What sources can an accounting professional rely on to determine whether a cash or non-cash charitable...

What sources can an accounting professional rely on to determine whether a cash or non-cash charitable deduction is tax deductible and/or a bona fide financial reporting expense? Are Investopedia, Wikipedia, News websites and other general websites acceptable? What is the final authority on accounting matters, if any? What is the consequence of relying on dubious resources?

Expert Solution

An accounting professional should only rely on the IRS and IRS publication related to any provisions which impact the income tax and financial statements. They can also rely on the bulletins or the guidance notes issued by the IRS or any other relevant authority which is authorised by IRS to issue the same. These are the only sources which are highly acceptable.

Investopedia, Wikipedia, News websites and other general websites reads the provisions as written by the IRS and on reading the same, they give their opinions on the same. They interpret the same in their way and give us the opinions on the same. However, they themselves write at the end that "This is our personal opinion. Please take guidance of other CPA before proceeding with the same." We can rely on such resources only in case we are confident that the law speaks the same as interpreted by the source. However, if we trust them in case of such complex transactions and give effect accordingly and of the same is incorrect, IRS can penalize us with heavy amount.

The final authority related to tax matters is IRS and final authority related to accounting matters is ASC, FASB and other such authorised authorities.

ekkarill92 answered 2 years ago

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