Audit & Accounting

FPA SEEKS BOARD NOMINATIONS: The Financial Planning Association is currently accepting nominations for its 2006 board of directors.Members of the FPA's 2005 board will elect the 2006 board from candidates nominated by June 30, 2005. The 2006 board of directors will consist of up to 18 members, including three officers. The new members elected in 2005 will each serve three-year terms beginning on Jan. 1, 2006.

With more than 76 million Baby Boomers moving toward retirement, the need to save more money for a secure financial future is clear.These individuals, who currently constitute 29 percent of the U.S. population, are putting away only one third of the estimated amount that they need to retire comfortably.

Generally, property inherited from a decedent gets a basis equal to the property's fair market value on the date the decedent died. This rule applies regardless of whether a federal estate tax return is filed.However, the fiduciary of the decedent's death can elect to value all the property includible in the decedent's estate on the alternate valuation date, but only if that will result in a decrease in both:

As if to continue the angst and agony of waiting, the Securities and Exchange Commission recently postponed the compliance date for the application of the Financial Accounting Standards Board's Statement 123(R), "Share-Based Payments."The SEC ruling allows companies to implement the statement, which requires them to expense stock option compensation, at the beginning of their next fiscal year instead of in their first interim or annual period that begins after June 30, 2005, or, for small companies, after Dec. 15, 2005.

The two regulatory "missionaries" responsible for bringing religion to the accounting profession - the Public Company Accounting Oversight Board and the Securities and Exchange Commission - told House lawmakers that their tandem efforts are paying off.Oversight of auditors by the three-year old PCAOB "has already changed the environment of registered public accounting firms," and the board's regulatory presence has "triggered a profound shift in the overall character of public company auditing," PCAOB Chairman William J. McDonough said in remarks before the House Financial Services Committee.

The demand for capital in the Republic of China, whose 9.5 percent growth has spurred its government to rein in that rapid rate for fear that its economy could overheat, is also spinning off steps to spruce up the country's accounting procedures.The country's rising capital market needs mean that accounting methodologies should be tailored to suit the needs of that market, asserted Liu Zhongli, president of the Chinese Institute of Certified Public Accountants, during a recent speech in Brussels.

A district court judge here gave the okay in late April to a settlement in which Arthur Andersen agreed to pay $65 million to resolve a class-action lawsuit brought by WorldCom investors who alleged that the audit firm failed to protect them by not uncovering the $11 billion fraud at the telecommunications company.Andersen also agreed to pay investors 20 percent of any remaining capital that it intends to distribute to its partners, and also to pay the difference between the $65 million and any larger settlement in any other lawsuit it may settle in the future, according to Sean Coffey, an attorney for lead plaintiff the New York State Common Retirement Fund.

In April, President Bush signed into legislation the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, also known as the Bankruptcy Reform Act.At least eight years in the making, the legislation marks the most significant bankruptcy legislation in decades, and will most likely wend its way to accounting firms.

April's landmark bankruptcy legislation helped change the world for spendthrift Americans.By virtue of the Bankruptcy Abuse Prevention and Consumer Protection Act, Congress reformed bankruptcy laws by taking away some privileges, and then the U.S. Supreme Court gave some of them back with a ruling that IRAs would be safe from creditors. Both actions have prompted CPA advisors to rethink the strategies available to clients whose finances get out of control.

The types of activities that allow a state, under its own rules, to tax a business entity vary widely. In fact, the same company with relatively light activity within one state might be subject to tax in that state, yet not be taxed in a state where its activity is greater.