<br />
At the Frontline of Investor Protection<br />
An Interview with<br />
Charles<br />
Niemeier<br />
PCAOB board<br />
member<br />
Subprime Meltdown Implications Closing the GAAP Gap Educating with VITA<br />
PLUS<br />
<br />
<br />
C ONTENTS<br />
december 2008<br />
24 Accounting & Auditing<br />
❙ Accounting<br />
Accounting Implications of the Subprime Meltdown:<br />
The Peril of Forgetting the Fundamentals<br />
By William M. VanDenburgh and Philip J. Harmelink<br />
❙ Accounting<br />
Closing the `GAAP Gap': The Case<br />
of Business Combinations<br />
By Brian W. Carpenter and Daniel P. Mahoney<br />
❙ Auditing<br />
Quality Control Defects Revealed in Smaller Firms'<br />
<a title="The CPA Journal - December 2008 page 1" href="http://viewer.zmags.com/publication/bd37ce6f?page=1"> At the Frontline of Investor Protection An Inter</a>
<a title="The CPA Journal - December 2008 page 2" href="http://viewer.zmags.com/publication/bd37ce6f?page=2"> </a>
<a title="The CPA Journal - December 2008 page 3" href="http://viewer.zmags.com/publication/bd37ce6f?page=3"> </a>
<a title="The CPA Journal - December 2008 page 4" href="http://viewer.zmags.com/publication/bd37ce6f?page=4"> C ONTENTS december 2008 </a>
<a title="The CPA Journal - December 2008 page 5" href="http://viewer.zmags.com/publication/bd37ce6f?page=5"> vol. LXXVIII/no. 12 6PERS</a>
<a title="The CPA Journal - December 2008 page 6" href="http://viewer.zmags.com/publication/bd37ce6f?page=6"> Publisher LOUIS GRUMET Associate Publi</a>
<a title="The CPA Journal - December 2008 page 7" href="http://viewer.zmags.com/publication/bd37ce6f?page=7"> </a>
<a title="The CPA Journal - December 2008 page 8" href="http://viewer.zmags.com/publication/bd37ce6f?page=8"> P ERSPECTIVES viewpoint The Inevitable Move</a>
<a title="The CPA Journal - December 2008 page 9" href="http://viewer.zmags.com/publication/bd37ce6f?page=9"> publisher's column The Only Real Mistakes …</a>
<a title="The CPA Journal - December 2008 page 10" href="http://viewer.zmags.com/publication/bd37ce6f?page=10"> (Continued from page 6) issue. FASB Chairman Bob </a>
<a title="The CPA Journal - December 2008 page 11" href="http://viewer.zmags.com/publication/bd37ce6f?page=11"> Tax Issues There are a number of differences b</a>
<a title="The CPA Journal - December 2008 page 12" href="http://viewer.zmags.com/publication/bd37ce6f?page=12"> state & local taxation Partnership Ta</a>
<a title="The CPA Journal - December 2008 page 13" href="http://viewer.zmags.com/publication/bd37ce6f?page=13"> join together in conducting a business activity a</a>
<a title="The CPA Journal - December 2008 page 14" href="http://viewer.zmags.com/publication/bd37ce6f?page=14"> technology mation is shared with clients. So</a>
<a title="The CPA Journal - December 2008 page 15" href="http://viewer.zmags.com/publication/bd37ce6f?page=15"> recognition Recognition ThtieonedtoitotrhsewE</a>
<a title="The CPA Journal - December 2008 page 16" href="http://viewer.zmags.com/publication/bd37ce6f?page=16"> Business Fairy Tales: Grim Realities of Fictitiou</a>
<a title="The CPA Journal - December 2008 page 17" href="http://viewer.zmags.com/publication/bd37ce6f?page=17"> inbox: letters to the editor Iwanisehx</a>
<a title="The CPA Journal - December 2008 page 18" href="http://viewer.zmags.com/publication/bd37ce6f?page=18"> Focus In All photos by Rob Horne/Photography Pro</a>
<a title="The CPA Journal - December 2008 page 19" href="http://viewer.zmags.com/publication/bd37ce6f?page=19"> An Interview with Charles D. Niemeier Public Com</a>
<a title="The CPA Journal - December 2008 page 20" href="http://viewer.zmags.com/publication/bd37ce6f?page=20"> accounting scandals, but it didn't go far enough.</a>
<a title="The CPA Journal - December 2008 page 21" href="http://viewer.zmags.com/publication/bd37ce6f?page=21"> order to access our capital, that is not some- th</a>
<a title="The CPA Journal - December 2008 page 22" href="http://viewer.zmags.com/publication/bd37ce6f?page=22"> can't just ignore the fact that there are those o</a>
<a title="The CPA Journal - December 2008 page 23" href="http://viewer.zmags.com/publication/bd37ce6f?page=23"> of pressure placed on the PCAOB to back off. Ther</a>
<a title="The CPA Journal - December 2008 page 24" href="http://viewer.zmags.com/publication/bd37ce6f?page=24"> </a>
<a title="The CPA Journal - December 2008 page 25" href="http://viewer.zmags.com/publication/bd37ce6f?page=25"> </a>
<a title="The CPA Journal - December 2008 page 26" href="http://viewer.zmags.com/publication/bd37ce6f?page=26"> A CCOUNTING & AUDITING accounting Acco</a>
<a title="The CPA Journal - December 2008 page 27" href="http://viewer.zmags.com/publication/bd37ce6f?page=27"> ■ Loans were made to borrowers whose income was</a>
<a title="The CPA Journal - December 2008 page 28" href="http://viewer.zmags.com/publication/bd37ce6f?page=28"> ■ A standard of due care was not exer- cised by</a>
<a title="The CPA Journal - December 2008 page 29" href="http://viewer.zmags.com/publication/bd37ce6f?page=29"> Arthur Andersen (2002), the endorsement and marke</a>
<a title="The CPA Journal - December 2008 page 30" href="http://viewer.zmags.com/publication/bd37ce6f?page=30"> A CCOUNTING & AUDITING accounting </a>
<a title="The CPA Journal - December 2008 page 31" href="http://viewer.zmags.com/publication/bd37ce6f?page=31"> Accounting Standard (IAS) 27. The issuance of thi</a>
<a title="The CPA Journal - December 2008 page 32" href="http://viewer.zmags.com/publication/bd37ce6f?page=32"> liabilities of the acquired company were indeed b</a>
<a title="The CPA Journal - December 2008 page 33" href="http://viewer.zmags.com/publication/bd37ce6f?page=33"> forward at their “purchased” prices. To do otherw</a>
<a title="The CPA Journal - December 2008 page 34" href="http://viewer.zmags.com/publication/bd37ce6f?page=34"> which company involved in a business combination </a>
<a title="The CPA Journal - December 2008 page 35" href="http://viewer.zmags.com/publication/bd37ce6f?page=35"> will is to be capitalized. Under SFAS 141, goodwi</a>
<a title="The CPA Journal - December 2008 page 36" href="http://viewer.zmags.com/publication/bd37ce6f?page=36"> attributable to the noncontrolling interest was t</a>
<a title="The CPA Journal - December 2008 page 37" href="http://viewer.zmags.com/publication/bd37ce6f?page=37"> </a>
<a title="The CPA Journal - December 2008 page 38" href="http://viewer.zmags.com/publication/bd37ce6f?page=38"> A CCOUNTING & AUDITING auditing Quality</a>
<a title="The CPA Journal - December 2008 page 39" href="http://viewer.zmags.com/publication/bd37ce6f?page=39"> the Board's Interim Quality Control Standards”). </a>
<a title="The CPA Journal - December 2008 page 40" href="http://viewer.zmags.com/publication/bd37ce6f?page=40"> EXHIBIT 1 Summary </a>
<a title="The CPA Journal - December 2008 page 41" href="http://viewer.zmags.com/publication/bd37ce6f?page=41"> Stretching too far to serve public clients can le</a>
<a title="The CPA Journal - December 2008 page 42" href="http://viewer.zmags.com/publication/bd37ce6f?page=42"> T AXATION federal taxation Tax Court Can Be</a>
<a title="The CPA Journal - December 2008 page 43" href="http://viewer.zmags.com/publication/bd37ce6f?page=43"> if they exceed 2% of AGI (which is larger with ga</a>
<a title="The CPA Journal - December 2008 page 44" href="http://viewer.zmags.com/publication/bd37ce6f?page=44"> that exceeded winnings. Both wagered on gaming ma</a>
<a title="The CPA Journal - December 2008 page 45" href="http://viewer.zmags.com/publication/bd37ce6f?page=45"> primary purpose, income or profit.” Wagering agai</a>
<a title="The CPA Journal - December 2008 page 46" href="http://viewer.zmags.com/publication/bd37ce6f?page=46"> T AXATION business valuation The AICPA Busi</a>
<a title="The CPA Journal - December 2008 page 47" href="http://viewer.zmags.com/publication/bd37ce6f?page=47"> higher level of service than a calculation engage</a>
<a title="The CPA Journal - December 2008 page 48" href="http://viewer.zmags.com/publication/bd37ce6f?page=48"> ual amount is simply assigned to goodwill. If, ho</a>
<a title="The CPA Journal - December 2008 page 49" href="http://viewer.zmags.com/publication/bd37ce6f?page=49"> </a>
<a title="The CPA Journal - December 2008 page 50" href="http://viewer.zmags.com/publication/bd37ce6f?page=50"> F INANCE personal financial planning Mast</a>
<a title="The CPA Journal - December 2008 page 51" href="http://viewer.zmags.com/publication/bd37ce6f?page=51"> marginal tax rate (28%) below the top cor- porate</a>
<a title="The CPA Journal - December 2008 page 52" href="http://viewer.zmags.com/publication/bd37ce6f?page=52"> MLP has a basis adjustment election (IRC section </a>
<a title="The CPA Journal - December 2008 page 53" href="http://viewer.zmags.com/publication/bd37ce6f?page=53"> inventory are liberally construed [IRC sec- tions</a>
<a title="The CPA Journal - December 2008 page 54" href="http://viewer.zmags.com/publication/bd37ce6f?page=54"> since income is source-based. If the MLP operates</a>
<a title="The CPA Journal - December 2008 page 55" href="http://viewer.zmags.com/publication/bd37ce6f?page=55"> KyeNav.htm) is representative of funds in the ind</a>
<a title="The CPA Journal - December 2008 page 56" href="http://viewer.zmags.com/publication/bd37ce6f?page=56"> M ANAGEMENT accountant's liability Limitin</a>
<a title="The CPA Journal - December 2008 page 57" href="http://viewer.zmags.com/publication/bd37ce6f?page=57"> news/speech/2007/spch020907cwh.htm). The U.S. Tre</a>
<a title="The CPA Journal - December 2008 page 58" href="http://viewer.zmags.com/publication/bd37ce6f?page=58"> have allowed certain liability-limiting clauses </a>
<a title="The CPA Journal - December 2008 page 59" href="http://viewer.zmags.com/publication/bd37ce6f?page=59"> favor, and two expressed reservations, but not ex</a>
<a title="The CPA Journal - December 2008 page 60" href="http://viewer.zmags.com/publication/bd37ce6f?page=60"> of fiduciaries, and the idea that a fiducia</a>
<a title="The CPA Journal - December 2008 page 61" href="http://viewer.zmags.com/publication/bd37ce6f?page=61"> ought to be routinely enforced. When a CPA licens</a>
<a title="The CPA Journal - December 2008 page 62" href="http://viewer.zmags.com/publication/bd37ce6f?page=62"> R ESPONSIBILITIES & LEADERSHIP education </a>
<a title="The CPA Journal - December 2008 page 63" href="http://viewer.zmags.com/publication/bd37ce6f?page=63"> Pedagogy. The current education model is rules</a>
<a title="The CPA Journal - December 2008 page 64" href="http://viewer.zmags.com/publication/bd37ce6f?page=64"> versities can also use the VITA program for t</a>
<a title="The CPA Journal - December 2008 page 65" href="http://viewer.zmags.com/publication/bd37ce6f?page=65"> ■ Assess the accuracy of completed returns. </a>
<a title="The CPA Journal - December 2008 page 66" href="http://viewer.zmags.com/publication/bd37ce6f?page=66"> forward. The participating faculty members sugges</a>
<a title="The CPA Journal - December 2008 page 67" href="http://viewer.zmags.com/publication/bd37ce6f?page=67"> VITA program. These students were also familiar w</a>
<a title="The CPA Journal - December 2008 page 68" href="http://viewer.zmags.com/publication/bd37ce6f?page=68"> R ESPONSIBILITIES & LEADERSHIP future of t</a>
<a title="The CPA Journal - December 2008 page 69" href="http://viewer.zmags.com/publication/bd37ce6f?page=69"> that will demonstrate this knowledge and interest</a>
<a title="The CPA Journal - December 2008 page 70" href="http://viewer.zmags.com/publication/bd37ce6f?page=70"> Students should come to the interview having p</a>
<a title="The CPA Journal - December 2008 page 71" href="http://viewer.zmags.com/publication/bd37ce6f?page=71"> T ECHNOLOGY electronic reporting Insights </a>
<a title="The CPA Journal - December 2008 page 72" href="http://viewer.zmags.com/publication/bd37ce6f?page=72"> ipating in the SEC's VFP. Two of the ny's inv</a>
<a title="The CPA Journal - December 2008 page 73" href="http://viewer.zmags.com/publication/bd37ce6f?page=73"> For the two companies that brought the projec</a>
<a title="The CPA Journal - December 2008 page 74" href="http://viewer.zmags.com/publication/bd37ce6f?page=74"> T ECHNOLOGY what to bookmark Website of t</a>
<a title="The CPA Journal - December 2008 page 75" href="http://viewer.zmags.com/publication/bd37ce6f?page=75"> Business Tax Climate Index,” which is available i</a>
<a title="The CPA Journal - December 2008 page 76" href="http://viewer.zmags.com/publication/bd37ce6f?page=76"> Classified PROFESSIONAL OPPORTUNITY l BUSINESS l</a>
<a title="The CPA Journal - December 2008 page 77" href="http://viewer.zmags.com/publication/bd37ce6f?page=77"> CPA PRACTICES Sales Mergers Va</a>
<a title="The CPA Journal - December 2008 page 78" href="http://viewer.zmags.com/publication/bd37ce6f?page=78"> Experienced NYC Based CPA, MST with diver- sified</a>
<a title="The CPA Journal - December 2008 page 79" href="http://viewer.zmags.com/publication/bd37ce6f?page=79"> FREE 46 Profitable Marketing Ideas! Build your p</a>
<a title="The CPA Journal - December 2008 page 80" href="http://viewer.zmags.com/publication/bd37ce6f?page=80"> </a>
<a title="The CPA Journal - December 2008 page 81" href="http://viewer.zmags.com/publication/bd37ce6f?page=81"> E CONOMIC & MARKET D ATA monthly update</a>
<a title="The CPA Journal - December 2008 page 82" href="http://viewer.zmags.com/publication/bd37ce6f?page=82"> E DITORIAL a message from the editor-in-chie</a>
<a title="The CPA Journal - December 2008 page 83" href="http://viewer.zmags.com/publication/bd37ce6f?page=83"> </a>
<a title="The CPA Journal - December 2008 page 84" href="http://viewer.zmags.com/publication/bd37ce6f?page=84"> </a>