Accounting education

A House subcommittee plans to conduct a hearing into the tax treatment of derivatives next week.

A 61 percent majority of chief financial officers at leading U.S. technology companies feel that shareholders should have a say on executive compensation plans, according to a new survey.

Becker Professional Review has introduced a scholarship program that will award Becker CPA Review scholarships valued at $2,690 each to 50 students who need financial assistance to prepare for the CPA Exam.

The many Boomers partners of firms who are planning to retire or slow down is being viewed as generating firm succession and staffing issues. Similarly, another expressed concern is the declining number of Ph.Ds. in accounting, which hurts the pipeline of incoming accounting graduates to the profession. A partner in a national firm also commented that he was alarmed by the many college professors teaching accounting who don’t have a familiarity with U.S. businesses.

For investment property owners, the first and last concern in a Sec. 1031 exchange transaction should be safety. "Will my funds be secure?" is the most important question to ask a qualified intermediary before beginning a Sec. 1031 exchange.Recent events by a handful of disreputable qualified intermediaries have led to speculation on what is the true litmus test for security of funds in a 1031 exchange. In response, a few QIs and pundits have generated a rash of propaganda and half-truths.

EISENBERG GARNERS PFP DISTINGUISHED SERVICE AWARDThe American Institute of CPAs has named Michael Eisenberg, CPA/PFS, of Los Angeles, the recipient of the 2007 Personal Financial Planning Distinguished Service Award.

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The results of a new survey were released a few weeks ago at the AICPA Advanced Personal Financial Planning Conference. It concluded that retirement savings is a key concern for Americans and that life decisions are in limbo because of finances. According to the survey, having enough money to retire and to pay for major life needs such as healthcare and education are at the top of the list of concerns for Americans. In fact, the AICPA says that in response to an open-ended question, nine out of 10 CPAs surveyed said their individual clients were concerned about retirement and that costs associated with healthcare and education were ranked by respondents as the second (59 percent) and third (47 percent) financial concerns of clients. “Many Baby Boomers are discovering their retirement kitty is not as big as it needs to be to fund a comfortable retirement and that they are going to have to work longer than they had intended,” says James Metzler, AICPA vice president. By the way, respondents included CPAs who hold the Personal Financial Specialist (PFS) credential. The survey also revealed that nearly a third of the respondents (32 percent) reported that clients who are approaching retirement age are postponing leaving the workforce for financial reasons. Also, as many as one-third of CPAs with clients between the ages of 25 and 34 are seeing individuals foregoing buying a home, having children, and even saving for retirement. Moreover, one third of the CPA planners say their clients were carrying more credit card debt than they did five years ago, with excessive discretionary spending pinpointed as the primary culprit. The median level of increased credit card dent is $8,333. “With so many people in debt because of unnecessary spending, Americans of all ages need education and guidance about how to improve their financial well-being,” notes Carl George, chair of the Institute’s National CPA Financial Literacy Commission. Actually, three years ago, the AICPA launched the 360 Degrees of Financial Literacy effort, which has a dedicated consumer Website (www.360financialliteracy,.org) containing hundreds of tools and resources to help Americans improve their financial understanding. A related campaign, Feed the Pig (www.FeedthePig.org) is designed to help Americans aged 25-34 save for long-term financial security. It should be noted that the survey was conducted this past December via a questionnaire mailed to members of the AICPA Financial Planning Membership Section. Of the respondents, some 44 percent manage more than $10 million in assets.

Two accounting firms, Mueller Yuva & Osterman and Larson and Associates, have merged to combine their strengths in auditing, estate planning and other services.

The Securities and Exchange Commission has introduced Financial Explorer, a tool that shows corporate financial performance using interactive data in Extensible Business Reporting Language.

Last year, we published for the first time a ranking of CPAs by AUM (Assets Under Management). It was a huge undertaking by CPA Wealth Provider because we reached out to as many CPA firms as possible. Admittedly, we didn’t get all of them but we received a response that was staggering. We had two criteria for consideration: They must be a CPA firm that has a financial planning practice, even as a subsidiary or affiliate, and the financial planner in the office must hold a CPA credential. In the top list were 11 firms that were in “The Billion Dollar Club” while another 41 firms were in “The $100+ Million Club” and then a listing of those in the eight-figure category that we deemed “Rising Stars.” We also delved beneath the surface of just a ranking and unearthed what affiliations each firm had, such as broker/dealers, wire-houses, financial services companies, and the like. We went even further and revealed the areas of financial planning products that each firm recommended in basic categories such as IRAs, 401(k)s, mutual funds, life insurance, bonds, 529 plans, to name a few. The reaction from the accounting profession was simply wonderful. No one had ever seen such a ranking before and it opened the door now for a second ranking. Firms clamored for this to be an annual event, and we are complying. We are contacting everyone on our list from last year for updates plus additional firms that have contacted us. The final list will be compiled on May 1 and we will publish the rankings in the July 2008 CPA Wealth Provider. We encourage you to participate. For a copy of the Survey Form, contact me by email (stuart.kahan@sourcemedia.com), by fax (646) 264-6828, or write to me at Source Media, One State Street Plaza, 27th Floor, New York, NY 10004.

Mutual fund research company Morningstar has begun rating hedge funds.

KPMG is holding a five-week competition among auditing students from more than 27 colleges and universities around the country.

The Foundation for Financial Planning has awarded nine new grants totaling $565,272. The grants went to:

Are you feeling overwhelmed by the task of sorting through a multitude of mutual funds to offer clients? Think of narrowing down the appropriate funds as a funneling process.This technique works for Sean Bergin, managing director of Citrin Cooperman Wealth Management Co., based in Philadelphia. For him, the key is to slim the selection down via a handful of requirements.

The challenges for creating an effective executive compensation package are many. The executive wants more pay but less taxation, while the company wants incentive-based benefits that bind the executive more closely to the company.The traditional solution for these needs is a nonqualified stock-option program. The executive gets both a potentially high payout and the ability to time the taxation of the payout. The employer likes the program because stock options are a cashless, incentive-based package with vesting restrictions.

Are your clients pointed in the right direction? Gail Cunningham of the National Foundation for Credit Counseling recommends that people review where they are in order to determine where they’re headed, as well as encouraging them to consider implementing certain tips. The NFCC was founded back in 1951 and is the nation’s largest and longest serving national nonprofit credit counseling organization. She says that a few simple steps can make a dramatic difference in one’s financial life.

The American Institute of CPAs and Fiduciary360 have published the U.S. edition of a handbook for investment advisors.

Deloitte Financial Advisory Services has introduced a service that issues fairness opinions on the consideration offered to companies on financial deals such as mergers, acquisitions, going-private transactions and divestitures.

The American Institute of CPAs has written to the Treasury Department and the Internal Revenue Service about proposed regulations for automatic contributions to 401(k) plans, as well as cafeteria plans.