Audit

The Japanese Institute of CPAs said that the nearly 400 accountants belonging to Japan's four largest auditing firms have worked with the same clients for more than seven years.

The Internal Revenue Service could revoke the tax-exempt status of about 20 credit-counseling firms, just as the country's new bankruptcy laws are set to go into effect on Oct. 17.

Media titan Barry Diller said lawmakers should revisit Sarbanes-Oxley, citing that the high cost of compliance is negatively impacting American businesses.

A bill creating a new regulator for Fannie Mae and Freddie Mac and setting capital levels for the two home mortgage giants could be ready for a House vote by the end of the month.

The Public Company Accounting Oversight Board had a harsh critique for several Deloitte & Touche audits performed by the firm last year. The PCAOB's report echoed many of concerns the regulators expressed last week about audits performed during the same period by KPMG.

The Securities and Exchange Commission said the former KPMG accountant who oversaw audits of Xerox Corp. will pay a $100,000 fine to settle charges that he failed to disclose accounting violations that came to his attention.

Eugene D. O'Kelly, 53, former chairman and chief executive of KPMG, died Sept. 10 at his New York City home at the age of 53.O'Kelly remained a senior partner at KPMG after disclosing a diagnosis of advanced-stage cancer in June and stepping out of his leadership role at KPMG, which he had helmed since 2002.

ABAXIS DISMISSES D&T: Blood-analysis systems manufacturer Abaxis Inc. dismissed Big Four firm Deloitte & Touche as its outside auditor, and retained Burr, Pilger & Mayer LLP as its successor.A federal filing did not state a reason for the auditor change, and there were no disagreements with Deloitte on accounting matters.

It's another busy season for us with the beginning of the academic year. As a result, we're buying some time by bringing back an all-time favorite tongue-in-cheek column that sheds light on how ludicrous many important features of GAAP are.If financial statements really are scorecards for business, reporting real outcomes, as well as sources of information for predicting the future, it's essential that they usefully describe what actually happens, instead of what someone hoped would happen.

Houses and offices under water. Looting in the streets. Factories on fire. What's an accountant to do?According to the Financial Accounting Standards Board's Emerging Issues Task Force, treat the situation as ordinary.

New guidance from Securities and Exchange Commission regulators sets limits on ways to determine the cost of stock options, though the new SEC chairman said that the report was "tentative."Chief accountant Donald Nicolaisen, who will leave the SEC in October, wrote in a statement that he had doubts as to whether the creation of a financial instrument to mimic employee stock options would be an accurate tool. And chief economist Chester Spatt wrote in a memo from the SEC's Office of Economic Analysis that such an instrument would face the inherent difficulty of reconciling market price with the fair value of stock options.

Environmentalism has arrived, and it's here to stay. And apparently the time to account for it has also come. The question is how.Many corporations have seen real, market-driven reasons to report on their environmental impact and sustainability. Consumers are paying attention. Investors are worried about what they're investing in and how environmental liabilities could impact their investments. In many countries, environmental regulation agencies are requiring some degree of reporting.

BearingPoint Inc., a spinoff of Big Four firm KPMG's former consulting business, said that the Securities and Exchange Commission has launched a formal investigation of the company.Along with providing an update to the progress of the company's plans to release its 2004 financial statements, BearingPoint said that the SEC has issued a formal order of investigation into the company. In a statement, BearingPoint said that it believes the matters involved are the same as the informal investigation that it announced in March.

Two state pension funds and other large investors have sued Delphi Corp. and its auditor, Deloitte & Touche, saying that the auto parts supplier made deals with third-party vendors to hide the company's financial problems.

The Securities and Exchange Commission released a request for information on interactive financial data as part of its ongoing efforts to make financial disclosure more useful and accessible to investors.

PricewaterhouseCoopers was ordered to pay $182.9 million in connection with audits it performed for Ambassador Insurance Co., more than 20 years after the company collapsed into bankruptcy.

The Louisiana Division of Administration is soliciting accounting firms to provide oversight of the federal funds received to rebuild in the wake of Hurricanes Katrina and Rita. Proposals are due Oct. 6.

Intuit, which is ramping up an aggressive expansion of its product line for small businesses, is also jumping into the financial planning market.

The Securities and Exchange Commission charged two accountants in connection with auditing the financial statements of bankrupt cable company Adelphia Communications Corp.

After agreeing to pay some $195 million in a settlement to roughly 280 investors in its tax shelters, Big Four firm KPMG is under fire again, this time from a critical inspection report from the Public Company Accounting Oversight Board, which identified a number of deficiencies in some 18 of 76 audits that it examined.