Audit & Accounting

I recall a discussion in the mid-1990s as though it were yesterday.A case was made that dynamic hedging meant that everything would work out in the end and hence should not be reflected to have either gains or losses in a given reporting period.

AUDIT QUALITY GETTING BETTERSarbanes-Oxley has led to big improvements in audit quality, according to a newly released survey. Seventy-eight percent of the 253 public company audit committee members surveyed by the Center for Audit Quality rated overall audit quality as either “very good” or “excellent.” Meanwhile, 82 percent said that it has improved somewhat or significantly in the past several years.

Because we produce 22 columns a year, we’re always looking for topics. Some come from readers, others from students, and some we pluck out of midair. For this column, we thank Allan Sloan, who published a piece called Buy High, Sell Low in the Feb. 4, 2008, issue of Fortune magazine.Sloan’s article skewers the managers of the “Wall Street Four” — the large investment banking/brokerage/etc. conglomerates, including Citigroup, Merrill Lynch, Morgan Stanley and UBS.

As an accountant, you observe your clients’ business successes and failures every day. However, many accounting firms struggle in their efforts to deliver financial planning services profitably.Why?

H.D. VEST TURNS 25Broker/dealer H.D. Vest, which pioneered the strategy of using CPAs and tax professionals as financial planners, is celebrating its 25th anniversary. Since its founding in April 1983, 47 states now allow CPAs to accept commissions for advising their clients and implementing investment planning strategies and products. Currently, H.D. Vest has some 5,400 independent advisors.

Grant Thornton has consolidated its advisory services practice, combining the firm's various advisory service lines and more than 800 professionals across the U.S. into a single division.

The American Institute of CPAs has begun publicizing the revised set of peer review standards it quietly issued earlier this year.

XBRL US, the nonprofit group working to develop the Extensible Business Reporting Language in the U.S., said it has finished codifying collections of financial and business terms for U.S. generally accepted accounting principles in XBRL format, along with an accompanying preparers guide.

The Financial Accounting Standards Board may change some accounting rules to make it more difficult for banks to get subprime loans off their books.

2008 was to be the year that companies and their tax advisors worked to get their nonqualified deferred-compensation plans in order to comply with the new requirements under Code Section 409A and the regulations thereunder. Recent positions from the Internal Revenue Service are, however, expanding the focus of compensation concerns for 2008 beyond deferred compensation to include deductions for current performance-based compensation.BACKGROUND