Audit

A trio of related companies have filed suit to stop the Securities and Exchange Commission from infringing the trademark of their auditing software product. Former SEC Chairman Christopher Cox said last August that the SEC would develop a new interactive financial statement filing system to replace its old Edgar system. The new system, known as Interactive Data Electronic Applications, or IDEA, would rely on Extensible Business Reporting Language, or XBRL, data tag technology, which the SEC is beginning to require large public companies to use for their filings.

Tennessee Governor Phil Bredesen has tapped a CPA, Charles L. Harrison, to lead the state’s “implementation” of the stimulus funding it receives.

Michigan CPA firms Frank & Freedman and Hirsch, Subelsky & Associates have merged to form Frank, Hirsch, Subelsky & Freedman.

Federal Reserve Chairman Ben Bernanke said that accounting standards need to be modified to deal better with valuing illiquid assets.

To help small and midsized accounting firms cope better with implementing international auditing standards, the International Federation of Accountants has published a “Guide to Quality Control for Use by Small- and Medium-sized Practices.”

So, do you get the feeling that American seniors will be living longer but on less money? Well, according to a new study from the Senior Economic Security Index, a new research project developed by the Institute on Assets and Social Policy at Brandeis University and Demos, a national public policy and research organization, some three out of four senior households lack the economic security needed to sustain them through their lives. The study points out that older Americans have experienced huge, negative financial shifts that now make it more difficult to enter retirement with sustainable economic security. In fact, 87 percent of all senior households are financially vulnerable when it comes to their ability to meet essential expenses and to cover projected costs over their lifetimes. It also notes that single households, African-American households, and Latino households are the most likely groups of seniors to be financially vulnerable. Particular areas of vulnerability include: *45 percent of seniors households spend nearly a third of their income on housing while 31 percent either rent or have no home equity to draw on in tough times *40 percent of senior households spend more than 15 percent of their income on healthcare *One in three senior households has no money whatsoever left over after meeting essential expenses *More than half of senior households (some 54 percent) do not have sufficient financial resources to meet median projected expenses based on their current financial net worth, projected Social Security, and pension incomes. However, it’s not all doom and gloom. Tatjana Meschede, lead author of Living Longer on Less: The New Economic (In)Security of Seniors, says that “Even in their current precarious state, it is important to note that today’s seniors are better prepared for retirement than subsequent generations will be. They have benefited from pensions, jobs with significant retirement benefits, and a stronger social safety net than subsequent generations will enjoy.” But, left unchanged, the report points out that the current decline in employer-based retirement savings, the weakening of Social Security and Medicare, and rising debt experienced by younger Americans will add up to even greater vulnerability as they retire, “Younger generations who face historically low savings rates, declining assets, and an unsure future for their retirement accounts and Social Security itself, must urge our policy leaders to take action to strengthen the security of today’s seniors and to ensure their own,” says Jennifer Wheary, a co-author of Living Longer on Less. For more information and to download the report, go to iasp.brandeis.edu and demos.org.

The internal audit function has become crucial to helping companies cope with the economic crisis and complex regulatory requirements, according to a new guidebook.

All taxpayers dread the prospect of facing an Internal Revenue Service audit. Here is some advice from the New Jersey Society of CPAs on some steps taxpayers can take to minimize the likelihood they will be audited or ensure a more positive experience if they are:

One third of public companies did not satisfy the minimum requirements of disclosure of their tax reserves last year as required by new rules put in place by the Financial Accounting Standards Board.

The Public Company Accounting Oversight Board has re-proposed for comment a standard for auditing firms to use for reviewing their audit reports internally by a second or concurring partner before they are issued.

Securities and Exchange Commission Chairman Mary Schapiro has been under pressure not to appoint a leading critic of International Financial Reporting Standards as a permanent chief accountant, according to a former official who filled that post.

Are you able to get what you need from reviewing financial statements? Do you think there are ways to enhance the usefulness of the presentation of the information?

The International Auditing and Assurance Standards Board has completed a project aimed at updating and clearing up ambiguities in auditing standards.

The American Institute of CPAs has appointed four new members of the Auditing Standards Board.

The town of Fairfield, Conn., has filed a lawsuit against KPMG and an investment advisor after its employee retirement programs lost an estimated $40 million in two hedge funds that invested all their assets with Bernard Madoff.

Berkshire Hathaway chairman Warren Buffett said in his annual letter to shareholders that he endorses mark-to-market accounting, even though it helped produce the worst financial results for his company in the 44 years he has been running it.

Although admittedly many people look upon January 1st as the trigger-point for resolutions, an organization known as Savvy Ladies figures that April 15th is really the better date. “Tax time is often the only time of the year when a lot of people sit down and look at how much they’ve earned and how much they’ve been able to save,” says Stacy Francis, founder of Savvy Ladies and a certified financial planner,. “It’s a bit of a shock for many to see how much cash slips through their fingers every month.” Savvy Ladies is dedicated to providing financial education to women in their quest for financial independence. It has free monthly newsletters, seminars, and teleconferences that are pegged at fostering a sense of community and are specifically designed to educate, amuse, and fulfill savvy women who want to take control of their financial future. There are currently 2,100 members and growing rapidly. The founder of this organization is Stacy Francis who is the president of Francis Financial, a New York City-based firm that specializes in helping individuals create more fulfilling lives through financial freedom.

Rep. Paul Kanjorski, D-Pa., has introduced a bill in Congress to close a legal loophole that allowed Bernard Madoff’s tiny auditing firm to avoid scrutiny.

The Public Company Accounting Oversight Board’s chief auditor and director of professional standards, Thomas Ray, has resigned and plans to return to the private sector on March 6.

CaseWare IDEA and Audimation Services plan to introduce the latest version of their IDEA audit software, including a new project overview feature that presents a graphical representation of the entire audit or investigation process.