Audit & Accounting

You can hear it in their voices: There's something about providing accounting work for not-for-profit entities that produces a smile of satisfaction. These people like what they're doing for a living."They very much appreciate what you do for them. They're not out just to increase the bottom line of the organization - they're out there to do a service for the community, and they appreciate anything you can do to help them," said Rob Fleming, shareholder director of the Not-for-Profit Services Group at the Bellevue, Wash.-based firm of Clark Nuber.

Recent headlines surrounding the ordeal of 104-year-old socialite Brooke Astor chronicled a lawsuit filed by her grandson that accused his father of mismanaging his grandmother's financial affairs.For once, maybe the rich aren't so different: Experts predict that, for millions of Americans, the problems associated with relatives acting as trustees, guardians or conservators will only grow as the population ages. Policymakers are focusing on solutions that may well affect the way CPAs serve clients in the coming years.

UBIQUITEL RETAINS KPMG: UbiquiTel, a subsidiary and provider of Sprint communications services throughout midsized markets in the Western and Midwestern U.S., named Big Four firm KPMG as its new independent accountant.KPMG replaces PricewaterhouseCoopers as auditor to the Conshohocken, Pa.-based company. According to a filing, PwC's reports on UbiquiTel's financials for the years ended Dec. 31, 2004 and 2005, did not contain any adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principle.

Sometimes things become so commonplace that people stop giving them a second thought, even though they deserve one, or even more than one.Like a great many others, recent events have caused us to realize that we may have become complacent about the magnitude of executive compensation. Those at the top rung of corporate America make what seems to everyone but them to be truly staggering amounts of money each year.

ADP TO SPIN OFF BROKERAGE ARM: Payroll and benefits outsourcing concern Automatic Data Processing Inc. will spin off its massive brokerage-services unit, an arm that observers project would have a market cap of more than $3 billion. ADP said that as a result of the spinoff - which should be completed by the end of fiscal 2007 - it expects to receive a distribution of $500 million to $700 million from the business in the form of a tax-free dividend.ADP said that the decision to spin off the unit came after a year-long strategic review. In that process, the company mulled an initial public offering, as well as an outright sale of the business. Although ADP is better known for its signature payroll unit, its brokerage-services business both processes and clears trades of securities, along with handling the distribution of related materials such as proxy reports. It generated roughly $2 billion in revenue for its most recent fiscal year, accounting for about 20 percent of the company's overall revenue figure.

With as much as 75 percent of CPAs performing some type of financial planning services for their clients, there are many financial planning business models available for accountants who are thinking about wading into that growing arena.One such model is an affiliation with a broker/dealer who has an understanding of CPAs and their client relationships. What follows is a basic overview of four major broker/dealers and their programs.

If an individual delays claiming Social Security benefits until after she reaches full Social Security retirement age, her benefits may be increased for two reasons.First, there is a delayed retirement credit that increases the benefits for each month that retirement is delayed beyond full Social Security retirement age. Second, additional earnings (wages or self-employment income) may also increase the benefits that will be received after retirement.

Ernst & Young has launched two new podcasts, one focusing on international taxes, and the other focusing on measuring the success of business transactions.The International Tax Podcast Channel is aimed at U.S. multinationals and non-U.S. multinationals with stateside operations. Besides the "Washington Dispatch," the channel will also offer the "Global Dispatch" every other month.

A 2004 e-mail could come back to haunt the Internal Revenue Service in its case against 16 former KPMG executives accused of selling questionably legal tax shelters.

Accounting for derivatives has never been easy, but the Governmental Accounting Standards Board has proffered some thoughts on how it might be done, and 85 concerned industry professionals generally agreed - but not completely.GASB project manager Randy Finden said that the bulk of the board's complex preliminary views document could be boiled down to two sentences: "Put all derivatives in the balance sheet at fair value. Fair-value changes will be reported as gains and losses in income, except for hedging gains and losses, which will be reported on the balance sheet as deferrals."