Audit & Accounting

With the close of 2006 approaching, we asked industry leaders to share their ideas of what the accounting profession will look like in five years: What will be its major concerns? Challenges? Hot new service areas? What will shape will the firm landscape have taken?In the final part of the series, among others, managing director of research for research firm Glass Lewis & Co. Lynn Turner, Information Technology Group Inc. principal David Cieslak and Internal Federation of Accountants chief executive Ian Ball take a stab at forecasting what the future holds for the profession. The managing partner of Beckstead and Watts, Brad Beckstead, the firm involved in the legal challenge over the constitutionality of the Public Company Accounting Oversight Board, wraps things up.

The Public Company Accounting Oversight Board will meet Thursday, Nov. 30, to consider adoption of its budget for the 2007 fiscal year.As outlined under the Sarbanes-Oxley Act, the board -- which sets its fiscal year according to the calendar -- must set a budget for the upcoming year no later than one month before the end of the current fiscal year. Once approved by the board, the budget will be submitted to the Securities and Exchange Commission for approval.

After years of sounding the fiscal imbalance bell, Comptroller General David Walker, the head of the Government Accountability Office, has committed a to-do list to paper for the 110th Congress.In a letter dated Nov. 17, Walker outlines a number of areas his federal watchdog agency, says the newly-elected politicians should consider in getting a “jump-start” on legislative planning.

SENIOR CAPITAL DISMISSES KPMG: Senior Capital Living Corp., a Dallas-based operator of senior residential communities, jettisoned its auditor, Big Four firm KPMG, and named Ernst & Young as its new independent accountant.KPMG's audit report for the year ended Dec. 31, 2005, noted ineffective internal controls over financial reporting. The auditor stated that SCLC's policies and procedures, and allocation of resources, did not provide for an effective review of the company's accounting for income taxes, which was prepared by tax consultants and third-party advisors.

High-profile corporate scandals in recent years have seriously eroded public confidence in published financial results.Reliance on the accuracy of financial statements is essential if investors are to own equity or debt instruments of corporations. With the passage of the Sarbanes-Oxley Act in 2002 leading the way, the governance role and function of boards of directors are evolving and expanding for public and private companies, as well as nonprofit organizations.

The controversy over options backdating just won't go away, and with good reason.According to the latest count, more than 120 companies are under investigation for doing it. In September, the heretofore-worshipped Steve Jobs was in the news with an apology for past backdating misdeeds at Apple. Even though he denied receiving any backdated options, he apparently approved some, but claims he was unaware of any accounting impropriety.

FIDELITY LOWERS MINIMUM GIFT FUND CONTRIBUTION: In an effort to make the benefits of donor-advised funds more accessible, the Fidelity Charitable Gift Fund announced that it would lower its initial contribution and grant recommendation minimums.

Last year, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, and with that legislation came some changes in the way bankruptcy debtors are taxed.New Internal Revenue Service guidelines have been issued to help explain provisions of the act that affect individual taxpayers filing Chapter 11 bankruptcies. The guidelines are issued in IRS Notice 2006-83 and relate to all Chapter 11 bankruptcies filed on or after Oct. 17, 2005.

The American College, a financial services educator based here, has launched an expedited learning program designed to prepare financial advisors for the Certified Financial Planner certification examination in roughly seven months.Developed in conjunction with the JR Financial Group, a financial services trainer, the program, titled Financial Planning Express, combines self-study with a series of live, four-day classroom sessions held every six weeks. The six modules that comprise the Express program conclude three weeks prior to the CFP certification examination with a live, five-day comprehensive review of all 89 CFP topics covered on the test.

Federal prosecutors will not challenge a judge’s ruling that vacates the conviction of Enron founder Ken Lay, who died in July after being found guilty for his role in the massive corporate accounting scandal.