Accounting standards

In an effort to address major gaps in international accounting requirements for governments, the International Public Sector Accounting Standards Board of the International Federation of Accountants has issued a proposed standard on the financial reporting of revenue from non-exchange transactions, including taxes and transfers.

The Securities and Exchange Commission and the Japan Financial Services Agency announced terms for increased cooperation and collaboration.

Tax law changes, a surge in business e-filing, and a move by practitioners toward greater use of the Internet will impact the type of filing season that tax preparers have this year."It will be typical year in terms of filing," observed John Hewitt, chief executive officer of Virginia Beach, Va.-based Liberty Tax Service. "About a million-and-a-half to two million more people will file returns than last year."

The Internal Revenue Service was singled out by congressional auditors for slow-footed implementation of federal accounting rules requiring government agencies to implement effective management reporting for cost information.In a report to the House Government Reform Subcommittee on Government Management, Finance and Accountability, investigators at the Government Accountability Office concluded that, overall, the federal bureaucracy is doing only a mediocre job in complying with government accounting standards that call for the development and implementation of managerial cost accounting.

The Governmental Accounting Standards Board has published a Guide to Implementation of GASB Statement 44 on the Statistical Section.The guide was prepared to assist preparers and auditors of governmental financial statements as they implement the updated and expanded statistical section. The statistical section is the part of a state or local government's comprehensive annual financial report that presents trend information for the last 10 years about a government's financial results, major revenue sources, outstanding debt, economic and demographic indicators, and operating activities.

Although tax experts from across the spectrum predict that a real tax reform is in our future, they are divided on how soon it will happen or what form it will take.Mark Weinberger, former Treasury assistant secretary for tax policy, said during a recent Tax Analysts-sponsored Webcast that tax reform will eventually happen. However, said Weinberger, currently Americas vice chair for tax services for Ernst & Young, the structure and timing are still up in the air.

Congress, in the waning days of its 2005 session, after failing to carry out significant parts of its tax agenda for the year, has managed to pass a Gulf Coast recovery tax act. As is common with the "last stagecoach out of town" for the year, a lot of things managed to "jump on."The hurricane provisions take up 84 pages of bill text, but the legislation goes on for another 100 pages. Among the areas addressed beyond hurricane recovery and relief are a few extensions of expiring provisions, a couple of miscellaneous items, and a huge package of technical corrections covering 10 pieces of tax legislation going back as far as 1987.

Factors such as changes to estate tax laws and the initial wave of retirement for the Baby Boomers will bring a year of significant change for financial advisors and their clients.According to a survey conducted by Impact Technologies Group Inc., a provider of financial sales software for the banking, capital markets and insurance industries, its annual industry trends forecast for 2006 predicted that action by the federal government to change the tax code and reform or repeal the estate tax will have the most impact on how advisors handle their clients' financial plans.

United Rentals, the world's largest equipment rental company, said that it removed three financial officers and fired two other employees after hearing a report from a special committee confirming accounting irregularities within the company.

Cardinal Health Inc., a manufacturer of medical supplies, has reached a tentative settlement with the Securities and Exchange Commission to end a two-year investigation into the company's accounting practices.

The Financial Accounting Standards Board has issued a proposal that would provide companies with the option to report financial assets and liabilities at fair value.

Speaking at the at the Financial Service Institute's 2006 Broker-Dealer Conference in San Diego, Securities and Exchange Commissioner Cynthia Glassman said that brokerages were the focus of more investor complaints to the SEC in the 2005 fiscal year than any other type of business.

The American Institute of CPAs' Auditing Standards Board has reissued its exposure draft containing a proposed statement on standards for attestation engagements.

Without providing details, a lawyer for former Qwest finance chief Robin Szeliga said that her deal with the Securities and Exchange Commission had collapsed.

Barry Goldsmith, the enforcement chief of brokerage regulator NASD, will step down in March to return to private law practice, and his deputy was named as his acting replacement.

The Securities and Exchange Commission voted unanimously to propose a number of changes to the disclosure rules for executive pay packages.

The Securities and Exchange Commission has launched a formal investigation into an accounting change made by IBM in 2005.

The Securities and Exchange Commission has opened an informal inquiry into how Home Depot Inc. records the credits it receives from vendors for defective merchandise.

Alan L. Beller, director of the Division of Corporation Finance at the Securities and Exchange Commission, will return to the private sector next month.

McAfee Inc., a manufacturer of computer security software, agreed to pay a $50 million civil penalty to settle securities fraud charges brought by the Securities and Exchange Commission.