Audit & Accounting

Testifying with blunt honesty before the Senate Banking Committee, Fannie Mae's top executives said that it will be years before the mortgage giant can recover from an accounting scandal.Fannie Mae's president and chief executive, Daniel Mudd, alongside chairman Stephen Ashley, testified that the Fannie Mae of today is nearly unrecognizable from before. In mid-June, Mudd volunteered to return some of his salary from the period that the accounting irregularities occured. He served as Fannie Mae's chief operating officer from 2000 through 2004.

The Financial Planning Association has unveiled the FPA Career Center, a tool designed to help those in the market for a new job and those looking to hire new employees.The site has more than 170 financial planning job openings from 139 firms throughout the country. It offers employers targeted access to financial planning professionals, and offers job seekers free and confidential resume posting.

A federal judge has ruled that the Internal Revenue Service went too far in retroactively banning the "Son of Boss" tax shelter.

Conrad W. Hewitt, a former Big Four managing partner and commissioner of California's department of financial institutions and superintendent of banking for the state, is expected to be named the chief accountant of the Securities and Exchange Commission.

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.