Audit

The U.S. Department of Labor reached an agreement Monday to set aside $356 million from the sale of Enron's assets to cover some of the bankrupt energy company's retirement and pension plan benefits.

Patrick Conroy was named vice chairman and national managing principal of the consumer business practice for Deloitte & Touche USA LLP.

California Rep. Christopher Cox, President Bush's nominee for chairman of the Securities and Exchange Commission, disclosed his stock, mutual fund and other assets on Tuesday, the value of which could range from $2.7 million to $5.9 million.

PricewaterhouseCoopers will pay $41.9 million in civil penalties to settle claims that it over-billed the government for travel-related expenses.

After nearly two years of deliberation, the Securities and Exchange Commission dismissed an administrative proceeding against two former partners of Arthur Andersen & Co. last week.

The executive stock option settlement initiative launched in February has received a strong turnout, according to the Internal Revenue Service. The initiative provided corporate executives and their companies a means to resolve an abusive tax transaction involving the transfer of stock options to family controlled partnerships.

Accounting firm Marcum & Kliegman LLP has launched a Risk Management & Corporate Advisory Services Group.

Buoyed by strong growth in its five business sectors, consulting giant Accenture Ltd. posted third quarter profits of $484 million, compared with $368 million in net income from the year-ago third quarter.

The board of KPMG LLP elected Timothy P. Flynn as chairman and chief executive, succeeding Eugene O'Kelly, who will step down to deal with a recent diagnosis of advanced-stage cancer.

Better than one in every eight U.S. corporations that have undergone the more rigorous audits mandated by the Sarbanes-Oxley Act during the past year have been flagged for ineffective internal controls over their financial reporting, officials at the Public Company Accounting Oversight Board disclosed during a recent meeting with the organization's Standing Advisory Group.

An online filing error has revealed that the Public Company Accounting Oversight Board authorized a probe into a 2003 audit performed by Big Four accounting firm Deloitte & Touche LLP.

The Public Company Accounting Oversight Board will host a forum in early August, "Auditing in the Small Business Environment," in Orlando, Fla., designed for registered accounting firms and public companies working in the small business community.

The International Auditing and Assurance Standards Board, a unit of the International Federation of Accountants, has released ISRE 2410, a standard to assist auditors in reviewing interim financial statements.

Big Four firm PricewaterhouseCoopers has named Rob Ward to head its global assurance practice -- the company's largest line of service. Ward had previously served as deputy global assurance leader and will succeed Gerald Ward (no relation), who is retiring after more than 30 years of service.Ward, 51, will oversee 5,000 partners and approximately 55,000 employees for the business line, which had revenues of $8.7 billion for the 2004 fiscal year. Before joining the Global Assurance Group, he had been the national managing partner of PwC Australia."Rob Ward will lead PwC's assurance business at a dynamic time for our firm and the profession," said Samuel A. DiPiazza, chief executive of PwC, in a statement. He added, "The breadth and depth of his experience with major clients make him uniquely qualified to lead during this period of growth and change."A graduate of the University of New South Wales and a chartered accountant, Ward joined PricewaterhouseCoopers in 1974. He has been extensively involved in the development of global audit methodology and the application of computer technology. Additionally, he served as president of the Institute of Chartered Accountants in Australia, national executive of the Institute of Chartered Accountants in Australia, and chairman of the Australian Accounting Research Foundation. In January 2005, Ward was awarded and admitted as a Member of the Order of Australia for his contribution to the accounting profession and the community.

American Express Financial Advisors Inc. will pay New Jersey $5 million and implement company-wide reforms to address allegations that it failed to reasonably supervise its financial advisors. The settlement follows revelations that a financial advisor in AEFA's Voorhees, N.J., office stole more than $400,000 from at least 22 clients. The New Jersey Bureau of Securities discovered the theft, and expanded its investigation with the uncovering of widespread problems involving AEFA's failure to supervise financial advisors within its franchise offices. "In investigating and prosecuting this individual, we identified a larger issue of inadequate supervision of the company's financial advisors," said New Jersey Attorney General Peter C. Harvey. "To its credit, American Express has worked cooperatively with our office to address deficiencies in its oversight of financial advisors." Harvey vowed to continue his scrutiny of financial advisory services. "We are taking a hard look at the industry," he added. "Where we find firms failing in this area and the failures are significant, we will be imposing major penalties and demanding significant reforms."

Financial Executives International, a 15,000-member trade group for chief financial officers and other senior financial personnel has elected its new slate of officers. Robert Walker, former CFO of Agilent Technologies, will serve as chairman, while Richard Schrader, executive vice president and CFO of Parsons Brinckerhoff Inc., in New York, will become vice chairman. Additional officers include: Alexis Dow, elected auditor, metro, regional government in Portland, Ore., and Joseph DiLorenzo, co-founder and manager, M/D Group LLC, in Humarock, Mass., who will serve as vice presidents at large. Gerald Urich, corporate assistant controller, The Hershey Co., Hershey, Pa., will serve as treasurer. Jeffrey Curtiss, senior vice president and CFO, Service Corp. International, Houston, will become secretary.Mary Jo Green, immediate past FEI chairman, and senior vice president and treasurer, Sony Corp. of America, New York, and second past FEI chairman H. Stephen Grace, Jr., president of H.S. Grace & Co., Houston, will continue in their capacities as directors-at-large. Joan Netzel, first vice president, audit relationship manager for SunTrust Banks Inc., Atlanta, will remain as chairman of the Board of Trustees for Financial Executives Research Foundation -- FEI's research affiliate. The FEI officers slate began officially July 1.

President Bush formally nominated Rep. Christopher Cox, R-Calif., to become the next chairman of the Securities and Exchange Commission, succeeding William Donaldson, who stepped down June 30 after nearly two-and-a-half years at the helm of the regulator. In the interim, the president appointed SEC commissioner Cynthia Glassman to serve as acting SEC chair until Cox is confirmed. A confirmation hearing for Cox -- which requires Senate approval -- could occur in July. Meanwhile, Senate Minority leader Harry Reid, D-Nev., has recommended that Bush nominate Annette Nazareth, currently the commission's market regulation division director, for the commissioner post that will be vacated when Harvey Goldschmid leaves in the fall for a teaching post at Columbia Law School.

Extensible Business Reporting Language, or XBRL, the technology that tags financial information through disparate applications and carries it through the business reporting chain, can lower costs and provide enhanced analytical capabilities for users, preparers and consumers of financial statements. "It usually takes two years for data to go from the corporate reporting chain to actual economic policy-making," said Mike Willis, a partner at Big Four firm PricewaterhouseCoopers and founding chairman of XBRL International. "Paper in the reporting process doesn't cut it; it's too manual and too expensive." Willis, one of the nation's leading authorities and proponents of XBRL, led a session titled, "Business Reporting in XBRL -- Tagging for U.S. GAAP" at the AICPA Information Technology Conference, here. Currently, XBRL International has 350 member organizations in 24 countries. In the United States, XBRL reporting programs are underway at the Securities and Exchange Commission and the Federal Deposit Insurance Corp. However, it has been slower to gain traction domestically. "Information labels are inconsistent from one application to another, such as ERP to Excel," said Willis. "Information goes in one direction -- there's no shared context." As an example, Willis said that large companies that have stakeholders in other countries have to publish annual reports or financial statements in other languages. In XBRL, the information is tagged and flowed into indigenous spreadsheets so that users don't have to be fluent in English to find the desired categories. "Accountants by nature tend to be reactive," Willis said. "But they need to be proactive with XBRL, or their relevancy in external reporting will dwindle."

The Securities and Exchange Commisson has settled with KPMG Canada and two of its partners for the audit firm's lack of independence related to its audit of Southwestern Water Exploration Co., a now-bankrupt Colorado-based concern.KPMG Canada provided bookkeeping services to Southwestern and then audited its own work, issuing what were supposed to be independent audit reports on Southwestern's financials for the years 1999-2002.The SEC's order censures KPMG Canada without the firm admitting or denying guilt. KPMG Canada also agreed to adopt new auditor independence policies and procedures and pay $73,682 -- its fees for the audit of Southwestern, plus interest.In addition, two KPMG Canada partners -- Gary Bentham, the audit engagement partner, and John Gordon, the concurring and SEC reviewing partner -- are prohibited from auditing SEC issuers for two years and nine months, respectively.

The chief financial officer of advertising giant Interpublic Group, which is the subject of a newly widened probe by the Securities and Exchange Commission, has stepped down. Robert Thompson had been CFO of the company for just a year; his successor, who will not be named until late July, will be Interpublic's fourth CFO in two years. In a statement, Interpublic chairman and chief executive Michael Roth said, "Bob and I have independently come to the conclusion that the next steps in our company's progress will require new financial leadership." The SEC, which had been investigating the company's accounting due to restatements made in 2002, recently expanded its probe to include its accounting for the many acquisitions that it made from 1996 through 2001, as well as for other issues. Interpublic has yet to file statements for 2004, citing material weaknesses in internal controls and the time required to complete its Sarbanes-Oxley Section 404 report. It also suggested that it might have improperly consolidated the results of some of the companies it acquired, and might have to restate prior results.