Audit & Accounting

When Mark Olson starts his new job as chairman of the Public Company Accounting Oversight Board in July, his commute into work won't be all that much different from his most recent gig - a few blocks away at the Federal Reserve Board.But there's little doubt that the course he'll be setting with the accounting firm regulator will be markedly different from his duties over the last five years as a Fed governor.

Among the many disasters lurking behind the scenes of the U.S. economy is that of pensions and other post-retirement benefits. It has been estimated that in 2005 there were $472 billion of unrecorded obligations for pension and other post-retirement benefit plans, and that the after-tax effect of these obligations would reduce shareholders' equity by $248 billion or more.Perhaps to give the Senate Committee on Banking, Housing and Urban Affairs an inkling of hope, Financial Accounting Standards Board Chairman Robert Herz and International Accounting Standards Board Chairman Sir David Tweedie presented their plans to require the underlying economic effects of post-retirement plans to be more faithfully and transparently reported through better accounting practices.

Having gotten down to the building blocks of the federal books, the Federal Accounting Standards Advisory Board has issued a concepts statement exposure draft on the definitions and recognition of the elements of accrual-basis financial statements.The 16-year-old developer of federal accounting standards abides by the four fundamental concepts that are covered in the proposed statement: asset, liability, net position and revenue/expense.

QuickBooks parent and tax and small business software provider Intuit Inc. has become the latest in a series of companies to have the Securities and Exchange Commission question their stock-option grants.The regulator served Intuit with an informal inquiry notice in June, after a Center for Financial Research and Analysis report questioned Intuit's granting policies, and the company later announced that it had implemented a self-review.

Who is responsible for IT in your firm? Do you have a written technology plan and budget? Is technology viewed as a strategic asset, or as overhead? Are you adequately staffed in the IT department, and in the firm as a whole? Do you have the right people on your IT team?These are all important questions, and your firm should be able to provide definitive answers if you expect to compete in a rapidly changing digital and global economy. Many traditional services are being commoditized, and profit margins are under pressure. With the right technology, you can compete, as well as offer new, higher-value services.

Many audit committees concede some specific issues and processes could be improved -- including oversight of accounting judgments and estimates, risk management and agenda setting, according to a recent survey by the Audit Committee Institute of KPMG International.

Blaming delays in information sharing, as well as a battle over who will pick up the tab for legal fees, the trial over former KPMG partners' sales of questionably legal tax shelters won't begin until Jan. 15.

I was raised in a family of medical people: father, brother, son, to name a few. Where other kids in our neighborhood might have had a Cross or a Star of David hanging over their beds, I had a caduceus. Thus, you must immediately ask, why am I writing columns such as this? Well, the answer is relatively simple. To repeat the famous cliche, I really couldn't stand the sight of blood, especially my own.

The Securities and Exchange Commission has filed the first charges in its stock options practices investigations, charging the former chief executive of Brocade Communications Systems Inc. Gregory Reyes with misconduct linked to option grant practices.

As expected, the Financial Accounting Standards Board formally added a project to its agenda to reconsider the current accounting standards for leases.