Audit Practice-Less Arthur Andersen Is Back from Damnation

Andersen Tax
Vorsatz says the firm will go by Andersen Tax from now on, and it will draw lessons from both the rise and the fall of the old Andersen. He’s hoping to restore the old firm’s reputation for ethics and integrity. And, he says, his firm’s focus will continue to be narrower than the old Andersen’s was. “We don’t want to be an audit firm,” he says. “We tried that, and it didn’t work. For most of us, we lost our unfunded retirement plans, we lost most of our capital.”    Curated from I was scrolling through my twitter account’s live stream when I came across a tweet discussing the...
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CPA Exam Review Spotlight (FAR): Accruals and Deferrals

Accruals and Deferals
When it comes to accounting, timing is everything. Accruals and deferrals are two of the practices through which both the revenue recognition and the matching principles are applied.  Those principles of accounting are two of the pillars on which accrual accounting (i.e., U.S GAAP) stands. So let us examine further what accruals and deferrals are about. Accruals are recognized in the accounting records because the  economic substance of a transaction triggers an accounting entry but not the disbursement or collection of cash. In other words, the chief aim of accounting for accruals is to record the financial transactions of a business in the period in which they occur, rather than...
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CPA Exam Review Spotlight (FAR): Installment Sales Method

Installment Sales Method
Based on some of the accounting literature I reviewed in preparation of this spotlight on the installment sales method, one of the most challenging issues accountants deal with is the proper recognition of revenue related to the operations of a business concern. While a good number of general rules and guidelines have been developed to facilitate the application of the revenue recognition principle, the multitude of marketing methods for products and services make it difficult to apply the rules consistently across various circumstances. Indeed, there are many ways a sale can be structured. When you think about it, depending on the surrounding circumstances, revenue may need to be recognized at...
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CPA Exam Review Focal Point (FAR): Converting from Cash to Accrual Accounting

Cash Kitty
“Converting from Cash Basis to Accrual Basis Accounting” is the first installment in a long series of blog posts geared toward deconstructing the most likely topics you may be tested on when you take the Financial Accounting and Reporting (FAR) section of the Uniform CPA Exam. Candidates are likely to get questions about this topic because the administrators of the exam desire to assess the candidates’ understanding of the differences between cash basis accounting and accrual basis accounting. With the cash basis of accounting, a revenue item is recorded in the time period in which the related cash is received from the customer and an expense is recorded in the...
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