OUT LIKE A LAMB?
An extremely busy tax season came to a relatively quiet close, with few reports of glitches or other problems. An unhappy trend came to light in the home stretch, though, when the Internal Revenue Service reported data showing that returns filed by tax professional were down 1.3 percent compared to last year, and self-prepared returns were up almost 6 percent.
Separately, the IRS warned of an e-mail phishing scam that claimed to come from the Taxpayer Advocate Service -- and that was just a week or so after the Treasury Inspector General for Tax Administration warned of a phone scam that claimed to represent the IRS.
Meanwhile, legislation to revive many of the55 tax breaks that expired last December 31 continued to creep through Congress; at press-time, it had passed through the Senate Finance Committee -- which then turned to hold a hearing on unethical and incompetent tax preparers. The testimony favored registering and regulating tax preparers.
The Public Company Accounting Oversight Board held a public meeting in early April to solicit feedback from experts on its proposals for changing the auditor's reporting model. The session focused on the critical audit matters, or CAMs, section of the PCAOB's proposal.
Separately, the board announced the dates of its annual forums for auditing firms that work in the small-business environment and on audits of smaller broker-dealers. The 2014 schedule starts on May 8 in Dallas, and includes forums in Chicago on May 29, New York City on July 17, Vancouver, B.C., on September 11, Atlanta on October 9, Miami on October 30, and Las Vegas on December 3.
After releasing a wide-ranging tax reform proposal, House Ways and Means Committee Chairman Dave Camp, R-Mich., announced that he will not seek re-election after his term ends this year.
The House Ways and Means Committee voted to send a criminal referral letter to Attorney General Eric Holder, asking him to determine whether Lois Lerner, the former director of the Internal Revenue Service's Exempt Organizations unit, violated the law in regards to last year's revelations about IRS scrutiny of conservative groups. Lerner declined to testify at two congressional hearings on Fifth Amendment grounds, although her attorney has reportedly been seeking immunity for her to provide testimony.
The Governmental Accounting Standards Board voted unanimously in late March not to delay the implementation date of its new pension accounting and financial reporting standards, despite requests from various groups for an indefinite delay. The requirements of GASB Statement No. 68, Accounting and Financial Reporting for Pensions, are scheduled to take effect for periods beginning after June 15, 2014.
The European Parliament endorsed a draft agreement in early April on legislation to open up the audit services market in the European Union beyond Big Four firms. The draft aims to improve audit quality and transparency and to prevent conflicts of interest. It would require auditors in the EU to publish audit reports according to International Standards on Auditing. As one in a series of measures to open up the EU market to competition and improve transparency, the approved text would prohibit "Big Four-only" contractual clauses that require audits be done by one of these firms. Public entities would be required to issue a call for tenders when selecting a new auditor. Members of parliament also agreed on a "mandatory rotation" rule that would allow auditors to inspect a company's books for up to 10 years, which could be increased by 10 additional years if new tenders for audit services are issued, and by up to 14 additional years in the case of joint audits -- that is, when a firm is being audited by more than one audit firm.
The PCAOB announced that it has entered into a cooperative agreement with the Supervisory Board of Public Accountants of Sweden on the oversight of audit firms in both regulators' jurisdictions. The board has reached similar agreements with other countries in the European Union, including Finland, France, Germany, the Netherlands, Spain and the United Kingdom. The PCAOB has agreements with Switzerland and Norway, and with several regulators in North America, the Middle East, Asia and Australia.
IN OTHER NEWS
A federal judge dismissed several of the claims by best-selling crime novelist Patricia Cornwell against her former accounting firm, Anchin Block & Anchin, and set aside a jury verdict last year that awarded her $50.9 million, while granting the firm a new trial. In his order, the judge ruled that a number of the plaintiffs' core claims, including "the largest single element of the various claims of damage," were barred as a matter of law and that those dismissed claims tainted the jury's entire verdict. As a result, he granted Anchin's motion for a new trial on the remaining claims. The judge admitted that he had erred in his instructions to the original jury and that the statute of limitations had precluded at least one claim.
A report from the IRS Whistleblower Office revealed that the IRS paid out $53 million in whistleblower awards in 2013, down by more than half from $125 million in 2012, though the number of awardees only dropped to 122 from 128. The report showed that the IRS received 9,268 tips from whistleblowers last year. The tips led to the collection of $367 million in taxes.
The Institute of Internal Auditors launched the American Center for Government Auditing, a specialty offering that will focus on serving the needs of auditors in the public sector. Its mission is to advance the professional practice of government auditing by advocating its value through timely and relevant thought leadership, communication, collaboration and education.
The National Association of State Boards of Accountancy released its 2013 Uniform CPA Examination School Performance Book, a companion to its NASBA Candidate Performance Book that includes comprehensive statistical data from all four testing windows of the 2013 Uniform CPA Examination.
In a speech, Public Company Accounting Oversight Board member Jeanette Franzel warned that the representation of women within the leadership of public accounting firms is too low, pointing out that despite the fact that women have represented about 50 percent of new CPAs in the accounting profession for the past 20 years, women account for only 19 percent of partners in CPA firms nationwide. She argued that the business case for public accounting firms to invest and focus on retention and development of female leaders is clear, and the benefits to firms also extend to retaining talented professionals of diverse ethnic backgrounds.
CORRECTION
In our Top 100 Firms report, we misspelled the name of Marks Paneth co-managing partner Harry Moehringer. Our apologies.
