Economy

In the wake of a number of national restaurant operators having to restate earnings due to lease accounting errors, the Securities and Exchange Commission advised restaurant companies to assess the impact of such errors in order to determine whether restatements are necessary, according to The Wall Street Journal. In a letter sent to the American Institute of CPAs, SEC chief accountant Don Nicolaisen wrote that restaurateurs who "determine their prior accounting to be in error should state that the restatement results from the correction of errors, or, if restatement was determined by management to be unnecessary, state that the errors were immaterial to prior periods." Operators such as Red Lobster and Olive Garden parent Darden Restaurants Inc.; Brinker International, operator of the Chili's and Macaroni Grill concepts; and Carl's Jr. parent company CKE Restaurants Inc., have all restated financials due to lease accounting errors.

Some 71 percent of CPAs currently serving as chief executives and chief financial officers are optimistic about the nation's economy and its outlook for 2005, according to results from the Business and Industry Economic Outlook Survey conducted by the American Institute of CPAs. The semi-annual poll represented the views of 631 AICPA decision-makers, including 351 CFOs and 104 CEOs in privately held and public companies, not-for-profits, and other organizations. The goal of the survey is to gauge the level of confidence in the economy as a whole; prospects for organizations for the upcoming six months; spending, capital funding and workforce plans; and their level of concern about issues of importance. In addition, 62 percent of those participating in the survey indicated that the results of the 2004 presidential election will have a positive impact on the 2005 outlook. Other findings included: o 73 percent of the respondents said that they were at least optimistic, if not very optimistic, about their own company's prospects; o 12 percent of those surveyed projected substantial growth during the first half of 2005, while moderate growth is expected by 52 percent. o 31 percent said that workforce increases are in the offing, while 10 percent expected cuts in the workforce. However, in comparison to the June 2004 survey, the percentage of small companies with plans for increased capital spending declined to 40 percent, from 50 percent, while the percentage of small companies expecting to increase the size of their workforce declined to 30 percent, from 41 percent. When asked to weigh in on specific issues, the majority of CPA executives indicated greater concern about inflation than unemployment, greater concern about federal deficits than Social Security and Medicare reform, and greater concern about health care reform than tax reform.

The American Institute of CPAs has officially rolled out a new tagline to accompany the CPA logo.

The Internal Revenue Service can use the efforts of CPAs and other tax practitioners as a springboard to leverage IRS initiatives to improve taxpayer compliance, Tom Purcell, chair of the American Institute of CPAs' Tax Executive Committee, told the IRS Oversight Board.

With two of its top executives departing, the American Institute of CPAs announced a number of organizational changes.

The American Institute of CPAs named Ben Neuhausen, national director of accounting at BDO Seidman, as chairman-elect of its Accounting Standards Executive Committee.Neuhausen will succeed KPMG's Mark Bilstein in that post following the conclusion of the next AcSEC meeting.As an AcSEC member, Neuhausen chaired the AICPA task force on real estate time-share transactions. He also has served as a member of FASB's Interpretation 46 Resource Group and its Liabilities and Equities Resource Group. From 1979 to 1981, he was a Financial Accounting Standards Board fellow.Prior to joining BDO in 2002, Neuhausen was a partner in the Professional Standards Group at Andersen.The institute's AcSEC unit provides accounting guidance and serves as the organization's voice on financial reporting matters. It includes members from academia, business and industry, and public practice.

With the audit implosion at the Roslyn, N.Y., school district still reverberating in the profession's ears, American Institute of CPAs president and chief executive Barry Melancon warned some 400 attendees at a conference here that the resulting backlash of a nonprofit scandal could be as devastating to the profession as the ruins left by Enron and WorldCom.

The American Institute of CPAs' Auditing Standards Board is poised to issue an exposure draft of five proposed statements and amendments to statements relating to auditors' risk assessment.

As part of its fraud prevention program, the American Institute of CPAs has expanded its portfolio of resources for audit committees with new guides on understanding management override of internal controls and issues related to whistleblowers.

Accounting, finance, and banking professionals who hold a professional credential of some type earned 30 percent more on average than employees in those fields working without a credential, according to a survey by CareerBank.com.

For the third consecutive year, information security - the processes and procedures designed to protect information technology systems from internal and external threats - has remained the country's No. 1 technology concern, according to the results of the 2005 Top Technologies Survey of the American Institute of CPAs.

As part of its efforts to promote the Personal Financial Specialist designation, the American Institute of CPAs at its 2005 Personal Financial Planning Conference this week announced a new online financial planning resource targeted at CPA/financial planners and consumers seeking financial planning guidance.

What four words cause public accountants to cringe more than, "Where were the auditors?"

For the third consecutive year, information security - the processes and procedures designed to protect information technology systems from internal and external threats - remained the country's No. 1 technology concern, according to the results of the 2005 Top Technologies Survey of the American Institute of CPAs. The poll, now in its 16th year, attempts to define the 10 most important technology-critical issues for the upcoming year. This year's poll surveyed some 300 participants, 30 percent more than the number surveyed in the 2004 poll. Predictably, in second place for 2005 was document management - reflecting the snowballing trend toward a paperless or less-paper office. Electronic document management captures, indexes, stores retrieves and manages documents in such formats as Adobe's PDF. Data integration - the ability to update one field and have it automatically synchronize between multiple databases - finished as the third most-cited technology issue. Data integration also involves the application-neutral exchange of information - such as the increased use of the Extensible Business Reporting Language, or XBRL by companies worldwide - which provides for an exchange and aggregation of financial data using different applications to read, present and analyze data. The remaining top 10 technology issues for 2005 were: 4. Spam technology 5. Disaster recovery 6. Collaboration and messaging applications 7. Wireless technologies 8. Authentication technologies 9. Storage technologies 10. Learning and training competency. Each year the institute also compiles a "watch list" list of emerging technologies that are currently flying just below the radar screen but have the potential to impact businesses and individuals in the ensuing 24 to 36 months. The top three emerging technologies for 2005 are: 1. Radio frequency identification 2. Search 3. Fuel cells For more information visit: www.aicpa.org/infotech/technologies/toptechs.htm.

The American Institute of CPAs has named California accounting professor Robert S. Roussey as the 2004 recipient of its Special Recognition Award, which is presented to individuals who have made substantial contributions to the accounting profession.

Improving taxpayer service, enhancing enforcement of the tax law, and modernizing the Internal Revenue Service through its people, processes and technology should be the tax administration's top priorities for 2005, according to the American Institute of CPAs.

The majority of tax professionals who enter the financial planning business do so by hooking up with an independent broker/dealer firm, according to a report by market research and consulting firm Tiburon Strategic Advisors.

While he conceded that the current financial reporting system needs lots of improvement, Financial Accounting Standards Board chair Robert H. Herz urged members of the profession to make changes at a measured pace.

On the heels of the Securities and Exchange Commission's decision to temporarily postpone the filing date for smaller accelerated filers' management reports on internal controls, the commission's chief accountant hinted this week that foreign issuers could also get a reprieve on implementing the new rules.

2004 was a banner year for local and regional firms across the U.S., with many reporting salary increases and double-digit revenue growth, according to this year's PCPS/Texas Society of CPAs National Management of an Accounting Practice Survey.