Audit & Accounting

American Institute of CPAs president and CEO Barry Melancon defended fair value accounting standards at a securities industry conference, but admitted the standards could be improved.

Fair value under fire Financial crisis spurs debate over standardAs the financial community scrambles to regain the trust of investors angered by the Wall Street crisis, fair value accounting continues to come under fire.

The financial rescue plan approved by Congress included many extensions of expiring tax credits and deductions that helped it win passage in the House, but it also left out some tax issues that will surely be bones of contention for the next Congress."It's safe to predict that not much will happen in a lame duck session," said Tom Ochsenschlager, vice president of taxation at the American Institute of CPAs.

In what can be seen as a cruel irony in the midst of the current financial crises, the Financial Accounting Standards Board has issued a proposed staff position - 144-d, Amending the Criteria for Reporting a Discontinued Operation.The proposal, issued as an exposure draft, redefines "discontinued operation" and matches a simultaneous proposal issued by the International Accounting Standards Board. The proposals also establish identical new disclosure requirements. The new definition would no longer include certain subsidiaries and asset groups.

AARP Financial, a registered investment adviser and a subsidiary of AARP, has provided proactive steps that people can take to help protect their nest egg amidst a financial market that is in turmoil. According to Mac Hisey, president of the company, he has been hearing from many AARP members who are expressing the fact that it is a rough time for people who are planning for retirement. “The natural instinct is to pull all your money out of the market and put it under your mattress. This is not a time to abandon your retirement plans or take drastic measures," He says that the financial advisors at AARP Financial can provide investment guidance and help make the most of retirement investments. In fact, in order to guide people through challenging economic times, the company has prepared the following tips: 1) Don't Make Rash Decisions. It’s clear that one needs to have a financial plan that can be followed no matter what the market swings are. Keep in mind that emotions shouldn’t be driving investment decisions. 2) Revisit Reasons for Investing. In volatile markets, sometimes the best course of action may simply be no action. That’s why it’s important to maintain a long-term time horizon. Only make changes when it is absolutely necessary. 3) Establish an Emergency Fund. It’s prudent to keep at least six months of living expenses that are easily accessible; they can be in a savings or money market fund account. The idea is to be able to meet unexpected financial obligations. 4) Make Saving Automatic. Clearly, the best way to ride the volatile economy is to make investing automatic. For example, establish an automatic investing plan by regularly deducting a set amount from the paycheck or checking account and transferring it to a retirement savings account. 5) Review Fees and Expenses. This needs a review on what is being paid on financial products and services such as mutual funds, credit cards, interest rates, and bank transaction charges. Switching to a lower cost product may save some money. 6) Resist Impulse Purchases. Watch that discretionary spending and pretty much avoid incurring debt on any impulse purchases regardless of the "deal." Instead, put that money in a savings or investing account. 7) Have a Plan. Better late than never to put a retirement plan in place. This helps determine whether the right path is being followed. Again, a plan, not emotions, should drive investment decisions. 8) Consult an Expert. Financial advisors are specially trained to help people manage their finances. Discuss all concerns. 9) Get Informed. Research shows that many people struggle with fundamental financial terms and concepts. Take steps to get the needed information. 10) Don't be Afraid to Ask for Help. For example, AARP Financial's salaried financial advisors provide personalized investment advice. They can be reached at 1-888-778-6187.

Crowe Horwath has signed an agreement with Grobstein Horwath that will effectively merge the two firms.

Optimism among CFOs about the U.S. economy and their own companies fell precipitously in the third quarter, according to a new survey.

House Financial Services Committee Chairman Barney Frank, D-Mass., said he did not plan to have Congress suspend fair value accounting rules.

The Securities and Exchange Commission held the first of two roundtable discussions on fair value accounting standards, receiving input from accounting firms such as PricewaterhouseCoopers and Grant Thornton, along with other organizations.

The Securities and Exchange Commission plans to hold its annual forum on small business capital formation on Nov. 20 at its headquarters.