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Former Senator Paul Sarbanes, D-Md., who, as the head of the Senate Banking Committee, co-authored the sweeping Sarbanes-Oxley reform act said he supports developing additional guidance for smaller filers but, not surprisingly, dismisses exempting those companies from compliance with the legislation's rigid Section 404. "Stop and think about that for a moment," said Sarbanes in a speech before attendees at a conference on financial reporting and governance presented by Pace University's Lubin School of Business, here. "That would mean that you would be exempting 80 percent of public companies from compliance."

Distilling the nation's complex tax code is the key to reducing the $290 billion tax gap, the American Institute of CPAs told lawmakers. In a hearing before the House Small Business Committee, James Brennan, chair of the AICPA's IRS Practice and Procedures Committee, said simplification should be the foundation to begin stripping away the mammoth deficit.

If XBRL is going to evolve to the financial reporting standard of the future, the accounting profession is going to have to step up its communication efforts on the tagging language, according to a survey of CFOs and controllers by global CPA firm Grant Thornton. According to the GT poll, roughly 85 percent of the survey participants indicated that the profession was not effectively communicating the benefits of using XBRL or Extensible Business Reporting Language for either internal or external financial reporting.

Maintaining that auditor concentration and litigation issues erect barriers to better pricing and service, Grant Thornton chief executive Ed Nusbaum called for the U.S. to undertake a comprehensive study on the domestic audit sector. More specifically, Nusbaum said the U.S. needs to produce a similar study to the one released this week in the U.K., "Financial Reporting Council's Market Participants' Group," which examined concentration and choice in the U.K. audit market. "In addition to the fear of one of the large accounting firms failing, there is no question that audit concentration, along with uncontrolled litigation exposure, is undermining the U.S. economic business model that served so well for so many years: More accounting firms means greater competition and increases quality and lowers costs to the end user," said Nusbaum. "We need a similar U.S. auditor concentration study with accompanying action steps to address the issue."

Sen. Chuck Grassley, R-Iowa, ranking member of the Senate Finance Committee, has sent a letter to his chamber colleagues in an attempt to blunt what he termed "inaccurate claims" about the private collectors employed by the Internal Revenue Service. In a "Dear Colleague" letter, Grassley pointed out that the IRS's own collection infrastructure is better set up for placing liens and garnishing wages than making initial phone calls to delinquent taxpayers to set up a payment plan. Grassley wrote that the private debt collection program consists of having contractors make basic phone calls to taxpayers, contrary to the images of thuggish collection agents using questionable tactics, as has been portrayed by opponents of the program. As evidence, he said that of 24,000 cases of collection just 36 inquiries have been registered. Grassley said there is roughly $90 billion in unpaid taxes that is languishing instead of being collected. His letter said that some of that money is best collected by the "tough cops" of the IRS, fully empowered to seize property, garnish wages, freeze bank accounts and sell the family home or business. However, a large percentage, typically the smaller, newer debts, is better obtained by a modern outbound calling system -- a system that the IRS currently doesn't have, nor are its employees trained for it.

A report by the Government Accountability Office has raised questions regarding the value of consumer-mandated credit counseling as required by the 2005 Bankruptcy Protection Act. The auditor general's study, which examined the BPA's requirement for consumers to undergo credit counseling and debtor education courses before having debts discharged, said that by the time most clients receive the counseling, their financial situations are dire, leaving them with no viable alternative to bankruptcy. The counseling was intended to help consumers make informed choices about bankruptcy and its alternatives. The auditor general's report was intended to address growing concerns over potential abuses by credit counseling agencies in the wake of the counseling/education requirement. Among other things, the GAO report examined: * The process of approving counseling and education providers; * The content and results of the counseling and education sessions, * The fees charged, and; * The availability of and challenges to accessing services. The GAO has recommended that the Justice Department's U.S. Trustee Program analyze the outcomes of pre-filing credit counseling and issue formal guidance on what constitutes "ability to pay." As of October 2006, the Trustee Program had approved 153 credit counseling and 268 debtor education providers. For the report, go to: www.gao.gov/cgi-bin/getrpt?GAO-07-203.

The Private Companies Practice Section of the American Institute of CPAs has developed an online toolkit to help members understand and implement Statement on Auditing Standards No. 112, "Communication of Internal Control Related Matters Identified in an Audit." SAS 112 is effective for audits performed on or after Dec. 15, 2006. The product -- accessible to PCPS member firms -- is available at www.pcps.org. It includes talking points, a newsletter template and a client communication letter, among other resources. For interested parties, a free FAQ sheet and SAS 112 Web forum archive are available on the Web site.

During its annual Convergence user conference in March, Microsoft issued a press release announcing that it had promoted a Dane, Klaus Holse Andersen, to the position of corporate VP worldwide sales and operations for its Dynamics operations Other than that, Microsoft didn’t make a big deal of the news Andersen’s name was not mentioned during keynotes at the events. At interviews with Dynamics head Doug Burgum and Satya Nadella, held during the conference, neither man said, “Of course, you know we are strengthening our executive team. Would you like to talk to Klaus?” That didn’t happen. Nor did Andersen’s named get mentioned by Burgum or corporate VP Tami Reller when they announced that Nadella was unexpectedly moving to head Microsoft’s search engine wars. A PR person said Andersen was highly visible at reseller events, but the only reseller I got to talk to about this claim said essentially, “Baloney.” It’s possible this was all simply disarray triggered by the sudden move with Nadella. Or maybe it’s an attempt to manipulate the press--something Microsoft has always excelled at. It doesn’t matter. What does matter is that for the first time, someone with the title of operations has been placed outside the United States, out side of Fargo, N.D., which gave us Dynamics. Andersen will remain in Copenhagen. There’s been no rush to explain the title and most of the press coverage has been straightforward rehashing of the official press release. In the words of the Deep Throat in “All the President’s Men,” the secret is to follow the money and the money is increasingly coming from Dynamics AX and NAV, still largely called Axapta and Navision, even by top Dynamics people Whether or not there is still something called Project Green, designed to give the four Dynamics accounting packages a common engine, the fact is that all the key people I’ve met in programming over the last four years have been Danish. Now, I don’t think any of this means we’ve seen the last of Great Plains or Solomon (Dynamic GP and SL), because Microsoft would be pretty dumb to snub those installed bases. But it’s also clear these are largely U.S. products while AX and NAV are international products which have a lot more growth potential. The more important question is whether Denmark runs everything. Does Microsoft put Burgum’s successor in America, much less in Fargo, with the head of operations now in Copenhagen? More intriguing was that most of the sales functionality had been drained from Dynamics and placed under Kevin Johnson over the last four years. This is the first exec with a sales title at Dynamics in a while. And also intriguing is that Andersen has CEO experience. A lot of people think Reller is the favorite to replace Burgum. But I’m starting to think it that were going to happen, it would have happened already. But Microsoft has been full of surprises.

On the heels of its financial reporting roundtable last month, the Securities and Exchange Commission said it may allow U.S. filers to choose what standards they want to use to report their financials.

Jim Metzler, vice president of small firm interests for the American Institute of CPAs, has received the U.S. Small Business Administration’s New York District Office 2007 Financial Services Champion of the Year Award.