Audit & Accounting

WACHOVIA BUYS AMERIPRISE RECORD-KEEPING UNIT: Banking group Wachovia Corp. will acquire the defined-contribution record-keeping business of Ameriprise Financial Inc. Terms of the deal, which is subject to federal approval, were not disclosed.The Ameriprise unit provided record-keeping and plan administration services to 225 defined-contribution retirement plans at the end of March - covering nearly 700,000 participants and administering about $28 billion in assets.

Raymond James Financial Inc. announced an initiative that would require the restructuring of variable annuities offered through financial advisors at the firm's broker/dealer subsidiaries, Raymond James Financial Services and Raymond James & Associates.President and chief operating officer Chet Helck said that beginning in August, Raymond James will require all approved annuity providers to offer an alternative pricing structure that reduces client costs without impacting standard or optional benefits. The changes are designed to lower policy fees, create consistent commissions and reduce opportunities for confusion by simplifying offerings.

The Securities and Exchange Commission and the North American Securities Administrators Association have announced a national initiative designed to protect seniors from investment fraud and sales of unsuitable securities.The initiative, which builds on the success of cooperative efforts between the SEC and Florida regulators, in conjunction with the NASD, to crack down on senior investment fraud, will include targeted examinations to detect abusive sales tactics, aggressive enforcement of securities laws in cases of fraud against seniors, and active investor education.

Former shareholders of Tyco International Ltd. have been given the go-ahead to sue the company and accounting firm PricewaterhouseCoopers.

A former chief financial officer for a small Virginia bank has been ordered back to work under the Sarbanes-Oxley Act's whistleblower protections.

With a few years of Sarbanes-Oxley implementation behind them, both the Securities and Exchange Commission and the Public Company Accounting Oversight Board announced concrete steps that they will follow in considering some tweaking of the sweeping corporate reform law.Both regulators proposed a series of steps to make revisions to the Section 404 internal control requirements laid out under SOX.

Fannie Mae will pay $400 million to put an end to the accounting woes that have dogged the home mortgage giant since 2004.The latest estimates from government-chartered Fannie Mae, whose official name is the Federal National Mortgage Association, are that the company expects to reduce net income by upwards of $11 billion in financial restatements for fiscal years spanning 1998 to 2004.

The Auditing Standards Board is issuing a new standard on auditing internal controls. By adopting definitions from Auditing Standard No. 2 of the Public Company Accounting Oversight Board, the standard will make audits of public and private companies more similar."This standard is important because it requires the auditor to communicate with management those areas of their internal control system that are not up to par," said AICPA vice president of professional standards and services Chuck Landes. "We want to make it clear that management has a responsibility for not only their financial statements but their internal control systems, and they are responsible to take appropriate action with respect to any material weaknesses or significant deficiencies that the auditor may identify."

The Tax Increase Prevention and Reconciliation Act of 2005, signed by President Bush on May 17, 2006, took so long in coming that it still carried the "Act of 2005" label.Far from having no surprises, however, the final bill contained a generous handful of provisions that had been far out of the money only weeks before. While some of these unexpected changes impact businesses, the most high-profile surprises appear to focus on the individual taxpayer. These include the lifting of the adjusted gross income cap on Roth IRA conversions, the raising of the "Kiddie Tax" age limit to 18 years, and the increase in the AMT exemption amounts.

When recognizing benefits from uncertain tax positions in their financial statements, what level of confidence should corporations have that those positions will be sustained? How do they determine whether or not their positions meet that threshold for recognition?And if the position meets that recognition threshold, what share of the related benefit should be included in the entity's financial statements? What actions or events could change that recognition status for future financial statements?