Audit

Inflation at its highest levels in 27 years, screams one headline. Manufacturers pass price increases along to consumers, screams another. “Consumers make changes – but will they last?” asks another recent headline.

Ernst & Young renewed a multi-year licensing agreement with software developer Approva to offer risk controls analytics to clients.

More than 28 percent of large public companies are not fully meeting disclosure requirements for tax reserve estimates, according to a new report.

The Governmental Accounting Standards Board issued for comment a proposed technical bulletin to help government accountants determine the annual required contribution for post-employment benefits.

Grant Thornton took first place in Public Accounting Report's second-quarter audit rankings, the first time one of the Big Four audit firms didn't get the top spot for the quarterly rankings.

The Public Company Accounting Oversight Board has adopted rules requiring audit firms to submit reports at least once a year on fees, disciplinary actions and other information that will be posted on its Web site.Each of the more than 1,800 public accounting firms registered with the PCAOB must provide basic information about audit reports issued during the year and the disciplinary history of people who have joined the firm during that time. They must also report information about fees billed to audit clients in various categories of services as a percentage of the firm’s total fees billed.

In this third installment in our Mythbusters series (with credit to the Discovery Channel show, MythBusters), we turn to the oft-repeated but seldom-scrutinized notion that reporting values in financial statements creates volatility.This idea has been in the spotlight because of the recent financial crisis, with one myth-monger after another blaming the Financial Accounting Standards Board and anyone but themselves for financial institutions’ crashing stock prices. They say that mark-to-market accounting made it look like these entities were going into the tank. How much better it would be, they said, if the collateralized debt obligations were just carried at their cost so things wouldn’t look so bad. And if they didn’t look so bad, we’d all be better off.

I just came across a rather interesting Web site that I thought I would share with you. It’s called ValueForum.com. It’s an online investment forum geared toward allowing the free-flow of information among investors. The site provides a discussion forum where members can immediately gain access to more than 1,500 other members to talk about individual stocks, mutual funds, market sectors (i.e. energy), economic conditions (i.e. housing market), and any number of other topics that affect the everyday investor. The company says that the members on this site are all screened rigorously to ensure that no one is there to “product push” or gain anything besides knowledge. These members, the company notes, range from experienced individual investors to financial professionals and even those new to investment. The majority of the forum members are between the ages of 55 & 65 while over 20 percent are 65+…retirees, or many who are of retirement age but are still employed. A few of the offerings that ValueForum.com brings to the table are an active discussion forum, where with over 125 discussion topics, members can post a discussion question/topic to create a forum of open and free-flowing discussion. These discussions are listed in chronological order and by topic. There is also what is called shared portfolios whereby users can view the holdings of other ValueForum.com users, or share their own portfolios with the group. Members can also view the latest news on the stocks within each of the shared portfolios. Moreover, they can choose to contribute to the “Community Portfolio Project,” a portfolio built solely on the picks of members who wish to share their portfolios with others. Then too, there is a stock-picking contest where members participate in quarterly or year-long contests in which they choose a handful of stocks and a desired weight. Prizes are then given at the end of each contest period to the members with the highest performing portfolios. And finally, there are group polls by which members can create a poll question to their peers, answer questions posted by other members, and view results of all poll questions posted. ValueForum was formed in 2003 by Adam Menzel, Ben Nobel, and Daniel Pedisich. They created the site with the belief that the power of collaboration leads to better investment decisions. They say that there have always been investment clubs where people physically get together in a room every week, but now there is a way to bring people together from all over the country, and the world, to one spot in order to share their ideas. The benefit, they note, is a collaboration of cultural diversity, different work experiences, and varying investment experiences. The power of “group thinking” benefits those investors managing their own portfolio as well as those managing accounts for clients, says the company. Members immediately gain access to a wealth of knowledge about different industries to help them in their due diligence and analysis on investments, sectors, and the like. Now, in the interests of fair disclosure, I am not advocating or “pushing” this in any way. I simply am imparting information about such a site and you can take it from there.

The KPMG Foundation has granted $410,000 in scholarships to 41 minority doctoral scholarships for the 2008-2009 academic year as part of its effort to increase the number of minority students and professors in business schools.

The Bonadio Group has merged with Dorfman-Robbie and its affiliated companies, the DR Group, to create an accounting firm with annual revenues of nearly $45 million.

Accounting firm J.H. Cohn has combined practices with Frederic Kantor & Co., a Manhattan-based accounting firm serving high-net-worth individuals and families working in entertainment and the creative arts.

The Schonbraun McCann Group LLP has changed its name to Cornerstone Accounting Group LLP and announced some management changes.

Maybe because I am so literal, I am a firm believer in transparency. Perhaps that was why I was intrigued by a newsletter from a leading firm association that goes to association members and friends. Included was a two-pager entitled “Vision for Our Future,” that identifies ten possible goals of the association for 2008-2012. The process, which included member surveys, conference calls, and meetings, was also detailed. The proposed goals were developed by a 15-member team and facilitator, all listed in the two-pager.

Job satisfaction among financial planners remains high, with 96 percent of financial planners saying they are "satisfied" or "very satisfied" with their career choice, according to an annual survey.

Ernst & Young won a decision involving a defunct hedge fund after its liquidators sued the firm's Cayman Islands unit, accusing it of performing a deficient audit and failing to detect the investment managers' fraudulent valuation.

CPA Wealth Provider's second ranking of firms by AUM has now been published and it’s bigger and better than ever. As you know, AUM is a term originally employed by financial services companies in the mutual fund and money management or investment management business to gauge how much money they were managing. Many financial services companies used this as both a measure of success and comparison against their competitors; in lieu of revenue, they had total assets under management. For readers of the publication, last October it presented the first-ever ranking of such firms by AUM. The initial response was staggering. It had 89 responses so it tried again and now the responses are no longer staggering—they are stupendous! CPA Wealth Provider more than doubled last year’s count and reached the 200 mark which included a batch of firms who unfortunately couldn’t get their survey forms completed in time for this closing. Because of this response, the publication decided to break the numbers down into sections and to specifically indicate each section. There are now 18 firms in the Billion Dollar Club (termed Wealth Magnet Elite), 87 in the $100+ Billion Club (termed Wealth Magnet Select), and another 37 in the $50+ Million Club plus a whole host of Rising Stars and Ones to Watch. But most importantly of all, take a look at the firms on the charts. They practically mirror the entire CPA/financial planning industry—from geographic location to size to AUM numbers to affiliations to recommended financial planning products. What does this show? Exactly what we felt all along—the financial planning industry is a tiger by the tail. We see this at various conferences and trade shows where copies of this publication literally fly off the racks. We are also getting tons of communiqués from readers as to how well they like the magazine and leading experts in the field constantly inquire about contributing articles. You can see this by the varied mix of authors and subjects. I firmly believe that CPA Wealth Provider remains the leading national publication for CPAs involved in financial planning.

Katz, Sapper & Miller plans to merge in another Indianapolis accounting firm, Heaton and Eddie, to build its healthcare and employee benefits consulting capabilities.

The U.S. Court of Appeals for the Sixth Circuit has referred questions to the Pennsylvania Supreme Court in a case involving PricewaterhouseCoopers that could set a precedent for accountant liability.

Massachusetts Mutual Life Insurance has introduced SignatureCare 500, a long-term care insurance product that lets consumers customize a policy to meet their needs.

The Securities and Exchange Commission convened a roundtable of experts to discuss the controversial topic of fair value measurements in accounting.