Audit

Corporate volunteering has hit a new phase. It's gone global.

Seymour Mann, co-founder of Mann Frankfort Stein & Lipp Advisors, which later became UHY Advisors TX, has died at the age of 87, only a few weeks after announcing his retirement from the firm he co-founded in 1971.

Sarbanes-Oxley has led to big improvements in audit quality, according to a newly released survey.

Deloitte & Touche's statements in an audit released last year of Bear Stearns may have given investors an inkling of the trouble to come at the investment firm, which was acquired this week by JPMorgan Chase for $2 a share in a Federal Reserve-backed deal that has averted a likely bankruptcy.

By the time this column appears, CPAs everywhere are going to be tackling stacks of paperwork for income taxes. This will be true whether they are up to their necks in client returns, or struggling in an audit to reconcile book and tax income in Schedule M.With those pains in mind, it only makes sense that accountants would prefer GAAP accounting for income taxes to be relatively simple.

Thomson Tax & Accounting has introduced an estate-planning notebook organizer that accountants can send to their clients as gifts.

The Financial Accounting Standards Board’s Private Company Financial Reporting Committee has been active for barely a year, but it has already changed the way accounting standards are set.And 2008 may well be the group’s breakout year, according to committee chairperson Judith O’Dell.

The 2008 Moss Adams Financial Performance Study of Advisory Firms has just been launched and the company urges advisors to participate. This annual study provides data and insights to help financial advisors across all business models achieve success. The study coverage includes:

Don't burn bridges. Don't take any nonsense. Those were some of the curt, but significant nuggets of advice from a keynote by Nichola Holt, a partner within Global Employer Services at Deloitte Tax LLP, during the Association for Accounting Marketing New York Metropolitan Chapter's March meeting. At the session, titled, "Women's Initiatives: The Revolution to Bridge the Gender Divide," Holt shared her experiences of coming to New York City from London and her road to making partner -- first at Arthur Andersen in 1999 and then later at Deloitte --and how she lassoed opportunities, opening up doors for others in the process. "You've got to really ask and articulate the value when the opportunity comes up," she said, "Sometimes you have to focus on what's important rather than what's urgent on your desk." Holt, who has been part of her firms' committees choosing candidates for partnership, said she admitted to being a little embarrassed at times by what some of the women offered up as client presentations. She said men were more prepared than their female counterparts, who lacked punch and enthusiasm. "Their personality wasn't coming out," she recalled, adding that women need to know and then articulate to their firms how to win business and then present themselves in a polished and succinct manner. For personal and professional development, Holt suggested "paying it forward," finding role models, understanding how gender differences impact success, articulating your value, enhancing your personal brand and maintaining self-clarity. She said career planning should be focused and include asking for help, as well as seeking feedback. When considering someone for partner, Holt said that she wants to know how the person will build the business, how they will bring value to their business and how much revenue they are currently managing. While Deloitte has formal programs to enhance women's leadership, work/life balance and diversity issues, she said the firm also encourages informal interactions to keep people connected and inspired. "Dr Pepper breaks" or brief 15-minute meetings in places such as the break room or by the water cooler with mentors or others in the firm can keep people engaged without the commitment of a lunch or dinner meeting to catch up. During tax season, Holt said she offers food-centric breaks such as ice cream in the afternoon or pizza at dinnertime if people are still in the office. She said Deloitte would be relaunching their mentoring program once tax season is over. Holt added that younger women in the firm are asking for male mentors, especially if it's a senior member of the firm to find out their career experiences. Deloitte also introduced a "Junior Win" program with a specific focus on those at the manager level or lower. She said younger staff members are often interested in work life balance and "green" environmental issues, as well as, community-oriented volunteerism. "It's a journey and you have to focus or you won't get there," she said.

The Securities and Exchange Commission and the Commodity Futures Trading Commission have put aside their regulatory turf wars and entered into a memorandum of understanding that fosters cooperation between the two enforcement bodies in market oversight and regulation. The agreement includes an information-sharing platform along with guidance for new product reviews - particularly if the products can trade as both a security or a commodity. The first order of business under the joint relationship is notices requesting public comment on two new products --the first is an option that would be traded on options exchanges, and the other is a future that would trade on a single stock futures exchange. The requests for comment will be published in the Federal Register.

The Center for Audit Quality has weighed in on the Securities and Exchange Commission's proposal to delay certain internal control reporting requirements for smaller companies, in a letter suggesting that the commission use the postponement to better assess the costs and benefits of implementing new standards and guidance. The SEC has proposed pushing back by one year the Sarbanes-Oxley Section 404 deadline for non-accelerated filers to provide auditors' attestation reports on internal controls over financial reporting in annual reports, to fiscal years ending on or after Dec. 15, 2009. While stating that, "The benefits of complete 404 reporting ... should be available to investors in smaller companies," the comment letter from CAQ executive director Cindy Fornelli acknowledged the potential benefits of the delay in allowing the integration of forthcoming guidance from the Public Company Accounting Oversight Board and the Committee of Sponsoring Organizations into auditor assessments. The letter also urged the SEC to broaden its effort to evaluate the cost effectiveness of new regulations and guidance, particularly the PCAOB's Auditing Standard No. 5, by including input not only from reporting companies, but from investors, audit committee members, auditors and others. An affiliate of the American Institute of CPAs, the CAQ is dedicated to fostering investor and market confidence in the audit process.

Nonprofit software provider Serenic Corp., parent to the flagship Navigator product, okayed granting stock options to its directors and senior officers. The company granted 100,000 stock options to Bruce Saville, who joined the Serenic board last week; 85,000 to board members Don Caron, Ron Odynski, and chairman Dwayne Kushniruk; 50,000 to chief executive Randy Keith; 35,000 to corporate secretary David Tam; and 25,000 to CFO Paul Johnston.

Big Four firm KPMG LLP is offering two Webcasts this week, with one on the potential affect of proposed Treasury Department regulations on contract manufacturing arrangements, and another on recent developments for companies doing business in India. "Proposed Regulations May Affect Taxation of Contract Manufacturing Arrangements" will take place on Thurs., March 13, at 2:00 p.m. EST, and will examine the Treasury and Internal Revenue Services' Feb. 27 proposed regulations on the foreign-based company sales income consequences under the Subpart F provisions of U.S. tax law. The proposed regulations are intended to modernize the FBCSI rules to reflect new manufacturing arrangements. Experts from KPMG's national tax, international corporate tax, and global transfer pricing services practices will discuss the proposed regulations and their potential impact on the supply chains of multinational companies. The other Webcast, "2008 India Budget Briefing," will take place on Wed., March 12, at 2:00 p.m. EST, and will discuss the potential implications of the country's recently introduced budget proposal for U.S. multinational companies with investments or operations in India, with a focus on various tax changes, and will include a Q&A session. Continuing professional education credits are available for both Webcasts, for participants who meet the eligibility requirements. To register, go to www.kpmgtaxwatch.com.

Governments in large countries seem to be turning away from taxes as a way to force their citizens to follow better environmental practices, according to a report by KPMG.

The Securities and Exchange Commission has issued a report warning public pension funds that they risk violating the anti-fraud provisions of the federal securities laws if they do not have adequate compliance policies in place to prevent wrongdoing.

Australians are considered the world's richest superannuation holders, a report indicates. It says this is because of a very strong domestic currency and the government permitting citizens to drop as much as $1 million tax-free into their retirement savings. Superannuation is a pension scheme in Australia. It has a compulsory element whereby employers are required by law to pay a proportion of an employee's salaries and wages (currently nine percent) into a superannuation fund, which can be accessed when the employee retires After over a decade of compulsory contributions, Australian workers have close to a trillion dollars in superannuation assets with more money invested in managed funds per capita than any other economy. Compulsory superannuation in combination with buoyant economic growth has turned Australia into a 'shareholder society' where most workers are now indirect investors in the stock market. Consequently, a lively personal investment marketplace has developed, and many Australians take an interest in investment topics. According to the AFG Global Fund Management Index, our Aussie friends had an average of $63,794 invested in managed funds at the end of the last financial year. My wife’s cousin read this in the local Sydney paper. In fact, local super funds, on average, outperformed their peers in a top-10 list that included the United States, Canada, and France. To add to this, in the fiscal year that ended June 30, 2007, the amount handled by Australian managed funds grew by 32.4 percent. In comparison to our world, the value of American managed funds climbed by only 8.5 percent to $43,458 while those in Britain rose by 23.2 percent to $17,515. Ross Nayler, who is a principal with AFG Financial Planning, says that clearly the stronger Australian dollar, now trading at around 90 U.S. cents, plus specific laws allowing people to put up to $1 million tax free into their super savings helped make Australia the world leader. "One of the key messages is we've been at the top of the table for quite some time and we're getting further ahead.” In fact, for the period of five years to the second quarter of 2007, Australian managed funds posted a per capita growth rate of 97.7 percent. But now comes the clinker. Another survey, the AMP Superannuation Adequacy Index Report, for January to June of last year, found that 30 percent of Australian workers under the age of 40 would not have enough savings to retire comfortably. Moreover, it found that 3.4 million Australians across all working-age groups were falling behind in preparing for their twilight years. Nayler notes that minimum contribution levels are needed. Macquarie Research Economics expects then that Australian superannuation funds will post less spectacular returns in 2008. It points out that after recording huge gains in the past couple of years on the back of double-digit returns, growth in superannuation funds under management is set to be more subdued this year. Of course, I might add, as my cousin stresses, the absence of the $1 million contribution program is expected to slow down super growth rates in 2008. It may be their lead in superannuation will be dwindling.

The Securities and Exchange Commission's Office of the Chief Accountant chose six professional accounting fellows for two-year terms beginning in 2008.

Representatives from PricewaterhouseCoopers outlined the benefits of an international tax treaty between the United States and Belgium at a seminar in New York.

Fidelity Investments has released a report estimating that a 65-year-old couple retiring in 2008 would need approximately $225,000 to cover their medical costs in retirement, a 4.7 percent increase over the 2007 estimate of $215,000.

Entry-level job Web site CollegeGrad.com named KPMG as the top-ranked employer among the Big Four accounting firms in a poll of the site's users.