Audit & Accounting

Krista McMasters made history in April when her firm, Clifton Gunderson, named her to succeed Carl George as chief executive next year.

States are getting pounded by the economy, with tax collection revenues in the third quarter among the worst in years, according to a new report.

Deloitte Financial Advisory Services has elected a new CEO and U.S. chairman.

“An emperor of a prosperous city who cares more about clothes than military pursuits or entertainment hires two swindlers who promise him the finest suit of clothes from the most beautiful cloth. This cloth, they tell him, is invisible to anyone who was either stupid or unfit for his position. The Emperor cannot see the (non-existent) cloth, but pretends that he can for fear of appearing stupid; his ministers do the same. When the swindlers report that the suit is finished, they dress him in mime. (acting out a story through body motions, without use of speech—Ed.) The emperor then goes on a procession through the capital showing off his new ‘clothes.’ During the course of the procession, a small child cries out, ‘But he has nothing on!’ The crowd realizes the child is telling the truth. The Emperor, however, holds his head high and continues the procession.”

The International Auditing and Assurance Standards Board said it is getting close to completing an 18-month project aimed at making audit standards more understandable.

Business planning software developer Adaptive Planning has created what it calls a "Recession Survival Kit" to help companies get better control of their financial processes and survive the economic crisis.

Finance and accounting staff will receive an average salary boost of 3.4 percent next year despite the economic downturn, predicts recruiting company Robert Half International.

Leaders of six business associations have written a joint letter to the Securities and Exchange Commission complaining that recent guidance about the use of judgment in fair value accounting "has the potential to cloud transparency."

A certain advisor had a 35-year relationship with his client/friend. He helped him with businesses, financial plans, estate plans, and the like. When the client died, and then subsequently his wife, the family advisor was called to the home by the daughter to discuss the next steps regarding the estate. He asked the daughter what she wanted to do with the vast collection of art and antiques. The daughter, who had just lost both parents and was herself in the middle of a divorce, said she trusted the advisor and ended with “Can you handle this?” The advisor called a local auction house and was pleased to see the auction results yielded more than $500,000, with one piece of furniture in particular selling for $68,000. When he reported this to the daughter, she said, “That was Mom’s favorite piece.” Well, eight months later the daughter’s aunt called the advisor to say that the piece of furniture that sold for $68,000 was subsequently sold in a New York auction for $725,000. Does the advisor see a lawyer calling him? This story is related by Michael Mendelsohn who a few months ago launched The Briddge Group to meet the growing demand for art succession planning advocates. He created it in partnership with some of the nation’s foremost art, legal, and financial experts. Mendelsohn says that “Collectors and their advisors need an advocate who knows how to lift art and collectibles out of the estate planning process and treat them with the special handling every collection deserves.” He also listed the top 10 art succession planning mistakes made by financial and legal advisors: 1. Failure to understand the effect a large art inheritance will have on your clients’ children and future generations. 2. Assuming that if a piece is “undeclared” and passed quietly to an heir (the empty hook approach), it can avoid taxation—that approach can actually cause serious tax problems. 3. Failure to understand the difference between clients who accumulate common objects and clients who are collectors. 4. Neglecting to collect proper documentation, including cost basis, proper title, provenance, and current opinion of valuation for each piece in a collection. 5. Failure to take advantage of current tax laws which allow a collector to reduce current income tax, eliminate capital gains, and estate taxation on art assets. 6. Failure to leverage/arbitrage your clients’ art holdings for the benefit of their favorite charities. 7. Failure to develop a plan to protect art assets from creditors’ claims. 8. Failure to understand the art headlines in the press—those big auctions often mean panic selling, a huge reduction in value, and/or a lost legacy. 9. Confusing estate planning with art succession planning. There are different rules and different opportunities for art assets. 10. Failure to use a team approach when planning for their clients’ art assets—collectors and their advisors need specialized advocates. For more information, contact Annette@briddgegroup.com

Accounting regulators from more than 15 countries plan to gather at a forum in Boston next week hosted by the National Association of State Boards of Accountancy.