In testimony on Capitol Hill, Securities and Exchange Commission Chairman Christopher Cox said that the costs of complying with Sarbanes-Oxley's Section 404 will go down, but reiterated his position that there was no need for another delay in 404 compliance for smaller filers. Testifying before the House Committee on Small Business, Cox said, "The focus of this hearing is on whether the SEC's new guidance for management, and the PCAOB's new standard for auditors, will lower compliance costs for small companies. The answer is yes." Cox said he did not support further delays in the current deadline for small companies -- generally defined as those with less than $75 million market cap -- to file their first management report on internal control. The chairman said the costs of SOX will go down under the SEC's new guidance because companies "will be able to focus on the areas that present the greatest risk of material misstatements in the financials," and will be able to "exercise significant judgment in designing an evaluation tailored to its individual circumstances."

The multi-billion-dollar-gap between what publicly traded companies book as expenses for executive stock options and what they report cost the U.S. Treasury roughly $43 billion between 2004 and 2005, charged Sen. Carl Levin, D-Mich. Levin, who chairs the Homeland Security and Governmental Affairs Committee said at a hearing earlier this week that companies are reporting higher deductions for stock options to the Internal Revenue Service than what they are reporting to their shareholders. Levin said when company directors who approve executive compensation learn that the options, while an expense, also produce a huge tax break, it "becomes a tempting proposition for them to pay their executives with stock options instead of cash." Levin proposed that the massive gap be closed via legislation that requires a uniform reporting standards for options.

Tax, audit and accounting software and services provider CCH, a Wolters Kluwer Co., had added a Sarbanes-Oxley Section 404 internal controls library to its proprietary Accounting Research Manager database. The new offering includes materials such as: * The American Institute of CPAs: professional standards related to internal controls;*The COSO Internal Control Integrated Framework;* Institute of Internal Auditors' "Designing and Writing Message-Based Audit Reports";* Public Company Accounting Oversight Board auditing standards related to internal control; and,* Securities and Exchange Commission rules and releases related to internal controls. For more information, go to www.accountingresearchmanager.com

Small businesses, those companies with less than 50 employees, increased their payrolls by 58,000 in May, according to the Small Business Report from payroll provider ADP. Highlights from the May report show that the service-providing sector added 61,000 jobs in May, while there was a loss of 3,000 in the goods-producing sector for a net gain of 58,000. Additional charts on monthly job growth and job levels, along with historical data, are available at http://www.smallbusinessreport.adp.com. ADP said its June report would be released July 5.

A bill that is now before the Connecticut State Senate would give its state comptroller the legal authority to establish GAAP for the state’s financials, thereby sidestepping the Governmental Accounting Standards Board — the standard-setter for governments and municipalities.

The Public Company Accounting Oversight Board issued its 2006 inspection report for Big Four firm Ernst & Young, citing problems in eight of the audit engagements it reviewed.The audit overseer inspectors said that E&Y appeared to have signed off on some audits without having sufficient evidence to support its opinions. However, the number of problems in E&Y's inspected audits declined since last year's report, when the PCAOB cited 10.

When Deborah F. Kretchmar, audit director of Horace Mann Cos., flipped through the introduction of Four Approaches to Enterprise Risk Management ... and Opportunities in Sarbanes-Oxley Compliance, she knew she had to have it."I bought the book because my company is looking at enterprise risk management and thinking about developing a more formal process for it," Kretchmar said. "We have informal processes, but S&P and Moody's are very interested in seeing us move toward a more formal process that they can place more reliance on."

TECUMSEH PRODUCTS JETTISONS PRICEWATERHOUSECOOPERSTecumseh Products Co., a manufacturer of electronic motors and compressors, has dismissed its auditor, Big Four firm PricewaterhouseCoopers, and named Grant Thornton as its new independent accountant. No reason was given for the change in auditors in a federal filing. Tecumseh said that it did not have any disagreements with PwC on financial statement disclosure, accounting principles or audits.

The fact that there has been no Baby Boomer "bust" has been due in large part to the skill of retirement planners, accountants and their clients.The bust was supposed to occur as Boomers began reaching retirement age without having saved enough to retire. This, coupled with the dismantling of the retirement and pension programs at a host of corporations nationwide, could have created the most poverty-stricken generation of retirees since the Great Depression.

The Certified Financial Planner Board of Standards said that after more than 20 years in Denver, the organization plans to relocate its headquarters to Washington, D.C. CFP Board chair Karen Schaeffer said, "The financial planning profession and the people it serves are being significantly impacted by public policy developments and trends in the financial sector that can best be monitored, influenced and managed from our nation's capital."The board expects to complete the move over the next few months.

Although couples generally agree on which retirement products they own, they often differ on their plans and expectations for retirement, according to research conducted by Fidelity Investments.Fidelity polled couples born between 1937 and 1964. When asked which income sources they would rely on most in retirement, most couples agreed that workplace savings plans, pensions and Social Security would top the list, but only 39 percent agreed upon which potential sources would be their primary source of income.

Former Senator Paul Sarbanes, D-Md., who, as the head of the Senate Banking Committee, co-authored the sweeping Sarbanes-Oxley Act, said that he supports developing additional guidance for smaller filers but, not surprisingly, he dismisses exempting those companies from compliance with the law's rigid Section 404."Stop and think about that for a moment," Sarbanes said in a speech before attendees at a conference on contemporary accounting issues. "That would mean that you would be exempting 80 percent of public companies from compliance."

My show business career was, to be kind, unremarkable.

With Friday marking the official start of the hurricane season, the Internal Revenue Service is encouraging taxpayers to safeguard their records. Taking simple steps now can ensure that both individuals and businesses have protected financial and tax records in case of a hurricane, or other disaster.

After a slide in April, worker confidence among accounting and finance workers rose in May, as the group’s Hudson Employment Index increased 12.1 points, to 116.1.

Feeble audit procedures are allowing tax cheats to evade billions of dollars in U.S. tax liabilities each year by hiding funds in offshore accounts, government investigators told Congress.

Moving forward with plans to converge U.S. generally accepted accounting principles with international financial reporting standards, the Financial Accounting Standards Board expects to crank out a host of related proposals in the second half of 2007.Even as the Securities and Exchange Commission proceeds to explore the possibility of allowing foreign companies to use financial reports prepared under IFRS to list on U.S. capital markets, FASB and the International Accounting Standards Board are working together to produce standards that are identical or very similar.

Nexus - the amount of contact between a taxpayer and the state that subjects the taxpayer to taxation - continues to vary widely from state to state. In addition, the nexus for sales and use tax differs from the nexus for income tax.The nexus requirement is derived from the language in two different places in the Constitution - the commerce clause, which prohibits states from unduly burdening interstate commerce, and the due process clause, which requires a minimum connection between a state and an entity it seeks to tax.

Our last column dug into some of the reporting practices used by Hertz Global, specifically its somewhat misleading depreciation of its rental fleet.We noted that Hertz reported the fleet in the 2006 10-K as a long-term asset, showing full cost less accumulated depreciation. It also showed depreciation as an add-back to net income in the operating section of the cash-flow statement. To provide a scale, out of $18.7 billion total assets, the fleet's book value at the end of 2006 was about $7.4 billion, or 40 percent. On the cash-flow statement, the reported operating flow for 2006 was about $2.6 billion, after adding back $1.8 billion of depreciation.

CCH has released a white paper on the recent regulatory guidance from the Securities and Exchange Commission and the Public Company Accounting Oversight Board concerning the internal control provisions of the Sarbanes-Oxley Act.