Category Archives: accounting

The Turbo Tax Rap

“The Turbo Tax Rap”

Of the many tax rap songs on YouTube website I’ve listened to only a few (there are over 170); however, this one by far is the best I’ve heard. Let me know what you think. You can check them out yourself at YouTube

Death & Taxes

It’s tax time and YouTube is having a contest “The TAX RAP” sponsored by TurboTax with a prize of $25,000. Here is one of the videos “Death & Taxes” to enjoy while you are preparing your taxes or getting them ready for your accountant.

QuickBooks Service Discontinuation Plan

Computers love or hate em, sometimes they are frustrating!

QUICKBOOKS creates more business for itself from its own customers. Forcing them to upgrade their software.

As many QuickBooks users do not need the most current version to run their accounting and bookkeeping system. The only way that you are forced to upgrade is when the software company discontinues a specific version of a program and also eliminates the support of that software.

If you are currently using QuickBooks 2004 – QuickBooks Assisted Payroll, your next recent release from QuickBooks.

“On May 31, 2007, we are discontinuing QuickBooks Assisted Payroll for QuickBooks 2004.”

For more details click here

ADP Acquires Intuit Outsourced Payroll Business

I just received a release that ADP has acquired the outsourced payroll from For those of you that use Quickbooks payroll service, there will be a transition to ADP’s payroll service. I received this news release from my contact at Paychex. I’m sure that she expects there to be fallout from those who do not want to stay with ADP or are not happy with the transition and they will look to Paychex.

For more about the Acquisition ADP/INTUIT or INTUIT/ADP.

Quickbooks Solution to Internet Explorer 7

On November 19, 2006, I let you know about a problem with 2005 editions of Quickbooks after having installed Internet Explorer 7.

Quickbooks has come up with a patch to allow the 2005 edition to work.

QuickBooks Alert!

There is now an update from QuickBooks that will make QuickBooks 2005 compatible with Microsoft Internet Explorer 7. There is also an update for QuickBooks 2004 that will remove the Internet Explorer 7 warning message if your machine must run Internet Explorer 7

Please go to for the solution.

If you have a question regarding QuickBooks and would like to see it answered in this newsletter, please email us your inquiry at

If you need help in getting QuickBooks to work more effectively for you in YOUR business , email us your inquiry at or checkout the website at

Tax Credit for Federal Excise Tax

You’ve Just Hit the Jackpot!!!

A credit for overcharged federal telephone excise tax is available. The credit is for the federal excise tax on long distance charges during the period March 2003 through July 2006. You can either take the standard amounts set $30 single, $40 married and $10 extra for each of the first 2 children.

If you have all your invoices you can claim your actual telephone excise taxes paid. It requires the information be filed on form 8913. The form requires the amounts paid by quarter.

The credit is available for both businesses and individuals. The credit is refundable, you will receive the refund even if you have no federal income tax.

For more info check out the IRS website Telephone excise credit

Tax Season

Tax Season – where the rubber meets the road. During the next 3 1/2 months, that we call tax season, the work we perform whether it is preparing individual and /or business tax returns and/or financial statements, the earlier you get your paperwork to your accountant the sooner you will get your results.

Additionally, those of you who are filling out Financial Aid Forms for children going to college, you must have either a completed tax return or a fairly close estimate much earlier than the tax returns are due, usually February 1 vs. April 16 .

If you have a refund coming to you, the earlier you file the sooner you get the refund (e-filing gets the refunds back sooner).

If you will be owing taxes and or retirement contributions, the earlier you know the amounts that will be necessary, the easier it is to plan and set aside the funds, save from current income or make arrangement for loans to cover the funds necessary to make the payments timely.

If you do not have the funds to pay youre taxes, file the returns on time. By filing the returns on time, you will only be subject to a late payment penalty 1/2 % per month plus interest versus a late filing penalty of 5% per month plus interest.

Employee Theft – Embezzlement of Funds

This past week a friend of mine that is a business owner asked me what responsibility the outside accountant had in relation to a bookkeeper’s theft.

What is the accountant’s responsibility? Depending on what level of accounting is being prepared by the accountant; be it a tax return, a compilation, a review or an audited set of financial statements, determines how an accountant’s responsibility is determined.

An audit is the highest level of responsibility the accountant has regarding a set of financial statements. Based on the AICPA requirements auditor is required to brainstorm prior to the audit, to determine where in the books and records of the client is there potential risk of fraud. After the brainstorming the auditors must test any area that is a potential fraud risk. To see more click here: AntiFraud and Corporate Responsibility Center.

Just because the accountant tests for fraud doesn’t mean that he or she will find it. In testing, the auditor is reviewing random transactions. The chances of testing and finding fraud is very difficult, there can be collusion or the test data did not happen to be the ones where fraud occurred.

An auditor’s report does not say that the financial statements are correct or perfect and has no errors. The auditor’s report states the financial statements “are presented fairly”. The CPA can not say every transaction has been handled correctly. To do that would mean that the auditors would have to review every transaction that the company had. The cost would be unbearable for a business.

As to the other type of financial statements there is even less responsibility to find fraud as the accountant is not testing transactions. However, if the accountant is suspicious that there is a problem, he or she must follow up and may not ignore the possibility just because it is not an audit engagement.

When looking at financial statements, comparing activity on a year to year and/or a year to budget based on dollars and percentages is important. Any large variances should be reviewed and discussed with management and the owners.

If one person controls all aspects of cash or any other valuable assets, procedures should be in place that requires other levels of management to review the work under the control of one person. Management must monitor the employee’s work, follow the procedures.

If there are internal controls with a separation of duties the only way fraud can occur is through collusion. When there is only one person in the bookkeeping department it is alot easier to commit fraud.

Therefore it is the resposibility of management or the owners to review the work of the bookkeepers and make certain to set up procedures to minimize the possibility of theft. This is especially true when there is a large amount of purchasing of material for cash.

Here is my friend’s case:

A part-time intrern was trying to reconcile the petty cash slips. When he found a variance, he went to the owner and not the bookkeeper. After speaking to his accountant and making copies of all the paperwork for this petty cash reconciliation the owner had the intern show the bookkeeper the discrepency the bookkeeper said she would take care of it. She changed a number to make the totals work; however, there was no backup to the change.

After seeing how the adjustment was made, the accountant reviewed the books and it was determined that she had embezzeled over $50,000 during the past few years.

Where does the responsibility lie?