Audit & Accounting

Risk consulting and internal audit services provider Protiviti has teamed with enterprise software company diCarta to provide a contract management compliance solution for Protiviti clients.

The Internal Revenue Service's 2005 IRS Data Book is now available at the agency's Web site.

A business group including some of the country's largest companies said that corporate governance practices are improving and that the percentage of companies adopting pay-for-performance measures for senior executives continues to rise.

A paper from the Governmental Accounting Standards Board has outlined key differences between the needs of users of state and local government financial information and users interested in for-profit businesses.

CPA and business advisory firm Hill, Barth and King, has merged in Presque Isle Capital Management with its financial planning unit HBK Sorce Advisory LLC.

The Public Company Accounting Oversight Board named Laura Phillips and Jennifer Rand to the position of deputy chief auditor.

E&Y RESIGNS AS A.P. PHARMA AUDITOR: Big Four firm Ernst & Young has resigned as auditor to Redwood City, Calif.-based pharmaceutical concern A.P. Pharma.A federal filing did not state a reason for E&Y's resignation, and a replacement has not been named.

Several columns back, we wrote about a recent report from the CFA Institute called A Comprehensive Business Reporting Model: Financial Reporting for Investors. This monograph is the long-awaited update of the influential Financial Reporting in the 1990s and Beyond.The new report is authored by a committee comprising a veritable who's who of highly experienced financial analysts, and speaks forthrightly about the highly limited usefulness of current generally accepted accounting principles financial reports. (The full report is available free at http://cfapubs.org/ap/issues/v2005n4/toc.html.)

SEC REQUIRES HEDGE FUND REGISTRATION: The Securities and Exchange Commission now requires hedge funds to register as investment advisors. Under the ruling, hedge funds will not have to register their individual funds. Rather, they have to provide basic information about the firm and are required to hire a chief compliance officer. Also, hedge fund firms are now subject to random inspections.Exceptions to the registration mandate include funds with less than $30 million under management, which will not have to register, although funds with $25 million or more are eligible for registration. Hedge funds that "lock up" their investors' money for two or more years or refuse to take new money can also avoid registration. The two-year loophole was meant to protect private equity and venture capital funds from getting caught up in the rule, but some managers invoked the exception to avoid registration.

In the current age of more stringent ethics codes and increased burdens on compliance officers, the level of compliance awareness in financial advisory firms has ratcheted up to new heights.During 2005, audits revealed that almost 80 percent of firms have some sort of conflict of interest not disclosed fully and fairly, with a majority of those issues centering on compensation streams - how and by whom the financial advisor is compensated.