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<br /> Is Real<br /> Tax Reform<br /> Realistic?<br /> Plus<br />  Changes in Pension Accounting<br />  Economic Substance Doctrine<br />  Questions on Outsourcing<br /> CONTENTS<br /> october 2012<br /> 24 Accounting & Auditing<br /> ❙ Accounting<br /> A New Reality Ahead for Pension Accounting?:<br /> The Recession's Aftermath and IAS 19R<br /> Prompt Changes in Accounting Practices<br /> By James M. Fornaro<br /> ❙ Auditing<br /> Audit Fee Patterns of Big Four and Non–Big Four Firms:<br /> A Study of the Potential Effects of Auditing Standard 5<br /> By H. Leon Chan, David G. DeBoskey, and Kevin Hee<br /> ❙ Financial Reporting<br /> Disclosures on Derivatives and Hedging Transactions:<br /<a title="The CPAJ - October 2012 page 1" href="http://viewer.zmags.com/publication/7205b0ed?page=1"> Is Real Tax Reform Realistic? P</a> <a title="The CPAJ - October 2012 page 2" href="http://viewer.zmags.com/publication/7205b0ed?page=2"> CONTENTS october 2012 </a> <a title="The CPAJ - October 2012 page 3" href="http://viewer.zmags.com/publication/7205b0ed?page=3"> vol. LXXXII/no.10 6PERSPECTIVES 18IN FOCUS </a> <a title="The CPAJ - October 2012 page 4" href="http://viewer.zmags.com/publication/7205b0ed?page=4"> new york state society of NYSSCPA certif</a> <a title="The CPAJ - October 2012 page 5" href="http://viewer.zmags.com/publication/7205b0ed?page=5"> </a> <a title="The CPAJ - October 2012 page 6" href="http://viewer.zmags.com/publication/7205b0ed?page=6"> PERSPECTIVES viewpoint Improving Governance</a> <a title="The CPAJ - October 2012 page 7" href="http://viewer.zmags.com/publication/7205b0ed?page=7"> publisher's column Truth and Accuracy— in </a> <a title="The CPAJ - October 2012 page 8" href="http://viewer.zmags.com/publication/7205b0ed?page=8"> (Continued from page 6) Internal Control Issues i</a> <a title="The CPAJ - October 2012 page 9" href="http://viewer.zmags.com/publication/7205b0ed?page=9"> and the contract stipulated that they had the “ri</a> <a title="The CPAJ - October 2012 page 10" href="http://viewer.zmags.com/publication/7205b0ed?page=10"> the revised framework for external report- ing. A</a> <a title="The CPAJ - October 2012 page 11" href="http://viewer.zmags.com/publication/7205b0ed?page=11"> Thought Papers and Future Projects CPAJ: Since</a> <a title="The CPAJ - October 2012 page 12" href="http://viewer.zmags.com/publication/7205b0ed?page=12"> future of the profession A Case-B</a> <a title="The CPAJ - October 2012 page 13" href="http://viewer.zmags.com/publication/7205b0ed?page=13"> of licensing costs and the client's incorrect cap</a> <a title="The CPAJ - October 2012 page 14" href="http://viewer.zmags.com/publication/7205b0ed?page=14"> Five Tips to Reduce the Risk of Internal Fraud K</a> <a title="The CPAJ - October 2012 page 15" href="http://viewer.zmags.com/publication/7205b0ed?page=15"> trols are implemented, periodic mainte- nance sho</a> <a title="The CPAJ - October 2012 page 16" href="http://viewer.zmags.com/publication/7205b0ed?page=16"> the auditor's responsibility for detecting fraud;</a> <a title="The CPAJ - October 2012 page 17" href="http://viewer.zmags.com/publication/7205b0ed?page=17"> that Enron had fairly presented financial stateme</a> <a title="The CPAJ - October 2012 page 18" href="http://viewer.zmags.com/publication/7205b0ed?page=18"> In Focus </a> <a title="The CPAJ - October 2012 page 19" href="http://viewer.zmags.com/publication/7205b0ed?page=19"> ★★ ★★ Is Real ★ Tax Reform Realistic? The</a> <a title="The CPAJ - October 2012 page 20" href="http://viewer.zmags.com/publication/7205b0ed?page=20"> Article I of the Constitution (in particular, sec</a> <a title="The CPAJ - October 2012 page 21" href="http://viewer.zmags.com/publication/7205b0ed?page=21"> example would be the assessment of real estate ta</a> <a title="The CPAJ - October 2012 page 22" href="http://viewer.zmags.com/publication/7205b0ed?page=22"> tax benefit was granted for the sole reason of sp</a> <a title="The CPAJ - October 2012 page 23" href="http://viewer.zmags.com/publication/7205b0ed?page=23"> Traditional thinking on penalty taxes holds</a> <a title="The CPAJ - October 2012 page 24" href="http://viewer.zmags.com/publication/7205b0ed?page=24"> ACCOUNTING & AUDITING accounting </a> <a title="The CPAJ - October 2012 page 25" href="http://viewer.zmags.com/publication/7205b0ed?page=25"> now agree that an overhaul of existing accounting</a> <a title="The CPAJ - October 2012 page 26" href="http://viewer.zmags.com/publication/7205b0ed?page=26"> age of fair values for up to five years based on </a> <a title="The CPAJ - October 2012 page 27" href="http://viewer.zmags.com/publication/7205b0ed?page=27"> recognition until future periods. Second, any sys</a> <a title="The CPAJ - October 2012 page 28" href="http://viewer.zmags.com/publication/7205b0ed?page=28"> roadmap for future changes to U.S. GAAP. At its A</a> <a title="The CPAJ - October 2012 page 29" href="http://viewer.zmags.com/publication/7205b0ed?page=29"> expenses compared to U.S. GAAP and existing IAS 1</a> <a title="The CPAJ - October 2012 page 30" href="http://viewer.zmags.com/publication/7205b0ed?page=30"> 2008. Other companies that also changed their pen</a> <a title="The CPAJ - October 2012 page 31" href="http://viewer.zmags.com/publication/7205b0ed?page=31"> </a> <a title="The CPAJ - October 2012 page 32" href="http://viewer.zmags.com/publication/7205b0ed?page=32"> ACCOUNTING & AUDITING auditing Aud</a> <a title="The CPAJ - October 2012 page 33" href="http://viewer.zmags.com/publication/7205b0ed?page=33"> analytics.com) and included all firms with inform</a> <a title="The CPAJ - October 2012 page 34" href="http://viewer.zmags.com/publication/7205b0ed?page=34"> tation of AS 5. The reduction of average audit fe</a> <a title="The CPAJ - October 2012 page 35" href="http://viewer.zmags.com/publication/7205b0ed?page=35"> age of total fees, have been relatively flat sinc</a> <a title="The CPAJ - October 2012 page 36" href="http://viewer.zmags.com/publication/7205b0ed?page=36"> the differential impact AS 5 has had on larger ve</a> <a title="The CPAJ - October 2012 page 37" href="http://viewer.zmags.com/publication/7205b0ed?page=37"> </a> <a title="The CPAJ - October 2012 page 38" href="http://viewer.zmags.com/publication/7205b0ed?page=38"> ACCOUNTING & AUDITING financial reporti</a> <a title="The CPAJ - October 2012 page 39" href="http://viewer.zmags.com/publication/7205b0ed?page=39"> $Y. (While hypothetical, this situation could ari</a> <a title="The CPAJ - October 2012 page 40" href="http://viewer.zmags.com/publication/7205b0ed?page=40"> TAXATION compliance & enforcement The Ec</a> <a title="The CPAJ - October 2012 page 41" href="http://viewer.zmags.com/publication/7205b0ed?page=41"> conflicts among the various courts about how to a</a> <a title="The CPAJ - October 2012 page 42" href="http://viewer.zmags.com/publication/7205b0ed?page=42"> trine is relevant in the same manner as before th</a> <a title="The CPAJ - October 2012 page 43" href="http://viewer.zmags.com/publication/7205b0ed?page=43"> tion in inappropriate situations. It contains a s</a> <a title="The CPAJ - October 2012 page 44" href="http://viewer.zmags.com/publication/7205b0ed?page=44"> over form or step transaction, should be consider</a> <a title="The CPAJ - October 2012 page 45" href="http://viewer.zmags.com/publication/7205b0ed?page=45"> nate the National Office review with all of the A</a> <a title="The CPAJ - October 2012 page 46" href="http://viewer.zmags.com/publication/7205b0ed?page=46"> TAXATION state & local taxation Marriag</a> <a title="The CPAJ - October 2012 page 47" href="http://viewer.zmags.com/publication/7205b0ed?page=47"> tremendous responsibility to keep up with these l</a> <a title="The CPAJ - October 2012 page 48" href="http://viewer.zmags.com/publication/7205b0ed?page=48"> narily itemized deductions on the federal Schedul</a> <a title="The CPAJ - October 2012 page 49" href="http://viewer.zmags.com/publication/7205b0ed?page=49"> 2010 ruling claiming that DOMA interferes with th</a> <a title="The CPAJ - October 2012 page 50" href="http://viewer.zmags.com/publication/7205b0ed?page=50"> FINANCE personal financial planning Tran</a> <a title="The CPAJ - October 2012 page 51" href="http://viewer.zmags.com/publication/7205b0ed?page=51"> of the transferee remains that of the trans- fero</a> <a title="The CPAJ - October 2012 page 52" href="http://viewer.zmags.com/publication/7205b0ed?page=52"> owner is the beneficiary of the policy he owns on</a> <a title="The CPAJ - October 2012 page 53" href="http://viewer.zmags.com/publication/7205b0ed?page=53"> the owner/insured's co–business owner as the bene</a> <a title="The CPAJ - October 2012 page 54" href="http://viewer.zmags.com/publication/7205b0ed?page=54"> Businesses with multiple owners often look to </a> <a title="The CPAJ - October 2012 page 55" href="http://viewer.zmags.com/publication/7205b0ed?page=55"> In an attempt to avoid split-dollar issues, </a> <a title="The CPAJ - October 2012 page 56" href="http://viewer.zmags.com/publication/7205b0ed?page=56"> MANAGEMENT corporate management </a> <a title="The CPAJ - October 2012 page 57" href="http://viewer.zmags.com/publication/7205b0ed?page=57"> with relevant expertise, businesses relied on out</a> <a title="The CPAJ - October 2012 page 58" href="http://viewer.zmags.com/publication/7205b0ed?page=58"> captive centers represent alternatives that compa</a> <a title="The CPAJ - October 2012 page 59" href="http://viewer.zmags.com/publication/7205b0ed?page=59"> of companies that took part in a recent sur- vey,</a> <a title="The CPAJ - October 2012 page 60" href="http://viewer.zmags.com/publication/7205b0ed?page=60"> that are not in the top 10 overall global out- so</a> <a title="The CPAJ - October 2012 page 61" href="http://viewer.zmags.com/publication/7205b0ed?page=61"> be shorter and will include the ability to renego</a> <a title="The CPAJ - October 2012 page 62" href="http://viewer.zmags.com/publication/7205b0ed?page=62"> RESPONSIBILITIES & LEADERSHIP education </a> <a title="The CPAJ - October 2012 page 63" href="http://viewer.zmags.com/publication/7205b0ed?page=63"> unclear whether the Boards will be able to</a> <a title="The CPAJ - October 2012 page 64" href="http://viewer.zmags.com/publication/7205b0ed?page=64"> Improvement Council,” FAF Board of Trustees, Octo</a> <a title="The CPAJ - October 2012 page 65" href="http://viewer.zmags.com/publication/7205b0ed?page=65"> indications that this status quo will change soon</a> <a title="The CPAJ - October 2012 page 66" href="http://viewer.zmags.com/publication/7205b0ed?page=66"> RESPONSIBILITIES & LEADERSHIP education </a> <a title="The CPAJ - October 2012 page 67" href="http://viewer.zmags.com/publication/7205b0ed?page=67"> choice about what to cover in the course that the</a> <a title="The CPAJ - October 2012 page 68" href="http://viewer.zmags.com/publication/7205b0ed?page=68"> TECHNOLOGY it management 10 Questions Aud</a> <a title="The CPAJ - October 2012 page 69" href="http://viewer.zmags.com/publication/7205b0ed?page=69"> nesses using increasingly complex tools, some of </a> <a title="The CPAJ - October 2012 page 70" href="http://viewer.zmags.com/publication/7205b0ed?page=70"> op a formal policy related to password security (</a> <a title="The CPAJ - October 2012 page 71" href="http://viewer.zmags.com/publication/7205b0ed?page=71"> improving profitability. These relationships crea</a> <a title="The CPAJ - October 2012 page 72" href="http://viewer.zmags.com/publication/7205b0ed?page=72"> TECHNOLOGY what to bookmark Website of t</a> <a title="The CPAJ - October 2012 page 73" href="http://viewer.zmags.com/publication/7205b0ed?page=73"> well as potential damaging effects on the economy</a> <a title="The CPAJ - October 2012 page 74" href="http://viewer.zmags.com/publication/7205b0ed?page=74"> CLASSIFIEDMARKETPLACE PROFESSIONAL OPPORTUNITY l </a> <a title="The CPAJ - October 2012 page 75" href="http://viewer.zmags.com/publication/7205b0ed?page=75"> Peer Review If you need help, the</a> <a title="The CPAJ - October 2012 page 76" href="http://viewer.zmags.com/publication/7205b0ed?page=76"> Sub-lease office space available. Utilities inclu</a> <a title="The CPAJ - October 2012 page 77" href="http://viewer.zmags.com/publication/7205b0ed?page=77"> PROFESSIONAL CONDUCT EXPERT PROFESSIONAL CONDUCT</a> <a title="The CPAJ - October 2012 page 78" href="http://viewer.zmags.com/publication/7205b0ed?page=78"> </a> <a title="The CPAJ - October 2012 page 79" href="http://viewer.zmags.com/publication/7205b0ed?page=79"> ECONOMIC & MARKET DATA monthly upd</a> <a title="The CPAJ - October 2012 page 80" href="http://viewer.zmags.com/publication/7205b0ed?page=80"> EDITORIAL a message from the editor-in-c</a> <a title="The CPAJ - October 2012 page 81" href="http://viewer.zmags.com/publication/7205b0ed?page=81"> </a> <a title="The CPAJ - October 2012 page 82" href="http://viewer.zmags.com/publication/7205b0ed?page=82"> </a>