SEC sets date for SOX roundtable

Washington - The Securities and Exchange Commission said that it would hold its previously announced roundtable on the internal controls requirements of Sarbanes-Oxley on April 13 - affording companies and auditors an opportunity to air their grievances on the difficulties and costs of the federal mandate.

Since the 2002 passage of the sweeping corporate reform act - Section 404 of which requires a company's executives to attest to the adequacy of its internal controls - the guidelines have been the subject of frequent complaints from firms and auditors citing the prohibitive costs in both money and time.

The SEC is currently mulling a delay for internal controls compliance for both smaller and foreign-based companies, both of which are required to be in compliance by July 15. After receiving a delay last year, larger companies - those with a market cap of $700 million and higher - began complying with the internal controls requirements in November.

Supremes to hear Andersen appeal

Washington - The U.S. Supreme Court agreed to hear arguments on the appeal of the obstruction of justice conviction of former Big Five firm Arthur Andersen. The arguments are scheduled for April 27.

In 2002, Andersen was convicted in a Houston courtroom of obstruction of justice charges related to its now-famous shredding of documents for audit client Enron, the Houston-based energy trader. The 5th U.S. Circuit Court of Appeals subsequently upheld the obstruction conviction. The issue before the Supreme Court will be whether the instructions to the jury at the Andersen trial were too vague and broad to determine correctly whether the audit firm obstructed justice.

Andersen is asking that the high court either acquit the company or grant a new trial with new jury instructions.

Auditor changes abounded in 2004

San Francisco - In 2004, some 1,600 companies told their independent accountants that their services would no longer be required, an eye-opening jump of 78 percent from the prior year, according to a study conducted by proxy researcher Glass Lewis & Co. The report found that the auditor switching hit the Big Four firms the hardest, with Ernst & Young posting a net client loss of 200, while the aggregate client exits for E&Y, PricewaterhouseCoopers, KPMG and Deloitte hit 400.

Conversely, the national firms have picked up much of the client largesse emanating from the Big Four, with Chicago-based BDO Seidman adding 109 new audit clients last year.

The Glass Lewis report said that audit clients who revealed why they switched audit firms said that the top reasons for changing accountants included Sarbanes-Oxley prohibitions and lower audit fees, among others. The 2,500-plus companies than changed auditors over the past two years represent more than 25 percent of the SEC issuers in the United States.

Switch in IRS service centers

Washington - The Internal Revenue Service issued a reminder to taxpayers and tax preparers that certain returns from Arizona, Connecticut, Utah and Virginia need to be sent to different service centers than last year.

The changes affect Connecticut and Virginia returns with or without payments, and Arizona and Utah returns with payments. Connecticut returns without payments should be sent to the IRS in Kansas City, Mo., while Connecticut returns with payments should be sent to the IRS in St. Louis. Virginia returns without payments should be sent to the IRS in Fresno, Calif., while Arizona, Utah and Virginia returns with payments should be sent to the IRS in San Francisco.

The envelopes included in the tax packages of taxpayers filing paper returns have the correct center addresses; taxpayers who do not receive a package should refer to the back cover of the Form 1040, 1040-A or 1040EZ instructions.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access