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These articles are prepared for informational purposes only and should not be construed as professional advice or opinion on any specific facts or circumstances. Professional advice should be consulted with regard to specific application of the information on a case by case basis. Copyright 2009 by GL Howard & Company CPAs, LLP.

GL Howard & Company CPAs, LLP is pleased to provide the following articles.

“The Accountant’s Role with the Attorney in the Audit Process” as published by “Orange County Lawyer,” the official publication of the Orange County Bar Association. Reprinted with permission.

Accounting and Taxes

Attorneys’ Fees and Income Taxes: Is the issue finally resolved?

For years, the federal appellate courts split over whether contingent fees paid out of judgments or settlements in employment discrimination cases were taxable to the plaintiff. The American Jobs Creation Act eases the tax burden on most discrimination plaintiffs by providing an “above-the-line” deduction for these fees. But a recent Supreme Court ruling mandates a […]

FIN 48 Expands Reporting Requirements

Initially released in June 2006, Financial Accounting Standards Board (FASB) Interpretation 48 (FIN 48), Accounting for Uncertainty in Income Taxes, significantly revised the requirements for measuring and disclosing uncertain tax positions. FIN 48 requires both public and private companies to examine their uncertain tax positions and disclose any related potential tax liabilities on their financial […]

Insurance fraud: Is your client being scammed?

Abstract: Although businesses potentially can become victim to a variety of schemes intended to bilk insurance companies and workers’ compensation funds, on-the-job injury and property-casualty fraud are the most common. But there are specific clues that fraud experts use to uncover dishonest behavior. In addition to investigating workers’ comp or property-casualty claims, they can help prevent […]

It’s Time to Tighten Internal Controls

Strong internal controls can protect a company from fraud losses and reduce its exposure to liability. Since executives frequently lack the time and expertise to evaluate their controls, they may be wise to consider seeking external advice from a financial consultant. Today’s business managers have more reasons than ever before to tighten internal controls. The […]

Killing billing fraud schemes

Killing billing fraud schemes Employee billing fraud can take a big bite out of a company’s profits.  Motivated by the potential for big rewards, thieves have come up with a variety of billing fraud schemes. But businesses and their legal advisors can help prevent large losses and possibly enhance their chances of a successful prosecution […]

Measuring Fair Value – Recent Statement Likely Will Have Wide-Ranging Effect

A recent Financial Accounting Standards Board (FASB) statement, No. 157, Fair Value Measurements, is likely to affect every company’s financial reporting. As this article discusses, the statement defines and establishes a framework for measuring fair value and becomes effective for financial statements for fiscal years beginning after Nov. 15, 2007. Among other things, FASB 157 […]

Re: 2012 American Taxpayer Relief Act Overview

Dear Client: After weeks, indeed months of proposals and counter-proposals, seemingly endless negotiations and down-to-the-wire drama, Congress has passed legislation to avert the tax side of the so-called “fiscal cliff.” The American Taxpayer Relief Act permanently extends the Bush-era tax cuts for lower and moderate income taxpayers, permanently “patches” the alternative minimum tax (AMT), provides […]

Secrets behind securities fraud

Secrets behind securities fraud Thanks to the widespread popularity of retirement accounts and college savings plans, growing numbers of individuals, entities and institutions have poured into the securities and commodities markets in recent years. Increased participation has, in turn, led to increased opportunities for — and incidents of — fraud. When victimized investors turn to […]


AICPA Offers Guidance on Fighting Fraud

A new AICPA publication outlines six key steps audit committees can take to combat one of the most significant and costly fraud risks: management override of internal controls. This article provides a summary of this important release. In response to widely reported financial reporting frauds, the American Institute of Certified Public Accountants (AICPA) has published […]

Antitrust Litigation Demands Sophisticated Economic Analysis

Antitrust cases present a number of complex issues involving both liability and damages, and both areas demand comprehensive economic analysis. Proving causation is a particular challenge, requiring more than a positive correlation between the defendant’s alleged misconduct and the plaintiff’s claimed injury. This article gets into the details. Antitrust litigation demands sophisticated economic analysis Almost […]

Breach of Contract Damages Go Beyond Lost Profits

Lost profits may come to mind first when contemplating damages for breach of contract. This article reveals, however, that several other available remedies should also be kept in mind, including other compensatory damages, incidental and consequential damages, attorneys’ fees and costs, rescission, and reformation. Breach of contract damages go beyond lost profits In commercial cases […]

Broke or Dishonest? Uncovering alter ego companies

Chrysler’s and GM’s recent bankruptcy filings were very public examples of a much broader insolvency trend that cuts across all industries and market capitalizations. Most companies filing for bankruptcy accurately represent their assets. But a small percentage of filers that claim to have little or nothing to offer creditors aren’t being honest. Instead, they’ve diverted […]

Carefully Drafted Settlement Can Minimize Bankruptcy Risks

The peace of mind that comes with settlement can quickly be extinguished if the defendant files for bankruptcy. This article discusses how attorneys should take bankruptcy laws into account when drafting settlement agreements. The peace of mind that comes with settlement can quickly be extinguished if the defendant files for bankruptcy, even if full payment […]

Discounting Future Damages to Today’s Dollars

Selecting an appropriate discount rate involves an element of subjective judgment, which can lead to dramatically different damage calculations. This article explains how an understanding of the basics of discounting helps build a strong case in support of damages positions. Plaintiffs often seek damages for future losses — such as lost profits — expected to […]

Double vision: Analyzing alter ego liability

Abstract: Financial experts play a critical role in alter ego litigation, examining a wide range of factors to analyze whether a company is a shell or a legitimately separate entity. This article explains how the expert looks at what’s going on inside the companies to determine whether the ownership structure serves legitimate business purposes or is […]

Employee Fraud: Forewarned is Forearmed

A 2004 annual study of occupational fraud by the Association of Certified Fraud Examiners (ACFE) reveals that fraud has a disproportionate impact on smaller businesses. Its results also indicate that asset misappropriation is the most common type of fraud, but fraudulent financial statements are the most costly. This article shows how the study can help […]

How to Bolster Your Clients’ Prenuptial Agreements

These days, prenuptial agreements aren’t just for Hollywood stars and Wall Street moguls. With divorce rates remaining high and blended families on the rise, more of your clients are likely taking a pragmatic approach to marriage. With the input of a CPA, prenuptial agreements can affirmatively define spouses’ financial rights, duties and obligations. Properly drafted, […]

New Businesses: Building the Case for Lost Profits

Courts recognize that a plaintiff shouldn’t be precluded from recovering lost profits where the defendant’s actions have prevented the plaintiff from establishing a track record. But the methods typically employed to calculate lost profits damages may prove tricky when the case involves a new or unestablished business. This article talks about the methods typically employed […]

Proving Lost Profits

Abstract: Establishing lost profits, particularly for new businesses that haven’t yet compiled any historical financial data, can be extremely challenging. In such cases, courts sometimes rely on data from comparable businesses. But as a recent New Jersey appellate court case illustrates, true comparability between the businesses is critical. A restaurateur who chose to testify on […]

Reasonable Royalties and Lost Profits Damages Help “Cure” Infringement

Patent infringement litigation is becoming increasingly common. When it comes to damages, reasonable royalties represent the statutory minimum, but plaintiffs often are able to recover greater amounts in the form of lost profits. How these damages are determined depends on a variety of factors. Intellectual property is playing a critical role in today’s technology-driven world. […]

Recovering the lost profits your clients deserve

Lost profits are a key component of damages in all kinds of litigation. In breach of contract and commercial tort cases, for example, a plaintiff may claim it suffered lower revenues, higher costs or both because of the defendant’s wrongful conduct. To accurately calculate lost profits, financial experts consider a number of factors, including lost […]

Show me the money

Tracing hidden business assets Distrust is typically part and parcel of divorce litigation — especially when it comes to financial matters. To secure a fair and equitable resolution, attorneys may need to trace assets and income that a business owner spouse has hidden to reduce child support, alimony liability or the final settlement amount. Forensic […]

Solving an Accounting Whodunit

Fraud costs U.S. businesses nearly $600 billion each year. While most business owners are aware of the problem, few imagine that they will fall victim to fraud. Unfortunately, many will. To uncover the facts when clients suspect employee fraud, attorneys often call on the services of forensic auditors, or fraud examiners. The following are some […]

Taking a Byte Out of Crime – An introduction to computer fraud

Computer operations are particularly vulnerable to fraudulent manipulation. This article reviews some of the more common types of fraud. Virtually every phase of computer operations is vulnerable to fraudulent manipulation. A particular phase may serve as the ultimate target of a fraud scheme, a tool in the commission of the scheme or both. While computer […]

The trouble with start-ups and never-started-at-alls

Lost profits damages The trouble with start-ups and never-started-at-alls Although calculating lost profits damages for businesses involved in litigation is always complicated, damages experts can use the company’s historic financial statements to make their projections. They can, that is, if the business has a history. Calculating damages for early-stage and never-launched businesses requires a different […]


Determining the Useful Life of Intellectual Property

Placing a value on intellectual property—such as patents, copyrights and trademarks — requires a determination of the asset’s remaining useful life (RUL). In addition to statutory limits, a number of factors affect an asset’s RUL, including economic, contractual, legal and technological factors. This article describes some of these factors. Calculating an asset’s remaining useful life […]

Evaluating Owner Compensation

When a business is valued, owner compensation is likely to come under the microscope. Generally, valuators consider only “reasonable compensation” — that is, the amount the business would need to pay a non-owner to provide comparable services. This article goes into the details of this important process. One of the perks of owning a closely […]

Law Firm’s Contingency Fees were Marital Property

A court found that unpaid contingency fees earned by a husband’s personal injury law practice were marital property, but it rejected the historical average income approach used to value the fees. This article looks at the important lessons of the case. In a recent case, Stageberg v. Stageberg, a Minnesota appellate court found that unpaid […]

Using Financial Experts to Smooth Purchase Price Adjustments

Most acquisitions are finalized before closing-date financial statements have been prepared. When the closing-date financials become available, a purchase price adjustment may be required. This article explains why financial experts are invaluable in drafting PPA provisions and helping resolve disputes. Businesses put a great deal of time and effort into structuring acquisitions, but the most […]

What does an appraiser need?

The more information in the appraiser’s hands, the more accurate the valuation. Here’s a guide to the information you should make available to your appraiser. Regardless of the reason for a business valuation, one fact is indisputable: The more information in the appraiser’s hands, the more accurate the valuation. To obtain a business valuation that […]