The Public Company Accounting Oversight Board voted to adopt Auditing Standard No. 5, which will replace its previous internal control auditing standard, the much-maligned Auditing Standard No. 2.

Financial services provider the Bisys Group will pay $25 million in restitution to settle federal charges that it violated financial reporting rules to artificially inflate earnings by $180 million over three years.

Glass, Lewis & Co., a major player in the world of investment research and global proxy advisory and voting services, announced that Lynn Turner will leave his post as managing director of research on June 8.

National Taxpayer Advocate Nina E. Olson announced that the Internal Revenue Service has awarded almost $8 million in matching grants to Low-Income Taxpayer Clinics for the 2007 grant cycle.

The Securities and Exchange Commission unanimously approved guidance yesterday aimed at helping public companies balance their internal control over financial reporting, while at the same time reducing unnecessary costs, particularly for smaller companies.

The Public Company Accounting Oversight Board announced that Martin F. Baumann will succeed Phil D. Wedemeyer as director of its Office of Research and Analysis.

Securities and Exchange Commission Chairman Christopher Cox announced that five former chairmen of the commission will join him for a roundtable discussion today.

While such issues as mobility, Sarbanes-Oxley 404, peer review and private company financial reporting continue to impact the accounting profession, keeping the CPA pipeline filled remains the profession’s No. 1 priority, American Institute of CPAs president and chief executive Barry Melancon told attendees at the institute’s spring meeting of its Governing Council.

“A series of accounting irregularities at large companies have deepened public distrust of both accounting and auditing firms.”

Texans have always been an independent bunch, but many Lone Star CPAs think that their state legislature is going too far when it tries to write off Statement 45 of the Governmental Accounting Standards Board as irrelevant.State Senator Robert Duncan and State Representative Vicki Truitt, both Republicans, introduced alternative bills in their respective financial committees that would allow, but not require, governmental entities to issue financial statements that do not comply with Statement 45. The bills define an alternative method of accounting that would not record projected post-retirement benefits as a liability.

GRANT THORNTON DROPS PAIR OF SUBPRIME CLIENTSGrant Thornton has quit as auditor to subprime lenders Fremont General Corp. and Accredited Home Lenders Holding Co..

Baby Boomers - those Americans who were born between 1946 and 1964 - total about 79 million people.This segment of the population may soon find that they will be spending more annually in their retirement years than they did while working. Over the past century, life expectancy has increased over 56 percent, and this trend is expected to continue, so Baby Boomers will face the financial challenge of the cost of living for many years in retirement, as well as the associated costs of aging.

COURT NIXES SEC RULE GOVERNING FINANCIAL PLANNINGA federal appeals court ruled that the Securities and Exchange Commission overstepped its authority in updating rules governing brokers who offer financial advice.

H&R Block Inc. announced that its new bank opened more than 2 million prepaid card bank accounts by the end of the 2007 tax season, doubling the company’s original projection.

Suggesting that accounting firms may have become addicted to the fat audit fees associated with Sarbanes-Oxley compliance efforts, a spokesman for the nation's bankers warned that plans to streamline internal control reporting rules and issue new auditor guidance may not be enough to wean accountants away from wasteful and unnecessary SOX-related audit procedures."Reducing costs and streamlining efforts will only be achieved if the auditing firms have the incentive to make efficiency a priority," American Bankers Association spokesman Thomas Venables told a hearing of the Senate Committee on Small Business and Entrepreneurship.

Although progress has been made with regard to auditor reviews of internal controls, audit firms haven't used the most efficient techniques, according to a report from the Public Company Accounting Oversight Board.The audit watchdog examined a total of 275 audits of internal controls over reporting performed by registered public accounting firms, specifically looking at the second-year implementation of the board's Auditing Standard No. 2 on internal controls.

The popularity of S corporations has skyrocketed, with the number of businesses opting for them rising from 725,000 in 1985 to more than 3 million, according to the most recent statistics.And that growth is well-deserved, according to Richard Thompson, of the CPA and business advisory firm Sikich LLP. "S corporations have become such an important business vehicle because taxpayers understand their extreme value," he said.

The recent release of the long-awaited final regs on nonqualified deferred compensation under Code Sec. 409A did not bring a much-hoped-for extension of the effective date for full implementation of the rules. The final regs - all 209 pages of them, and the 186 pages it took to explain the changes made or not made to the proposed regs - do not extend the transition relief for compliance beyond Dec. 31, 2007.That does not leave much time for compliance, let alone formulating tax strategies that take maximum advantage of the small leeway that the final regs provide to employers. Compensation plans drafted under the proposed regulations must be compared against the final regs. Decisions on whether a plan should be terminated must be made. Final plan designs must be drafted and adopted. And then an explanation of the terms of the compliant plan must be explained (and sold) to the key executives who the plan has been adopted to keep happy in the first place.

Two years ago, I thought that the strategy of outsourcing tax returns overseas had prompted some fairly spirited debates within the accounting profession and made slam dunk opinion pieces and commentary for Accounting Today.

In a sweeping macro-view of major accounting issues poised to impact the profession, Financial Accounting Standards Board chairman Robert Herz said that the profession can get to a better reporting system, but it’s going to take some changes to get there.