Options boom results in AICPA recommendations

Article Abstract:

Option contracts give the holder the right to sell (put) or buy (call) a commodity or financial instrument at a specified price during a prescribed time period. The participation of businesses in options trading is due to various factors such as flexibility, protection from interest rate movements, and the use of options to enhance a company's current yield and as a management tool. Options do not result in margin calls and sellers of options receive a premium for writing them. In spite of some objections, options are increasingly used for hedging. Guidance on accounting for hedges is provided by the Financial Accounting Standards Board (FASB) Statements 12, 52, and 80 and by 'Accounting for Options' published by the Accounting Standards Executive Committee of the American Institute of Certified Public Accountants. An overview of options is also given, as well as hedge criteria.

Management, Economic aspects, Options (Finance), Stock options, Commodity options

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Is your accounting firm still an accounting firm?

Article Abstract:

As accounting firms provide a greater array of services (in areas such as management and financial consulting, business planning and budgeting, controllership services, business cycle and forecasting services, general internal control consulting, and asset appraisal services) and their product lines merge with those of other consulting companies, the question must be answered as to whether these firms are still in the accounting industry. Increasingly, accounting firms are furnishing consulting, appraisal, and advisory services, areas previously not within their domain. Many accounting firms are pursuing mergers in order to provide such services. The accounting firm's ability to perform as an independent auditor may be threatened by the proliferation of other services offered; in fact, it is possible that conflicts of interest could arise.

Innovations, Financial services industry, Financial services, Risk management, Business forecasting

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Does the slipper fit? How to choose the right auditor

Article Abstract:

Finding the right accounting firm for a company can be a difficult matter, especially because most established auditors have similar levels of technical expertise. Although many companies are content to keep the same accounting firm unless faced with serious problems, the field is becoming more competitive. Financial executives interviewed cited industry specialization, creativity, personality and costs as factors that influence their choice of an accounting firm.

Evaluation, Accounting, Practice

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