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The Internal Revenue Service has issued for public comment draft versions of revised Form 1120-F, U.S. Income Tax Return of a Foreign Corporation, and related schedules, including Schedule M-3, new for 2007.Taxpayers with $10 million or more in total reportable assts filing Form 1120-F for tax years ending on or after Dec. 31, 2007, will be required to file Schedule M-3. Three other new schedules for Form 1120-F include: · Schedule H, Deductions Allocated to Effectively Connected Income Under Regulations Section 1.861-8; · Schedule I, Interest Expense Allocated Under Regulations Section 1.882-5; and, · Schedule P, List of Foreign Partner Interest in Partnerships. The new schedules will provide for increased disclosure of information regarding such items as allocable interest expense and home office deductions, as well as effectively and non-effectively connected income that is included in Form K-1 reported by a partnership to a foreign corporate partner and that is reportable by the partner on Form 1120-F. The new schedules also provide a consistent reporting format for all taxpayers. In addition, Schedules M-1 and M-2, previously included in Form 1120-F, are now separate forms. Schedule M-1, Reconciliation of Income (Loss) per Books with Income per Return is used by corporations with assets under $10 million. Schedule M-2, Analysis of Unappropriated Retained Earnings per Books, is used by corporations of all asset sizes. The draft form and schedules are available on www.IRS.gov, and any comments should be submitted by May 25, 2007, via e-mail to SchM3@irs.gov.

Embattled mortgage financing concern Freddie Mac said Eugene McQuade, its president and chief operating officer, will exit the company September 1. McQuade, a former executive with FleetBoston Financial Corp. joined Freddie Mac in September 2004 following Fleet's acquisition by Bank of America, and was in line to succeed chairman and chief executive Richard Syron. Freddie Mac, and sibling Fannie Mae have been embroiled in mammoth accounting scandals, with both entities having to restate an $11 billion in earnings. A replacement for McQuade has not been named. However, a management succession committee has been established. Meanwhile, the Securities and Exchange Commission began distributing a $357 million Fair Fund created as part of a financial reporting fraud settlement last year with Fannie Mae. Anyone who purchased Fannie Mae common stock between Jan. 14, 1999, and Dec. 22, 2004, or preferred stock between Sept. 25, 2003, and Dec. 22, 2004 is eligible. The distribution is expected to be completed by October. More information is available at www.SECFannieMaeSettlement.com.

When it comes down to it, it’s with surprisingly little debate or complaint that the general populace submit to the payment of taxes.

The Public Company Accounting Oversight Board is soliciting nominations and re-nominations for members of its Standing Advisory Group. Created in 2003, the 31-member SAG assists the audit firm overseer in carrying out its standards-setting responsibilities. The PCAOB is currently seeking nominations and re-nominations annually to fill 15 positions. Appointments are for two-year terms. Nomination forms are available on the PCAOB Web site, www.pcaobus.org. The deadline for submissions is June 15, 2007. Appointments will be announced by the end of October, and the new terms will begin in January 2008. The group, chaired by the PCAOB chief auditor and director of professional standards, Thomas Ray, meets roughly three times a year.

In the ongoing movement toward the convergence of U.S. and international accounting standards, President Bush and German Chancellor Angela Merkel have sealed an agreement that would clear a path toward a unified set of accounting standards by 2009. The agreement will establish a "Transatlantic Economic Council" to help lower regulatory barriers between the U.S. and the European Union. The council, will co-chaired by White House economic adviser Allan Hubbard and European Commission vice president Guenter Verheugen and will submit annual reports on the progress top both EU and U.S. leaders. The signing comes as the Securities and Exchange Commission is mulling whether to allow foreign companies registered in the U.S. to file their statements using international financial reporting standards in lieu of generally accepted accounting principles.

The Center for Audit Quality, the group backed by the profession's six largest audit firms as well as the American Institute of CPAs, has lured aboard a pair of high-level staffers from the Securities and Exchange Commission. Lori Schock, the SEC's acting director of investor education, and general counsel Robert Burns will join the new group in May. Schock will assume the post of director of outreach, while Burns becomes the CAQ's new director of research. The group, which evolved from the AICPA's Center for Public Company Audit Firms, currently has about 800 members. Its executive director, Cindy Fornelli, and director of operations, Jane Cobb, are both former senior-level directors at the SEC. Fornelli served as deputy director of the SEC's investment management division, while Cobb helmed the regulator's legislative affairs office. Fornelli and several of the CAQ board are scheduled to embark on a multi-city "listening tour" to elicit feedback from investors, regulators, academics and business leaders to hone the business reporting model.

The Internal Revenue Service is calling for nominations to its Internal Revenue Service Advisory Council, a group that provides an organized public platform for IRS officials and public representatives to discuss relevant tax issues. Applications will be accepted from May 1, 2007, through June 15, 2007. The IRSAC is comprised of up to 30 members, who are appointed to three-year terms by the commissioner. Nominations are currently being accepted for five to seven appointments that will begin January 2008. IRSAC membership includes representation from the tax professional community such as tax attorneys, CPAs, enrolled agents, enrolled actuaries and appraisers, as well as members of the large and small business communities. More information is available on the tax professional's page at www.irs.gov.

While the jump from controller to CFO may seem like a natural progression, a report from management consultancy Korn/Ferry International suggests that while controllers may posses the technical expertise to gain access to the CFO suite, their leadership skills may be lacking. The study, titled "Navigating the Uncertain Road from Controller to CFO: The Leadership Imperative," said that controllers with designs on the C-suite need to move beyond financial expertise to become "participative leaders." "Controllers can become more attractive CFO candidates by developing a critical set of behavioral skills that characterize the most successful CFOs," said Charles B. Eldridge, co-leader of Korn/Ferry's financial officers practice and co-author of the report. Other key findings of the report include: * Some 33 percent of all CFOs who had been promoted to their jobs came from the post of controller. Treasurers ran a distant second place at 19 percent. * In organizations that recruited their CFO from outside, only four percent of external hires were controllers, while 58 percent were already corporate or divisional CFOs elsewhere. * CFOs focus on "people" issues, as well as on financial ones, while controllers, by contrast, tend to be more task-focused and less inclined to build consensus. To prepare the report, Korn/Ferry's financial officers practice conducted a detailed analysis of the 2006 Fortune 500, examining trends related to the hiring and promotion of their CFOs.

Accounting firms are getting more creative and innovative, and many see the value in receiving independent recognition for their efforts and publicizing that fact. The innovations help improve the firm’s bottom line, and the recognition and publicity aids in attracting and retaining top talent. It also substantially enhances the firm’s brand, as existing and prospective clients see increased value in being associated with an innovative firm.

Financial Executives International, a 15,000-member body of chief financial officers, controllers and other c-level financial executives, has thrown its support behind the Senate's efforts to modify Sarbanes-Oxley's Section 404. In a letter to Sens. Chris Dodd, D-Conn., and Richard Shelby, R-Ala., the chairman and ranking Republican, respectively, of the Senate Banking Committee, FEI president and chief executive Michael Cangemi lauded their leadership in "allowing the SEC and the PCAOB to resolve the challenges of improving Section 404." Cangemi told Dodd and Shelby that FEI's position is that "Section 404 needs to be made more efficient. However, we remain encouraged that the forthcoming SEC and PCAOB guidance will achieve a greater balance in the implementation of the annual compliance process of Section 404." FEI's letter comes on the heels of an overwhelming 62-35 defeat in the Senate of an amendment put forth by Sen. Jim DeMint, R-S.C., which would have made 404 compliance optional for companies below a certain market cap. Shortly thereafter, the chamber voted unanimously 97-0 to approve an amendment from Dodd, suggesting that the SEC and the PCAOB forge ahead with their previously announced plans to develop guidance for smaller filers to make SOX more manageable.