Audit

The most comprehensive cost analysis in long term care in the industry and the only one that provides comprehensive data for the past five years was released by Genworth Financial. The study found that nationwide the cost of long term care in nursing homes, assisted living facilities, and in the home increased for the fifth consecutive year. The national average for a year in a private nursing home is now $76,460, more than one and a half times the average annual household income in the U.S. of $48,201. In short, most long term care services in this country are rising at a rate faster than inflation. In fact, for one year in a private nursing home in Miami, the cost is an astounding $91,022. Each year Genworth surveys the cost of care in more than 10,000 nursing homes, assisted living facilities, and among home care providers in all 50 states and 90 geographic regions including the District of Columbia. This year, it also included adult day health care costs for the first time. The study also reveals an imminent shortage of caregivers. In actuality, the U.S. will need to recruit 200,000 new direct-care workers each year to meet future demand among the 78 million Baby Boomers as they age. Moreover, the care-giver workforce is dwindling and faces issues of retention. “Rising long term care costs are creating significant financial planning challenges for millions of Americans and their families,” say Buck Stinson, president of Genworth Financial’s Long Term Care Insurance business. As it stands now, a private one-bedroom unit in an assisted living facility has an average annual cost of $36,090. For home care, the average rate for a non-Medicare certified, state licensed home health aide is $19.18, a cost that translates to $43,884 per year for 44 hours per week of care. As far as adult day health care is concerned, first year research findings indicate the average annual cost for five days a week in an adult day health care facility is $15,236 nationally. The survey, 2008 Cost of Care Survey, along with a research paper, “A Workforce to Care for Our Aging” is available at Genworth./com/CostofCare.

The Committee of Sponsoring Organizations of the Treadway Commission has released an exposure draft document offering guidance on monitoring internal control systems.

The Financial Accounting Standards Board has issued an exposure draft of a proposed standard for expanding the required disclosures of certain loss contingencies.

The International Accounting Standards Board has formed an advisory panel to deal with the controversial topic of determining the value of financial instruments in inactive markets.

The Government Accountability Office has issued a report containing dozens of recommendations for ways the Internal Revenue Service should improve its internal controls.

A report from Ernst & Young describes the potential adverse impact on the U.S. economy if the research and development tax credit is not renewed.

Cheshire Software has released a new version of its financial planning software program, Cheshire Wealth Manager, with a new feature for analyzing insurance-planning needs.

An international accounting standard-setter has issued a revised set of proposals designed to strengthen the independence requirements for accountants.

Adaptive Planning has added team collaboration and the sharing of best practices to the latest version of its business performance management software.

A new accounting standard is giving executives second thoughts about plans for mergers and acquisitions.

The number of financial restatements finally began to decline last year after a decade-long increase and will probably continue to fall as the Securities and Exchange Commission makes it easier for companies to avoid restatements that aren't likely to greatly affect investors.

KPMG SETS UP IFRS INSTITUTENew York — KPMG has established the IFRS Institute to address the needs of companies, investors and academics affected by the transition to International Financial Reporting Standards.

The Institute of International Finance, a global association of financial institutions, has moved to clarify its position on fair value accounting after word leaked out that it wanted to loosen the standards, provoking an outcry.

The American Institute of CPAs has begun publicizing the revised set of peer review standards that it quietly issued earlier this year.The new standards are designed to be more principles-based and less of a checklist-based process than older peer review standards. A key difference is the elimination of letters of comment and the old three-tier system of unmodified, modified and adverse grades given to firms by reviewers. The new standards require a simple grade of “pass,” “pass with deficiencies” or “fail.”

The May 2008 issue of The Journal of Accountancy ran opinion pieces on the role of accounting in the subprime crisis and subsequent bursting of the credit market bubble. Paul Miller was invited to comment on a controversial claim that mark-to-market practices made things worse. The critics claim that GAAP practices weakened institutions that invested in collateralized debt obligations by revealing large losses when the CDOs’ market values evaporated.They assert that financial statements would better serve the public interest if managers can keep unrealized losses (which they consider to be unreal) out of their financial statements. By a huge leap of ego, they conclude that they and everyone else would be better off if nobody is aware that those losses had occurred. After all, everyone knows they aren’t real because they are always followed by gains. Except when they aren’t, of course.

The Public Company Accounting Oversight Board issued the latest inspection report of Deloitte & Touche, noting problems with nine audits performed by the firm last year.

The MetLife Mature Market Institute has available to consumers, especially those who are not in "traditional families," some tips on how to make the right choices in preparing for retirement, notwithstanding the challenges they face.

The Securities and Exchange Commission has charged a former Ernst & Young partner, an investment banker and her father with insider trading involving information about potential M&A transactions.

The U.S. Financial Accounting Standards Board and the International Accounting Standards Board said they are seeking public comment on two documents that are part of their joint project for developing an improved conceptual framework for future accounting standards.

CPA firm Marcum & Kliegman is expanding from New York to New Jersey by merging with RosenfarbWinters, a specialist in forensic accounting.