PCAOB proposes new reporting rules
The Public Company Accounting Oversight Board will propose rules for annual and special reporting of information and events by accounting firms that are registered with the board. The reporting framework proposed by the PCAOB includes two types of reporting obligations:
Each registered firm will have to provide basic information once a year about the firm and the firm's issuer-related practice over the most recent 12-month period.
The proposal identifies certain events that, if they occur, must be reported by the registered firm within 14 days.
The board also voted to propose rules that, in certain circumstances, would allow a successor firm to succeed to the registration status of a predecessor firm following a merger or other change in the registered firm's legal form.
The rules are intended to minimize disruption of a firm's registration, and would allow a firm in certain circumstances to succeed outright to a predecessor's registration without any disruption in registration status. In other circumstances, the proposed rules would allow for temporary succession for a transitional period of up to 90 days while the firm seeks registration.
Comments on the proposed rules must be received by July 24. The PCAOB will then determine whether to adopt final rules, which would be submitted to the SEC for approval. The full text of the rules is available online at www.pcaob.org.
GAO looks at IRS OIC program
The Government Accountability Office says that the performance of the Internal Revenue Service's offers-in-comprise program has been mixed, and suggests that a combination of better management information and simplification could improve it.
In a report, the GAO described trends in the program's performance, attempted to determine whether the IRS's regulations for exceptional-circumstance offers were consistent with statutes, and looked at a handful of program objectives, including timeliness, quality, accessibility, compliance and cost.
The IRS agreed to consider tracking compliance, study repeat offers and reduce staffing (offers have decreased in recent years, though processor levels have remained the same). The agency only said that it would consider setting goals for timeliness from the perspective of taxpayers.
The GAO also said that the IRS has not analyzed whether the decrease in offers accepted since 2003 reflects a decrease in program accessibility, or whether the efforts to improve the compliance of program participants have been successful. In 2005, the IRS accepted more than 14,000 offers.
Judge OKs $6.6B Enron settlement
A district court judge approved a $6.6 billion settlement between a trio of banks and Enron Corp. shareholders. In a civil lawsuit, the shareholders accused the banks of helping the bankrupt company hide its shaky financial footing.
The settlements include $2.4 billion from Canadian Imperial Bank of Commerce, $2.2 billion from JP Morgan Chase and $2 billion from Citigroup. Judge Melinda Harmon had already given preliminary approval to the settlement with the three banks in February, and most of the amounts were announced in the summer of 2005.
The total of settlement cash to be returned to shareholders now stands at about $7.2 billion, including settlements with Lehman Brothers and Bank of America. The shareholder plaintiffs include about 50,000 investors who owned Enron securities between September 1997 and December 2001 and estimate that they lost some $40 billion in Enron's fall.
The civil suit filed by shareholders against Enron, its banks and several former top executives is scheduled to start in October, and still needs to be granted class-action status.
Lead shareholder attorney William Lerach said that he's preparing new civil lawsuits against Enron insiders, auditor Arthur Andersen and seven other large banks.
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