Audit

The Center for Audit Quality has sent a comment letter to the Treasury Department's Advisory Committee on the Auditing Profession recommending that it pay more attention to the litigation risk for audit firms.

I just returned from a three-day trip to my undergraduate university and my 50th reunion. Yes, you read that right. Fifty years. Okay, so I started college at 10. About 400 showed up for this clambake and the most startling thing of all is that I recognized nobody and they probably felt the same about me. To the credit of the planning committee, the name badges draped around our necks not only had our names, including any nicknames known in school at that time in 1954, but also our graduation picture. That made it much easier to recognize people. I would simply go up to some unknown face, look at the picture on the name tag, and say “Hey, Bill, I know you.” And then lift my eyes to his face and say, “But you I don’t know.” What a wakeup call. Interestingly enough, if I talked to 10 people, only one—one mind you—was still working. The other nine had all “retired.” I put quotes around the word “retired” because retirement is not in my lexicon. I believe in changing lifestyles but sitting home, watching Oprah, and eating bon bons is not my ideal life. I would have to keep the brain going and the muscles in the body stimulated. Now, of those 10 people, the one who is still working is not doing it by choice. He is working because he “has to,” meaning he doesn’t have the funds to “pack it in”…another phrase commonly used at this reunion. The other nine? Catch this. None of them went to a financial planner. They used their accountants to determine what the income flow was (Social Security, pensions, securities, savings, et al) against what the expenses would be. This is a complete turnabout with what is going on today where Baby Boomers are flooding to financial planners and the financial planning niche is the fastest growing one in the industry. Why is that? One thing to keep in mind. At the time my colleagues decided to put a brake to the 9-5 grind, the economy was in good shape, stocks were up, there was pretty solid economic growth. This was all pre-9/11 and pre-Iraq, because the majority of my colleagues stopped full-time work by the time they turned 60, some 12 years ago. Today, the economy is panting, stocks are taking a beating, cost of living is sky-high, and everyone is running scared. A different world from one decade to another. What I found also fascinating is that my classmates were not living like Donald Trump. They were comfortable with enough money for their basic needs and at least one vacation (not more than $5,000) a year. Many had moved to other parts of the country to keep costs down. They were extracting only about five percent from any pension plans; in effect, living off the interest rather than the principal. And oddly enough (and maybe it’s the generation), nobody was scrimping and saving to leave a big fortune to kids and grandkids. “Shrouds have no pockets,” said one classmate. “You can’t take anything with you. I’m spending every last cent.” Another chimed in with “Hey, my kids make more than I did.” But, these weren’t cries of bitterness. They were statements of fact. I think the most telling aspect of this reunion and the one that woke us all up was a particular dinner where the university president offered a slide show in which he talked about our class and what we had and didn’t have when we came to school as freshmen in 1954. Up there on the screen the only electronic equipment we saw was the record player spinning 78s and 45s, and the old Underwood manual typewriter with those red/black spools that had to be changed quite frequently. And then he showed us what the kids of today have: computers, desktop and wireless, Blackberries, Blueberries, iPods, DVDs…it went on and on and on…and we all groaned. “Yeah, look at what we had and now look at what these kids have.” Everybody griping until the president ended with these words: “And you people should have no regrets, for after all, you invented all of this.” End of story. See you in another 50? Sure. Take two and hit to right.

The prison sentences of a father-and-son pair of former cable television executives have been reduced by three years after an appeals court dismissed one of the two bank fraud counts for which they were convicted.

Securities and Exchange Commission chief accountant Conrad Hewitt said SEC staff members planned to propose a date for mandating the use of International Financial Reporting Standards by public companies, but the date would not be confirmed for two years, giving accountants some extra leeway.

Accounting firm RSM McGladrey is donating $10,000 to the American Red Cross to help with Midwest flood relief, while setting up a relief fund for its own employees.

A Russian appeals court has given PricewaterhouseCoopers' Russian firm the right to appeal a tax evasion case involving the firm's audits of the bankrupt Yukos oil company.

Despite significant progress in streamlining efficiency at government finance departments around the world in the past decade, 48 percent of public officials believe their organizations lack adequate financial management capabilities, according to a new survey by Deloitte.

Olympic gold medalist Wendy Lansbach Boglioli gave a thought-provoking talk last week at the New York State Society of CPAs’ Personal Financial Planning and Eldercare Conference about the importance of long-term care insurance.

We all want to do more productive, efficient work.

The Securities and Exchange Commission plans to launch an ambitious project to re-examine how companies and other entities should make financial disclosures to take advantage of the latest technologies.

LarsonAllen plans to merge in Schreiner, Legge & Co., at the beginning of July, marking LarsonAllen's second merger in two years in the D.C. area.

We all want to do more productive, efficient work.

CCH has enhanced the Audit Public Library in its Accounting Research Manager database with a set of questions and answers about Financial Accounting Standard 157 for fair value measurements.

We all want to do more productive, efficient work.

Japanese electronics giant NEC has settled with the U.S. Securities and Exchange Commission over charges that it improperly booked revenue from its customer contracts and did not maintain accurate books and records, causing the company to miss filing financial statements two years in a row.

The Securities and Exchange Commission has approved a one-year extension of the compliance date for smaller public companies to meet the Section 404(b) auditor attestation requirement of the Sarbanes-Oxley Act.

Try this on for size. A new study shows that of some one million 401(k) portfolios, some 69 percent of participants have portfolios with inappropriate risk or diversification, 36 percent hold high concentrations of company stock, and 33 percent fail to contribute enough to receive the full company match. While groups of participants are taking full advantage of their 401(k) plans, participants with lower salaries, lower plan balances, and those closer to retirement tend to make the most costly mistakes.

Cohen & Co. has acquired Mercurio & Bridgford, expanding the Ohio-based firm's presence in Florida.

A jury awarded investors approximately $58 million in a lawsuit against a former Oregon Republican Party chairman who was accused of defrauding three venture capital funds he founded, and the funds' now-defunct accounting firm, Arthur Andersen.

Financial regulators from around the world are setting up a monitoring group that will work with international accounting standards-setters.