Accountants Eye New Income in 'Going Paperless'
Consulting opportunities abound in growing niche for small and medium-sized businesses overwhelmed by regulations and paperwork.

“We are uniquely situated for helping clients with questions like that,” according to Susan Bradley, CPA, a practicing accountant in Fresno, Calif., and one of the profession’s leading technology experts. “Who would a client rather take advice from, a retail salesman, or their accountant?”

Now published at the January 2004 HP/CPA Tech Advisor, News and Trends Exclusively for CPAs from Hewlett-Packard by Rick Telberg, Special for Hewlett-Packard

Happy New Year! Yes, It Really Could Be
... Rick Telberg/At Large

Economic signals point to a prosperous and healthy 2004 for the CPA profession.

Making Money With Basic Accounting Software
... in the January 2004 Journal of Accountancy

Clients who need help with entry-level programs represent a healthy market for CPA services.

Who Would-a Thunk It?
Accounting and baseball clash in Milwaukee

Blame Bud Selig. Everyone else is. But the fact remains that Brewers fans and Milwaukee citizens deserve a full accounting of how their tax dollars and subsidies for a new stadium are being spent. Worse: The team is still a losing team -- in money AND games. So Selig has promised to open the books. Let the accounting tell the tale. More at In Milwaukee, a Bookkeeping Brouhaha

Sarbanes-Oxley Adds Pressure to Go Digital
New edition of HP/CPA Tech Advisor says new recordkeeping regs spur accountants toward paperless offices.

In this new era of disclosure, comes too a new era for document management. It is imperative now that every company create and maintain an enterprise-wide record-keeping system for paper, email and electronic files.

Well, It's About Time.
But Is It enough?

The Internal Revenue Service is auditing two dozen companies to make sure they followed the rules for compensating executives, scrutinizing corporate perks such as stock options and the use of private jets and luxury apartments, according to the AP.

The examinations will focus on more companies and possibly mean auditing the personal tax returns of some corporate leaders, said Keith Jones, the agency's director of field specialists.
"Executive pay packages have become much more complex. We're taking a close look at these vehicles to make sure they fully comply with the law," IRS Commissioner Mark Everson said.

The IRS started its inquiries this summer to find out whether companies were following the rules for fringe benefits and other forms of paying top officers. The review came as corporate bankruptcies exposed the lavish lifestyles of some executives. The audits, geared toward companies with $10 million or more in assets, intensified this fall. The IRS, which is not identifying the companies, plans to use its findings from the first batch of audits and expand the investigations.

The agency identified eight areas of scrutiny. The list includes rules regarding the business and personal use of fringe benefits such as private jets, vacation homes, golden parachutes, deferred compensation programs and stock options.

Sounds like a new niche for savvy tax accountants and lawyers: The pre-audit audit.

Can 40 State Tax Agencies Be Wrong?

Maybe, maybe not. But a lot of tax professionals have a lot to say about what happens after states turn over tax-collection work to private companies. Is yours one of the 40 states? How's it going?
-- New at Rick Telberg/At Large

Would You Trust the Government to Do Your Tax Returns?
Maybe, But Not Likely.

Which is why it's good news that in California, the Franchise Tax Board may shelve its fledgling NetFile program at the request of the tax software industry.

The software makers are understandably concerned by competition from the government. But just as as valid, I think, is the system of checks and balances built into a sytem of an educated citizen taxpayer and the power of government.

Calfornia's NetFile would provide a direct link to the Franchise Tax Board. State officials said that although the program offers few of the bells and whistles of privately produced products, it allows many people to file directly with the state, according to the LA Times. But the program excludes taxpayers earning more than $265,000 and anyone with certain types of income or deductions. As a result, about 8 million taxpayers cannot use NetFile.

Still, state tax officials have suspended work on software that would allow every taxpayer to file directly. The software firms want the state to provide free electronic filing only through partnerships with private industry, similar to an approach used by the federal government.

But don't exhale yet. The state has only called for a two-year moratorium on NetFile.

How Big, Bad, and Ugly is SOX Compliance, Really?
Either Sarbanes-Oxley is not as costly and complicated to implement as the Cassandras were saying, or a lot of companies are simply turning a blind eye to the realities of the requirements.

Many CPA firms and back-office services outfits appear to be very busy getting client companies up to speed. But now comes a study from Meta Group Inc. that finds 57 percent of IT vendors are failing to meet their SOX-inspired sales targets. In fact, they "failed to see any substantial sales movement resulting from companies' need to become SOX compliant," according to WebCPA. Still, 97 percent view ongoing SOX compliance as a future business driver. Meta suggests that companies are getting their own houses in order before seeking outside help. Internal analysis and documentation efforts account for an average of 75 percent of total SOX compliance investments, Meta said.

So Where Were the Accountants?
According to a new KPMG survey, more companies, spurred by new regs and investor scrutiny, are finding more problems with internal controls than they were before.

KPMG said it's survey showed that 75 percent of respondents report they have uncovered fraud in their organizations in the last year, compared with 62 percent of executives responding to a similar survey in 1998. Employee fraud occurred the most frequently, according to survey respondents, although financial reporting and medical/insurance fraud were much more costly. KPMG's 2003 report surveyed executives at 459 U.S. public companies, with revenues of more than $250 million, and at state and federal government agencies.

And still, KPMG said, "despite heightened awareness and broader implementation of fraud detection controls," 22 percent of executives said they do not plan to implement new controls. "This finding was regrettable," said a KPMG'er. No kidding.

Should IRS Hire Bounty Hunters?

Most CPAs say 'No,' citing concerns with government waste, the potential for fraud and possible legal-rights abuses. But 40 states are doing it already. What do you think?
-- More Rick Telberg/At Large