Audit & Accounting

In mid-January, the Public Company Accounting Oversight Board issued reports on its 2004 inspections of Grant Thornton LLP and Crowe Chizek & Co. LLC -- outlining "audit deficiencies" similar to other recently released reviews from the board.

In an effort to address major gaps in international accounting requirements for governments, the International Public Sector Accounting Standards Board of the International Federation of Accountants has issued a proposed standard on the financial reporting of revenue from non-exchange transactions, including taxes and transfers.

Corporate executives are still manipulating stock options, say researchers at the University of Michigan's Ross School of Business.

The Securities and Exchange Commission and the Japan Financial Services Agency announced terms for increased cooperation and collaboration.

Accountants have long wondered why their professional sector has remained, so, well, white.After all, in an industry where job market demands exceed the supply of professionals, just about anybody who can count the beans is welcome to join the firm.

PWC RESIGNS AS ALLIANCE AUDITOR: Big Four firm PricewaterhouseCoopers resigned as accountant to Alliance Semiconductor Corp. At presstime, a replacement had not been named. Santa Clara, Calif.-based Alliance, a provider of analog and mixed-signal and chip-to-chip connectivity products, networking controllers and high-performance memories, reported no disagreements with its former auditor. However, PwC said that its accounting staff lacked skill and depth with relation to applying generally accepted accounting principles, and added that Alliance has ineffective controls over inventory and the accounting for an equity-method investment.AEHR ENGAGES BURR, PILGER & MAYER: Aehr Test Systems, a Fremont, Calif.-based manufacturer and developer of test equipment for the semiconductor industry, retained the firm of Burr, Pilger & Mayer as its new auditor, replacing PwC. PwC's reports on the company's financial statements for the years ended May 31, 2005 and 2004, did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principle.

It's hard to believe 10 years and 220 columns (without missing a deadline) have passed since the debut of The Spirit of Accounting, but that is indeed so.Born out of a collaboration between Ed Ketz of Penn State University and Paul Miller of the University of Colorado at Colorado Springs, it has brought issues to the attention of a wide range of accounting professionals, from neophytes still in college up to those in corner suites in corporations, public accounting firms, professional associations and regulatory agencies.

MORNINGSTAR TO PURCHASE IBBOTSON: High-profile investment research and products provider Morningstar will buy privately held Ibbotson Associates - an asset allocation service concern - for $83 million. The deal is expected to close in the first quarter of 2006. Morningstar said that it would retain the Ibbotson brand and is currently in the process of assembling a transition team."Ibbotson's expertise in asset allocation and Morningstar's expertise in security selection and investment research is a powerful combination," said Joe Mansueto, chairman and chief executive officer of Morningstar, in a statement. "Our companies share many similarities, and we have a firm commitment to helping investors reach their financial goals."

Consumer-driven health plans?The plans loom large in strategic decision-making for employers. Most firms have heard of the plans by now, and feel compelled to think about offering one to their employees. Health reimbursement arrangements are the most commonly implemented plan, but the newly available health savings accounts are generating plenty of interest, too.

Tax law changes, a surge in business e-filing, and a move by practitioners toward greater use of the Internet will impact the type of filing season that tax preparers have this year."It will be typical year in terms of filing," observed John Hewitt, chief executive officer of Virginia Beach, Va.-based Liberty Tax Service. "About a million-and-a-half to two million more people will file returns than last year."