Audit & Accounting

It figures that it would be Tom Allen who took on the single biggest accounting issue in the country, if not the world.It was Allen who, as chairman of the Governmental Accounting Standards Board, ushered in Statement 34, which moved state and local governments to accrual accounting - arguably one of the biggest changes ever to impact governmental accounting.

Your clients probably want to leave as much as possible to their heirs. However, if they don't take minimum distributions from their Individual Retirement Accounts after they reach 70-1/2, the government could take a substantial amount of those assets.The Internal Revenue Service can charge an excise tax of up to 50 percent if clients don't take the required minimum distribution from their IRA accounts or qualified retirement plans by April 1 of the year after the year they turn 70-1/2.

USE OF ALTERNATIVE INVESTMENTS TO INCREASE AHEAD OF BOOMERSRegistered investment advisors intend to ratchet up their use of alternative investments such as hedge funds, real estate, commodities and currencies in the next five years, according to a national survey released by Rydex AdvisorBenchmarking.

Insurance and financial services conglomerate New York Life Insurance Co. is donating $2 million to establish the New York Life Center for Retirement Income at Bryn Mawr, Pa.-based financial educator The American College.The company said that the purpose of the endowment was to help address the demand for sound retirement income solutions among retired Americans. The gift to the nonprofit educator of insurance and financial professionals will provide permanent support for programming and research.

A federal judge has signed off on a $9 million settlement against Ernst & Young over claims made by investors in PNC Financial Services Group Inc.

Internal Revenue Service agents are spending more time conducting face-to-face corporate audits that produce no revenue, according to a report released by the tax division of Syracuse University’s Transactional Records Access Clearinghouse.

The climate is changing for nonprofit organizations, with both the Internal Revenue Service and Congress zeroing in on issues such as transparency, board oversight and compensation matters.While Sarbanes-Oxley requirements apply to only the public company sector, the scandals emanating from publicly traded companies over the past several years have affected the nonprofit arena as well, according to Geralyn R. Hurd, an executive in the tax services group at Crowe Chizek's Chicago office.

Like their GOP predecessors, the Democrats in charge of Congressional tax committees continue to wring their hands over the fiscal train wreck looming due to the escalating alternative minimum tax.But agreement on a way to stop that runaway AMT locomotive - a step that many tax accountants say is needed to head off a tax revolt by millions of middle-income American families - seems just as elusive as ever.

Derivatives may be complex instruments, but they nevertheless have to be calculated, accounted for and reported on to investors and other users of financial information.The Financial Accounting Standards Board tried to settle the issue when it issued Statement 133, Accounting for Derivative Instruments and Hedging Activities in 1998, but people who read financial statements still had questions. For example, how do derivatives activities impact a company's operations? And how does a given derivative relate to a given risk?'

New Jersey is working to join a roster of U.S. states that are offering tax breaks to local military personnel, as a state legislator has authored a bill that would exempt income earned by military personnel stationed outside the state for at least six months from the state's gross income tax."I think there's no question that our men and women who are serving in the military are sacrificing a tremendous amount already," said New Jersey Assemblyman Michael Panter, author of the bill. "To tax them from a state perspective, when they're not in New Jersey taking advantage of the state services and infrastructure, really it's a windfall to the state, and I think it's incredibly unfair."