The Treasury Department has created a committee to study problems in the accounting profession - and in something of an unexpected move, former Securities and Exchange Commission chair Arthur Levitt was selected to lead the effort, along with former SEC chief accountant Donald Nicolaisen.

Valuation for financial reporting has long befuddled accounting professionals. Differences among industrial sectors often lead to inconsistencies, and recent new requirements for fair-value reporting have made the process even more confusing.

Do consumers really understand what a fiduciary standards means in the financial services industry? And, perhaps more importantly, do they even care? A new survey from the National Association of Personal Financial Advisors (NAPFA) was unveiled recently at its annual convention in Chicago and it certainly answers those two questions.

Williams & Webster PS, a CPA and business advisory firm with offices in Seattle and Spokane, has been censured by the Public Company Accounting Oversight Board for violations stemming from a 2004 client audit.

Senators Max Baucus, D-Mont., and Chuck Grassley, R-Iowa, chairman and ranking member of the Senate Finance Committee, respectively, have introduced legislation to give more than $550 million in tax relief for veterans, soldiers and their employers.

The Sarbanes-Oxley Act hasn't helped in the long-running battle against corporate fraud, according to a recent survey of certified fraud examiners -- a staggering 76 percent of whom reported that fraud is more prevalent today than five years ago. The 2007 Report on Corporate Fraud, conducted for governance software vendor Oversight Systems Inc., noted that that was up nine percentage points from its survey in 2005, and that a mere 3 percent of respondents felt that fraud was less prevalent, down from 7 percent in 2005. "This survey indicates the checklist approach to compliance is not effectively reducing fraud," said Oversight Systems chief executive Patrick Taylor, in a statement. Furthermore, 43 percent of respondents felt that "vigilance and interest by corporate leaders" in creating a culture of integrity and fraud prevention had "already started to fade." Among the survey's other findings:

The Securities and Exchange Commission is preparing to fine telephone-equipment giant Nortel Networks as much as $100 million for accounting fraud, according to published reports. The reports also noted that SEC attorneys sought permission from the commissioners to inflict a fine of less than $100 million -- the first instance of a new policy that gives the politically appointed commissioners more say in corporate penalties. Previously, attorneys negotiated settlements without consulting the commissioners. Toronto-based Nortel inflated its earnings by $3.4 billion between 2001 and 2004, when the SEC began an investigation of the company's accounting. As an indicator of the scale of the possible fine, late in 2006, federal judges signed off on an estimated $2.4 billion payout by Nortel to settle a shareholder lawsuit.

The Public Company Accounting Oversight Board is currently accepting 15 member nominations and re-nominations for its Standing Advisory Group. The 31-member SAG is comprised of representatives from audit firms, public companies and the investment community. Appointments are for two-year terms. The audit overseer has also scheduled its next SAG meeting for June 21 in Washington. The focus of the meeting will center on interim standards and fair value. Both the SAG nomination forms and the Webcast for the June meeting can be accessed at www.pcaobus.org. In related PCAOB news, chairman Mark Olson told attendees at a governance and compliance conference late last week, that the simpler language found in Auditing Standard No. 5 on internal controls should help pare down the costs of 404 compliance. Olson said AS5, unlike its predecessor AS2, was written in English and not "audit-speak."

Yep, it's that time of the year again! CPA Wealth Provider is calling for nominations for its Fifth Annual Financial Planning Awards in any of the following categories: CPA/Financial Planning Firms, Broker/Dealers, and Financial Planning Software Vendors.Winners are those firms or companies that have taken the lead through innovation, efficiency, initiative, or growth in the financial planning area.

Thomas R. Smith, one of the country's leading attorneys in the area of mutual funds, has joined the Investment Management Division of the Securities and Exchange Commission as a senior advisor to Andrew Donohue, the division's director. Prior to joining the SEC, Smith was a partner with the New York office of Sidley Austin LLP, and also served as managing partner at Brown & Wood LLP from 1996 until the firm's merger with Sidley Austin five years later.

A few years ago, someone suggested that vendors who wanted to market against Intuit’s Quick Books should adopt a phrase like “Do you want it Quick? Or do you want it right?

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.