Accounting standards

The Securities and Exchange Commission has voted to remove the requirement for non-U.S. companies to reconcile their financial statements to U.S. generally accepted accounting principles.

The Financial Accounting Standards Board reaffirmed an earlier vote against a blanket deferral of Statement 157, "Fair Value Measurements," but granted a deferral for some assets and liabilities.

The Securities and Exchange Commission is expected to drop the requirement for foreign companies that list on exchanges in the U.S. to reconcile their financial results to U.S. generally accepted accounting principles.

The Securities and Exchange Commission has received letters from accounting organizations and firms responding to its concept release on allowing public companies to prepare financial statements in accordance with International Financial Reporting Standards, some in favor and some opposed

Securities and Exchange Commission Chairman Christopher Cox met with securities regulators from Australia, Canada, China, Israel, Japan and South Korea to discuss the timeline for the implementation of interactive data for financial reporting.

The Financial Accounting Standards Board has decided to defer the effective date for FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes," for nonpublic entities.

The International Accounting Standards Committee Foundation, the oversight body for the International Accounting Standards Board, has taken several steps to enhance its governance structure and allow more input from government securities regulators, as well as investors.

The Securities and Exchange Commission has released a staff accounting bulletin that revises and rescinds some of the rules for written loan commitments to make them more consistent with recent accounting rules.

After a summer of discussions, the Financial Accounting Standards Board is expected to release as many as 10 documents by the end of the year or early in 2008.Susan Bielstein, FASB director of major projects and technical activities, said that the board had shown strong progress this year, especially with the completion of a business combination standard that it wrote jointly with the International Accounting Standards Board. It was the first joint standard the boards have produced, and it's expected to be released in mid-October. "It was a real milestone in the convergence process," Bielstein said.

The Internal Revenue Service has softened its opposition to contingent fees charged by Circular 230 practitioners. Originally, the IRS proposed permitting a contingent fee only in connection with an IRS examination or the challenge of an original return, or an amended return filed before a notice of examination was received.Under the final rules, a tax practitioner will be allowed to charge a contingent fee for services rendered in connection with the IRS examination of, or challenge to, an original return, or an amended return or claim for refund or credit where it was filed within 120 days of the taxpayer receiving a written notice of the examination, or a written challenge to the original return.

Small and midsized companies are facing increased scrutiny from tax authorities both in the U.S. and in foreign jurisdictions to ensure that the transfer pricing of transactions among their subsidiaries is treated as if they were at arm's length - or what two unrelated parties would pay."Transfer pricing is something that a lot of small and medium-sized companies need to be paying attention to and thought they were under the radar in the past," said Meril Markley, a principal at UHY Advisors in Houston. "But because of FIN 48, they're really going to have to take a close look for the first time."

When the Financial Accounting Standards Advisory Council met in September to discuss the use of International Financial Reporting Standards, they found themselves answering questions with questions.FASAC, which advises the Financial Accounting Standards Board on a variety of issues, had been given the task of providing perspectives on where accounting and financial reporting might be going over the next two or three decades - with special consideration of the role of IFRS.

Dell filed its past-due financial reports from fiscal 2003 through 2006 and the first quarter of fiscal 2007, while shedding light on some of the accounting missteps that led to its financial restatements and delays.

Many firms conduct surveys and issue releases summarizing them hoping for the maximum press coverage. Grant Thornton is one of the “best” at it.

Fitch Ratings has released a report on the recent disruptions in the credit market and the effect of two new accounting standards.

A majority of CFOs and senior comptrollers do not agree with proposals to allow companies to file financial statements in International Financial Reporting Standards instead of U.S. generally accepted accounting principles, according to a newly released survey by accounting firm Grant Thornton.

The Senate Banking Committee held a hearing on allowing U.S. companies to use International Financial Reporting Standards.

SEC Commissioner Paul Atkins told U.S. business leaders in Japan that a recently issued auditing standard should have the effect of cutting audit fees.

A former Arthur Andersen audit partner has settled charges brought against him by the Securities and Exchange Commission alleging that he assisted in a $300 million fraud committed by an audit client in 2000.Without admitting or denying the charges, Fred Gold agreed to a $100,000 fine, a permanent anti-fraud injunction, and an administrative order barring him from appearing or practicing before the commission.The SEC alleged that Gold should have known that the 2000 financial statements of American Tissue -- the audit of which he supervised and approved -- included fraudulently inflated assets and earnings, and also that in 2001 Gold altered work papers to prevent discovery of the fraud in a peer review, and later tried to hide the audit failure by destroying documents and e-mails after another accounting firm discovered American Tissue's overvalued inventory.Earlier, former Andersen audit manager John Parson and senior accountant Brendon McDonald settled SEC charges in the same matter; Parson for $50,000 and permanent suspension from practicing before the commission, and McDonald for a $30,000 penalty and a five-year suspension.

The Treasury Department has selected a Kansas professor to study the effects of financial restatements.The department picked Susan Scholz, a professor at the University of Kansas, to carry out the study, which will look at the impact of public company financial restatements and the reasons behind them. Treasury Secretary Henry Paulson discussed the need for a better understanding of these issues back in May.While Sarbanes-Oxley requirements and tougher auditing standards have forced companies to issue a growing number of restatements, some observers have questioned whether immaterial restatements might unnecessarily harm investor confidence.Scholz will examine the factors triggering public company financial restatements, describe the restatements, analyze their impact, and evaluate their significance.The Treasury Department chose Scholz through the competitive bidding process. She is an associate professor and Harper Faculty Fellow at the University of Kansas School of Business, and received her doctorate in business administration from the University of Southern California.