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<br /> Focus on Fraud & Forensic Accounting<br /> Recognizing the Red Flags<br /> of a Ponzi Scheme<br /> Plus<br /> •Antifraud Tips<br /> •Criminal Tax Evasion<br /> •Hybrid Approach to Fair Value<br /> <br /> <br /> C ONTENTS<br /> june<br /> 26 Accounting & Auditing<br /> ❙ Standards Setting<br /> Fair Value Accounting<br /> and the Current Financial Crisis<br /> By John M. Trussel and Laura C. Rose<br /> ❙ International Auditing<br /> Audit Risk and IFRS: Does Increased<br /> Flexibility Increase Audit Risk?<br /> By Ronald E. Marden and Kennard S. Brackney<br /> 38 Taxation<br /> ❙ Compliance & Enforcement<br /> Criminal Tax Evasion and Taxpayer Intent:<br /> Supreme Court Says No Harm<a title="The CPA Journal - June 1, 2009 page 1" href="http://viewer.zmags.com/publication/95cbd4ae?page=1"> Focus on Fraud & Forensic Accounting Recognizing</a> <a title="The CPA Journal - June 1, 2009 page 2" href="http://viewer.zmags.com/publication/95cbd4ae?page=2"> </a> <a title="The CPA Journal - June 1, 2009 page 3" href="http://viewer.zmags.com/publication/95cbd4ae?page=3"> </a> <a title="The CPA Journal - June 1, 2009 page 4" href="http://viewer.zmags.com/publication/95cbd4ae?page=4"> C ONTENTS june 26 Accounting </a> <a title="The CPA Journal - June 1, 2009 page 5" href="http://viewer.zmags.com/publication/95cbd4ae?page=5"> vol. LXXIX/no.6 6PERSPECT</a> <a title="The CPA Journal - June 1, 2009 page 6" href="http://viewer.zmags.com/publication/95cbd4ae?page=6"> Publisher LOUIS GRUMET Associate Pu</a> <a title="The CPA Journal - June 1, 2009 page 7" href="http://viewer.zmags.com/publication/95cbd4ae?page=7"> </a> <a title="The CPA Journal - June 1, 2009 page 8" href="http://viewer.zmags.com/publication/95cbd4ae?page=8"> P ERSPECTIVES emerging issues Stepping Up </a> <a title="The CPA Journal - June 1, 2009 page 9" href="http://viewer.zmags.com/publication/95cbd4ae?page=9"> publisher's column Navigating the State's </a> <a title="The CPA Journal - June 1, 2009 page 10" href="http://viewer.zmags.com/publication/95cbd4ae?page=10"> (Continued from page 6) participants. That princi</a> <a title="The CPA Journal - June 1, 2009 page 11" href="http://viewer.zmags.com/publication/95cbd4ae?page=11"> small corporations, so long as we do not develop </a> <a title="The CPA Journal - June 1, 2009 page 12" href="http://viewer.zmags.com/publication/95cbd4ae?page=12"> The record of the SEC in recent years has not </a> <a title="The CPA Journal - June 1, 2009 page 13" href="http://viewer.zmags.com/publication/95cbd4ae?page=13"> sidiaries can be very helpful in unwinding failed</a> <a title="The CPA Journal - June 1, 2009 page 14" href="http://viewer.zmags.com/publication/95cbd4ae?page=14"> FDIC, then we would have a strong agency regulati</a> <a title="The CPA Journal - June 1, 2009 page 15" href="http://viewer.zmags.com/publication/95cbd4ae?page=15"> Mentoring the Next Generation By Stephe</a> <a title="The CPA Journal - June 1, 2009 page 16" href="http://viewer.zmags.com/publication/95cbd4ae?page=16"> From Crisis to Confidence: What Is the R</a> <a title="The CPA Journal - June 1, 2009 page 17" href="http://viewer.zmags.com/publication/95cbd4ae?page=17"> And today, in the midst of the greatest eco- nomi</a> <a title="The CPA Journal - June 1, 2009 page 18" href="http://viewer.zmags.com/publication/95cbd4ae?page=18"> Accounting Irregularities and Financial Fraud: A </a> <a title="The CPA Journal - June 1, 2009 page 19" href="http://viewer.zmags.com/publication/95cbd4ae?page=19"> </a> <a title="The CPA Journal - June 1, 2009 page 20" href="http://viewer.zmags.com/publication/95cbd4ae?page=20"> Focus In </a> <a title="The CPA Journal - June 1, 2009 page 21" href="http://viewer.zmags.com/publication/95cbd4ae?page=21"> Recognizing the Red Flags of a Ponzi Scheme Wil</a> <a title="The CPA Journal - June 1, 2009 page 22" href="http://viewer.zmags.com/publication/95cbd4ae?page=22"> demand his money at any time was no reassurance, </a> <a title="The CPA Journal - June 1, 2009 page 23" href="http://viewer.zmags.com/publication/95cbd4ae?page=23"> investors by promising steady and above- market r</a> <a title="The CPA Journal - June 1, 2009 page 24" href="http://viewer.zmags.com/publication/95cbd4ae?page=24"> the year 2000, only the scheme remained. He calle</a> <a title="The CPA Journal - June 1, 2009 page 25" href="http://viewer.zmags.com/publication/95cbd4ae?page=25"> author's opinion, the auditing firms may claim th</a> <a title="The CPA Journal - June 1, 2009 page 26" href="http://viewer.zmags.com/publication/95cbd4ae?page=26"> Analyzing the Fraud EXHIBIT 4 Risk Fact</a> <a title="The CPA Journal - June 1, 2009 page 27" href="http://viewer.zmags.com/publication/95cbd4ae?page=27"> the plaintiff justifiably relied upon. There must</a> <a title="The CPA Journal - June 1, 2009 page 28" href="http://viewer.zmags.com/publication/95cbd4ae?page=28"> A CCOUNTING & AUDITING standards setting </a> <a title="The CPA Journal - June 1, 2009 page 29" href="http://viewer.zmags.com/publication/95cbd4ae?page=29"> standard exacerbate the problems or merely illumi</a> <a title="The CPA Journal - June 1, 2009 page 30" href="http://viewer.zmags.com/publication/95cbd4ae?page=30"> cretion. The complexity of such assets sug- gests</a> <a title="The CPA Journal - June 1, 2009 page 31" href="http://viewer.zmags.com/publication/95cbd4ae?page=31"> highly publicized transactions in the fall of 200</a> <a title="The CPA Journal - June 1, 2009 page 32" href="http://viewer.zmags.com/publication/95cbd4ae?page=32"> is preferable as a level one input. As seen in th</a> <a title="The CPA Journal - June 1, 2009 page 33" href="http://viewer.zmags.com/publication/95cbd4ae?page=33"> </a> <a title="The CPA Journal - June 1, 2009 page 34" href="http://viewer.zmags.com/publication/95cbd4ae?page=34"> A CCOUNTING & AUDITING international auditi</a> <a title="The CPA Journal - June 1, 2009 page 35" href="http://viewer.zmags.com/publication/95cbd4ae?page=35"> ity these standards offer, the audit process will</a> <a title="The CPA Journal - June 1, 2009 page 36" href="http://viewer.zmags.com/publication/95cbd4ae?page=36"> </a> <a title="The CPA Journal - June 1, 2009 page 37" href="http://viewer.zmags.com/publication/95cbd4ae?page=37"> Inherent risk and control risk are the company</a> <a title="The CPA Journal - June 1, 2009 page 38" href="http://viewer.zmags.com/publication/95cbd4ae?page=38"> 19 differences, IFRS requires or permits the use </a> <a title="The CPA Journal - June 1, 2009 page 39" href="http://viewer.zmags.com/publication/95cbd4ae?page=39"> </a> <a title="The CPA Journal - June 1, 2009 page 40" href="http://viewer.zmags.com/publication/95cbd4ae?page=40"> T AXATION compliance & enforcement </a> <a title="The CPA Journal - June 1, 2009 page 41" href="http://viewer.zmags.com/publication/95cbd4ae?page=41"> the way §§ 301 and 316(a) are written (to dist</a> <a title="The CPA Journal - June 1, 2009 page 42" href="http://viewer.zmags.com/publication/95cbd4ae?page=42"> the monies received constituted a tax-free return</a> <a title="The CPA Journal - June 1, 2009 page 43" href="http://viewer.zmags.com/publication/95cbd4ae?page=43"> Covina Publications, Inc., and related com- panie</a> <a title="The CPA Journal - June 1, 2009 page 44" href="http://viewer.zmags.com/publication/95cbd4ae?page=44"> such distributions were intended to be such a ret</a> <a title="The CPA Journal - June 1, 2009 page 45" href="http://viewer.zmags.com/publication/95cbd4ae?page=45"> tions “in a tax status limbo in criminal cases.” </a> <a title="The CPA Journal - June 1, 2009 page 46" href="http://viewer.zmags.com/publication/95cbd4ae?page=46"> T AXATION federal taxation How Deductions, </a> <a title="The CPA Journal - June 1, 2009 page 47" href="http://viewer.zmags.com/publication/95cbd4ae?page=47"> ly believe that this income is tax-free. Consider</a> <a title="The CPA Journal - June 1, 2009 page 48" href="http://viewer.zmags.com/publication/95cbd4ae?page=48"> The increase in tax of $350 represents a margi</a> <a title="The CPA Journal - June 1, 2009 page 49" href="http://viewer.zmags.com/publication/95cbd4ae?page=49"> JUNE 2009 / THE CPA JOURNAL </a> <a title="The CPA Journal - June 1, 2009 page 50" href="http://viewer.zmags.com/publication/95cbd4ae?page=50"> F INANCE succession planning Guiding Fami</a> <a title="The CPA Journal - June 1, 2009 page 51" href="http://viewer.zmags.com/publication/95cbd4ae?page=51"> The CPA's Role What is the CPA's role in the s</a> <a title="The CPA Journal - June 1, 2009 page 52" href="http://viewer.zmags.com/publication/95cbd4ae?page=52"> cess floundered until the son-in-law forced the i</a> <a title="The CPA Journal - June 1, 2009 page 53" href="http://viewer.zmags.com/publication/95cbd4ae?page=53"> A financial arrangement must be crafted to all</a> <a title="The CPA Journal - June 1, 2009 page 54" href="http://viewer.zmags.com/publication/95cbd4ae?page=54"> M ANAGEMENT cpa consultant </a> <a title="The CPA Journal - June 1, 2009 page 55" href="http://viewer.zmags.com/publication/95cbd4ae?page=55"> client results in increased client-specific exper</a> <a title="The CPA Journal - June 1, 2009 page 56" href="http://viewer.zmags.com/publication/95cbd4ae?page=56"> from Going Concern Audit Opinions,” Journal of Ac</a> <a title="The CPA Journal - June 1, 2009 page 57" href="http://viewer.zmags.com/publication/95cbd4ae?page=57"> ly affecting bond rater perceptions, the research</a> <a title="The CPA Journal - June 1, 2009 page 58" href="http://viewer.zmags.com/publication/95cbd4ae?page=58"> M ANAGEMENT fraud Practical and Ethical Co</a> <a title="The CPA Journal - June 1, 2009 page 59" href="http://viewer.zmags.com/publication/95cbd4ae?page=59"> nesses, and the legal process. Guaranteeing succe</a> <a title="The CPA Journal - June 1, 2009 page 60" href="http://viewer.zmags.com/publication/95cbd4ae?page=60"> There are other disclosure issues that aren't </a> <a title="The CPA Journal - June 1, 2009 page 61" href="http://viewer.zmags.com/publication/95cbd4ae?page=61"> M ANAGEMENT practice management The Human</a> <a title="The CPA Journal - June 1, 2009 page 62" href="http://viewer.zmags.com/publication/95cbd4ae?page=62"> under IFRS guidelines, they are recognized when i</a> <a title="The CPA Journal - June 1, 2009 page 63" href="http://viewer.zmags.com/publication/95cbd4ae?page=63"> necessary to adopt strategic financial per- spect</a> <a title="The CPA Journal - June 1, 2009 page 64" href="http://viewer.zmags.com/publication/95cbd4ae?page=64"> R ESPONSIBILITIES & LEADERSHIP ethics </a> <a title="The CPA Journal - June 1, 2009 page 65" href="http://viewer.zmags.com/publication/95cbd4ae?page=65"> learned were materially false. More diffi- cult c</a> <a title="The CPA Journal - June 1, 2009 page 66" href="http://viewer.zmags.com/publication/95cbd4ae?page=66"> Whistleblowing Under the Securities Laws In 19</a> <a title="The CPA Journal - June 1, 2009 page 67" href="http://viewer.zmags.com/publication/95cbd4ae?page=67"> can be claimed by the accountant, the client, or </a> <a title="The CPA Journal - June 1, 2009 page 68" href="http://viewer.zmags.com/publication/95cbd4ae?page=68"> EXHIBIT Decision Table for CPAs </a> <a title="The CPA Journal - June 1, 2009 page 69" href="http://viewer.zmags.com/publication/95cbd4ae?page=69"> not violate the provisions of the AICPA Code of P</a> <a title="The CPA Journal - June 1, 2009 page 70" href="http://viewer.zmags.com/publication/95cbd4ae?page=70"> T ECHNOLOGY the cpa & the computer </a> <a title="The CPA Journal - June 1, 2009 page 71" href="http://viewer.zmags.com/publication/95cbd4ae?page=71"> Similarly, Statement on Auditing Standards 109</a> <a title="The CPA Journal - June 1, 2009 page 72" href="http://viewer.zmags.com/publication/95cbd4ae?page=72"> placed in a library, which will allow all mod- ul</a> <a title="The CPA Journal - June 1, 2009 page 73" href="http://viewer.zmags.com/publication/95cbd4ae?page=73"> the FICA percentage into the source code; if the </a> <a title="The CPA Journal - June 1, 2009 page 74" href="http://viewer.zmags.com/publication/95cbd4ae?page=74"> T ECHNOLOGY what to bookmark Website of </a> <a title="The CPA Journal - June 1, 2009 page 75" href="http://viewer.zmags.com/publication/95cbd4ae?page=75"> form number, and can also be located by type of f</a> <a title="The CPA Journal - June 1, 2009 page 76" href="http://viewer.zmags.com/publication/95cbd4ae?page=76"> Classified PROFESSIONAL OPPORTUNITY l BUSINESS l</a> <a title="The CPA Journal - June 1, 2009 page 77" href="http://viewer.zmags.com/publication/95cbd4ae?page=77"> SPACE FOR RENT AAA PROFESSIONAL OFFICES FOR REN</a> <a title="The CPA Journal - June 1, 2009 page 78" href="http://viewer.zmags.com/publication/95cbd4ae?page=78"> SALES TAX, ISAAC STERNHEIM & CO. Sales tax consu</a> <a title="The CPA Journal - June 1, 2009 page 79" href="http://viewer.zmags.com/publication/95cbd4ae?page=79"> PEER REVIEW PE</a> <a title="The CPA Journal - June 1, 2009 page 80" href="http://viewer.zmags.com/publication/95cbd4ae?page=80"> </a> <a title="The CPA Journal - June 1, 2009 page 81" href="http://viewer.zmags.com/publication/95cbd4ae?page=81"> E CONOMIC & MARKET D ATA monthly update</a> <a title="The CPA Journal - June 1, 2009 page 82" href="http://viewer.zmags.com/publication/95cbd4ae?page=82"> E DITORIAL a message from the editor-in-chie</a> <a title="The CPA Journal - June 1, 2009 page 83" href="http://viewer.zmags.com/publication/95cbd4ae?page=83"> </a> <a title="The CPA Journal - June 1, 2009 page 84" href="http://viewer.zmags.com/publication/95cbd4ae?page=84"> </a>