Audit & Accounting

Like its U.S. counterparts, the Canadian Public Accountability Board says that the Big Four firms have more work to do in order to improve audit quality and consistently meet professional standards. It was the board's third public report on its continuing inspections of accounting firms.

A CPA with radio personality Howard Stern's accounting firm has settled insider trading charges brought by the Securities and Exchange Commission.

The accounting support fees imposed on corporations by the Public Company Accounting Oversight Board will be slashed by nearly 20 percent next year, under the organization's recently released 2006 operating budget.In announcing the new budget plan for the coming year, PCAOB officials said that the board will charge publicly traded companies a total of $109.3 million in accounting support fees during 2006 - down from the $136.1 million assessed in 2005.

FIRST VIRTUAL DISMISSES PWC: Video software concern First Virtual Communications Inc. dismissed auditor PricewaterhouseCoopers and subsequently engaged Squar Milner Reehl & Williamson as its new independent accountant.In January, First Virtual filed for Chapter 11 protection. In August, the company filed a liquidation plan that proposed a reverse merger, whereby First Virtual Communications would acquire the assets of newly formed U.S. Dry Cleaning and change its name to U.S. Dry Cleaning Corp.

GLOBAL BENCHMARK EN ROUTE FOR FINANCIAL PLANNERS: The upcoming International Standards Organization's 2222 standard is now in a final ballot, with the objective of achieving and promoting a globally accepted benchmark for individuals who provide the professional service of personal financial planning. This would be the first truly non-technical service standard for financial services.According to Stuart Kessler, managing director of RSM McGladrey Inc. and the chair of the ISO's blue ribbon committee on financing planning, "ISO 2222 will specify the ethical behaviors, competences and experience required of a professional personal financial planner. It describes and addresses the various methods of conformity assessment and specifies requirements applying to each of them."

Roth 401(k) accounts will - with the blessing of the Internal Revenue Service - make their debut effective Jan. 1, 2006.Unlike the 401(k), which is funded with pretax dollars, the Roth 401(k) is funded with after-tax dollars from the employee. Any employer match would remain taxable.

Financial planning is usually not a static process. When your clients ask you for advice in investing their resources, one of the more difficult tasks is getting them to make decisions on not only what their ultimate investing goals are (besides becoming wealthy or wealthier), but just how much risk they want to take along the way.As a client's economic and life conditions change, often their goals do as well. Many successful planning professionals find that periodic re-analysis of each client's holdings is a good idea. By examining how well a client's investment portfolio is performing and what progress is being made towards meeting a client's ultimate and near-term goals, you are best serving your clients, and very possibly generating additional fees for your practice.

The Public Company Accounting Oversight Board announced it has selected deputy chief auditor and former KPMG partner Thomas Ray as its chief auditor.

Until now, individual taxpayers who were unable to meet the April 15 tax return filing deadline could file a Form 4868 and receive an automatic four-month filing extension until August 15. And if August 15 didn't provide enough time to get the tax return completed, taxpayers could provide a good reason for the delay on a Form 2688 and request another extension for two months until October 15.Effective for tax returns due after Jan. 1, 2006, the kinder, gentler, more cost-effective Internal Revenue Service has done away with the second extension request and changed the initial automatic extension period from four months to six. Not only will this action remove the need for taxpayers to come up with a reason for requesting the extra two months to file tax returns, it will cut back on lots of paperwork and processing time.

Public companies, for better or worse, have completed the first year of compliance with the Sarbanes-Oxley Act. Now is a good time for CPAs in industry and their external auditors to reflect on the Year One experience, identify lessons learned, and change their compliance strategies accordingly.For example, many companies only cleared the Year One Sarbanes-Oxley hurdle via an "all hands on deck" approach. Sarbanes-Oxley compliance, however, is not a one-time event; it is an ongoing requirement. So this tack is too disruptive to be allowed to continue.