Audit & Accounting

Good judgment and thorough disclosure -- from both auditors and issuers -- are the keys to restoring investor confidence in the capital markets as well as the accounting profession, Public Company Accounting Oversight Board Chairman William McDonough told a gathering of financial executives here.

The National Association of Securities Dealers charged H&R Block Financial Advisors Inc., the investment arm of the tax prep giant, with fraud in the sale of $16 million worth of Enron Corp. bonds after the energy firm's finances and bond ratings had begun to collapse.

Auto loan provider United PanAm Financial Corp. said that it will restate three years of financial statements due to a programming error in its accounting system that led it to fail to properly reverse $3.1 million in accrued interest on certain charged-off accounts since 1998.

Average tuition and fees at four-year public colleges and universities for the 2004-05 year climbed 10.5 percent from last year's levels, to $5,132, while fees at four-year private schools rose 6 percent, to $20,082, the College Board reported.

Electronic Data Systems postponed for the second time the release of its third quarter earnings pending an evaluation by the company and its auditor of an asset impairment related to its Navy Marine Corps Intranet account.

Two former Computer Associates executives settled Securities and Exchange Commission charges that they participated in a widespread practice that resulted in the software maker's improper recognition of revenue.

Citing objections from banking regulators including the Federal Reserve, the Securities and Exchange Commission said it would delay a plan to oversee brokerage services offered by banks until March 31, 2005.

The American Institute of CPAs has adopted ethics rules that place new requirements on members who outsource clients' work to third-party providers and broaden the definition of those providers.

Media and entertainment giant Time Warner Inc. said that it had established $500 million in legal reserves related to pending government investigations, and that it intends to restate its accounting for its interests in AOL Europe prior to 2002.

In one of the first cases of document destruction brought under Sarbanes-Oxley, a former partner in Ernst & Young's San Francisco office pled guilty to falsifying records in a federal investigation, the U.S. Attorney's Office for the Northern District of California said.