The end is in sight

As this issue arrives, April 15 should be in sight. It was a heads-down, highly focused, abbreviated sort of tax season, one that saw preparers working longer hours than ever, and putting more returns on extension than usual. After a late start and a ridiculous amount of complexity, it settled into a grueling marathon in early March once the Internal Revenue Service got all of Congress' last-minute changes programmed into its filing systems.

The IRS, meanwhile, showed no signs of giving up on its Registered Tax Return Preparer regime, filing a series of briefs with the U.S. Court of Appeals in attempts to get a stay on the original ruling that invalidated the regime, even as it continued its appeal.

And Congress and the White House were already looking for ways to complicate next tax season, between endless wrangling over the sequester, introducing competing budget proposals, and floating a raft of incompatible and unlikely ideas of tax "reform."

 

Personnel announcement

March was marked by a number of high-profile leadership changes, with perhaps the most surprising being Krista McMasters' decision to resign as co-chief executive officer of CliftonLarsonAllen. This leaves exactly no women at the helm of a Top 75 Firm, and calls into question the co-managing partner model that a number of large firms have used following major mergers.

International Federation of Accountants CEO Ian Ball stepped down after 10 years, but will continue in a volunteer capacity as principal advisor. Fayezul Choudhury, a former World Bank executive, succeeded him.

After a rocky start to tax season, CCH Small Firm Services president Jeff Gramlich resigned. Former Wolters Kluwer Financial & Compliance Services vice president and general manager Jason Marx succeeded him.

The Public Company Accounting Oversight Board re-appointed Steven Harris and Jay Hanson for five-year terms, while the Financial Accounting Foundation re-appointed Marc Siegel to a five-year term on the Financial Accounting Standards Board.

And finally, the Senate confirmed Jacob Lew as the next Secretary of the Treasury, succeeding Timothy Geithner.

 

Back to accounting

The Financial Accounting Standards Board and the Governmental Accounting Standards Board will begin using a majority vote, instead of relying on the board chairman's decision alone, to establish project plans and agendas, and decide on the priority of projects. The chairs of both boards are departing in June, and no successors have yet been named.

The trustees of the IFRS Foundation have included FASB among the national and regional standard-setters in the Accounting Standards Advisory Forum, a new group that will advise the International Accounting Standards Board on the development of International Financial Reporting Standards.

The IASB published revised proposals for loan loss provisioning and expected credit losses as part of the financial instruments project that it has been working to converge with the U.S. Financial Accounting Standards Board, but the two proposals still take different approaches. 

The FAF released an updated print edition of FASB's Accounting Standards Codification, an authoritative source of U.S. GAAP for public and private companies, along with not-for-profit organizations.

The Governmental Accounting Standards Board introduced an online version of its Governmental Accounting Research System, GARS Online, providing online access to accounting standards and related literature for state and local governments.

A report from research firm Audit Analytics revealed that, over the past four years, the quantity of financial restatements from SEC public registrants has leveled off and their severity has remained low, but restatements have increased from accelerated filers for the third straight year. 

A new academic study by a group of academic researchers suggests a correlation between a high level of stock sales by top execs of distressed companies and the diminishing chances that outside auditors will warn investors about the corporation's future viability. Going concern opinions, always rare, have become an increasing cause of investor complaints lately.

The Securities and Exchange Commission asked for public comments on a proposal from Nasdaq to require companies listed on the exchange to establish an internal audit function no later than December 31. Under the proposal, a listed company would be able to outsource its internal audit function to a third-party service provider other than its auditor. The New York Stock Exchange adopted a similar rule soon after passage of the Sarbanes-Oxley Act of 2002.

In a comment letter to the International Auditing and Assurance Standards Board, the U.S. Government Accountability Office expressed its support for giving auditors more responsibility for the information in documents accompanying audited financial statements.

Big Four firm Ernst & Young agreed to pay $123 million to resolve a federal tax shelter investigation while admitting wrongful conduct by certain E&Y partners and employees. The agreement comes in connection with the firm's admitted participation, from 1999 to 2004, in four tax shelters that were used by approximately 200 Ernst & Young clients in an effort to defer, reduce or eliminate tax liabilities of more than $2 billion, according to the Manhattan U.S. Attorney's Office.

The American Institute of CPAs and the National Association of State Boards of Accountancy extended their multi-year agreement with Prometric for delivering the computer-based Uniform CPA Examination through 2019. Prometric delivered the first computerized CPA Exam in 2004, and to date has delivered more than 1.8 million exams.

 

Note

In our 2013 Top 100 Firms and Regional Leaders report, Alexandria, Va.-based Cotton & Co. was listed as having 12 professionals. In fact, it has 128.

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