Accounting standards

It didn't take long for critics to start throwing eggs at Treasury Secretary Henry Paulson's plan for overhauling the structure of the government's financial regulatory agencies.

CCH has introduced an online resource, FAS 157 Manager, designed to help accountants deal with the complexities of Financial Accounting Standard Statement No. 157 on fair value measurements.

Tax Partner Named Woman of the Year

On January 24, 2002, I gave a presentation, at the Large- and Medium-Sized Firms Practice Management Committee of the New York State Society of CPAs, entitled "Like the Energizer Bunny, the Enron Mess Keeps Going and Going." It seems I was right as Citigroup just settled a lawsuit in which it agreed to pay $1.66 billion to the Enron Bankruptcy Estate, which had filed bankruptcy and fraud claims against Citigroup in the United States Bankruptcy Court in New York.

The Treasury Department has released its blueprint for overhauling the regulatory structure of the financial markets in an effort to cope with the crisis in the mortgage and credit markets.

A federal judge has dismissed major parts of a class-action lawsuit brought against tax prep chain Jackson Hewitt and a large group of its franchisees.

Xerox and KPMG have agreed to settle a shareholder lawsuit dating back to 2000 claiming that Xerox manipulated its accounting to inflate its earnings.

R.R. Donnelley & Sons and Edgar Online have launched TryXBRL.com, a Web site that allows users to view and analyze financial statements tagged in Extensible Business Reporting Language from over 12,000 publicly traded companies.

Center for Audit Quality Comments on Treasury Blueprint

This year’s tax return filing season appears to be proceeding smoothly, despite the initial confusion that was generated by the seemingly annual last-minute tax legislation.Included in that flurry of new guidelines were the Tax Increase Prevention Act of 2007, which passed in December and included an Alternative Minimum Tax patch for the year that required some fine-tuning of the Internal Revenue Service’s computers to process returns that might be subject to the AMT; and the Mortgage Forgiveness Debt Relief Act of 2007, which also passed in December, and excluded mortgage debt forgiveness for homeowners whose home at foreclosure sold for less than the outstanding mortgage, if a portion of the unpaid debt was forgiven. In total, more than 10 forms this season were affected by the AMT patch.

The Financial Accounting Foundation’s board of trustees has voted to approve a range of sweeping changes in the oversight, structure and operations of the FAF and its two standards-setting boards — the Financial Accounting Standards Board and the Governmental Accounting Standards Board.The FAF plans to expand the number and breadth of investors, accounting, business, financial and government organizations and entities invited to nominate FAF trustees. Final authority for all the appointments will remain at the discretion of the board of trustees, who are responsible for the oversight, administration and finances for both of the standard-setting boards.

Much of the election-year criticism of hedge funds misses the point when it focuses on the claim that hedge fund operators get unfair tax breaks, experts say.There is abuse in the current Tax Code when it comes to hedge funds, but it affects the investors, according to Alan Dlugash, a tax partner at New York-based CPA and business advisory firm Marks Paneth & Shron. They’re often subjected to taxes that wipe out nearly all — or more than all — of the income that they made from the fund, he observed.

Accounting firm BDO Seidman said corporate executives and board members should be prepared to address various questions about the effect of the credit market crisis on their companies at their upcoming annual shareholder meetings.

The Securities and Exchange Commission said it has settled with six former executives and employees of Riverstone Networks who had been accused of inflating revenues at the communications router maker after they agreed to pay penalties and fines.

The Securities and Exchange Commission has charged Canadian pharmaceutical company Biovail and its former CEO and CFO and two current senior executives with engaging in fraudulent accounting schemes and making a series of misstatements to analysts and investors.

Software developer Compliance Coach introduced CompliancePal, a product intended to help businesses comply with new rules for safeguarding against identity theft.

The Financial Accounting Standards Board has issued a statement intended to improve financial reporting on derivative instruments and hedging activities.

The International Accounting Standards Board has issued a discussion paper, "Reducing Complexity in Reporting Financial Instruments," intended to be the first step in developing principles-based standards that are less complicated than existing standards for reporting on derivatives and other investments.

The California Society of CPAs said it would begin an educational initiative to help its 31,000 members cope with International Financial Reporting Standards.

The administration’s budget proposal to conform the penalty standards applicable to preparers and taxpayers has been welcomed by tax professionals concerned about possible conflicts of interest between preparers and their clients.The budget, the administration’s blueprint for legislative proposals, also calls for making permanent the 2001-2003 tax cuts, and offers measures to increase savings and investment and to improve compliance with the tax system. Rather than address Alternative Minimum Tax reform, it proposes a one-year patch to keep the number of taxpayers subject to the tax at around 4 million.