Accounting standards

Natural gas distribution company Nicor Inc. will reportedly pay a $10 million fine to settle charges of deceptive accounting practices brought by the Securities and Exchange Commission.

Last week, the Financial Accounting Standards Board and the International Accounting Standards Board each published for public comment a consultative document setting out their preliminary views on the first two chapters of an enhanced conceptual framework. The draft chapters define the objective of financial reporting, and the qualitative characteristics of decision-useful financial information.

As part of its broader initiative to improve financial reporting for insurance accounting, the Financial Accounting Standards Board is seeking constituent comment and perspective on the potential bifurcation of insurance and reinsurance contracts into insurance components and financing components.FASB said that the invitation to comment aligns with the standards-setter's concerns about a potential lack of transparency in the financials of both policyholders and reinsurance companies.

The Securities and Exchange Commission requested that the Public Company Accounting Oversight Board delay issuing guidance related to backdating stock options.According to The Wall Street Journal, the PCAOB had planned to issue an alert to accounting firms about the front-burner topic, which would have advised auditors about grant issues they should examine in audits.

Don't expect many heavy pronouncements from the Financial Accounting Standards Board during the second half of 2006, but behind the scenes there will be a lot of progress and a good number of lesser documents on technical implementation.The only final statement on accounting standards projected for the remainder of the year is on post-retirement benefit obligations, including pensions. A comment period on the proposed standard ended in May; roundtable discussions were scheduled for the end of June.

Congressional investigators have uncovered a new breed of tax chiselers - deadbeat charities that shortchange the government and their own employees by failing to pay millions of dollars in payroll taxes.As tax-exempt organizations, or EOs, charities are excused from income tax liability, but are required to withhold and pay employment taxes for their workers. With one in 12 U.S. civilian workers now employed by exempt organizations, even a small percentage of non-compliance by charities can add up to a significant drain for federal tax collectors.

The Securities and Exchange Commission announced that securities lawyer Andrew N. Vollmer will serve as its deputy general counsel.Vollmer, 52, is a partner in the international law firm of Wilmer Cutler Pickering Hale and Dorr LLP, and has represented corporate clients in SEC investigations and proceedings. He currently serves as vice chair of the firm's Securities Department, and previously served as one of two partners managing the London office.

The Financial Accounting Standards Board and the International Accounting Standards Board have published the first draft chapters of a document laying out their views for an enhanced conceptual framework.

James Lockhart, director of the Office of Federal Housing Enterprise Oversight, said that mortgage finance concerns Fannie Mae and Freddie Mac should each be allowed to prop up the U.S. home mortgage market in periods of financial malaise.In an interview with The Wall Street Journal, Lockhart said the companies, whose combined mortgage portfolio is roughly $1.4 trillion, creates a serious risk if they fail to control their interest-rate risks, but nevertheless both have a role for their portfolios, albeit on a smaller scale, to ensure monies available for home loans.

The Securities and Exchange Commission is looking into the relationship between the former First Union Corp. and KPMG, according to published reports.

Lori Schock, the deputy director of the Securities and Exchange Commission's Office of Investor Education, has been named the division's acting director.

The Board of the International Federation of Accountants has approved the reappointment of John Kellas as chairman of the International Auditing and Assurance Standards Board.

Just over a year after his acquittal on charges of overseeing a $2.7 billion accounting fraud as the head of health care company HealthSouth Corp., Richard Scrushy was found guilty on charges of bribery, conspiracy and mail fraud.

The Securities and Exchange Commission has won the court battle over the first billion-dollar financial fraud it ever tackled, a case filed against the former chief financial officer of Waste Management Inc. back in March 2002.

Defense contractor Raytheon Co. and two of its former top executives have settled improper accounting charges brought by the Securities and Exchange Commission.

Securities giant Morgan Stanley will pay a $10 million fine to the Se curities and Exchange Commission after failing to maintain safeguards to prevent the misuse of inside information.

A federal appeals court has dealt a serious blow to the Securities and Exchange Commission's plans to more closely regulate hedge funds.

The Financial Accounting Standards Board will hold two public roundtable meetings today to discuss the board's proposal to improve accounting for postretirement benefit plans, including pensions.

A California state Senate committee canceled a hearing on a bill to allow out-of-state accountants to provide tax services in the state without first notifying the state's Board of Accountancy.

California officials are starting to consider making changes to accounting reforms the state adopted in the wake of Enron Corp.'s collapse.