroll technology provider Paychex.

Of the more than 250 business owners surveyed, 47 percent ranked the U.S. tax structure as the top issue affecting their small business, nearly double the number that selected health care reform (25 percent).

Overall government regulation (20 percent), potential government inaction (6 percent), and immigration reform (2 percent) ranked below those among the top issues.

by Michael Cohn, Accounting Today

Exports of unrefined American oil could begin soon

The Obama administration cleared the way for the first exports of unrefined American oil in nearly four decades, allowing energy companies to start chipping away at the longtime ban on selling U.S. oil abroad.

In separate rulings that haven't been announced, the Commerce Department gave Pioneer Natural Resources Co. and Enterprise Products Partners LP permission to ship a type of ultralight oil known as condensate to foreign buyers. The buyers could turn the oil into gasoline, jet fuel and diesel.

The shipments could begin as soon as August and are likely to be small, people familiar with the matter said. It isn't clear how much oil the two companies are allowed to export under the rulings, which were issued since the start of this year. The Commerce Department's Bureau of Industry and Security approved the moves using a process known as a private ruling.

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BMW looking to build new plant; choosing between US and Mexico

MUNICH—German luxury car maker BMW AG BMW.XE -0.13%  will decide before Bavarian summer vacations whether to build a new auto plant in Mexico or the U.S., Chief Executive Norbert Reithofer said on Wednesday.

Speaking at industry event in Munich, Mr. Reithofer said BMW would decide on the location of a second plant to serve the North American market "clearly before the summer break."

Summer school vacations in Bavaria begin on July 30 this year.

BMW said earlier this year that it was considering building a second factory in North America to meet growing demand. BMW delivered about 376,000 vehicles in the U.S. last year, according to Autodata, about 19% of its world-wide deliveries.

It is widely expected that BMW will locate the new plant in Mexico instead of Spartanburg, S.C., an existing factory that builds its X series sport utility vehicles. Earlier this year, the company said it would invest $1 billion over several years in Spartanburg to expand production, including a proposed seven-seat SUV.

by Hendrik Varnholt, Wall Street Journal

CPA Poll Indicates Upward Hiring Trend

In a poll conducted by the American Institute of CPAs, accounting executives in US companies are projecting increased hiring despite concerns about the outlook of the American economy. The quarterly AICPA Economic Outlook Survey polls CEOs, CFOs, controllers and other CPAs in U.S. companies who hold executive and senior management accounting roles, according to Accounting Today.

Friday’s monthly jobs report from the U.S. Bureau of Labor Statistics indicated that current hiring trends are still relatively weak. The AICPA survey, however, serves as a forward-looking indicator of hiring expectations over the next 12 months. 

Some 15 percent of respondents now say they have too few employees and are planning to hire in the next 12 months, up from 12 percent last quarter and 9 percent a year ago. Another 19 percent say they have too few employees but are reluctant to bring on new staff. 

Some 53 percent of business executives indicated their companies have the right number of employees. The largest companies (those with more than $1 billion in annual revenue) are more likely than other businesses to say they have too few employees. On an industry basis, the construction, technology, and professional, technical and scientific services sectors are expected to post the largest job growth.

If you're anticipating hiring additional personnel for your company and you have questions, please give Neikirk, Mahoney & Smith PLLC a call. We'd be happy to advise you. 

See this from Indeed.com (http://indeed.com) 

Job Postings 119,868	Accounting job postings have increased 6% since August 2012. Clicks on Accounting jobs have increased 21% since August 2012.
Clicks 9,335,782	Top Job Titles Clicks 0 300,000 Staff Accountant 271,435 Accountant 155,785 CONTROLLER 149,790 Accounting Clerk 147,114 Account Manager 145,383 Business Analyst 141,325 Senior Accountant 127,767 Accounts Payable Clerk 117,342 Bookkeeper 104,872 Accounting Manager 90,934
Top Keyword Searches Clicks 0 950,000 accounting 913,060 accountant 369,358 accounts payable 190,849 controller 147,898 finance 105,920 payroll 101,228 business analyst 80,793 accounts receivable 76,810 staff accountant 72,199 bookkeeper 70,481	Top Locations Clicks 0 450,000 New York, NY 449,970 Houston, TX 243,176 Atlanta, GA 211,652 Chicago, IL 205,303 United States 187,862 Washington, DC 147,953 Los Angeles, CA 141,926 Dallas, TX 132,259 Charlotte, NC 114,439 San Francisco, CA 105,963
Statistical approximations are used to compute these results.

FASB, AICPA Partner to Simplify Accounting for Small Businesses

The American Institute of Certified Public Accountants and the Financial Accounting Standards Board, trade groups that manage and supervise standards used in the accounting profession, has announced that it is has created a “framework” that would simplify accounting for such companies. It would differ from the “generally accepted accounting principles,” or GAAP, that public companies must follow in a number of ways, large and small.

The goal is to make accounting-related life for small businesses (companies that are not publicly traded) easier to manage. Click here to read more