Friday, September 30, 2011

How are business ethics different in the US than other countries?

How are business ethics different in the US than other countries?

U.S political and legal social institutions create much greater coercive and normative pressure for US companies to comply with ethical standards. There are many prescriptive rules that companies are required to follow. For example, in the United States Sarbanes-Oxley is a law that dictates ethical guidelines for US companies. In comparison, in England there is no law requiring British companies to follow prescribed ethical guidelines. Instead, companies voluntarily comply with the Cadbury Code of Best Practices. It is very important to consider U.S. Business Ethics when doing business in the United States.

Is Sarbanes-Oxley necessary?

The law imposes much stricter guidelines on companies and executives creating stronger shareholder rights. Yet Critics argue that the increased compliance costs hurt US companies and are unnecessary.  For overall investment in the United States, the law creates a safer environment for foreign investors. Therefore, it has become a necessary part of doing business in the United States.

Tuesday, September 13, 2011

Education Expense Tax Deduction

For Education Deduction, Neither of these things can be true in order to get the deduction:

  1. Cannot violate the entry level test OR
    1. Education cannot meet the minimal entry level requirements in starting a new business or position. 
    2. Also applies if you are temporary employee trying to make your position permanent
      1. What is a temporary employee? 
      2. Regulations say if you have tenure or tenure track and the institution is contributing to the retirement plan, then you are permanent employee. 
  2. Upward Bound Test – New Type of Position
    1. Does the education do anything to qualify you for a new trade or business or big promotion?  
      1. The regulations give examples: Very blurry lines
      2. Elementary school teacher who becomes secondary teacher is not new business New teacher in new subject is not a new business. Classroom teacher to guidance counselor is not a new trade or business.
Regulations emphasize idea that the education must be within the taxpayer’s already established field, and not in new field. Definition of taxpayer’s field has major tax consequences. Primary Purpose tests are subjective. These could be bought tests to meet in order for a taxpayer to get an education expense deduction.

Monday, September 12, 2011

Distinction between Joint Products and By-products

What is the difference between Joint Products and By-products in accounting?

The accounting classification of products created from the same manufacturing process into joint products and by-products depends upon the relative importance to the overall production system of good and the products respective value.

For example, if the end products are almost equal in importance and their value is also more or less the same, they may be identified as joint products.

However, if one end-product has greater importance and higher value and the other products are of less importance and rather of low value, some may be classified by accountants as by-products of the manufacturing process. If value of some end- products is so insignificant,  they may be classified by an accountant as waste or scrap.

Another distinguishing factor is that joint products are produced simultaneously, however, in contract,  by-products are produced incidentally during the production of the main product. This could be determined by looking at the overall goal of the manufacturing process and then use to determine if something is a joint product or a by-product of the process.

Friday, September 2, 2011

Why Outsource Accounting Services?

What are the best reasons to outsource accounting services to a foreign company?

Outsourcing bookkeeping has many advantages that include:

1. Give them peace of mind that accounting is being done right
2. Start things up the right way with  no errors.
3. Help them stay on top of their business instead of worrying about accounting.
4. Cut their business expenses, cut out the expenses of employing additional staff.

These are all good reasons to outsource accounting services to a reputable provider.

Popular Accounting Problems

The information on this site is for informational purposes only and should not be used as a substitute for the professional advice of an accountant, tax advisor, attorney, or other professional.