Audit & Accounting

The Securities and Exchange Commission has unveiled the agenda for next week's day-long meeting on internal controls compliance. The April 13 roundtable will include a series of six panels comprised of representatives of public companies, auditors, investors and attorneys. Section 404 of the sweeping Sarbanes-Oxley Act mandates that public issuers assess the effectiveness of their internal controls over financial reporting. For large companies, compliance became mandatory last year. For smaller companies with a market cap under $700 million and over $75 million compliance becomes mandatory in 2006. The SEC said that it would seek input from executives at larger firms, including feedback on the cost and benefits. The panels will cover such issues as: the first year of compliance, reporting to the public, planning and design, and documentation and testing using judgment in communications and conclusions. In addition to the roundtable, the SEC will seek written feedback from registrants, auditors and others on their experiences in implementing Section 404, and post the comments on its Web site. The roundtable will be Webcast on the commission's Web site at www.sec.gov. Selected other materials related to the roundtable are available at http://www.sec.gov/spotlight/soxcomp.htm.

In a unanimous decision, the Supreme Court ruled that creditors cannot seize individual retirement accounts in a bankruptcy filing, thereby classing them with pensions, 401(k)s and Social Security, which are afforded protection under bankruptcy law. The case before the court involved a bankrupt couple from Arkansas who were fighting to keep more than $55,000 in retirement savings. Last year, more than 1.6 million people filed for personal bankruptcy, versus 875,000 a decade earlier. Experts say that much of that is being driven by people 55 and older who lose their jobs and can't pay off debts.

The Securities and Exchange Commission today named agency veteran Meyer Eisenberg to the post of acting director of the commission's Division of Investment Management. Eisenberg will fill on an interim basis the void created by the recent departure of division director Paul Roye, who left the SEC for a job in the private sector. Since 1998, Eisenberg has served as deputy general counsel for the commission. He previously served at the SEC from 1959 to 1970. During that period, he was the executive assistant to then-chairman Manuel F. Cohen. Current Chairman William Donaldson said in a statement, "Mike is a distinguished member of the securities bar and his history of service to the commission and to the investing public is unmatched." The SEC is actively seeking a full-time replacement for Roye.

The strain on the financial advisory business is starting to show.

* HENSSLER ENTERS ACCOUNTING JOINT VENTURE: The Henssler Financial Group, a Kennesaw, Ga.-based concern, has formed a joint venture with the Atlanta-area accounting firm of Dickinson & DiLuzio to form a new accounting division of the firm - Dickinson, DiLuzio & Henssler LLC.The new entity will provide financial consulting services for both individual and institutional clients. This partnership expands Henssler to two offices and a staff of more than 55.

The Internal Revenue Service's new rules for qualified retirement plans went into effect on March 28, but the ripple effect from the rules has yet to play out.

With limited exceptions, the tax on married couples filing jointly usually has been lower than the combined tax on married couples filing separate returns.

The embattled Roslyn School Board has filed an $11.2 million lawsuit against 10 current and former members in the aftermath to the massive accounting fraud at the Long Island school district. According to Newsday, the board members are being sued personally, and those members who served between 1998 and 2004 are accused of contributing to the alleged embezzlement of school funds. The board also voted to remove board member Patricia Schissel for failing to attend the previous five meetings. She is also named in the suit. The school district garnered national headlines following a report released by New York State Comptroller Alan Hevesi that charged three former officials of the Roslyn N.Y. School District with plundering more than $11 million over an eight-year period. Former superintendent Frank A. Tassone, assistant superintendent Pamela Gluckin and clerk Debra Rigano, all of whom who were alleged to have siphoned the money from district coffers, are currently awaiting indictment by the Nassau County Grand Jury. In addition, Hevesi's state probe has implicated an additional 26 people in the audit scam. The accounting firm that audited the district, Miller Lily & Pearce, which also audited over 50 additional school districts and whose affiliate sold financial software to some 250 districts across New York state, has closed down.

American accounting contains an awkward contradiction. Though 99.7 percent of the country's 4.9 million corporations are privately held, a good deal of the country's generally accepted accounting principles are primarily relevant to the financial conditions of public companies traded on equities markets.

Congress is considering new legislation that could streamline accounting procedures for tens of thousands of U.S. companies by liberalizing the rules for the use of the cash accounting method by small business taxpayers.