Audit

Deloitte & Touche debuted a Deloitte Film Festival featuring short films submitted by teams of Deloitte employees from around the U.S.

David Amir Makov, one of the remaining defendants in the KPMG tax shelter case, pleaded guilty in Federal District Court in Manhattan to one count of conspiracy to commit tax fraud and agreed to cooperate with prosecutors.

Reznick Group said it has signed a letter of intent to acquire another accounting firm, Tidwell DeWitt, building its presence in the Southeast and adding more services.

Influential accounting profession veteran Mark Tibergien has been named chief executive officer of Pershing Advisor Solutions LLC, an affiliate of Bank of New York Mellon subsidiary Pershing LLC.

DELOITTE DECLINES ATARI RE-ELECTIONBig Four firm Deloitte declined to stand for re-election as auditor to video game manufacturer Atari Inc. A regulatory filing did not give a reason for the decision. New York-based Atari said that its audit committee had received several proposals from other accounting firms. At press time a successor had not been named.

Big changes are coming for financial statements, if the Financial Accounting Standards Board's recent discussion with its advisory board is any indication.This spring, at a meeting of its Financial Accounting Standards Advisory Council, the board and staff discussed their working ideas on what statements could and should look like in the future if they are going to be useful. The discussion took place in the context of the board's joint project with the International Accounting Standards Board on financial statement presentation. It was held in anticipation of releasing a preliminary views document sometime this fall.

Responding to widespread uncertainties about the implementation of Financial Accounting Statement 133, Accounting for Derivative Instruments and Hedging Activities, the Financial Accounting Standards Board has issued a proposed implementation issue intended to make it easier for companies to use the "shortcut method" in accounting for many hedging transactions.It should also help those companies' confidence.

Enrique Vasquez is a most interesting person. I’ve gotten to know him over the years and have found him to be someone with a firm eye toward the future. Many times he will say, “It’s where I want to be.” Two and a half years ago, Vasquez succeeded the highly personable and knowledgeable David Reedy, one of the founders of Terra Securities which evolved into Genworth Financial Securities and Genworth Financial Advisors, both based in Schaumburg, Ill., the companies that Vasquez now heads. Actually, he moved into the top position as president and CEO at the ripe age of 39. I like to tease him with the fact that I have sneaks of such vintage and that two of my children are older than he is. Still, his background is fascinating. He has a B.S. in accounting from Kean College and an MBA in international finance from Fordham. He began his career with Societe Generale as a financial supervisor and then went over to GE, rising rapidly to become a vice president of GE Financial. Genworth Financial Securities has focused on helping tax and accounting professionals become successful wealth managers for over a quarter of a century and today has more than 2,400 independent representatives licensed in all 50 states. “My goal is to help clients fulfill their dreams by providing wealth management solutions,” says Vasquez. “Our vision at Genworth is to be the partner of choice for the independent financial professional with a focus on accountants and tax preparers.” Under his guidance, Genworth has developed a consultative culture working one-on-one with representatives. “We know that representatives need a strong partner to provide advanced training and support,” notes Vasquez, “so our practice management tools are delivered by seasoned specialists in a way that is customized to the needs of each representative.” In fact, it is noted that Genworth provides representatives with more than 300 training opportunities each year with meetings offered in more than 30 locations across the U.S. Vasquez winks when he is referred to as being so successful. But he points out that figures back him up. “On average, our representatives have been able to grow their business by 20 percent per year. The average tenure for our representatives is seven years.” He expects that to continue to grow. “The future. It’s certainly where I want to be.”

Crowe Chizek said it plans to combine practices with Carter, Belcourt & Atkinson, expanding the Oak Brook, Ill.-based accounting firm's footprint in Florida.

Fidelity Investments has begun offering a Web-based retirement-planning tool, Fidelity Retirement Income Evaluator, aimed at helping advisors create and manage retirement plans for clients.

The International Accounting Standards Board issued a revised version of its standard for the presentation of financial statements aimed at improving users' ability to analyze and compare the information in them.

Thomson Corp. said it would acquire the Deloitte Tax LLP Property Tax Services business for an undisclosed sum.

KPMG's Canadian arm found itself on the receiving end of a class-action lawsuit, claiming that the firm did not properly compensate employees for their overtime work or denied them overtime compensation altogether.

The Virginia Society of CPAs debuted an "Ask a CPA" e-mail program that promises free answers to personal financial questions within three business days.

Accounting firm Grant Thornton has launched a Financial Services Group in the United Kingdom that combines its old Financial Markets Group with the financial services practice it acquired from its merger with RSM Robson Rhodes in the U.K.

CPA firms saw big gains in both income and fees last year, thanks to the demand for Sarbanes-Oxley compliance services, according to a newly released survey.

CEOs of Fortune 100 companies are receiving increasingly valuable financial planning perks, according to a new study.

Financial holding company International Bancshares Corp. said that its audit committee has dismissed KPMG as its auditor and replaced the Big Four firm with McGladrey & Pullen.

It’s nice to see that CPAs and their firms are doing very well. According to the just-released 2007 Rosenberg MAP Survey, firms with net fees over $2 million enjoyed annual net fee growth of 11.4 percent in 2006, compared to 9.7 percent in 2005. The average income for partners in these firms, according to the survey, is $350,000.

Doris Rubenstein is the Principal Consultant of PDP Services, based in Minneapolis, and has over three decades of experience in the field of philanthropy. Her book, The Good Corporate Citizen: A Practical Guide (John Wiley & Sons, 2004), is a landmark work in addressing the complexities of planning and administration of charitable giving and volunteer programs for business. She is a member of the Philanthropic Advisors Network and pays dues to the National Committee on Planned Giving (NCPG) which provides both educational programming and ethical standards for those who work in this field. “Those who belong to the NCPG know that one of their major themes is “Leave a Legacy,” she says. “The idea is that those who make bequests and other deferred gifts can make a long-term impact not only on the beneficiary organization, but on their descendents as well. This legacy is supposed to be a point of both pride and unity for their family.” She said it was surprising then to read a report conducted by the Indiana University Center on Philanthropy for the Bank of America, Bank of America High-Net-Worth Philanthropy Study,which seemsto refute the whole legacy concept that NCPG has been promoting for nearly two decades: For 86.3 percent of respondents, “giving back” is more important than “leaving a legacy.” In fact, only 26.1 percent of respondents cited “leaving a legacy” as a motivator for their philanthropy. Rubenstein points out that there is only a very small group of mega-wealthy individuals who inherited their money. “Much of their wealth is measured in what they control through past legacies deposited in family foundations. Members of the Rockefeller and Ford families are still intimately involved in the policies of the foundations that bear their names.” In effect, she notes, the majority of high-net-worth persons are self-made. “They worked hard to make their money, and they appreciate the institutions that helped them along the way. Indeed, the report shows that entrepreneurs are the most generous donors.” She feels that as an accountant, the principal concern for the client is taxes. But, are taxes the principal concern of the client when deciding to make a major gift? She says that many in the nonprofit sector have been deeply concerned about the impact of the proposed estate-tax repeal on giving. “Evidently, high-net worth donors do not share this concern since 56.1 percent responded that their giving would remain the same regardless of the existence or non-existence of an estate tax. Even the deductibility of charitable gifts is not a major factor in the mind of 51.7 percent of these wealthy donors.” She adds that two factors seem to make the difference in the decision of high-net-worth individuals to make big donations: Being asked, and their emotional connection to the charity. However, the survey showed an amazing correlation between the person’s volunteer hours and the dollars they donated to the same charity: $620 dollars were donated per hour for those volunteering up to 50 hours per year; the figure jumps to $927 at 100 hours of volunteer time. Still, it’s readily admitted that volunteering is the best way to make that emotional connection by developing an experience of trust, admiration, and respect for the organization itself. It allows the individual to see the inner operations and feel the spirit of the organization. Rubenstein believes that all of this still does not deny the reality that some wealthy persons do want to leave a legacy of some sort. “This was cited as a motivator by those 26.1 percent of the Bank of America study. The forms a legacy can take are still numerous: The family name on a summer camp cabin, an endowed scholarship fund at their alma mater, a family foundation that will continue to reflect long-held values.” So, we come down to the question of how and why the accountant’s high-net-worth clients give to charities? Do they compare to the profile drawn in the Bank of America report? Remember, very few of their giving decisions are made on the basis of their tax deductibility. As Rubenstein points out, “It’s your job to remind them of this part of their finances, but the decision is ultimately in their hands.”