Audit & Accounting

The Internal Revenue Service was singled out by congressional auditors for slow-footed implementation of federal accounting rules requiring government agencies to implement effective management reporting for cost information.In a report to the House Government Reform Subcommittee on Government Management, Finance and Accountability, investigators at the Government Accountability Office concluded that, overall, the federal bureaucracy is doing only a mediocre job in complying with government accounting standards that call for the development and implementation of managerial cost accounting.

The Governmental Accounting Standards Board has published a Guide to Implementation of GASB Statement 44 on the Statistical Section.The guide was prepared to assist preparers and auditors of governmental financial statements as they implement the updated and expanded statistical section. The statistical section is the part of a state or local government's comprehensive annual financial report that presents trend information for the last 10 years about a government's financial results, major revenue sources, outstanding debt, economic and demographic indicators, and operating activities.

Although tax experts from across the spectrum predict that a real tax reform is in our future, they are divided on how soon it will happen or what form it will take.Mark Weinberger, former Treasury assistant secretary for tax policy, said during a recent Tax Analysts-sponsored Webcast that tax reform will eventually happen. However, said Weinberger, currently Americas vice chair for tax services for Ernst & Young, the structure and timing are still up in the air.

Congress, in the waning days of its 2005 session, after failing to carry out significant parts of its tax agenda for the year, has managed to pass a Gulf Coast recovery tax act. As is common with the "last stagecoach out of town" for the year, a lot of things managed to "jump on."The hurricane provisions take up 84 pages of bill text, but the legislation goes on for another 100 pages. Among the areas addressed beyond hurricane recovery and relief are a few extensions of expiring provisions, a couple of miscellaneous items, and a huge package of technical corrections covering 10 pieces of tax legislation going back as far as 1987.

Factors such as changes to estate tax laws and the initial wave of retirement for the Baby Boomers will bring a year of significant change for financial advisors and their clients.According to a survey conducted by Impact Technologies Group Inc., a provider of financial sales software for the banking, capital markets and insurance industries, its annual industry trends forecast for 2006 predicted that action by the federal government to change the tax code and reform or repeal the estate tax will have the most impact on how advisors handle their clients' financial plans.

United Rentals, the world's largest equipment rental company, said that it removed three financial officers and fired two other employees after hearing a report from a special committee confirming accounting irregularities within the company.

Cardinal Health Inc., a manufacturer of medical supplies, has reached a tentative settlement with the Securities and Exchange Commission to end a two-year investigation into the company's accounting practices.

CPA Wealth Provider, the magazine for CPAs who are now in, or want to enter, the financial planning world is in its fifth year and as each issue goes by, the call for financial planning gets even louder. Now, according to a new report from Spectrem Perspective, a strategic consulting firm that specializes in the retirement markets, what are called "Barely Boomers" requires advisors with a broad range of skills.

The Financial Accounting Standards Board has issued a proposal that would provide companies with the option to report financial assets and liabilities at fair value.

Speaking at the at the Financial Service Institute's 2006 Broker-Dealer Conference in San Diego, Securities and Exchange Commissioner Cynthia Glassman said that brokerages were the focus of more investor complaints to the SEC in the 2005 fiscal year than any other type of business.