Audit & Accounting

Nearly half of all business organizations worldwide have been victims of fraud in the past two years, according to the 2005 PricewaterhouseCoopers' Global Economic Crime Survey released in late November.The survey found that the number of companies reporting fraud increased from 37 percent to 45 percent since 2003, a 22 percent increase. The cost to companies was an average of $1.7 million in losses from "tangible frauds," those resulting in immediate and direct financial loss, like asset misappropriation, false pretences or counterfeiting.

AMERIPRISE TO SETTLE TRADING CHARGES: Ameriprise Financial - the entity spun off by former parent American Express - and its broker/dealer arm agreed to pay $57.3 million to settle charges of illegal trading and brokerage misconduct.The Securities and Exchange Commission charged that Minneapolis-based Ameriprise Financial Services - the company's broker/dealer - failed to "adequately" disclose millions in revenue-sharing payments that it received from a group of mutual fund companies dating back to 2001.

Mutual fund portfolio managers used to be as inaccessible as the Wizard of Oz.Fund companies for the most part hid their ideas and activities behind a wall of wholesalers and scripted messages on brochures. When Morningstar began trying to contact portfolio managers in the late 1980s, their analysts often were greeted with phone hang-ups.

If you've had problems applying Auditing Standard No. 2, the Public Company Accounting Oversight Board says you're not alone.The board has known of widespread difficulties applying the new standard, "An Audit of Internal Control over Financial Reporting Performed in Conjunction with an Audit of Financial Statements," since audit firms first began grappling with its complex and often undefined demands.

"Any tax advice included in this written or electronic communication was not intended or written to be used, and it cannot be used by the taxpayer, for the purpose of avoiding any penalties that may be imposed on the taxpayer by any governmental taxing authority or agency." (Proposed Circular 230 disclaimer language from Deloitte.)Going forward, tax clients across the country, whether they seek advice from a Big Four Firm, a tax attorney or even a sole practitioner, can expect to see disclaimers like this accompanying all correspondence and written advice.

The ambitious road map to give the world a single accountancy standard - by converging U.S. generally accepted accounting principles with International Financial Reporting Standards by 2008 - may be fraught with bumps, potholes and even worse along the way, it was revealed at a recent conference of the European Accountants Federation, here.Delegates at the conference heard that the convergence plan would involve much more than a simple "clean up" of the U.S rules-based accountancy system dating back to the 1930s and the EU's brand-new principles-based system.

Edward Knauf didn't take long to get to work after rising to the chairmanship of the American Institute of CPAs' Technical Issues Committee. Within a month of his appointment, he met with the three organizations of most concern to the small and midsized accounting firms that comprise the TIC's constituents.All three - the Financial Accounting Standards Board, the Auditing Standards Board, and the AICPA's Professional Ethics Executive Committee - are, in the diligent pursuit of their respective missions, putting increased pressure on auditors, who are already stretched in one direction by the demands put upon them and in another by the scarcity of human resources available to satisfy those demands.

ISO 22222, the Standard on Personal Financial Planning, has been approved as an international standard. All ISO members (standardization institutes in approximately 150 countries around the world) can now adopt ISO 22222 as a national standard.According to Stuart Kessler, chairman of the International Standards Organization's blue-ribbon committee on personal financial planning, "ISO 22222 is by nature not legally binding, but a document of 'good practice' that can be applied voluntarily, unless there is a reference to it in legislation or it is part of a contract, in which case it might become binding."

Commerce Bancorp Inc., parent to some 375 Commerce Bank branches in the New York, Philadelphia and Southeast Florida markets, has acquired online wealth manager eMoney Advisor for $32 million.

Brian Cartwright, a law school and, later, law firm colleague of Securities and Exchange Commission Chairman Christopher Cox, was named general counsel at the regulator.