Audit

Ernst & Young is engaged in lawsuits with Entrepreneur Media Inc. over the use of the term "entrepreneur of the year" by Entrepreneur Magazine.

KPMG has released a publication on transfer pricing controversies, highlighting how tax authorities worldwide are relying on specific "red flags" to tighten their enforcement and audit efforts.

I am never ceased to be amazed at the misinterpretations of what a certain financial planner does or how the planner acts in conjunction with the client. Let me explain. For one, there is the definition of commission-based and fee-based. Actually, there are three aspects here. A fee-only planner is one who is paid based on a set hourly rate, a project rate, an annual retainer, a percentage of assts under management, or some combination. The planner does not receive any compensation contingent on the sale or purchase or a financial product. A commission-based planner may include brokers who receive compensation based upon commissions paid by the client or by the mutual fund company or insurance company, or other product provider, each time the client is sold a security. A fee-based compensation is not to be confused with fee-only. This indicates that compensation occurs by way of both fees and/or commissions. Now as to those artful terms of advisor, planner, et al, consider this. The term investment advisor describes a rather wide range of people who are in the business of giving advice about securities and they may use a variety of titles such as investment manager, investment counsel, asset manager, wealth manager, or portfolio manager. An investment advisor then provides ongoing management of investments based on the client’s objectives. The terms broker and broker-dealer refer to firms who are in the business of buying and selling securities on behalf of customers. Individual salespeople employed by brokerage firms are usually called stockbrokers and are officially referred to as registered representatives of the brokerage firm. They may also use other titles such as financial consultant, financial advisor, and investment consultant. A financial planner, unlike an investment advisor and broker, is not a legally defined term and it usually refers to providers who develop, and may also implement, comprehensive financial plans for clients based on their long-term goals, or who may prepare plans to address specific issues their clients may face such as retirement income planning, funding of educational expenses, and the like. When you talk about a comprehensive financial plan, you can turn to the National Association of Personal Financial Advisors who defines comprehensive financial planning advice as the coordinated consideration of each of the following areas for a client: income tax, cash flow, retirement planning, estate planning, investments, risk management, and any special needs planning.

Ernst & Young has settled charges with the Securities and Exchange Commission for $2.9 million alleging a conflict of interest in its audits of three companies.

The Financial Accounting Standards Board has issued a revised exposure draft of a proposed standard on earnings per share, along with a staff position on endowments for nonprofit organizations.

The Securities and Exchange Commission has issued a warning about the use of 401(k) debit cards that allow employees at some companies to borrow money from their retirement plans.

Admissions of material weaknesses in internal controls have declined in the filings of large U.S. companies in the past two years, showing the positive effects of Sarbanes-Oxley compliance, according to a newly released analysis.

The European Commission has decided to cut some of the red tape to allow audit firms from other countries, including the U.S., to operate in Europe.

Deloitte Financial Advisory Services has launched a new Electronic Discovery Solutions Center in the Nashville area to help with the evidence collection process for legal proceedings.

One of the speakers at the New York State Society of CPAs’ ethics conference last week told a series of alarming stories about accountants who had been sued by their own clients for not doing more to warn them about their own risky financial activities.

The Marketplace provides you, the tax and accounting professional, a tool to help find the products and services you need to easily and efficiently run your practice or to recommend to your clients. Browse by category below or search by company name.

UHY Advisors has named Tony Frabotta and Rick Stein as co-CEOs, replacing Steve Samek, who resigned from the firm last week.

The judge presiding over the KPMG tax shelter case has agreed to sever the four tax evasion counts for one of the defendants from the rest of the charges relating to the tax shelter.

The Institute of Internal Auditors has published a pair of Global Technology Audit Guides discussing business continuity management and information technology audit plans.

The Securities and Exchange Commission held a roundtable discussion on the performance of International Financial Reporting Standards and U.S. generally accepted accounting principles during the subprime crisis.

MAXXAM JETTISONS DELOITTE

This fourth of four columns on mythbusting is aimed at an old chestnut that has been repeated so often that virtually no one ever casts a wary eye in its direction. Here is a quote from a standard intermediate textbook (italics in the original): "Cost has an important advantage over other valuations: It is reliable."

Many aspects of business organizations today are challenged to do more with less, and the internal audit activity is no exception. As executive management and boards are increasingly recognizing the criticality of managing risks throughout their organizations, they are expecting more of their internal auditors than ever before.

“Women, Money and Power” is a new study released by Allianz Life Insurance Company of North America that says more than half of all women want to learn about retirement planning and try level-saving and investing, although many are not sure where to begin. Allianz examined two key questions: what women want to learn about finances and how they want to learn it. It found that while the Internet is the most consulted resource, it is the least trusted. Apparently, human contact remains the most meaningful and effective source of information. The study identified the financial planning topics women want to learn about most. The top five subjects include: · Planning for retirement/maintaining lifestyle in retirement · How to start saving or investing on very little income · Basics of buying smart (savvy shopping, buying vs. leasing, etc) · How to buy/select the right insurance products (life, long-term care) · Definition of basic financial terms (IRAs, annuities, mutual funds) According to Allianz, single women with children were overwhelmingly interested in planning for retirement, with 68 percent saying it was a topic of interest. In addition, 47 percent of that group was interested in how to buy or select the right insurance products, and 49 percent wanted to learn the definitions of basic financial terms. Single women were particularly interested in educating themselves. Forty-five percent of single women with children and 55 percent of single women without children expressed interest in learning about financial planning. Divorced women were also above the group average, at 42 percent. “This intense interest by women, especially single women with children, demonstrates that all women are thinking about finances for themselves and their families, and are ready to take control, with a little bit of help,” says Sherri DuMond, vice president of Marketing Solutions for Allianz. Difficulty in understanding financial information is a critical barrier for many women, the Allianz study finds. When asked about their financial planning concerns, women responded: · Information is overwhelming/too much/hard to sort through · Information is complicated or hard to understand · Materials are really boring and dry · Don’t understand terminology/materials seem foreign Despite their reservations, more than one in three respondents, some 35 percent, said they were very or quite a bit interested in learning about financial planning, retirement planning, and investment decisions. Tom Burns, senior vice president and chief distribution officer, says, “I’m excited about this opportunity to really take a look at what women need from a financial services company. This study represents a clear opportunity for Allianz and the financial services industry as a whole to break the cycle of women’s hesitance to be involved in financial planning.”

The Securities and Exchange Commission's Advisory Committee on Improvements to Financial Reporting voted Thursday to approve the recommendations in its final report, which the SEC will present publicly on Friday.