CPA2BIZ POSTS 2ND YEAR OF PROFITS
JERSEY CITY, N.J. - Fueled by growth in its new business lines, CPA2Biz Inc., the online marketing portal for the American Institute of CPAs, posted its second consecutive year of profitability, posting year-end net income of $1.5 million for the period ended July 31, versus profits of $150,000 for fiscal 2005.
CPA2Biz attributed the rise in profits to a spike of 25 percent in its Business Solutions, Job Board and digital newsletters services. Those units generated roughly $3 million of overall revenues. Meanwhile year-end revenues hit $15.7 million, a 10 percent rise from the prior year. In June, CPA2Biz executives had projected a 6 percent jump in revenues to about $15.2 million, with profits of $600,000.
TIGTA: IRS LAX ON PRIVACY
WASHINGTON - In the wake of a series of governmental gaffes involving the mishandling of private records, a federal report says that the Internal Revenue Service could do a better job with its controls. The Treasury Inspector General for Tax Administration reviewed the procedures put in place to ensure that the IRS's computer systems and employees adhere to privacy regulations, and recommended a number of improvements.
In 2004, the personal information contained in more than 130 million individual taxpayers' income tax returns was converted into electronic format and used in over 240 IRS computer systems. The inspector general said that privacy impact assessments have not been conducted for all of those systems, a requirement under law. As of August 2005, the report says that assessments were unable to be located for 130 of the 241 IRS computer systems. TIGTA attributed the missing assessments to a lack of emphasis on privacy issues.
The full report is available at www.ustreas.gov.
KPMG TO MERGE U.K., GERMAN FIRMS
LONDON AND BERLIN - KPMG International will combine its member firms in the United Kingdom and Germany. The combined firms will operate under the name KPMG Europe LLP and remain a member of KPMG International, which said in a statement that the hope is for other KPMG member firms in Europe to eventually merge into the new entity.
The deal is the first by a Big Four firm after the introduction of the European Commission's Eighth Directive legislation, which will allow cross-border mergers between accounting firms beginning in 2007. The Big Four currently operate as networks of national partnerships in Europe, because the law in most countries prevents them from being foreign-owned.
With combined revenues of more than $2.5 billion in the current fiscal year, the firm said in a statement that KPMG Europe LLP will be the largest professional services firm on the continent. Both the German and U.K. boards have already unanimously approved the proposal, but the merger must still be okayed by the firms' partners in December.
GAO EYES FEDERAL RESTATEMENTS
WASHINGTON - In a recent report, the Government Accountability Office said that it still has concerns about restatements to federal agencies' previously issued financial statements.
According to the GAO, during the 2005 fiscal year, at least seven of the 24 agencies governed by the Chief Financial Officers Act had restated their previous year's financial statements. When the GAO looked at the agencies' financial statements for 2003, the office found that nine of the 11 agencies that issued restatements in 2003 had received unqualified opinions, and then did not consistently communicate those restatements.
Among the issues highlighted by the GAO: Columns of the agencies' restated financial statements were not labeled "Restated;" audit reports did not disclose that the agencies had restated certain of their fiscal-year 2003 financial statements; and material misstatements and potential material misstatements were not timely communicated to a variety of parties.
