Accounting standards

As the American Institute of CPAs' director of auditing and attestation, Chuck Landes has guided the Auditing Standards Board through the upheavals of the Sarbanes-Oxley Act, and in late October, he saw the board issue 11 inaugural standards for the audits of private companies."This was a monumental meeting," Landes said of the most recent ASB meeting. "I am just thrilled. I'm very proud of the technical staff, who have worked very hard and are finally seeing the fruits of all their labor come to fruition in the issuance of these new auditing standards. These standards make significant changes in how some auditors perform their work, and clearly they will improve the quality of auditing."

The Public Company Accounting Oversight Board will meet prior to the Thanksgiving holiday in order to address a number of items.

The Securities and Exchange Commission's 2005 financial statements got a clean bill of health from the Government Accountability Office, after the SEC accelerated its financial reporting schedule to issue the documents.

Securities and Exchange Commission Chairman Christopher Cox named Scott Taub as the agency's acting chief accountant.

While the Internal Revenue Service has made "great strides" in addressing financial management challenges and internal control deficiencies, a report from the Government Accountability Office stated that the service still faces substantial hurdles in that area.

The Internal Revenue Service has issued Notice 2005-88, which explains steps that large corporations and tax-exempt organizations can take to seek waivers from electronic filing requirements.

The Financial Accounting Standards Board will add a new project to its agenda and reconsider its accounting guidance for pensions and other retirement benefits.

Bond insurer MBIA Inc. will restate its earnings for the past seven years, as well as set aside $75 million in anticipation of settling with regulators over an accounting probe into defaulted bonds.

Securities and Exchange Commission deputy chief accountant Andrew D. Bailey Jr. will leave the commission in December.

The Public Company Accounting Oversight Board is closing in on a proposed new audit standard governing engagement quality reviews by accounting firms.That standard, which appears on track to be advanced during 2006, is part of an ambitious agenda of audit standard-setting activities for the coming year that was outlined by PCAOB staffers during a recent meeting of the board's Standing Advisory Group.

The Financial Accounting Standards Board has issued another exposure draft on accounting for earnings per share, adding what may be the final tweaks to an amendment of Statement 128.The revised edition has few changes from the original ED that was issued in December 2003, but the board considered at least one change - it involves amending the computational guidance for calculating the number of incremental shares included in diluted shares when applying the treasury stock method - to be substantive enough to require another exposure draft for public comment.

Franklin Delano Roosevelt created the Securities and Exchange Commission to protect the country's investors. The SEC went on to create the Financial Accounting Standards Board to give investors standardized financial reports.And now FASB has taken the next step toward investor protection by establishing an Investor Task Force.

The Financial Accounting Foundation, overseer of the Financial Accounting Standards Board and the Governmental Accounting Standards Board, recently named Robert J. DeSantis to the newly created post of president and chief operating officer.DeSantis, a seasoned corporate executive, financial officer, public accountant and attorney, was, most recently, chief financial officer of DSL.net, a broadband communications provider. He also served as executive vice president at Tellium Inc., a manufacturer of optical switching solutions, and held senior posts at both GTE Corp. and Big Four audit firm KPMG Peat Marwick.

Three executives at Mercury Interactive Corp. resigned after an internal investigation revealed that the company had allegedly manipulated stock options over the past decade.

RenaissanceRe Holdings Ltd. announced chairman and chief executive James N. Stanard resigned in light of investigations into the company's earnings restatement.

As part of its program to improve the clarity of international standards, the International Auditing and Assurance Standards Board of the International Federation of Accountants has issued exposure drafts of four proposed standards in a new drafting style.

The Securities and Exchange Commission will begin random annual visits to investment advisors, instead of its usual five-year visits, a ccording to published reports.

In mid-October, accounting firm Grant Thornton LLP was contacted by both the Securities and Exchange Commission and the Public Company Accounting Oversight Board about its role as auditor of Refco Inc.

General Motors Corp. announced in a filing that the Securities and Exchange Commission is investigating the company's handling of retirement benefits and its relationship with bankrupt auto-parts manufacturer Delphi Corp.

The Committee of Sponsoring Organizations, the private sector group working to improve the financial reporting process, has issued a draft to help small filers comply with internal controls requirements on a cost-effective basis.