NADER: CPAS 'MIA' IN CRISIS
Washington, D.C. - Consumer advocate Ralph Nader has written an article for his Web site chastising the CPA profession for standing by while Wall Street firms "used the latest tricks to cook the books."
The perennial presidential candidate criticized the Big Four auditing firms in particular for allowing "corporate casino capitalists" to manipulate earnings, and he excoriated the Financial Accounting Standards Board for passing recent changes in mark-to-market and fair value accounting rules that will allow banks to boost reported earnings even further.
"Where were the giant accounting firms, the CPAs, and the rest of the accounting profession while the Wall Street towers of fraud, deception and cover-ups were fracturing our economy, looting and draining trillions of dollars of other peoples' money?" wrote Nader.
He also accused Congress and the Securities and Exchange Commission of helping enable accountants to loosen the rules and avoid shareholder lawsuits.
Nader singled out a few accounting standard-setters who have resisted changes to mark-to-market accounting rules, including two former SEC chairs, Arthur Levitt and Richard Breeden. "Overpricing depressed assets may make bank bosses happy, but not investors or a former SEC chairman," said Nader. He ended by praising former SEC chief accountant Lynn Turner as a proponent of reform in the profession and the markets.
ECONOMY PROMPTS RECORD HIKES IN SALES TAX RATES
Berwyn, Pa. - The economic crisis is forcing many states and cities to increase their sales tax rates to the highest average level ever, according to a new report.
Tax software developer Vertex reported that 554 U.S. cities changed their sales tax rates in 2008. Of those, 200 were newly imposed rates and 307 were straight increases to existing rates. Other changes in sales, transit and use taxes, combined with new and pending changes for 2009, indicate that state and local governments are scrutinizing tax rates in light of the current economic turmoil.
While the overall total of state, county, and city sales and transit tax changes reflected in the latest report jumped significantly, much of this increase is due to changes made in Iowa, which imposed a rate change and allowed its School Infrastructure Local Option taxes to expire.
Four states - Indiana, Iowa, Maryland and North Carolina - increased their rates in 2008. Indiana's increase, from 6 to 7 percent, placed it among the highest sales taxes nationwide, along with Mississippi, New Jersey, Rhode Island and Tennessee. The average state sales tax rate in the U.S. is currently 5.377 percent, which is the highest average rate recorded since Vertex began tracking the data in 1982.
As the first quarter of 2009 closed, two states - California and Utah - had already increased their state tax rates. Utah was the only state to decrease its sales tax rate in early 2008.
The average county sales tax rate in the U.S. for 2008 declined to its lowest level (1.629 percent) since 2002, and the average city rate held steady at 1.568 percent. The average combined sales tax rate edged slightly higher to 8.574 percent.
For the complete report, visit www.vertexinc.com.
(c) 2009 Accounting Today and SourceMedia, Inc. All Rights Reserved.
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