Explain accountant-client privilege. What are the similarities and differences between it and attorney-client privilege?
What will be an ideal response?
According to judicial doctrine, certain communications between an attorney and a client are "privileged" ( i.e., nondiscoverable in the course of litigation). In l998, Congress extended this privilege to similar communications between a federally authorized tax practitioner and a client. A federally authorized tax advisor includes a certified public accountant.
The accountant-client privilege is similar to the attorney-client privilege in two respects. First, it encompasses communications for the purpose of obtaining or giving professional advice. Second, it excludes communications for the sole purpose of preparing a tax return. The accountant-client privilege is dissimilar in three respects. First, it is limited only to tax advice. Second, it may be asserted only in a noncriminal tax proceeding before a federal court or the IRS. Third, it excludes written communications regarding a tax shelter between an accountant and a corporation. A tax shelter is any plan or arrangement, a significant purpose of which is tax avoidance or evasion.
The creation of an accountant-client privilege reflects Congress's belief that the selection of a tax advisor should not hinge on the question of privilege. It ensures that all tax advice is accorded the same protection regardless of the tax advisor's professional status.
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_____________provide the evidence needed in an accounting system to record a transaction
Fill in the blank(s) with correct word
Which of the following is true of a unilateral mistake?
A) Only one mistake or ambiguity is present in the subject matter of the entire contract. B) Out of several contracts drafted simultaneously between two parties, one has a mistake in its subject matter that does not concern the other contracts. C) Only one party is mistaken about a material fact regarding the subject matter of a contract. D) A single mistake about a material fact in the subject matter of a contract appears several times in the contract.
The schedule of cost of goods manufactured must be prepared monthly as it is a required general-purpose financial statement.
Answer the following statement true (T) or false (F)
Olive Corp. currently makes 20,000 subcomponents a year in one of its factories. The unit costs to produce are: Per unitDirect materials $12Direct labor 8Variable manufacturing overhead 12Fixed manufacturing overhead 8Total unit cost $40An outside supplier has offered to provide Olive Corp. with the 20,000 subcomponents at a $36 per unit price. Fixed overhead is not avoidable. If Olive Corp. accepts the outside offer, what will be the effect on short-term profits?
A. $80,000 decrease B. $160,000 decrease C. $160,000 increase D. $320,000 increase