News Articles

Accounting and Financial Controllers Steer the Ship

Published on October 20, 2020

Accounting and financial controllers are some of the hardest-working executives in an organization, but unfortunately, they are often overlooked. There are more than 250,000 controllers in the United States, and 810,000 worldwide, yet CFOs and the C suite seem to get all the media attention. 

Around the world, companies and organizations turn to their controllers for everything from compliance to cash flow, internal controls and closing the books. With nearly a million people with controller job titles worldwide, there are nearly three controllers to every one CFO in the U.S., and more than five-to-one controllers to CFOs worldwide. 

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Risk Alert: COVID-19 and the Return to Work

Published on October 20, 2020

The emergence of the novel coronavirus quickly upended the way businesses, including accounting firms, around the United States operated. Shelter-in-place orders prompted millions to pivot nearly overnight to halt business travel, begin working from home, and use virtual conferencing software to substitute for what previously would be in-person meetings and visits. 

Now some CPA firm leaders may be considering how to phase staff back to the office environment, given that some parts of the country are experiencing lower community transmission rates of the pathogen. 

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IRS Releases Final Rules on Business Meals and Entertainment

Published on October 20, 2020

The IRS issued final regulations (T.D. 9925) implementing provisions of the law known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97, that disallow a business deduction for most entertainment expenses. The regulations also clarify the treatment of business deductions for food and beverages that remain deductible, generally limited to 50% of qualifying expenditures, and how taxpayers may distinguish those expenditures from entertainment. 

The final regulations adopt, with a number of clarifications in response to comments, proposed regulations issued in February 2020 (REG-100814-19; see also “Proposed Regs. Issued on Meal and Entertainment Expense Deductions,” JofA, Feb. 24, 2020). The proposed regulations were based, in turn, on Notice 2018-76, published in October 2018. 

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Let's End the Debate: Automation Will Never Replace Accountants

Published on October 20, 2020

Automation has brought significant changes to the accounting profession over the last decade. While some tools have made accountants’ lives easier, others have chipped away at their roles as startups seek to disrupt a legacy industry. The tech companies that developed these tools have also created and perpetuated a false debate about whether automation will overtake the industry completely and make accountants irrelevant. 

It’s time to end that debate. A valued accountant is a holistic business advisor to clients, solving human problems that technology simply cannot — and will never be able to — solve on its own.

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Continue to Focus on Accounting and Disclosures Related to the Pandemic

Published on October 20, 2020

Entities need to continue to consider the effects of the COVID-19 pandemic and its economic fallout in their accounting and disclosures for the latest period, and their disclosures should evolve as facts and circumstances change. 

As a reminder, that includes considering whether the pandemic-induced recession has triggered asset impairments; whether any accounting estimates, such as the amount of variable consideration an entity expects to be entitled to under contracts with customers, need to be revisited; and what the effect might be on hedging relationships, compensation arrangements and income taxes. 

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The Rise of Cybercrime in the Accounting Profession Continues

Published on September 24, 2020

The July 15 tax filing deadline is finally behind you. Now is the perfect time to address the growing number of cyberattacks still taking place in the accounting industry. 

Many accounting practices are reporting that IT vendors and employers rushed to provide access for remote employees without fully understanding how to properly implement and secure it. This has resulted in an increased number of cyberattacks on accounting practices of all sizes. With the increase in the remote workforce and the ongoing COVID pandemic, there has been a 300 percent increase in cyberattacks. 

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IRS Says Companies Are Responsible for Deferred Payroll Taxes

Published on September 24, 2020

The Internal Revenue Service said companies will be responsible for collecting and paying back any deferred payroll taxes under a directive by President Donald Trump aimed at helping workers while the administration and Democrats are stalemated on a stimulus deal. 

The agency issued guidance that implements Trump’s order to delay the due date for payroll taxes for millions of workers from Sept. 1 through year-end. Come next year, the taxes will need to be paid by April 30, however — unless Congress votes to forgive the liabilities, the release showed. 

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Guidance Issued on Payroll Tax Deferral

Published on September 24, 2020

The IRS issued much-anticipated guidance on the payroll tax deferral that was ordered by President Donald Trump in a presidential memorandum on Aug. 8 (Notice 2020-65). The notice allows employers to defer withholding on affected employees’ compensation during the last four months of 2020 and then withhold those deferred amounts during the first four months of 2021. 

Under the guidance, employers can defer the withholding, deposit, and payment of certain payroll taxes on wages paid from Sept. 1 through Dec. 31, 2020. The deferral applies to the employee portion of the old-age, survivors, and disability insurance (OASDI) tax under Sec. 3101(a) and Railroad Retirement Act Tier 1 tax under Sec. 3201. The due date for withholding and payment of these taxes is postponed until the period beginning Jan. 1, 2021, and ending April 30, 2021. 

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Will PPP Fraud Turn into the Next Wave of 'Liar's Loans'?

Published on September 24, 2020

In April, Andrew Marnell of California applied for millions of dollars of loans in federal assistance through the Paycheck Protection Program. Based on his applications, Marnell received approximately $9 million in federally awarded funds from banks authorized to make the loans. It was only after funding the loans that the lenders discovered the funds were going directly to Marnell rather than the small businesses listed in the applications, causing them to notify federal investigators. 

The Department of Justice soon brought a criminal complaint against Marnell, alleging that he received approximately $9 million in PPP loans by submitting applications for multiple, nonexistent businesses that employed hundreds of fabricated workers and had millions of dollars in fanciful payroll expenses. He’s alleged to have then used the money to make stock trades and gamble hundreds of thousands of dollars in Las Vegas. On July 16, Marnell was arrested on federal charges of bank fraud. 

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IRS Issues More Bonus Depreciation Rules

Published on September 24, 2020

The IRS issued final regulations (T.D. 9916) providing guidance on additional first-year (bonus) depreciation under Sec. 168(k), which was amended by the law known as the Tax Cuts and Jobs Act, P.L. 115-97. T.D. 9916 provides taxpayers with guidance on issues involving the application of Sec. 168(k) that were not addressed in 2019 final regulations (T.D. 9874). This includes clarifying guidance on the requirements that must be met for property to qualify for the deduction, including used property. The regulations also address recent legislative changes to the depreciation rules for qualified improvement property. 

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