Audit & Accounting

A letter drafted by technology sector lobbyists is making its way through Congress asking lawmakers for support in their battle against expensing stock options. The letter, which is scheduled to arrive on the desk of Securities and Exchange Commission Chairman William Donaldson on Monday, Feb. 14, requests that the regulator delay the June 15, 2005, implementation date, and recommends that the agency conduct an impact study on options expensing. The letter, of which WebCPA received a copy, specifically exhorts the regulator to: o Field test valuation methods "to ensure the methods imposed on all public and private companies make sense and not adversely affect our nation's economy." o Conduct, along with the Labor and Commerce Departments, "a comprehensive impact study before any standard is implemented. There is little doubt that the economic, labor and global competitiveness impact of stock option expensing could be severe." A representative for TechNet -- a bipartisan network of technology sector chief executives who represent more than one million employees -- said that he was aware of the letter, but that the group was not the one behind it. "The SEC has to realize that 14 million people own stock options, so it's not just for top executives. It's a much larger issue than that." In July, House lawmakers overwhelmingly passed their own stock option bill, H.R. 3574, which mandates expensing options only for a company's top five executives.

The American Institute of CPAs has joined with the Labor Department's Women's Bureau in an initiative to help educate women about personal financial management. The partnership will combine the financial education efforts of both organizations -- the AICPA's 360 Degrees of Financial Literacy, and the Women's Bureau's Wi$e Up. The joint effort would provide Labor's Wi$e Up program with the institute's financial experts to support its on-line program and teleconference calls, as well as financial education workshops and conferences. The AICPA's 360 Degrees of Financial Literacy was launched last year with the support of state CPA societies. The program encourages CPAs to volunteer to help educate the public on various financial topics.

Securities and Exchange Commission chief accountant Donald Nicolaisen told lawmakers that the regulator is conducting a top-down examination of mortgage-financing concern Fannie Mae. In prepared remarks before a House subcommittee, Nicolaisen said that, although he could not discuss the ongoing investigation, the SEC staff is "thoroughly" investigating accounting practices at the company. In December, the SEC determined that Fannie Mae's accounting practices didn't comply with generally accepted accounting principles, and told the company to restate its financials for the years 2001 through 2004. As a result, company's chief executive and chief financial officer have departed.

The Securities and Exchange Commission said it will host a roundtable -- possibly in April -- to discuss on how auditors and their smaller publicly traded clients are dealing with the Section 404 internal controls requirements of Sarbanes-Oxley. SEC Chairman William Donaldson has asked for an "appropriate delay" for smaller public issuers and non-U.S. companies whose compliance deadline was scheduled for July 15, 2005 and whose market cap is between $75 million and $700 million. Large U.S. companies, above that threshold, are already required to comply with the internal controls mandate as of Nov. 15, 2004. SEC chief accountant Don Nicolaisen said if a delay is provided, companies should use that time to continue documenting and testing internal controls.

As expected, the European Union Commission has mandated that European-listed companies expense stock options. The law, which must be applied retroactively from Jan. 1, 2005, applies to roughly 8,000 companies. Late last year, the E.U. lobbied hard for the expensing rule, but in order for it to be enacted into law it had to be approved by the European Parliament. In the U.S., companies must begin expensing stock options from June 15. Much like in the U.S., where options expensing was met with a flurry of lobbying activity -- especially from the technology sector -- many of Europe's biggest conglomerates had attempted to delay the expensing rule until it became effective in the U.S.

George W. Bush's presidency will be remembered for many things - and if the president has his way, one of those things will be an overhaul of the venerable Social Security system.

A federal judge here denied a motion to dismiss the WorldCom class-action litigation against its auditor - former Big Five firm Andersen - charging that the plaintiffs had "identified a host of audit failures."

For years, the $7 trillion mutual fund industry had escaped major reform. But that was then, and this is now.

Many of the country's wealthiest people have not taken basic steps to protect their assets or mapped out an estate plan, according to a recent survey by wealth management firm PNC Advisors.

How would you like to be the primary financial coordinator for the wealthy families in your community? How would you like to be earning a healthy fee for this advice, a fee that goes far beyond completing tax returns? Does this sound too good to be true for small to midsized accounting?