...Letter to Sue (Tax-Unsophisticated Client) Dear Ms. Ross: Thank you for the opportunity to work with you on this tax planning matter. Before I render any advice regarding this set of facts, it is important to lay out pertinent information about the opinion I will be providing. Responsibilities It is my role as a tax professional to help provide guidance where the tax law is unclear, or there is uncertainty between the different taxing authorities. My responsibility is to provide a position on the matter that has a realistic possibility of being sustained if questioned; this means exercising a good faith belief that the position has at least a 1 in 3 chance of being upheld if challenged by the Internal Revenue Service (IRS). In other words,...
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...99 Chapter 8 Litigation Services Provided by Accountants CHAPTER SUMMARY Overview This chapter explains what standards apply to accountants when they perform litigation services, discusses how to qualify as an expert witness, gives tips for testifying at a deposition or trial, and points out the potential liability that accountants risk when they testify at trial. Litigation in the United States ¶8001 U.S. Tort Costs Climbing The U.S. tort system cost $248.1 billion in 2009, which was about $808 per U.S. citizen ($12 in 1950). U.S. tort costs accounted for 1.74 percent of GDP (2.09 in 2002). Increasingly inefficient, the U.S. tort system returns less than 50 cents on the dollar to people it is designed to help; only about 22 cents to compensate for actual loss. ¶8006 A Dispute Begins There are two different courtroom environments: civil and criminal. Some experts believe it is more difficult to convict in a criminal trial (e.g., Casey Anthony). Types of Litigation Services Provided by Accountants ¶8011 Consultant An accountant may be hired by an attorney to gather and interpret facts, prepare analyses, help the attorney interpret evidence, advise about issues and strategies involved in a legal matter, locate other accountants to act as consultants or expert witnesses, and help expert witnesses form their opinions. Accountants acting as consultants will not be asked to testify in a judicial or regulatory proceeding, and their work usually will be protected from disclosure...
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...Scenario A 1. What do you see as the issues raised by the facts in the scenario? Describe as many as you see. * Third-party beneficiaries meaning that employees can sue Stephen (promisor) for not keeping its promise. * Bonuses are discretionary. It is not an obligation to give all employees a 15% bonus. * Not fair to give employees who work harder than others the same bonus. * US law requires that American workers must be sought before the employer hires a foreign worker for a job, which leads Stephen to a borderline Fraud situation. 2. What do you see as the consequences of Stephen’s decision? * Stephen’s decision of decreasing his employees’ bonus may decrease their intrinsic motivation, interest and performance on the job. * Nancy may not be as qualified and trained as the other employees. Since it’s a small accounting firm, he cannot afford to loose his clients especially that the beginning of the year is a critical time for accounting firms. * She’s lacking of qualifications since she just graduated with a BBA and isn’t a Certified Public Accountant (CPA) yet. * Hiring a foreign worker will increase the firm’s expenses (visa and lawyers process). 3. What alternative courses of action did Stephen have? * Instead of decreasing his employees’ bonus, which is detrimental to their morale and productivity, to find funds for his cousin’s hire, he could have let her pay all the foreign employment expenses. * Stephen...
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...images from sonograms play fetal heartbeats aloud and describe the features of fetuses at least 24 hours before abortions. There are exceptions in cases of rape, incest, fetal deformity and for women who travel great distances to a doctor. Discuss the following: (1) Who has standing to sue to challenge this law? (2) What legal issues might be raised as a basis to challenge this law? (3) What legal philosophy best support this law? (4) What legal philosophy best challenge this law? (5) What source of law(s) are relevant to this issue? Standing to Sue means “A legal requirement that an individual must have a sufficient stake in a controversy before he or she can bring a lawsuit (Miller & Cross, 2014). In simple words it means who ever is filing the lawsuit should have suffered or must have been threatened by a harm. Also a person can have standing to sue on behalf of another individual for example a mentally incomepetent person or for a minor. It also requires that the controversy needs to be substantial than a hypothetical contoversey i.e. Justiciable Controversy. In this Sonogram case the doctors are responsible and liable to perform an ultrasound and describe about the fetus and medical risks involved with them before they get an abortion. I think both the patient and the doctor or a group of doctors can chaallenge this law as they all have the standing to sue in this case. The legal philosophy that best supports this law is the legal positivism of taking every...
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...1. Richard and Suzanne Williams owned Sycamore City Cheese Co. Sycamore City sold its products to three major customers that used the cheese as a “filler” to blend into their cheeses. In 1982, Mark Case, a certified public accountant, became Sycamore City’s accountant and the Williams’ personal accountant. The Williams had known Case since he was seven years old, and even before he became their accountant, he knew the details of Sycamore City’s business. Case’s duties went beyond typical accounting work, and when the Williams were absent, he was put in charge of operations. In 1992, Case was made a vice president of the company, and a year later he was placed in charge of day to day operations. He also continued to serve as Sycamore City’s accountant. The relationship between Case and the Williams deteriorated, and in 1995, he resigned as Sycamore City’s employee and as its accountant. Less than two years later, Case opened Brent Foods, Inc., to make the same products as Sycamore City by the same process and to sell the products to the same customers. Case located Brent close to Sycamore City’s suppliers. Sycamore City filed a suit in a Connecticut state court against Case and Brent, alleging, among other things, misappropriation of trade secrets. Sycamore City argued that it was entitled to punitive damages because Case’s conduct was “willful and malicious.” Case responded in part that he did not act willfully and maliciously because he did not know that Sycamore...
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...unethical Accountant could change the atmosphere of your company a s well as your reputation to the public, one should change accountants immediately if they feel like they do not have an ethical accountant – in the end it will save your company a lot of hardship. “An accountant does your tax return. You complain about the amount of the refund saying that its $2,000 less than you traditionally receive. Without evidence, reason, or ethics, your accountant adjusts the numbers so that you receive the refund you expect. He signs the return. You sign it, and receive your refund. How can this hurt you?” (Amundson, 2011) This can hurt you in a number of ways if your company is audited and this fraudulent activity is shown you can face penalties, fines and an investigation into years before to see if the fraud was prevalent … Furthermore, if the fraud was serious enough in regards to the length and amount you could see prison time. The point is to make sure you have an accountant who will mirror your companies’ mission statement as well as provide an ethical balance to the profession and to your company. “Another example which is extremely common is that you go to one of these neighborhood magicians that prepare your returns without evidence, due diligence, or ethics. Being the unethical practitioner that they are, he does the same thing for the rest of his clients. One of the other clients gets audited and the IRS discovers fraudulent intent performed by the accountant. Since the...
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...Express Trusts – How do they work? LAW351 Equity & Trusts, Week 12 Friday Agenda Today * Trustees’ Powers * Trustees’ Rights * Beneficiaries’ Rights * Remedies for Breach of Trust Trustees Powers * The trustee has the powers conferred upon him in the trust instrument. If any * First in the instrument then look at the act(statute), if that fails you go to the court and seek a court order Statutory Trustees’ Powers * In addition to these, trustees have a variety of statutory powers, including: * The power to sell property (s27(1)(a), (b), (c)); * The power to lease property (s27(1)(d), (e)) including the power to renew leases under s36; * The power to expend money to repair, maintain or renovate property (s30(1)(a)). * If money is expended to improve or develop the property then the amount is limited to $20 000 ($50 000 if the trustee is acting on the advice of someone who the trustee reasonably believes to be competent to advise on improvement and development). * unless the Court consents (s30(1)(c)); * The power to “make decisions” with respect to any debts. (s42); * The power to insure the trust property (s46) and the power to use any insurance payout to replace, repair, rebuild etc damaged trust property (s47(4)). Here it is the power to insure – in the last lectures we have looked at the duty to insure. * The power to raise money by selling or mortgaging trust property...
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...Chapter 43 Law for Small Business ------------------------------------------------- Section 1: The Importance of Legal Counsel ------------------------------------------------- Section 1: The Importance of Legal Counsel This chapter will cover the specific laws for small business owners and requirements needed for someone to start their own small business. The legal principles in this chapter are applied in the context of a small business enterprise. Is an attorney needed for someone to start their own business? If one is not familiar with the myriad rules and regulations, it is insisted that one may hire an attorney to help avoid penalties incurred from violating laws or regulations. An Attorney helps with: * Negotiating franchise agreements * Creating standard business forms, such as purchase orders and contract confirmations. * Buying or selling real property or a business. * Negotiating agreements to license intellectual property rights. * Obtaining new outside investors. Finding an Attorney (pg.838) When selecting an attorney, businesspersons would rely on referrals from friends, business associates, and other local entities. Other sources one could use to find an attorney would be using: * The chambers of commerce and bar organizations, * Attorneys and their areas of specialty are often listed in the Yellow Pages, * Martindale-Hubbell Law directory found in most law library’s or via (www.martindale.com). Retaining an...
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...any forthcoming information from insiders. Whistle blowing has been almost nonexistent during the run up to the financial crisis and its aftermath. This is reflective of the negative stigma that is associated with whistle blowing in most businesses and corporations. Combined with a culture of silence that is prevalent in the finance and accounting industries this is not a big surprise. Federal regulators and congress have been encouraging whistleblowers to step up in recent years, however more must be done. Regulators must continue to improve protection and incentives for whistleblowers to come forward. In addition corporate culture must change in its negative view of whistle blowing. Most importantly though professionals, especially accountants must understand that they are serving the public interest and thus must step up and reveal any fraudulent or unethical activities that hurt the public. Whistle blowing is hard to encourage and federal authorities have been doing terrible job of it until recently. The trend has been changing, first with the passing of the Sarbanes-Oxley Act in 2002 that included a provision for expanded whistle blower protection. The act made it legal for public companies to fire employees that reported any illegal activities in which a firm or its employees...
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...page 75, par(s) 2 to 6 9. Refer to page 75, par 4 II. Multiple Choice Questions |D |D | | | |A |C | | | |C |D | | | |D |D | | | |D | | | | III. Cases Case 1 Nondisclosure is not considered an acceptable alternative because it makes you an accessory to the fact. Disclosure to the offending party only - with no action - may result in the destruction of part of the evidence. Probably, the first step is to report the matter to the chairman of the board. Circumstances, however, may require that the matter be referred to an external body such as the Securities and Exchange Commission, Justice Department, Bureau of Internal Revenue, or the shareholders. Case 2 The appropriate action depends on the type...
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...expenses should be reported on income statement in the same period in which the revenue, to which those expense are associated, is earned because in some situations it difficult to identify that in which period expenses incurred and in which period revenue is earned related to those expenses such as advertising. In this situation principles of accounting indicates that the recognition of advertising should be made as expense in the period it is incurred. Identification of ethical issue and stakeholders: The ethical dilemma is whether my responsibility to meet the request of CFO to take the advantage of advertising expense is stronger than my responsibility toward financial interests of my employer. Stakeholders included the CFO, the Accountant, employees of company, other managers of corporate, the bank and other creditors, investors, community and me Values related to issue: Responsibility to user’s financial statements, Knowledge, honesty, objectivity, loyalty and competence. Alternative courses of...
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...ISSN 1940-204X Embezzlement at Sanchou College Avinash Arya* University of Michigan-Flint Jui-Chin Chang Howard University IntroductIon “April 28, 2003. United Daily News. An employee at Sanchou College was caught stealing tuition refund money, the police authorities said. They did not release the name of the employee as the matter is under investigation. The suspect had been working in the Evening School Division of the school since 1998 and was responsible for tuition receipts and refunds. Apparently, the embezzlement was going on for several years. The incident came to light when the suspect requested a tuition refund on behalf of five students and an alert employee, who was helping him with the refund, noticed that he had seals of those five students, one of whom had died recently. She became suspicious and reported the matter to her supervisor who immediately called the police. The school has been under the supervision of the Ministry of Education for many years due to mismanagement and infighting among members of the school board.” Dan Wu, the president of Sanchou, read the news over and over again as he was having his morning coffee. He had been informed the previous evening that police had been called on campus. Later in the day, he called an emergency staff meeting to discuss the embezzlement. “Why did it happen? How much money did he take?” Dan asked his staff. He wondered whether the Weekend School and the Short-term Programs Division had similar problems, and...
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...on the public accounting industry which rocked the profession. Despite a decade of revisions in rules and regulations (variously established by the Securities and Exchange Commission, Accounting Principles Board, and Financial Accounting Standards Board), public accounting firms were still perceived by many on Capitol Hill as biased in favor of their clients, incapable of or unwilling to police themselves, and at times participants in cover-ups of client affairs. Senator Metcalf even went so far as to suggest nationalizing the industry in light of these activities. Just prior to the Metcalf report, Daniel Potter began working as a staff accountant for Baker Greenleaf, one of the Big Eight accounting firms. In preparation for his CPA examination, Dan had rigorously studied the code of ethics of the American Institute of Certified Public Accountants (AICPA) and had thoroughly familiarized himself with his profession's guidelines for morality. He was aware of ethical situations which might pose practical problems, such as maintaining independence from the client or bearing the responsibility for reporting a client's unlawful or unreasonably misleading activities and he knew the channels through which a CPA was expected to resolve unethical business policies. Dan had taken the guidelines very seriously; they were not only an integral part of the auditing exam, they also expressed to him the fundamental dignity every independent auditor was obligated to maintain and calling of the profession-namely...
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...explain that due to the high degree of influence, professionals should follow a strict code of ethics, and I will review the code of ethics established by the Institute of Managerial Accounting. I will use observations, articles, and peer reviewed sources. There is a need for fiduciary educational change that is necessary with respect to how individual employees conduct their business practices that operate on the Indian reservations throughout Indian country. Various Indian organizations operating have experienced an increase of unethical business practices. This changes deals with meeting the challenge of addressing current events and new regulations that need to be established on reservations. In 2010, a report by Sue Woodrow entitled, “Ethics as a building block of economic growth: Global insights and Indian Country models” warns an effective institutional framework encourages and manages ethical behavior is crucial aspect of good governance (¶2). The study is based on input from across the country suggest serious consequences if business professionals continue to ignore an ethical infrastructure. One area that needs to be addressed with all tribal governments and entities leaders...
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...saturated in a mineral solution to help assist in breaking down fat. She owns a small shop in a strip mall downtown. A Sole Proprietorship is a business that is owned by one person, and is commonly known as a small business. It is preferred by individuals who want to start their own business because they can make all the decisions regarding payroll, hiring and firing of employees ("Doing Business as a Sole Proprietor,") Business owners of this type file their own taxes. The owner can also sell the business without the approval from others, since they own the business outright. Personal liability is also a factor when opening a business as a sole proprietor. If for example, a customer gets burned by the wraps that are used and the customer sues Suzie, she will have to hire her own attorney utilizing her own funds. This can become very costly and personal assets may be at risk. She will also have to look into obtaining liability insurance for issues such as injury, burglary and the like (Cheeseman, 2010, Part VIII). Partnership. Chris and Jeremy decide to open a Barber shop in Vacaville. They each have a 50/50 share in the business. A partnership is a business where...
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