Audit & Accounting

The nation's small businesses are squarely in Washington's crosshairs - targeted for more rigorous, more painful scrutiny by both federal tax enforcement officials and the nation's auditing standard-setters.The first whiff of the shift in increased enforcement to smaller business came last summer, with a new study by tax researchers at Syracuse University's Transactional Records Access Clearinghouse that discovered that the number of federal tax audits targeting small businesses with between $10 million and $50 million in assets increased by 29 percent from 2005 to 2007. Among the smallest companies - those with assets under $10 million - Internal Revenue Service investigations increased a whopping 41 percent.

As the Financial Accounting Standards Board tinkers with amendments to its Statement 140 and Interpretation 46R, the FASB staff has issued a staff position that expands disclosures about corporate involvement with variable-interest entities and transferred financial assets.The FSP is a stopgap statement, and will likely become part of the more extensive amendments now being deliberated.

One of the many problems the ongoing financial crisis has brought to light is the fact that generally accepted accounting principles do not necessarily give investors all the information they need to foresee the perils that a company faces. And though auditors have to certify that an entity is a "going concern," they do not have to note that the concern is going over a cliff.Eleanor Bloxham, chief executive officer of the Corporate Governance Alliance, a governance advisory concern, said that the problem lies in the failure of financial reports to report a crucial fact: a company's actual financial condition.

We have a perennial puzzle we just can't explain to our satisfaction.Here it is: Why are managers so willing to go overboard in product development and promotion, yet so blissfully content in doing the least required when it comes to financial reporting?

Internal Revenue Service Commissioner Doug Shulman has announced guidance for Ponzi scheme victims and their tax preparers. The guidance, which Shulman emphasized is not specific to the Madoff case, is in the form of a revenue ruling and a revenue procedure.

Mary Lloyd says that retirement is simply not for old folks, anymore! In fact, she is out to change the concept that retirement means sitting in rocking chairs, watching sunsets, and playing shuffleboard, with the big night out every week consisting of a bus ride to the bingo hall. To young people, that seems as attractive as a long, slow root canal without Novocain. Lloyd is the author of Super-Charged Retirement from Hankfritz Press (www.mining-silver.com), and her view is that retirement doesn’t mean retreating from life, but rather, embracing it and all the things that drive one’s passions and fuel one’s fire. “The current version of retirement doesn’t work because we are living too long to be satisfied with a life that is focused primarily on leisure,” says Lloyd. “To make this stage of life meaningful, it needs to be shaped according to the values and preferences of each individual. That’s not as easy as it sounds and we need more resources to help us find the right things to create a satisfying life once we are old enough to retire.” Her advice doesn’t come from studies or data, but by walking the walk. By the time she was 47, she was working as a division manager for a Fortune 200 company, and found retirement a financially feasible option. So, in 1993, she left her job to embark on her “last” career, which was as a fiction writer. Given the tough ladder she had climbed in the business world, she didn’t think this next phase of her life would be difficult. After trying everything from a multi-month world cruise to deploying to Texas with the Red Cross in the aftermath of Hurricane Rita – with a few adventures in between – Lloyd finds herself singing a different song in 2009. Her message is simple: the current approach of retirement doesn’t work. Her tips for her baby-boomer brethren include: *The 100 percent leisure model of retirement (“the Golden Years”) is just a marketing spin for “get out of the way.” *We need some kind of work to thrive once we retire, even if we don’t do it for pay. Retiring doesn’t mean we have to stop making a difference. *By this time in our lives, each of us has a unique set of skills, talents and abilities. We need to mesh that with a personal sense of what’s important to define our own individual sense of purpose. *Living through our sense of purpose is as essential as breathing. Once we lose that, we lose the ability to make the choices we need to thrive. *Much of what we blame on aging is really the result of mindset and lifestyle decisions. It is within our capability to change and alter those elements of our lives, and master our destiny, rather than be a slave to circumstances. “The RV model might work for some, but most of us need a goal to work toward to feel worthwhile,” Lloyd says. “To retire well, we need learn how to include that and still relax and have fun.”

Sixty-eight percent of CFOs have taken steps to boost employee morale in the midst of the economic crisis, according to a new survey, but 26 percent haven’t done anything.

Interactive data-tagging technology could assist government auditors in monitoring the spending done under the $700-billion-plus financial bailout plan.

The Internal Revenue Service has been spending tens of thousands of hours auditing nonprofit credit counseling agencies and ordering changes at the vast majority of them, according to newly released data.

The Financial Accounting Standards Board and its parent organization, the Financial Accounting Foundation, sent a comment letter to the Securities and Exchange Commission giving a thumbs-up to the proposed roadmap to International Financial Reporting Standards, but they urged more consultation and study.