HEADING FOR THE EXIT
August saw several high-profile exits: First, David Williams, the head of the Internal Revenue Service's Return Preparer Office (and the man who brought you the RTRP) was due to leave by the end of the month; his successor, Carol Campbell, was deputy chief of staff for IRS Commissioner Doug Shulman. At San Francisco-based Top 100 Firm Burr Pilger Mayer, chief executive Stephen Mayer stepped down, though he will remain with the firm to run a new entity dedicated to early-stage businesses. An interim executive committee will run the firm while a successor is sought. And at major tax and accounting solutions vendor CCH, chief executive Mike Sabbatis will step down this month in favor of Karen Abramson, who previously ran Wolters Kluwer Health, Medical Research, which is owned by CCH's parent.
The presidential campaign ground on, with much arguing over the release of candidate's tax returns. Little was learned.
As a help to the new Private Company Council, the Financial Accounting Standards Board issued a staff paper with recommendations on which criteria and circumstances should be used to determine when it is appropriate to adjust U.S. GAAP reporting requirements for private companies.
The board also has issued an accounting standards update, Accounting Standards Update No. 2012-02, Intangibles -- Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment, that is intended to simplify the testing of indefinite-lived intangible assets, such as trademarks, licenses and distribution rights, for impairment. The amendments are effective for impairment tests performed for fiscal years beginning after Sept. 15, 2012.
The Public Company Accounting Oversight Board said that its initial inspections of auditors of broker-dealers uncovered problems with all of the audits.
Separately, the board adopted Auditing Standard No. 16, Communications with Audit Committees, which establishes requirements that enhance the relevance and timeliness of communications between the auditor and audit committee, in addition to amendments to other PCAOB standards.
It also issued a release to provide information to audit committees about its inspection process and how they might use the inspection reports to question their auditing firms.
In the space of little more than a week, the Securities and Exchange Commission shut down three separate Ponzi schemes, including a $600 million monster in North Carolina, an $80 million scheme allegedly run by a College Hall of Fame football coach, and a $15 million tiddler in Colorado.
TIGTA came out swinging this summer, with a series of reports slamming the Internal Revenue Service. One found that IRS supervisors urged employees to ignore potential fraud in a program that reviews and verifies applications for Individual Taxpayer Identification Numbers, substantiating many of the allegations in complaints from IRS employees that the service had earlier disputed. Another report said that identity theft is having a much larger impact on tax administration than the amount the IRS detects and prevents, and suggested that it might issue as much as $21 billion in fraudulent refunds over the next five years. A third TIGTA report suggested that many of the IRS's audits of S corporation tax returns are unnecessary and unproductive. And yet another questioned the IRS's handling of the Adoption Tax Credit.
On a more positive note, the service made a series of enhancements to its Preparer Tax Identification Number system, including a new look and feel, and at press time was due to unveil a revamped version of its main Web site, IRS.gov.
It also released two revenue procedures requiring reporting agents who remit taxes on behalf of clients to use electronic systems (see page 16), and announced that as of Oct. 1, 2012, applications to become an IRS e-file provider must be submitted online.
Finally, it released final regs governing tax deductions for entertainment use of business aircraft in TD 9597, and proposed amendments to the utility allowance regulations concerning the low-income housing tax credit in Code Sec. 42, in REG-136491-09.
An independent study of the Governmental Accounting Standards Board commissioned by its parent organization found opinions divided on what GASB's responsibilities should include as a standard-setter for state and local government accounting.
Separately, GASB issued an updated guide to help people better understand the financial statements of state and local governments. An Analysts' Guide to Governmental Financial Statements, 2nd ed., is the third in a series of expanded and updated resources that GASB has published this year.
The International Accounting Standards Board said that its staff will develop guidance to help "micro-sized entities" apply IFRS for Small and Medium-sized Entities. An IASB advisory body, known as the SME Implementation Group, will work with the IASB staff to develop the guidance, and will then approve a final draft to be sent to the full IASB for review.
IN OTHER NEWS
The American Institute of CPAs and the American Accounting Association released a report charting a course for the future of accounting education. The details are available online at http://pathwayscommission.org.
BDO USA LLP announced that its annual revenue for the year ended June 30, 2012, increased 8 percent, to $618 million, from the previous year's $572 million, led by consulting services, which jumped 36 percent. Tax services grew more modestly at 9.9 percent and assurance services at 5.7 percent.
Half a dozen accounting firms were sel-ected to help oversee compliance by the five banks that agreed to a mammoth national mortgage settlement: BKD, Baker Tilly Virchow Krause, Crowe Horwath, Grant Thornton and McGladrey.
XBRL US launched its second annual XBRL Challenge, a contest to discover the top open-source analytical tools that can mine XBRL-formatted corporate financial data from the SEC's EDGAR database, with a $20,000 Grand Prize for the top two submissions.
In the story "The World is Flat" (August 2012, page 8), the information and quotes attributed to Barry Garfield, audit partner of Holtz Rubenstein Reminick, should have been attributed to Bruce Madnick, managing partner of Friedman LLP and former DFK president. Our apologies for the error.