Audit & Accounting

The Public Company Accounting Oversight Board plans to consider adopting an auditing standard on evaluating the consistency of financial statements at a meeting on Tuesday.

The Securities and EXchange Commission has issued a final rule on accepting financial statements prepared by foreign companies in accordance with International Financial Reporting Standards without reconciling them with U.S. GAAP.The SEC noted that it was accepting statements prepared in accordance with IFRS as issued by the International Accounting Standards Board, leaving out regional variations such as those approved by the European Union.

Securities and Exchange Commission Chairman Christopher Cox plans to propose another year’s delay in imposing Sarbanes-Oxley Section 404 requirements for small public companies.In testimony before the House Small Business Committee in mid-December, Cox said that he thought the additional delay would allow regulators to assimilate the results of a study now underway on the costs of 404 compliance. “I intend to propose to the commission that we authorize a further one-year delay in implementation for small businesses in order to base our decision on final implementation of Section 404(b) on the best available cost data,” he said.

Completing their first major joint project, the Financial Accounting Standards Board and the International Accounting Standards Board have agreed on two new standards on accounting for business combinations.FASB member G. Michael Crooch termed the new guidance “a significant convergence milestone [that] improves reporting while eliminating differences” between the standards that were previously promulgated by the two boards.

There may be 2-D bar codes in the future of paper-filed returns, if recommendations from the Government Accountability Office are followed.In its end-of-year report on last year’s tax season, the GAO said that the Internal Revenue Service exceeded the previous year’s performance by most measures. However, it noted a number of opportunities to realize additional savings and increase tax compliance, with the barcoding of paper returns among them.

In the last few days before Congress adjourned for 2007, a number of tax law changes finally made it through the two chambers and on to President Bush. The president has either already signed or indicated his willingness to sign each piece of legislation. Several of the provisions enacted will have an impact on 2007 tax returns.Even with this flurry of activity, a number of pieces of legislation, including most of the energy-related tax proposals, an agriculture bill with tax provisions, military tax relief, and the extension of expiring provisions, as well as a fairly extensive list of offsetting revenue raisers, got left off the table and will be addressed again in 2008. The following is a summary of each of the tax laws enacted, the principal provisions, and the impact, if any, on 2007 tax returns.

On my first visit to Washington, D.C., I almost missed the Jefferson Memorial because there were so many other memorials to look at. The same can be said of Financial Accounting Standards Board projects, because several projects are currently in progress. However, one project, referred to as the FASB Codification, is a "must see" because it is sure to create significant changes for anyone who researches accounting or financial reporting issues.The FASB Codification project is designed to present all of the relevant U.S. accounting and financial reporting literature in a single, authoritative, integrated offering in an online, real-time database. That is, the goal is to provide all generally accepted accounting principles in one location for financial professionals to access and use.

So, let me ask you something. Do you believe that a person's approach to financial planning should be based on the future well-being of the family or on meeting a set of financial objectives? By the same token, do you really want to reach financial independence? Although these two questions appear relatively simple on the surface, the answers you may give can vary greatly depending on your sex. At least, that is what the results of a survey by the Desjardins Group, Canada's largest integrated cooperative financial group uncovered. This was a survey taken in the fall of 2007 among a group of 1,400 respondents that included an equal number of women and men. It was designed to measure the differences between the two groups’ concerns and attitudes on financial planning. The survey had 40 questions that covered ease of discussing financial planning with an advisor, the importance given to the various aspects of financial planning, and the understanding of financial planning vocabulary. "Even if the average spread between men's and women's answers is relatively narrow (seven points), the trend that emerges from our study shows a significant difference in terms of the approach,” says Eric Lemieux, vice-president, Wealth Management at Desjardins. “Women see financial planning as a whole that involves the well-being of the family, while men have a more compartmentalized approach, based on fixed objectives. This observation confirms the accuracy of our orientation, which is based on personalized, value-added service,” According to the survey, women appear more concerned about the well-being of others and more worried than men about the idea of being a burden on the family. In effect, they are more concerned than men by such things as financing the children's education, the importance of having a budget, and increasing the value of investments in the short term. They are also more aware than men about the importance of having a notarized will and a health mandate in case of inability. Desjardins notes that men's targeted approach comes across mainly in their greater concern for reaching financial objectives, for the tax consequences of their financial decisions, and for their retirement planning strategy. In fact, there are also more men than women who say they are solely responsible for their decisions and are consequently less inclined to ask for advice. As to the language of financial planning, this also seems more familiar to men. They were more likely to understand expressions such as "investor profile," "investment horizon,” and "net worth.” However, keep the following in mind: the more general concept of "financial independence" is understood equally well by women as by men, while women are more likely than men to desire such independence. "This survey is a tool that can help Desjardins Financial Planning Advisors to better understand members, both men and women, and to better accompany them on the path to financial security for themselves and their families," adds Lemieux, speaking for an organization with overall assets of $147 billion, as at September 30, 2007. They must know what they are talking about, eh?

The Financial Accounting Standards Board has agreed to defer the effective date of Interpretation No. 48, "Accounting for Uncertainty in Income Taxes," for nonpublic entities to years beginning after Dec. 15, 2007.

Andrew McKelvey, the former CEO of job listing provider Monster Worldwide, has agreed to pay $275,989.72 to the Securities and Exchange Commission to settle charges of stock options backdating.