POTENTIAL CHANGES

Public Company Accounting Oversight Board Chairman James Doty announced that he plans to start a dialogue on a new model for the auditor's report that would provide more useful, relevant and timely information. The PCAOB plans to issue a concept release this summer. He also said he wanted to see disciplinary proceedings for audit firms made public, and suggested that even though Sarbanes-Oxley has moved the hiring and firing of auditors from company management to the audit committee, it may not be enough to prevent conflicts of interest.

 

The PCAOB isn't the only one interested in auditors' reports: The International Auditing and Assurance Standards Board has released a new consultation paper on how to improve auditor reporting on an international basis. For the moment, the group, which develops International Standards on Auditing, is seeking feedback from statement users about the usefulness of current auditor reporting.

 

The Financial Accounting Standards Board and the International Accounting Standards Board published new requirements for fair value measurement and disclosure. The guidance, set forth in an update to Topic 820 in FASB's Accounting Standards Codification, completes a major project of the boards' joint work to converge the two sets of standards. The requirements do not extend the use of fair value accounting, but provide guidance on how it should be applied where its use is already required or permitted. For U.S. GAAP, the update will supersede most of the guidance in Topic 820, although many of the changes are clarifications of existing guidance or wording changes to align with IFRS 13. Non-public entities will be exempt from a number of the new requirements.

Separately, FASB issued an Accounting Standards Update that would revise the rules for dealing with repurchase agreements like those Lehman Brothers used to fudge its quarter-end numbers. (See page 19.)

 

The Securities and Exchange Commission released a raft of advice and best practices for filing financial statements in the Extensible Business Reporting Language, which will soon be required for the vast majority of public companies. It's available on www.sec.gov and http://xbrl.sec.gov/, and SEC staff are available to answer questions, either at ask-oid@sec.gov or (202) 551-5494.

 

TAX NEWS

The Internal Revenue Service is keeping busy: In Revenue Ruling 2011-12, it provided the rates for interest on tax overpayments and underpayments for the calendar quarter beginning July 1, 2011. They are: 4 percent for overpayments (3 percent in the case of a corporation), 4 percent for underpayments, 1.5 percent for the portion of a corporate overpayment exceeding $10,000, and 6 percent for large corporate underpayments.

In Rev. Proc. 2011-32, it provided the 2012 inflation-adjusted deduction limitations for annual contributions made to health savings accounts: For calendar year 2012, the limit for an individual with family coverage under a high-deductible health plan is $6,250, up from $6,150 in 2010 and 2011.

 

The IRS Oversight Board sent its annual report to Congress, saying that despite a successful 2010 tax season, the IRS has been challenged in the past few years to implement and administer many new tax provisions intended to bring relief to taxpayers. It also highlighted two systemic weaknesses: the tax gap, and the IRS's archaic tech systems.

On a more positive, if improbable, note, the Center for Plain Language gave the IRS its Grand ClearMark Award for clear language in its simplified notices.

 

FACES NEW AND OLD

Two of the Big Four announced major changes in their global and U.S. leadership. At Deloitte, U.S. chief executive Barry Salzberg has become CEO of the global firm, succeeding James Quigley, who will take on a "senior client service role" in the U.S. firm. Current U.S. managing partner and COO Joseph Echevarria has moved up to U.S. CEO, while Punit Renjen has been named the new chair, succeeding Sharon Allen.

KPMG, meanwhile, announced that Michael Andrew will take the reins at the global firm in October, succeeding Timothy Flynn, who will retire. Andrew is currently chair of KPMG Asia Pacific and KPMG Australia, and will be based in Hong Kong. He will be KPMG International's first chair from the Asia- Pacific region.

 

IN OTHER NEWS

Wells Fargo is reportedly seeking a buyer for its H.D. Vest brokerage and financial advisory unit, one of the largest providers of financial services through tax and accounting professionals in the U.S. The business is valued at over $200 million and has received attention from private equity firms.

 

The American Institute of CPAs has promoted assistant general counsel Michael Buddendeck to the job of general counsel and secretary, to succeed long-time institute veteran Richard Miller, who is set to retire at the end of July. Buddendeck has been assistant general counsel of the AICPA since 2007.

Separately, the institute announced it would close its Lewisville, Texas, office next March, to consolidate its CPE operations in Durham, N.C.

 

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