Audit & Accounting

The Public Company Accounting Oversight Board will host a forum in early August, "Auditing in the Small Business Environment," in Orlando, Fla., designed for registered accounting firms and public companies working in the small business community.

The International Auditing and Assurance Standards Board, a unit of the International Federation of Accountants, has released ISRE 2410, a standard to assist auditors in reviewing interim financial statements.

Former Securities and Exchange Commission Chairman Arthur Levitt has been named as a special advisor to insurer and financial services provider American International Group Inc.

Big Four firm PricewaterhouseCoopers has named Rob Ward to head its global assurance practice -- the company's largest line of service. Ward had previously served as deputy global assurance leader and will succeed Gerald Ward (no relation), who is retiring after more than 30 years of service.Ward, 51, will oversee 5,000 partners and approximately 55,000 employees for the business line, which had revenues of $8.7 billion for the 2004 fiscal year. Before joining the Global Assurance Group, he had been the national managing partner of PwC Australia."Rob Ward will lead PwC's assurance business at a dynamic time for our firm and the profession," said Samuel A. DiPiazza, chief executive of PwC, in a statement. He added, "The breadth and depth of his experience with major clients make him uniquely qualified to lead during this period of growth and change."A graduate of the University of New South Wales and a chartered accountant, Ward joined PricewaterhouseCoopers in 1974. He has been extensively involved in the development of global audit methodology and the application of computer technology. Additionally, he served as president of the Institute of Chartered Accountants in Australia, national executive of the Institute of Chartered Accountants in Australia, and chairman of the Australian Accounting Research Foundation. In January 2005, Ward was awarded and admitted as a Member of the Order of Australia for his contribution to the accounting profession and the community.

Barely a week after a federal jury found HealthSouth founder Richard Scrushy not guilty of participating in a massive accounting fraud, the Securities and Exchange Commission is preparing civil charges against the former chief executive.Scrushy was the first CEO charged under the Sarbanes-Oxley Act and had faced 36 counts of fraud, false corporate reporting and making false statements to regulators after prosecutors said that he led a $2.7 billion earnings overstatement at the medical services company beginning in 1996.After a five-month trial and nearly another month of jury deliberations, he was acquitted on all counts.According to a report from The Washington Post, the SEC will file the formal paperwork on Thursday to retry Scrushy and seek $786 million in penalties and disgorgement. The HealthSouth founder would also not be allowed to serve as an officer or director at any public company if found guilty. Scrushy remains a member of HealthSouth's board of directors.In bringing a civil claim, the SEC most show "a preponderance of the evidence" that Scrushy was involved in and had knowledge of the fraud, a lower burden than the "reasonable doubt" standard required for a criminal conviction.Two other former executives, including HealthSouth's first finance chief, Aaron Beam, and former vice president Will Hicks, who both pleaded guilty and testified against Scrushy, are set for sentencing this summer. Another pair of indicted executives are awaiting trial in Alabama.

Senators Connie Mack and John Breaux, chairman and vice-chairman of the President's Advisory Panel on Federal Tax Reform, respectively, announced that the panel's 10th meeting will be held on Wednesday, July 20. The meeting will be held at the Renaissance Hotel here. The panel has held nine meetings in which witnesses testified about problems with the current tax system and various options for reform. At this meeting, panel members will discuss issues associated with reform, but there will not be any testimony presented. The President's Advisory Panel on Federal Tax Reform was established by President Bush in January and charged with recommending reforms to the tax code that would make the U.S. tax system simpler, fairer and more growth-oriented. The panel's final recommendations are due by Sept. 30, 2005.

The International Auditing and Assurance Standards Board, a unit of the International Federation of Accountants, is soliciting comments on a pair of exposure drafts designed to sharpen auditor reporting.Proposed International Standard on Auditing 701, The Independent Auditor's Report on Other Historical Financial Information, addresses auditors' reports for a variety of engagements, including reporting on a single financial statement, or a specific element of a financial statement.It also gives guidance on helping determine the acceptability of the financial reporting framework, and also examines relevant matters that an auditor must consider in forming an opinion on the financials.ISA 800, The Independent Auditor's Report on Summary Audited Financial Statements, recognizes that criteria for preparing and presenting summary financial statements may not exist. It also contains new standards and guidance on the criteria used and procedures performed in an engagement to report on summary financial statements.Comments on the exposure drafts are requested by Oct. 31, 2005. The exposure drafts may be viewed by going to www.ifac.org/EDs. Comments may be submitted by e-mail to EDComments@ifac.org.

American Express Financial Advisors Inc. will pay New Jersey $5 million and implement company-wide reforms to address allegations that it failed to reasonably supervise its financial advisors. The settlement follows revelations that a financial advisor in AEFA's Voorhees, N.J., office stole more than $400,000 from at least 22 clients. The New Jersey Bureau of Securities discovered the theft, and expanded its investigation with the uncovering of widespread problems involving AEFA's failure to supervise financial advisors within its franchise offices. "In investigating and prosecuting this individual, we identified a larger issue of inadequate supervision of the company's financial advisors," said New Jersey Attorney General Peter C. Harvey. "To its credit, American Express has worked cooperatively with our office to address deficiencies in its oversight of financial advisors." Harvey vowed to continue his scrutiny of financial advisory services. "We are taking a hard look at the industry," he added. "Where we find firms failing in this area and the failures are significant, we will be imposing major penalties and demanding significant reforms."

Financial Executives International, a 15,000-member trade group for chief financial officers and other senior financial personnel has elected its new slate of officers. Robert Walker, former CFO of Agilent Technologies, will serve as chairman, while Richard Schrader, executive vice president and CFO of Parsons Brinckerhoff Inc., in New York, will become vice chairman. Additional officers include: Alexis Dow, elected auditor, metro, regional government in Portland, Ore., and Joseph DiLorenzo, co-founder and manager, M/D Group LLC, in Humarock, Mass., who will serve as vice presidents at large. Gerald Urich, corporate assistant controller, The Hershey Co., Hershey, Pa., will serve as treasurer. Jeffrey Curtiss, senior vice president and CFO, Service Corp. International, Houston, will become secretary.Mary Jo Green, immediate past FEI chairman, and senior vice president and treasurer, Sony Corp. of America, New York, and second past FEI chairman H. Stephen Grace, Jr., president of H.S. Grace & Co., Houston, will continue in their capacities as directors-at-large. Joan Netzel, first vice president, audit relationship manager for SunTrust Banks Inc., Atlanta, will remain as chairman of the Board of Trustees for Financial Executives Research Foundation -- FEI's research affiliate. The FEI officers slate began officially July 1.

President Bush formally nominated Rep. Christopher Cox, R-Calif., to become the next chairman of the Securities and Exchange Commission, succeeding William Donaldson, who stepped down June 30 after nearly two-and-a-half years at the helm of the regulator. In the interim, the president appointed SEC commissioner Cynthia Glassman to serve as acting SEC chair until Cox is confirmed. A confirmation hearing for Cox -- which requires Senate approval -- could occur in July. Meanwhile, Senate Minority leader Harry Reid, D-Nev., has recommended that Bush nominate Annette Nazareth, currently the commission's market regulation division director, for the commissioner post that will be vacated when Harvey Goldschmid leaves in the fall for a teaching post at Columbia Law School.