Audit & Accounting

EARNINGS FOR FINANCIAL PLANNERS RISE IN 2005: Earnings for financial planners have risen 27 percent from their 2004 levels, according to a survey conducted by the College for Financial Planning in conjunction with the Financial Planning Association. Its 2005 Survey of Trends in the Financial Planning Industry showed that the median gross amount of planner earnings climbed to $277,800 in 2005.The majority of CFP professionals surveyed (56 percent) also reported that their income is the result of a combination of fees for service and commissions, while only 34 percent reported that their income is the result of fee-only services. When asked about clients' net worth, planners reported the continuation of a trend from previous years, with a 33 percent increase - to $1 million - over last year's reported amount of $750,000. In other findings regarding the financial planning market, 67.3 percent of planners participating in the survey prepared between one and 19 single-focus plans, while 62.7 percent prepared up to 19 comprehensive plans.

Investment advisors write books for many reasons.Some have practice management techniques that they feel could help others. Some have a particular planning or investment expertise. Others just want to see their name on the dust jacket. Check your cost benefit analysis calculators before starting, say veteran scribes: The task is a monumental one, and the benefits often come quite indirectly.

The recently enacted Energy Tax Incentives Act of 2005 includes new and substantial tax incentives for individuals to make energy-saving (and some energy-creating) improvements to their homes.The incentives come in the form of tax credits, which reduce federal tax bills on a dollar-for-dollar basis. Unlike many other tax credits contained in the Internal Revenue Code, these energy tax credits are not phased out for higher-income individuals. These credits are available for certain energy-saving home improvements made in 2006 and 2007.

For the fourth consecutive year, Plante Moran Financial Advisors placed among the top 10 largest independent financial advisory firms in the nation based on total assets under management, according to Bloomberg Wealth Manager's fifth annual rankings.With more than $3.9 billion in total assets under management, PMFA ranked seventh in terms of overall assets; the firm also is 45th based on average client relationship size. Bloomberg Wealth Manager's annual financial advisor ranking includes 500 firms from across the United States.

To aid the convergence of International Public Sector Accounting Standards with International Financial Reporting Standards, the International Public Sector Accounting Standards Board has issued a new exposure draft, "Improvements to International Public Sector Accounting Standards."

A new set of proposed regulations from the Internal Revenue Service aims to change the way companies use accounting methods to switch profits from countries with high corporate tax to countries where corporate taxes are low.The regs - all 85 pages of them - create an ambitious regime with a number of nebulous new concepts, including an "investor model," to insure that businesses value intangibles, such as marketing, research and development, and patents, in a way that will maximize exposure to U.S. tax.

The chief accountant of the Securities and Exchange Commission, Donald T. Nicolaisen, will leave the commission in October to return to the private sector.Nicolaisen, 61, joined the SEC under former Chairman William Donaldson in September 2003 and led numerous initiatives to improve financial disclosure, strengthen the audit process and rebuild investor confidence.

In a continuing struggle to keep up with the increasing complexity of financial assets and special purpose entities, the Financial Accounting Standards Board has issued three proposals to amend existing statements that have, in just a few years, become - to some extent - obsolete.The proposals are a response to constituents in various sectors who requested clarifications and simplifications of the technically complex Statement 140, Accounting for Transfers and Servicing of Financial Assets, which was seen as becoming harder to interpret and implement as new kinds of financial assets come into existence, especially in the areas of securitizations and special purpose entities.

Both the Government Accountability Office and the Treasury Inspector General for Tax Administration have some advice for the Internal Revenue Service.On the heels of an IRS decision to focus on S corporations in order to zero in on the compliance problems of small businesses, the TIGTA issued a report calling on the IRS to improve its efforts against employment tax noncompliance. The GAO also weighed in in the same week with its report, "Tax Compliance: Better Compliance Data and Long-term Goals Would Support a More Strategic IRS Approach to Reducing the Tax Gap."

RIA, a part of the Thomson Corp. providing information and software to tax professionals, has computed the changes to next year's tax brackets, standard deductions, personal exemptions and other important tax breaks.