Audit & Accounting

HOUSE CONSIDERS MANDATING EMPLOYER IRA PLANSThe House Ways and Means Select Revenue Measures Subcommittee held hearings on bills that would encourage employers to automatically enroll their employees in individual retirement account plans. One bill is aimed at creating automatic payroll deposit IRAs for workers who do not have access to employer-sponsored pension plans.

The U.S. economy is already in a recession, say a majority of CFOs and senior-level executive CPAs.

Two years ago, Bob Bunting saw the writing on the wall for U.S. GAAP.As former chief executive and chairman of super-regional firm Moss Adams LLP, Bunting established resources to prepare for the reality of International Financial Reporting Standards becoming the future of financial reporting for public companies in the United States.

A company may take a position on its tax return in good faith, but due to the complexities of tax law, it’s never a sure thing that it will be sustained.The now two-year-old FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, or FIN 48, establishes a “more-likely-than-not” threshold for the reporting of uncertain tax positions on financial statements. Under the rule, an uncertain tax position may not be recognized on the financial statement unless it is more likely than not that it will be sustained on its technical merits, and then it is measured at the largest amount of benefit that is greater than 50 percent likely to be realized upon ultimate settlement.

National Taxpayer Advocate Nina E. Olson’s list of objectives — detailed in the first of her two annual required reports to Congress — zeroes in on the problems that she intends to focus on during the fiscal year ahead.At least one of the objectives — which focuses on the liabilities of incentive stock options under the Alternative Minimum Tax — has a good chance of being resolved, according to Tim Carlson, president of the Coalition for Tax Fairness and pro bono attorney for a number of victims of the anomaly. “Pending legislation will fix it, and it has support from both sides of the aisle,” he said.

With volatile economic times threatening, flexibility in all aspects of financial affairs, including charitable giving, is more desirable than ever. While there is an increased need for charitable donations, there are also fewer resources among potential donors. One charitable giving vehicle that has grown popular over the past ten years because of its efficiencies is the charitable remainder trust.A CRT can provide a new income stream for the donor and a benefit to charity — a classic win-win situation. CRTs should continue to have viability for present-day donors, especially those who maximize the flexibility that the rules allow. In pushing CRTs to their legal limit, however, taxpayers also must heed restrictions that, if not followed, can result in disastrous tax consequences.

It’s vacation season, and we’re buying some relief from the never-ending stream of deadlines by republishing our all-time favorite tongue-in-cheek column that sheds light on how ludicrous many important features of GAAP are.If financial statements really are scorecards for business, reporting real outcomes, as well as sources of information for predicting the future, it’s essential that they usefully describe what actually happens instead of what someone hoped would happen.

Apple's former general counsel, Nancy Heinen, agreed to pay $2.2 million to settle stock options backdating charges with the Securities and Exchange Commission.

Few people actually know what a credit score represents. For example, less than one-third of Americans understand that credit scores indicate risk of not repaying a loan and not knowledge of, or attitude toward, consumer credit. That is what has come out, among other things, from a new survey commissioned by the Consumer Federation of America (CFA) and Washington Mutual Bank, the guys you call WaMu. Moreover, the survey reflects the fact that most Americans fail to understand that one’s credit score shows only how they use credit and does not include factors such as income and age. Those that have obtained their scores are generally the most knowledgeable, says the survey. But if you have clients who have low credit scores, what can you advise them about raising such scores? Here are some ways they can do it:

Three-quarters of U.S. CEOs expect to see foreign companies investing more in U.S. businesses over the next year, according to a survey by Grant Thornton.