Audit & Accounting

Intuit Inc. announced that the Securities and Exchange Commission has closed its investigation into the software maker's stock option accounting practices without taking any punitive action.The SEC began its Intuit inquiry in June and in August, Intuit announced that based on its internal investigation of the handling of its stock options dating back to 1997, it wouldn’t need to restate past profits.

Initially, my column was only going to cover that a day after former Enron CEO Jeffrey Skilling was sentenced to 24 plus years, the SEC announced it settled civil fraud charges involving options backdating. The agreement provides for the payment of nearly $2.4 million in disgorgement and prejudgment interest, a permanent injunction, a permanent officer-and-director bar, and suspension from appearing or practicing before the Commission as an accountant.The SEC had charged the former CFO of Comverse Technology, Inc., David Kreinberg and two other former Comverse executives with engaging over many years in a fraudulent scheme to grant undisclosed in-the-money options to themselves and to others by backdating stock option grants to coincide with historically low closing prices of Comverse common stock. The SEC also alleged that Kreinberg and Comverse's former chairman and CEO created a slush fund of backdated options that the former Chairman and CEO used to recruit and retain key personnel.

To assist governments and other public sector entities in appropriately accounting for the costs of employee benefits, a board within the International Federation of Accountants has issued an exposure draft of a new standard.The International Public Sector Accounting Standards Board’s exposure draft No. 31, “Employee Benefits,” is based on the the International Accounting Standard No. 19, of the same name. The draft addresses the same categories of employee benefits -- short-term employee benefits, post-employment benefits, other long-term employee benefits and termination benefits.

The Public Company Accounting Oversight Board today announced 1- new appointments and six reappointments to its Standing Advisory Group for 2007.In May 2006, the board began soliciting nominations to fill the slots -- receiving more than 110 nominations and re-nominations. From that list, the board selected individuals with expertise in a variety of fields, including accounting, auditing, corporate finance, corporate governance, and investing in public companies.

My first visit to Las Vegas 30 years ago, consisted of a two-night stay at a long-since razed flophouse called “The Lone Palm Motel,” and the $1.99 dinner buffet at Circus Circus -- which I’m told still exists in some form.

According to the American Society of Appraisers, many chief executives and company presidents simply don’t know what their own company is worth and, as a result, they are making corporate decisions from an unenviable position.So, the society is now offering specific tips to understand why every company needs to have a current business valuation.

As a study from the American Institute of CPAs put it, Americans between the ages of 25 and 34 “are caught between a Baby Boomer rock and a fiscal hard place.”The institute recently commissioned the study to examine the spending and saving habits of the so-called Generation Y. According to the U.S. Census Bureau, there are approximately 40 million Americans in the demographic.

The Public Company Accounting Oversight Board will host a forum in New York to bring information to the small business community.The forum on auditing in the small business environment is a program designed to help registered accounting firms and public companies working in the small business community learn more about the work of the board. The forum will focus specifically on the PCAOB inspections process and the impact of new auditing standards.

The Financial Accounting Standards Board has voted to propose changes to a derivatives rule issued earlier this year affecting the financial statements of asset-backed and mortgage-backed securities investors.The proposal would affect FASB Statement No. 155, “Accounting for Certain Hybrid Financial Instruments,” and allow companies not to account for embedded derivatives that are associated with prepayment risks. Community banks, insurance companies and others may be exempted from having to recognize interest-rate-driven gains and losses on their income statements. Many of those groups had said without such an exemption, their earnings might be more volatile.

In response to a senator’s inquiry, the Government Accountability Office will review the operations of the Securities and Exchange Commission’s enforcement division and compliance department.