Legal Aspect of the Business Accounting
Accounting is the practice of recording or settling accounts in financial transactions and determining income and expenses for tax and other financial purposes. In a legal setting, it is often used to determine the nature and extent of damages in a lawsuit, or can even be a remedy in some cases.
There are several types of accounting commonly used, which include, among others:
Accrual: the accrual method shows expenses incurred and income earned for a given period of time whether or not such expenses and income have been actually paid or received by that time.
Cash: the cash method records income and expenses only when monies have actually been received or paid out.
Completed Contract: the completed contract method reports gains or losses on certain long-term contracts. Gross income and expenses are recognized in the tax year the contract is completed.
Installment: the installment method of accounting is a way regulated utilities calculate depreciation for income tax purposes.
The accounting profession, which is largely self-regulated, suffered through a series of scandals since the late 1990's. These controversies required the FASB and the SEC, as well as other regulatory organizations, to consider new rules designed to improve financial reporting. Between 1996 and 2002, investors lost an estimated $200 billion in earnings restatements and stock meltdowns following failures in auditing processes.
Articles on HG.org Related to Finance and Taxation
- Colorado Probate and Estate Tax LawsWhen someone passes away, it is important that the matter is settled quickly and easily so that the family and other dependents are given time to grieve and become situated with the circumstances. It is then vital that the next steps are taken to resolve any outstanding matters. The estate then must be settled and allocated as specified by a will or last testament.
- What is the Purpose of UCC Financing Statements?Uniform Commercial Code is a form of filing in regards to liens. These are connected to financial lenders who have an interest in an asset. This means that if someone were to enter an agreement where collateral is needed, the UCC lien may be filed against the assets that the borrower pledges in order to secure any loan monies.
- Tax Professionals Report More Audits as Stricter IRS Deadlines ApproachThe tax code is incredibly complicated and intricate. Even when a business or an individual intends to be in compliance with tax requirements, cost-saving measures can easily slip over the line into illegal territory.
- Expert Witnesses and the Securities Fraud Case CertificationFraud is often a very damaging crime to those affected. The theft of information or funds from a company tends to harm multiple persons, and it may lead to a continued problem for the business. When certain information is taken, it may be highly injurious based on who is involved and how much is stolen.
- Misrepresentation of Tax Procedures and Complications for Real Estate DealingsReal estate dealings often require exact documentation that specifies certain terms, conditions and details about the buyer, seller and property. There are complications that may arise through numerous pieces of the whole arrangement.
- How Revenue is Accrued without Products or ServicesRevenue is the backbone of any company. Without accruing money, the business will fail unless it is in the game for other means. Some individuals or organizations are able to stay in business through various other ways without services or products. Some have investments that keep revenue coming in, while others have contacts and trade information.
- U.S. District Court Upholds Multiple Willful FBAR Penalties Against TaxpayerIn a case that has raised eyebrows in the tax community, a jury in the Southern District of Florida has sustained the IRS's assessment of multiple willful FBAR penalties against an American business man and bank director.
- IRS Assesses Another 150% Civil FBAR PenaltyThe IRS has asserted multiple maximum civil FBAR penalties against Ashvin Desai, who failed to disclose the existence of offshore accounts or report interest income from the accounts on his tax returns. Desai, a sixty-four year old born in Mumbai, India, was sentenced last week to six months of imprisonment in his criminal trial.
- Can My Student Loan Be Discharged if I Become Disabled?When someone has become disabled through injury, illness or other means, it is possible that student loans may be discharged completely.
- Doing Due Diligence: Private Investigation of Your Business Partners and ContractsDue diligence is necessary when partners and contracts are involved in a business. This is due to certain paperwork, processes and the initial files needed to ensure the company is setup correctly, with valid processes and is legal in activity.
- Balance Sheets
A balance sheet is a snapshot of a business' financial condition at a specific moment in time, usually at the close of an accounting period. This site provides a definition and description of balance sheets in basic accounting.
- Cash Flow Forecasting
Cash Flow forecasts help you to build a model of the way in which cash moves within a project or organization. They help you to predict whether the sales or income you forecast will cover the costs of operation. They also allow you to analyze whether a project will be sufficiently profitable to justify the effort put into it.
- Income Statement
An explanation of the income statement, which is one of the major financial statements used by accountants and business owners.
- SEC - Beginners' Guide to Financial Statements
This brochure is designed to help gain a basic understanding of how to read financial statements and its basic parts.
- Statement of Cash Flows
Information about Cash Flow Statements and the various regulatory requirements.
- Understanding Cash Flow Analysis
Article from Iowas State University about cash flow analysis.
Accounting Legal Aspects
- Accountancy - Wikipedia
Accountancy is the process of communicating financial information about a business entity to users such as shareholders and managers. The communication is generally in the form of financial statements that show in money terms the economic resources under the control of management; the art lies in selecting the information that is relevant to the user and is reliable.
- Accounting and Auditing Enforcement Releases
The list below provides links to financial reporting related enforcement actions concerning civil lawsuits brought by the Commission in federal court and notices and orders concerning the institution and/or settlement of administrative proceedings. This list only highlights certain actions and is not meant to be a complete and exhaustive compilation of all of the actions that fall into this category.
- Accounting Terminology Guide
The NYSSCPA has prepared a terminology glossary as an educational tool for journalists who report on and interpret financial information.
- Ethical and Legal Obligations for Accounting
The SEC was established in 1934 by Congress to help ensure stability in the market and protect investors. The Securities Exchange Act was also established in 1934, both of which were used to protect investors and help keep the securities market ethical.
- Financial Accounting Standards Board (FASB)
The mission of the Financial Accounting Standards Board (FASB) is to establish and improve standards of financial accounting and reporting that foster financial reporting by nongovernmental entities that provides decision-useful information to investors and other users of financial reports.
- Governmental Accounting Standards Board (GASB)
The mission of the Governmental Accounting Standards Board is to establish and improve standards of state and local governmental accounting and financial reporting that will result in useful information for users of financial reports and guide and educate the public, including issuers, auditors, and users of those financial reports.
- IFRS Foundation
The IFRS Foundation is an independent, not-for-profit private sector organization working in the public interest to develop a single set of international financial reporting standards through its standard-setting body, the International Accounting Standards Board (IASB).
- Malpractice: Tax/Accounting Style - PCAOB
The Public Company Accounting Oversight Board (PCAOB) is a private-sector, nonprofit corporation created by the Sarbanes-Oxley Act of 2002 to oversee the auditors of companies in order to protect investors and the public interest by promoting informative, fair, and independent audit reports.
- Occupational Outlook Handbook - U.S. Department of Labor
The Bureau of Labor Statistics of the U.S. Department of Labor is the principal Federal agency responsible for measuring labor market activity, working conditions, and price changes in the economy. Its mission is to collect, analyze, and disseminate essential economic information to support public and private decision-making. This handbook was published by the Bureau.
- Office of the Chief Accountant
The Office of the Chief Accountant is responsible for establishing and enforcing accounting and auditing policy to enhance the transparency and relevancy of financial reporting, and for improving the professional performance of public company auditors in order to ensure that financial statements used for investment decisions are presented fairly and have credibility.
- U.S. GAAP Codification of Accounting Standards
In the U.S., generally accepted accounting principles, commonly abbreviated as US GAAP or simply GAAP, are accounting rules used to prepare, present, and report financial statements for a wide variety of entities, including publicly-traded and privately-held companies, non-profit organizations, and governments. Generally GAAP includes local applicable Accounting Framework, related accounting law, rules and Accounting Standard.