AT LAST, SORT OF
The Securities and Exchange Commission released its work plan for how International Financial Reporting Standards might be incorporated into the U.S. financial reporting system. It doesn't say the SEC will incorporate IFRS, just how it would incorporate IFRS if it were to incorporate IFRS, which it hasn't said it is doing. (See "In Brief," page 22.)
Meanwhile, at a dinner with the trustees of the Financial Accounting Foundation, SEC Chairman Mary Schapiro noted that, "Investors are not as confident as they could be" in accountants, and that she planned to make some changes to remedy that.
In another fraught speech, Public Company Accounting Oversight Board Chairman James Doty suggested that, as part of its upcoming proposals for changes in the auditor's reporting model, the board was considering mandatory audit firm rotation. He said all possible methods of improving audit quality were on the table, "considering the disturbing lack of skepticism we continue to see."
The PCAOB announced temporary plans to implement an interim inspection program for the auditors of broker-dealers. A day later, the SEC proposed amendments to its broker-dealer financial reporting rule to strengthen audits of broker-dealers, as well as the commission's oversight of the way broker-dealers handle their customers' securities and cash.
The Financial Accounting Standards Board and the International Accounting Standards Board agreed to re-expose their revised proposals for a common revenue-recognition standard, allowing people to offer further suggestions for changes.
Separately, FASB announced a new webcast series that will provide CPE credits.
A survey by Financial Executives International found that public company audit fees rose by 2 percent in 2010, while private company fees stayed roughly flat, or declined.
XBRL US introduced a new taxonomy for reporting on corporate actions, such as mergers, dividends, stock splits and other events, using the Extensible Business Reporting Language data-tagging format. The Corporate Actions Taxonomy has 550 base elements, compared to the more than 18,000 of the U.S. GAAP Financial Reporting Taxonomy.
NOT SO FAST, SAYS IRS
Don't call yourself a "registered tax return preparer" just yet. Internal Revenue Service Notice 2011-45 restricts the use of the term until tax preparers have officially passed a competency exam - which has not been created yet. The IRS also issued TD 9527 containing final regulations governing practice before the IRS for tax preparers, and in Notice 2011-48 called for comments on the exam, which were due early this month.
Two big numbers from the IRS: First, it announced that e-filed individual tax returns had passed the 1 billion mark. Second, it said that a whopping 275,000 organizations had lost their tax-exempt status for failing to file required returns three years running. It expects that most of them were defunct, and held out the possibility of reinstatement to the rest. (See page 21.)
Separately, in Announcement 2011-37, it eased some of the requirements for hospitals filing the Form 990. It also called for feedback on the recent changes to the form, which are due in early August. And it released a revised version of Form 8703, Annual Certification of a Residential Rental Project.
Finally, the service made some changes in two different areas involving overseas taxes. It extended the deadline for its 2011 Offshore Voluntary Disclosure Initiative, and offered new guidance on participating. (For details, see "Tax Strategy," page 20.) It also joined the Treasury Department's Financial Crimes Enforcement Network in granting a one-year extension to the deadline for filing the Report of Bank and Financial Accounts form, or FBAR - but only for those with only signature authority. Details are in FinCEN's Notice 2011-1.
IN THE DOCK
A former senior manager at Big Four firm KPMG filed a proposed $350 million class-action lawsuit against the firm, claiming gender discrimination that has prevented women from being promoted to leadership positions. Donna Kassman resigned after being denied a promised promotion and having her salary cut by $20,000 when she went on maternity leave. KPMG denied the discrimination claim, pointing out that, among the Big Four, it is tied for the highest percentage of women partners, who represent 24 percent of its most recent partner class.
In other legal news, former investors in Stanford Financial Group filed suit against BDO USA and BDO International, claiming the auditing firm knowingly participated in imprisoned Texas financier Allen Stanford's multi-billion-dollar Ponzi scheme. BDO called the claim "without merit," and noted that it hadn't actually audited the specific financial entity where the fraud took place.
Separately, Denis Field, who had previously served as chairman and CEO of BDO, was convicted of participating in a $7 billion tax shelter scheme. (See "In Brief," page 18.)
On a positive note, a federal appeals court ruled in favor of Big Four firm PwC in a lawsuit involving overtime pay for junior accountants. Approximately 2,000 unlicensed young accountants had sued the firm in a class action, saying it had not paid them the mandatory overtime pay that they were due under California state law. A lower court had ruled against the firm, but in June the 9th Circuit Court of Appeals reversed that ruling and sent the case back down to the lower court for reconsideration.
IN OTHER NEWS
The Governing Council of the American Institute of CPAs approved a joint venture with the Chartered Institute of Management Accountants to create a new credential for management accountants internationally. The Chartered Global Management Accountant, or CGMA, credential, was approved unanimously. The joint venture - which is not a membership body but will be responsible for managing and advocating for the institutes' combined brand - is called the Association of International Certified Professional Accountants. The new international credential will be available beginning in the first quarter of 2012 to those with three years of management accounting experience, specifically involvement in the practice of running a business, with an exam to be rolled out in January 2015.
Cloud accounting solution developer Intacct raised an additional $12.3 million of venture capital financing from several firms, which it plans to spend on increasing staff, product and service improvements, and expanding its sales and partner program. The vendor claimed a net gain of more than 800 new clients for the calendar year.
The California Board of Accountancy unveiled a set of proposals to add 30 credit hours to the education necessary for CPA licensure, beginning in January 2014. The extra hours are the result of the California Legislature's passage of Senate Bill 819 in 2009.
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