Audit

The Financial Accounting Foundation's board of trustees has voted to approve sweeping changes in the oversight, structure and operations of the Financial Accounting Foundation and its two standards-setting boards, the Financial Accounting Standards Board and the Governmental Accounting Standards Board.

Deloitte has teamed with the Institute of Internal Auditors on an educational alliance and curriculum for fighting fraud.

A 61 percent majority of chief financial officers at leading U.S. technology companies feel that shareholders should have a say on executive compensation plans, according to a new survey.

The Public Company Accounting Oversight Board has proposed an auditing standard on engagement quality review and a conforming amendment to the board's interim quality control standards that will supersede the board's interim concurring partner review requirement.

I sat in on part of a meeting of the Financial Accounting Foundation and heard that many in Europe are taken aback at the swift pace of convergence in the U.S. with international accounting standards, but they are still waiting for us to set a deadline.

The International Accounting Standards Board said its Fair Value Measurement project team has begun a standard-by-standard review of existing fair value measurements in International Financial Reporting Standards to assess whether each standard's use of a fair value measurement basis was intended to be an exit price.

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The Financial Accounting Standards Board has issued a proposed FASB Staff Position on the endowments of nonprofit organizations that could have large implications for how they recognize their assets and use donor-restricted funds.

The Public Company Accounting Oversight Board has voted to adopt Auditing Standard No. 6, Evaluating Consistency of Financial Statements, and an accompanying set of amendments to its interim auditing standards.

The results of a new survey were released a few weeks ago at the AICPA Advanced Personal Financial Planning Conference. It concluded that retirement savings is a key concern for Americans and that life decisions are in limbo because of finances. According to the survey, having enough money to retire and to pay for major life needs such as healthcare and education are at the top of the list of concerns for Americans. In fact, the AICPA says that in response to an open-ended question, nine out of 10 CPAs surveyed said their individual clients were concerned about retirement and that costs associated with healthcare and education were ranked by respondents as the second (59 percent) and third (47 percent) financial concerns of clients. “Many Baby Boomers are discovering their retirement kitty is not as big as it needs to be to fund a comfortable retirement and that they are going to have to work longer than they had intended,” says James Metzler, AICPA vice president. By the way, respondents included CPAs who hold the Personal Financial Specialist (PFS) credential. The survey also revealed that nearly a third of the respondents (32 percent) reported that clients who are approaching retirement age are postponing leaving the workforce for financial reasons. Also, as many as one-third of CPAs with clients between the ages of 25 and 34 are seeing individuals foregoing buying a home, having children, and even saving for retirement. Moreover, one third of the CPA planners say their clients were carrying more credit card debt than they did five years ago, with excessive discretionary spending pinpointed as the primary culprit. The median level of increased credit card dent is $8,333. “With so many people in debt because of unnecessary spending, Americans of all ages need education and guidance about how to improve their financial well-being,” notes Carl George, chair of the Institute’s National CPA Financial Literacy Commission. Actually, three years ago, the AICPA launched the 360 Degrees of Financial Literacy effort, which has a dedicated consumer Website (www.360financialliteracy,.org) containing hundreds of tools and resources to help Americans improve their financial understanding. A related campaign, Feed the Pig (www.FeedthePig.org) is designed to help Americans aged 25-34 save for long-term financial security. It should be noted that the survey was conducted this past December via a questionnaire mailed to members of the AICPA Financial Planning Membership Section. Of the respondents, some 44 percent manage more than $10 million in assets.

KPMG's Canadian member firm said it has begun to implement a plan to reimburse employees for unpaid overtime after it was slapped with a class action lawsuit.

A judge has tentatively approved a $38.25 million settlement to be paid by Deloitte & Touche to investors in Delphi.

The Financial Accounting Standards Board has issued final guidance on transfers of financial assets and repurchase financing, which should have an impact on the mortgage and real estate investment trust industry.

Two additional defendants have been charged with criminal tax fraud in a tax shelter case involving current and former partners at Ernst & Young.

CCH has introduced Knowledge-Based Audits of Governmental Entities, a module in its CCH Accounting Research Manager series that helps professionals comply with risk assessment standards.

Two accounting firms, Mueller Yuva & Osterman and Larson and Associates, have merged to combine their strengths in auditing, estate planning and other services.

Strategy and the Fat Smoker: Doing What’s Obvious But Not Easy by David Maister was given to me at the recent Winning Is Everything Conference, where he was a keynote speaker. This is the same David Maister who wrote the critically acclaimed Managing the Professional Firm (1993). I read that book twice and have heard him speak a number of times, and was always impressed by what he said, but always thought it was a bit theoretical.

The Securities and Exchange Commission has introduced Financial Explorer, a tool that shows corporate financial performance using interactive data in Extensible Business Reporting Language.

Last year, we published for the first time a ranking of CPAs by AUM (Assets Under Management). It was a huge undertaking by CPA Wealth Provider because we reached out to as many CPA firms as possible. Admittedly, we didn’t get all of them but we received a response that was staggering. We had two criteria for consideration: They must be a CPA firm that has a financial planning practice, even as a subsidiary or affiliate, and the financial planner in the office must hold a CPA credential. In the top list were 11 firms that were in “The Billion Dollar Club” while another 41 firms were in “The $100+ Million Club” and then a listing of those in the eight-figure category that we deemed “Rising Stars.” We also delved beneath the surface of just a ranking and unearthed what affiliations each firm had, such as broker/dealers, wire-houses, financial services companies, and the like. We went even further and revealed the areas of financial planning products that each firm recommended in basic categories such as IRAs, 401(k)s, mutual funds, life insurance, bonds, 529 plans, to name a few. The reaction from the accounting profession was simply wonderful. No one had ever seen such a ranking before and it opened the door now for a second ranking. Firms clamored for this to be an annual event, and we are complying. We are contacting everyone on our list from last year for updates plus additional firms that have contacted us. The final list will be compiled on May 1 and we will publish the rankings in the July 2008 CPA Wealth Provider. We encourage you to participate. For a copy of the Survey Form, contact me by email (stuart.kahan@sourcemedia.com), by fax (646) 264-6828, or write to me at Source Media, One State Street Plaza, 27th Floor, New York, NY 10004.