Accounting, QuickBooks, and Taxes Written by the Barefoot Accountant

April 29, 2010

An Accounting Firm in Connecticut

Filed under: Accountants CPA Hartford, Articles — Tags: , — William Brighenti @ 8:07 pm

Arthur E. Andersen          What thoughts I have of you tonight, Arthur Andersen, for 
I reviewed financial statements through dinner hour ad nauseum 
subconsciously thinking of my audit fee.
          In my hungry fatigue and looking for adjustments, I examined
balance sheet accounts, vouching countless transactions!
          What errors and irregularities!  Multiple assertions
misstated outright!  Loans in the revenues!  Improvements
in the expenses, interest in notes payable—and you, Bernard Madoff, what
were you doing down in the investments?

          I saw you, Arthur Andersen, inspecting documents and chastising the 
accountants.
          I heard you questioning of each:  Who reconciled
bank statements?  Who confirmed receivables?  Are you my Auditor?
          I wandered in and out of the general ledger,
following you, and followed in my imagination by the
SEC. 
          We performed audit procedures together in our
solitary fancy testing inventory, searching for unrecorded
liabilities, and never documenting one test.

          What are your findings, Arthur Andersen?  The audit needs to be
completed.  What opinion have you decided to render?
          (I touch your audit manual and dream of our odyssey in
Accounting Land and feel absurd.)
          Will we work all night through endless spreadsheets?  The
overhead lights add shadows to documents, as darkness descends, hiding our
loneliness.
          Will we work dreaming of the lost firms of public accounting
into the wee hours of the morning, back to our silent office?

          Ah, dear mentor, distinguished auditor, honorable predecessor,
to what field of Asphodel across the Lethe did you retire before
anti-Sherman’s demise, leaving us to talons of multinationals
trading bullions for sterling opinions tarnishing with greed?___________________________________________________________________________________

This article is provided for informational purposes and is not intended to be construed as legal, accounting, or other professional advice.  For further information, please consult appropriate professional advice from your attorney and certified public accountant. 

Have a tax or an accounting question?  Please feel free to submit it to William Brighenti, Certified Public Accountant, Hartford CPA Accountants.  For information and assistance on any tax and accounting issue, please visit our website:  Accountants CPA Hartford.

April 26, 2010

The Hippie CPA

Filed under: Accountants CPA Hartford, Articles — Tags: — William Brighenti @ 1:52 pm

The Hippy CPAYou may ask yourself—if you have virtually no clients and nothing to do or have just been fired for being a loser at a public accounting firm or have just smoked a joint and experienced a profound metaphysical rush—how a former hippie could have found the light, converted, and become a CPA?  The term “hippie CPA” is oxymoronic, if not contradictory, in nature.

Yes, I confess…I was there at Woodstock, saw and heard Jimmy Hendrix play the star spangled banner to 300,000 fans on orange sunshine at sunrise; campaigned for Eugene McCarthy for President during the Vietnam war and obtained the most signatures in Connecticut for him to be placed on the ballot qualifying me to meet him in New York; then worked for Bobby Kennedy and met Ethel at the Kennedy Compound after his death; talked to Abbie Hoffman at an anti-war rally and stole his book; participated in SDS’s takeover of the administration building at the University of Connecticut and by doing such received an “A” grade in Social Organization from a tenured professor subsequently dismissed from the University for being a campus radical….I was there on the left fringes of society attempting to usher in the Great Society, where peace, justice, equal opportunity, and love were to prevail.  Yes, I opposed the corporate state of our country, where 5% of our populace owns 95% of our country’s wealth, where Big Brother multinational corporations control our lives, outsourcing all jobs to distant countries and laying us off at will, leaving us penniless and unable to pay our mortgages and destined to become itinerants as in the Grapes of Wrath….I saw all of this 40 years ago and then forgot and abandoned all of these causes because I needed a job, so I became a CPA, an enemy and traitor to the Great Cause, selling out my former brothers and sisters for 30 pieces of silver….

It’s perhaps unfortunate that too many of us abandoned our youthful ideals out of mercenary needs.  If we had remained united, fighting for all of the causes of the Great Society, opposing the mammoth multinationals, big brother corporations, from controlling our government and our lives, perhaps this recent economic collapse of our country—that was foreseen and predicted by so many Nostradamuses so many years ago—could have been avoided.  How many of you in Accounting Land were there at Woodstock, at the Lincoln Memorial’s peace rally, at Martin Luther’s “I had a dream” speech?  How many of you remember that fleeting moment when we believed our country could have escaped this fate that has now landed on us with the crushing weight of Plymouth Rock, leaving our country broke and broken?  How many of you were there yearning for a better America, where there were good-paying jobs, homes not in foreclosure, universal healthcare, pensions, the provision of better lives for our children, a cleaner environment, an educated populace, equal opportunity for all (including all sexes, races, creeds, sexual preferences, and age groups), the time to appreciate and enjoy our fleeting lives, and world peace?  A country of understanding, tolerance, and loving kindness.  We had a dream and then squandered it, unlike our parents, the greater generation, who defeated Nazism and Fascism during World War II and spawned the middle class from the depths of the Great Depression.   We failed miserably.

We chanted the litany of Madison Avenue, buy on credit beyond our means, we need every nonsense product now at any cost…buy, buy, buy…consume, consume, consume.  Over a lifetime we’ve collected so much junk that we have now run out of landfills to dispose of all of it.  We have become a country of repossessed houses, abandoned factories, unemployed workers, business shells of outsourced businesses, landfills, and junk.  We have squandered all of our resources and have violated every creed of the conservationists.  We are now wasting our most valuable natural resource:  the human resource, unemploying and underemploying our labor force.  We have failed miserably.

As a nation, our national debt spiraled from $250 billion after World War II to $12 trillion.  We create wars for the multinational defense industries—that industrial military complex that President Eisenhower warned us about—to profit by.  $300 billion here this year; $300 billion there next year.  Tuitions have skyrocketed, children can no longer afford higher education, the dream of an educated populace has been forgotten and forfeited.

The angels are our accountants in heavenI believe angels are the accountants in heaven, debiting and crediting the actions of our everyday lives.  They have posted every transaction, recording it faithfully, shaking their heads in disbelief at our performance, recording all of the penalties and fines we have so justly incurred.  We have undone all that our parents had accomplished:  a home for every family; an education for every child; available jobs, livable wages, financial security.  So really, in all honesty, when it’s all done and over with, when our cardiac arrest train inevitably does arrive as suddenly and scary as the third, grim reaper spirit in “A Christmas Carol”, should we then be surprised to learn that we have received anything but a failing grade for the contribution to humanity of our entire life’s work?

Mea culpa.

This article is provided for informational purposes and is not intended to be construed as legal, accounting, or other professional advice.  For further information, please consult appropriate professional advice from your attorney and certified public accountant. 

Have a tax or an accounting question?  Please feel free to submit it to William Brighenti, Certified Public Accountant, Hartford CPA Accountants.  For information and assistance on any tax and accounting issue, please visit our website:  Accountants CPA Hartford.

April 24, 2010

Are You An Accounting Nerd?

Filed under: Accountants CPA Hartford, Articles — Tags: , — William Brighenti @ 10:04 pm

Accounting Nerd

There are varying degrees of accounting nerdiness.  Some accounting nerds live normal lives, marry and, according to Kinsley, even propagate.  Some never marry since everyone they ever dated lapsed into comas, never to be heard from again.  Others are complete introverts and should never have left the convent or monastery.  (The Father of Accounting, Luca Pacioli, was a monk.  He never left the monastery.  Hence, he was also the Father of Accounting Nerdiness.)

Do you know how much of an accounting nerd you are?  Of course you do.  Or do you?!  Like most nerds, you probably suffer from the mistaken belief that you are not an accounting nerd at all.  However, unless the confidence interval of your belief of not being an accounting nerd possesses an alpha significance value of less than 5%, then how can you be so sure that you are not a nerd after all?  Let’s face facts:  chances are you don’t have a clue about how nerdy you really are.  And it’s totally irrelevant how you perceive yourself; rather, what is relevant is how all of your friends, associates, clients, and family members laugh hysterically and derisively about you behind your back, ridiculing you as the nerdiest geek they ever met.  But they won’t ever tell you how much of an accounting nerd you are because that would ruin their enjoyment of ridiculing and laughing about you behind your back at every opportunity they get.

Perhaps it’s time for you to assess objectively your accounting nerdiness.  Below are a series of questions designed to measure just how much of an accounting nerd you are.  Please answer all of these questions truthfully, since if you are truly the nerdiest accountant on the entire planet, no one would care in the least bit anyway.

1. Do you examine your sales receipt before you leave the register at a store, adding it up in your mind to verify its accuracy, even though twenty people are behind you waiting in line and the store is closing?

2. After you have examined your sales receipt while at the register of a store and added up every item on the receipt to ensure its accuracy, do you then tick and vouch each item on the receipt to the actual goods in your carriage?

3. When you go out to lunch or dinner with others, when the check arrives, do you whip out your calculator and tally up each individual’s share to the penny, including tip and tax?

4. When your spouse asks you for money, do you
     a. Charge her/him interest
     b. Compound the interest daily
     c. None of the above

5. Did your tax filing status influence the timing of your wedding date?

6. On your honeymoon, did you select a Caribbean resort offering a CPE course in order to deduct its cost?

7. During tax season, do you
      a. Bring your laptop to bed
      b. Have sex via remote access
      c. Practice celibacy
      d. A and b
      e. None of the above

8. On your office desk, do you have a picture of Spock from Star Trek?

9. Do you reconcile your personal savings account bank statement every month in QuickBooks, even though the only transaction is an interest posting?

10. Out in the field on audit assignments, when you discover a client error requiring an adjusting entry, do you scream “gotcha”, and dance around the table singing “We are the champions of the world”?

11. Do you eat lunch at your desk, dropping your food in your keyboard, and continue typing with ketchup and grease on your fingers?

If you answered no to all nine questions and selected 4c and 7e, you are not an accounting nerd; however, you probably will never pass the CPA exam and should change careers before you are fired.

If you answered no to all nine questions but selected 4b and 7c, you are not an accounting nerd but you would be advised never to marry.

If you answered yes to at least five questions, and did not select 4c or 7e, you are bi-nerd and could swing either way.

If you answered yes to all nine questions and selected 4b and 7c, you are a true accounting nerd destined to be a partner at a public accounting firm as long as you do not enter a religious order in order to avoid taxes on your wages and obtain a non-taxable living allowance.

Have a tax or an accounting question?  Please feel free to submit it to William Brighenti, Certified Public Accountant, Hartford CPA Accountants.  For information and assistance on any tax and accounting issue, please visit our website, Accountants CPA Hartford, and our blog, Accounting and Taxes Simplified by the Barefoot Accountant. 

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If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose. The above tax advice was written to support the promotion or marketing of the accounting practice of the publisher and any transaction described herein. The taxpayer recipients of this offering memorandum should seek tax advice based on their particular circumstances from an independent tax advisor.

April 19, 2010

Laura Madeira’s book, “QuickBooks 2010 Solutions Guide”, is a must read!

Filed under: Accountants CPA Hartford, Articles — Tags: , — William Brighenti @ 11:41 am

This book—QuickBooks 2010 Solutions Guide—contains a wealth of information for certified public accountants who receive QuickBooks files from their clients.  As CPAs we receive files in various states of condition; however, since we are billing out our time to clients who carefully watch our hours, we need to find and fix the errors in our clients’ QuickBooks files quickly. Laura Madeira provides a book full of tools to help the CPA and other users of QuickBooks to not only set up QuickBooks correctly for a company, but also to find the errors in the company’s data and to correct them tout de suite.

QuickBooks 2010 Solutions GuideThe CPA’s QuickBooks tools are nicely organized in chapters easily retrievable by subject area and accounts of interest. In chapter 2, the book reviews methods to troubleshoot and correct chart of account issues, the origin of many QuickBooks problems found in client files and thus a great place to begin your overhaul of your clients’ QuickBooks files. In chapter 3, finding and fixing “item” errors (one of the most important items to understand in QuickBooks) is discussed in detail. Chapter 5 is packed with information for the auditor, or anyone reviewing the integrity of the QuickBooks data in a company file, including troubleshooting account balances, tracking changes to closed accounting periods (a customary requirement of the CPA since clients are notorious for retroactively contaminating prior periods), using the audit trail and the voided/deleted transactions reports, documenting changes made to a data file, etc. Chapter 6 focuses on reviewing bank reconciliations, with a section devoted to troubleshooting an incorrectly reconciled bank account. In similar fashion, chapters 7 through 14 devote sections on troubleshooting and correcting errors involving accounts receivable, undeposited funds, other current asset accounts, inventory, accounts payable, sales taxes, opening balance equity, and payroll, respectively.

Although this is a great book for any serious user of QuickBooks, it is “the” reference book for the certified public accountant reviewing clients’ files in QuickBooks. Whenever I travel out to a client who uses QuickBooks, I always bring along a copy of QuickBooks 2010 Solutions Guide just in case I need to refer to it. It’s a “must” book to own: so go buy, read, and reread!  It is available on Amazon.

Have a tax or an accounting question?  Please feel free to submit it to William Brighenti, Certified Public Accountant, Hartford CPA Accountants.  For information and assistance on any tax and accounting issue, please visit our website, Accountants CPA Hartford, and our blog, Accounting and Taxes Simplified.  All comments are welcomed here and there.

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If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose. The above tax advice was written to support the promotion or marketing of the accounting practice of the publisher and any transaction described herein. The taxpayer recipients of this offering memorandum should seek tax advice based on their particular circumstances from an independent tax advisor .

April 18, 2010

The Morning After the Battle of Tenaru

Filed under: Accountants CPA Hartford, Articles — Tags: , , — William Brighenti @ 12:50 pm

Like John Basilone on the morning of August 21st after the Battle of the Tenaru, surveying the endless corpses strewn across the Guadalcanal battlefield along the perimeter of Henderson airfield, feeling totally enervated and dazed, I open my office door on April 16th to Tartarus and see shades of boxes, papers, envelopes, folders, files, cabinet drawers, books, wrappers of Snickers and Starburst, and M&M peanuts lying here, there, and everywhere.   As lifeless as the shades of heroes on the Fields of Asphodel after quenching their insatiable thirsts in the pools of Lethe, I had survived another endless tax season of countless bonsai charges of crazed clients across the river Matanikau.  Why I sojourn to Hades with the regularity of a faithful Persephone for three months every year for the few shekels I charge is beyond me and Platonic reasoning.  My wife thinks I am nuts and that I should go directly to Hades and remain there for eternity, since my tax season stress is killing her.  Methinks my four cats agree.

And do my clients appreciate my low fees and sleepless nights on their behalf?  Absolutely not.  With deductive reasoning as adroit as that of Aristotle, if not as clever as that of a Sophist, they deduce that since my fees are modest in comparison to those of other certified public accountants, that so must the quality of my services be proportionately inferior to those of the higher priced CPAs.  Duh?!

I am ready to rejoin the land of the living, where nightly walks are now possible, a few moments of affection with a demanding kitty are now enjoyed without guilt, and even a few amorous minutes with my beloved before she enters la la land can be indulged.  So why on April 18th do I find myself before a computer screen, typing an entry into my blog when the sun is shining here in Berlin, Connecticut and the temperature is approaching 55 degrees, and the hyacinths, crocuses, and daffodils are blooming and the twenty bird feeders in my backyard need replenishing?  Dunno:  probably out of CPA habit, but I’m out of here now.  And I heartedly recommend the same to all.  We’re all wasted, and now it’s playtime.  Go outside and play.

This article is provided for informational purposes and is not intended to be construed as legal, accounting, or other professional advice.  For further information, please consult appropriate professional advice from your attorney and certified public accountant.

Have a tax or an accounting question?  Please feel free to submit it to William Brighenti, Certified Public Accountant, Hartford CPA Accountants.  For information and assistance on any tax and accounting issue, please visit our website, Accountants CPA Hartford, and our blog, Accounting and Taxes Simplified.

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If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose. The above tax advice was written to support the promotion or marketing of the accounting practice of the publisher and any transaction described herein. The taxpayer recipients of this offering memorandum should seek tax advice based on their particular circumstances from an independent tax advisor.

April 1, 2010

Why Not a TV Show about CPAs?

The CPA as TV StarCan you imagine watching every Monday night a TV show entitled, “The CPA”?  Or “NY CPA”?  Why not?  There was L.A. Law for lawyers; House for doctors; Hill Street Blues for detectives; and, of course, General Hospital, Dr. Kildare, Ben Casey, the Defenders, Perry Mason, Miami Vice, Streets of San Francisco, Mike Hammer, Magnum P.I., Nero Wolf, Murder 101, etc.,…but I cannot for the life of me ever recall a TV show about CPAs….And don’t say there was never a TV show about CPAs because CPAs deal with numbers!  In fact, there was a show called “Numbers” for mathematicians!  And I watched it.

OK, so CPAs don’t carry guns or stethescopes, but they do tote calculators and Master Tax Guides.  And remember, for all of the shootings of Eliot Ness and the Untouchables, it took an accountant to bring down Al Capone for not paying his taxes!   The tax code is mightier than a 45 magnum!

So why hasn’t there ever been a TV show featuring CPAs?!  Can you imagine a CPA as detailed as Monk solving a delinquent taxpayer’s dilemma with the IRS?  Imagine the suspense of someone facing the prospect of losing everything undergoing an IRS audit:  his home; his trophy wife; his jaguar; his Rolex….Can you picture the monkish CPA digging through the check registers, bank statements, receipts, QuickBooks files, looking for that one clue to save his client?  That’s an hour’s nail-biter for sure.

We should write a script and send it to Warner Brothers.

Episode1.  Joe the Tax Dodger rushes into the CPA’s office in a cold sweat after receiving a notice from the IRS claiming that he owes $1,000,000 in taxes, penalties, and fines.  He is facing criminal charges, too, for declaring personal deductions—such as renovations to his beach cottage—as business capital expenditures.  He appeals to you, the CPA, to save him from bankruptcy, divorce, a ten year stretch with a cell-mate named Buster, and social humiliation and ostracism.  Isn’t this the stuff of fiction?  Are only doctors, lawyers, and private investigators worthy of air time?  And you, the CPA, save this crook.  You prepare an offer in compromise, reduce his assessments to a mere pittance, write a letter on his behalf to the IRS attributing the error of mixing personal with business records to negligence on the part of his wife, his mistress, his bookkeeper who is also his mistress, his best friend, or all of them; then after sending him a huge bill, the camera pans to a deserted beach on a tropical island, where you are seen bathing in success with a very shapely companion.

And aren’t there enough witty repartees in a CPA office on a daily basis to sustain the dialogue in a weekly series?  Don’t you have plenty of wise-cracking, insulting office peers, always dumping on your personal habits in your office, too?  Did you say drama?  Doesn’t your office have enough drama, too?  What?!  You say that you don’t have any drama queens!?  (If so, I want to work in your office.)  Don’t your seniors always over-react to your exceeding budgeted time on assignments?  Don’t they make a mountain out of a mole hill because you missed a tick mark?  Or forgot a footnote?  And doesn’t your office have the Dominatrix office manager, bossing everyone around all the time, as if she were the senior partner of the firm?  Isn’t that the stuff of drama and suspense, or at least comedy?  There’s certainly conflict in a CPA office, too, especially among staff members fighting over which radio station prevails, or quibbling over the results of their fantasy baseball picks.  Denouement, though, may be difficult to achieve, since our office squabbles are never resolved.  But, then again, you can always write in the script…”to be continued”!   And keep the suspense rolling from week to week.

And we must have romance in the CPA office, too.  What about the nerdy accountant with the pencil holder in the pocket of his white polyester shirt and the thick glasses furtively stealing peeks at the new intern sporting a mini skirt, in stiletto heels, stuttering everytime she asks him a question, beaming when he knows the answer, pontificating on the intricacies of the FASBs, Regs, GAASs, and Code sections as if he were Chairman of the Securities and Exchange Commission.  And then he takes her for a stroll to the files, and just when he is about to ask her to attend the Tuesday night meeting of Junior Accountants, he stutters uncontrollably, exhibiting all the characteristics of turrets syndrome, and never quite manages to ask her out, until one day….See?  You want to know, too, how goofy got his gal.

Accountants are detectives, too, in a way.  They’re financial detectives!  They are always searching for missing files, checks, receipts, documents, numbers, and typically are forced to rely on subtle clues to reconstruct or calculate the missing information.  They make endless telephone calls often resulting in dead ends and unbillable time.  And they often receive the brush off from testy governmental officials, denying them information on the grounds of privacy.  Can’t you imagine the build up of suspense as the CPA pursues her quest in trying to obtain the cost basis from an investment house of an investor’s purchase of stock that occurred twenty years ago and underwent multiple splits and stock dividends?  We watch with baited breath as she connives her way around the financial advisor speaking in that husky Julie London voice, pleading helplessness and lady in dire straits, promising so much and yielding nothing, while extracting date, cost per share, intervening stock splits and stock dividends—if she is really good, even a stock tip—and the like….we marvel at the technique honed over twenty years of extracting confidential information with the dexterity of a dentist.  What an artist!

Frankly I’m tired of watching half-naked, young, wannabe models running around a deserted island.  I want to hear calculators and computer keys clacking away; staff members mumbling, swearing, grunting and hissing; pages turning; and phones ringing.  I want to see desks strewn with the corpses of files in every imaginable position—typically under my desk somewhere or blockading passage into my cubicle—and cups of coffee and remnants of snacks hardening and turning green with mold.  This is the stuff of realism, the stuff of everyday life, what it’s really all about being a CPA….(oh, God forbid)….your worst nightmare!

OK, OK, so you might pass on it , but c’mon, admit it, it would not be any less exciting than the shows on TV now. 

This article is provided for informational purposes and is not intended to be construed as legal, accounting, or other professional advice.  For further information, please consult appropriate professional advice from your attorney and certified public accountant. 

Have a tax or an accounting question?  Please feel free to submit it to William Brighenti, Certified Public Accountant, Hartford CPA Accountants.  For information and assistance on any tax and accounting issue, please visit our website:  Accountants CPA Hartford.

If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose. The above tax advice was written to support the promotion or marketing of the accounting practice of the publisher and any transaction described herein. The taxpayer recipients of this offering memorandum should seek tax advice based on their particular circumstances from an independent tax advisor.

 


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