Audit

The Financial Accounting Standards Board has proposed an overhaul of the board's structure that would cut the number of members of the board from seven to five and allow the chairman to put items on the agenda.

'Tis the season for holiday cheer and especially gifts, so herewith are some presents that accountants might like to find coming down the chimney this year in the company of a chubby bearded man.

Serious material weaknesses continue to plague the U.S. government's financial systems, recordkeeping and reporting, according to a newly released report.

The Public Company Accounting Oversight Board has disciplined two former auditors at BDO Seidman for failing to review the audit work of a junior member of the firm and then trying to cover up by backdating documents.

GRANT THORNTON DISMISSED AS MANNATECH AUDITORDietary supplement developer Mannatech has fired Grant Thornton as its auditor and appointed BDO Seidman in its place after a dispute over the company's chairman.

Three venerable accounting firms in South Carolina have combined operations.

Shortly after Sept. 11, 2001, America's financial institution auditors - internal and external - were called to the trenches of the war against terrorism.Under Section 352 of the USA Patriot Act, they have been required to verify that their institutions have adequate risk assessment and prevention systems in place.

Our previous two columns addressed the Securities and Exchange Commission's recently appointed Committee on Improvements to Financial Reporting, which has been charged with suggesting things that can be done to strengthen the system.Specifically, we have looked at some of the premises and other points in a discussion paper produced by the chair, Robert Pozen (available online at www.sec.gov), finding a few flaws here and there.

Inadequate internal controls and insufficient prevention programs are the primary contributors to corporate fraud, according to a newly released survey.

Financial Executives International has launched an Internet TV service with the help of Mash Networks that is designed to appeal to CFOs, treasurers, controllers and other senior financial executives.

You know what a Honey is? No, it’s not my wife, at least not in this context. It’s $100,000. Suppose you hit one of those lotteries or publishing prizes and a cool $100,000 is dropped into your lap. And let’s say you or your client (if you’re the financial planner or CPA involved) is between the ages of 62-75. Well, my friend Frank Piemonte, of River Communications, who is a fount of information and has his finger on the pulse of what’s happening with the senior community, told me about this new Senior Sentiment Survey from Financial Freedom, one of this country’s largest reverse mortgage lenders. The study explored the financial, social, and quality of life attitudes of older Americans. What were the results? Basically, 55 percent of seniors would bank the windfall. In fact, according to the survey, more than half of those seniors interviewed felt confident that they will have enough income to meet their needs during retirement and 51 percent say that the top two sources of income are Social Security and income from pension plans or other defined benefit plans. Insofar as debt is concerned, the majority (69 percent) do not have, or do not plan to have, any debt in retirement. Of those with debt, 79 percent have more than $15,000 and 23 percent never expect to pay it off. By the way, 40 percent of homeowners plan to still carry a mortgage into retirement. Survey While we’re at it, it’s interesting to note that 79 percent of seniors live in a single family home that is not part of a retirement community. They say that they would drop the $100,000 in a savings account or CD as their top choice, followed by paying off debt, making a charitable donation, and investing it in conservative, low risk investments, So, here’s the way it stacks up: - 55% Bank it (savings account or CD) - 48% Pay off debt (loan, mortgage, etc.) - 41% Donate some money to charity - 41% Invest the money in conservative, low risk investments - 24% Give the money to children/relatives - 21% Make a major change or renovation to home - 17% Invest the money in stocks, thereby assuming a higher level of risk - 15% Purchase a luxury item such as a car, boat, RV, etc. - 10% Use it to underwrite health care costs - 8% Purchase a new home - 4% Become a benefactor and donate some of the money to an alma mater - 3% Retire - 6% Other - 3% Nothing, just hold on to the money Now, as a financial planner, consider where you may come into all of this. In order to build trust among seniors, direct contact is still the key. Seniors are most likely to trust professionals if they deem the person to be of good character (67 percent) or deem the person to be an expert in the field. Bottom line? Become a honey to the honey. Seniors desire personal contact to build trust among professionals.

The Institute of Management Accountants hailed Securities and Exchange Commission Chairman Christopher Cox's plan to delay implementation for one year of Sarbanes-Oxley Section 404(b) requirements for small public companies, but expressed some reservations.

During a roundtable discussion revealing top issues in its advisory services practice, Big Four firm PricewaterhouseCoopers talked about how change and current market trends are transforming its clients' needs.

SEC Chairman Christopher Cox told the House Small Business Committee that he planned to propose a one-year delay in imposing Sarbanes-Oxley Section 404 requirements for small public companies to audit their internal controls.

H&R Block delayed its Form 10-Q filing for its fiscal 2008 second quarter after hiring a new auditor, but reported a wider loss as the tax prep giant continues to experience fallout from its mortgage business.

Responding to the meltdown in the mortgage and credit markets, the Public Company Accounting Oversight Board has issued a staff audit practice alert to remind auditors of their responsibilities for auditing fair value measurements of financial instruments, and how much reliance to place on the work of specialists.

The Securities and Exchange Commission settled a civil fraud action against the city of San Diego's independent auditor, Thomas J. Saiz and his firm Calderon, Jaham & Osborn, after he agreed to pay a $15,000 penalty.

The Public Company Accounting Oversight Board has imposed a $1 million penalty on Deloitte & Touche and issued orders instituting disciplinary proceedings against the firm and one of its former audit partners for a 2003 audit of Ligand Pharmaceuticals.

CPA firm Argy, Wiltse & Robinson has acquired Spear Safer CPAs & Advisors, allowing the Virginia-based firm to expand further in South Florida.

The real meat of Proposed Interpretation 501-8, “Failure to Follow Requirements of Governmental Bodies, Commissions, or Other Regulatory Agencies on Indemnification and Limitation of Liability Agreements with a Client,” by the AICPA Professional Ethics Division isn’t in the text of the proposed interpretation, but rather in what was specifically avoided.