The burgeoning scandal at Hewlett-Packard is undoubtedly tied more directly to privacy concerns and the Constitution than corporate governance and the Sarbanes-Oxley Act, but that doesn't mean some lessons don't spillover from one legal area into the other.

The Securities and Exchange Commission's top accountant has added his thoughts on how to properly account for stock options in the historical financial statements of public companies.

The Securities and Exchange Commission announced that it has filed and settled financial fraud charges against bank holding company Doral Financial Corp.

A church in Pasadena, Calif., says that the Internal Revenue Service has asked it to turn over all the documents and e-mails it created during the 2004 election year containing any references to political candidates.

The Government Accountability Office has released an updated listing of public companies that have made a financial restatement announcement because of financial reporting fraud or accounting errors.

You can hear it in their voices: There's something about providing accounting work for not-for-profit entities that produces a smile of satisfaction. These people like what they're doing for a living."They very much appreciate what you do for them. They're not out just to increase the bottom line of the organization - they're out there to do a service for the community, and they appreciate anything you can do to help them," said Rob Fleming, shareholder director of the Not-for-Profit Services Group at the Bellevue, Wash.-based firm of Clark Nuber.

Recent headlines surrounding the ordeal of 104-year-old socialite Brooke Astor chronicled a lawsuit filed by her grandson that accused his father of mismanaging his grandmother's financial affairs.For once, maybe the rich aren't so different: Experts predict that, for millions of Americans, the problems associated with relatives acting as trustees, guardians or conservators will only grow as the population ages. Policymakers are focusing on solutions that may well affect the way CPAs serve clients in the coming years.

UBIQUITEL RETAINS KPMG: UbiquiTel, a subsidiary and provider of Sprint communications services throughout midsized markets in the Western and Midwestern U.S., named Big Four firm KPMG as its new independent accountant.KPMG replaces PricewaterhouseCoopers as auditor to the Conshohocken, Pa.-based company. According to a filing, PwC's reports on UbiquiTel's financials for the years ended Dec. 31, 2004 and 2005, did not contain any adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principle.

Sometimes things become so commonplace that people stop giving them a second thought, even though they deserve one, or even more than one.Like a great many others, recent events have caused us to realize that we may have become complacent about the magnitude of executive compensation. Those at the top rung of corporate America make what seems to everyone but them to be truly staggering amounts of money each year.

ADP TO SPIN OFF BROKERAGE ARM: Payroll and benefits outsourcing concern Automatic Data Processing Inc. will spin off its massive brokerage-services unit, an arm that observers project would have a market cap of more than $3 billion. ADP said that as a result of the spinoff - which should be completed by the end of fiscal 2007 - it expects to receive a distribution of $500 million to $700 million from the business in the form of a tax-free dividend.ADP said that the decision to spin off the unit came after a year-long strategic review. In that process, the company mulled an initial public offering, as well as an outright sale of the business. Although ADP is better known for its signature payroll unit, its brokerage-services business both processes and clears trades of securities, along with handling the distribution of related materials such as proxy reports. It generated roughly $2 billion in revenue for its most recent fiscal year, accounting for about 20 percent of the company's overall revenue figure.

With as much as 75 percent of CPAs performing some type of financial planning services for their clients, there are many financial planning business models available for accountants who are thinking about wading into that growing arena.One such model is an affiliation with a broker/dealer who has an understanding of CPAs and their client relationships. What follows is a basic overview of four major broker/dealers and their programs.

If an individual delays claiming Social Security benefits until after she reaches full Social Security retirement age, her benefits may be increased for two reasons.First, there is a delayed retirement credit that increases the benefits for each month that retirement is delayed beyond full Social Security retirement age. Second, additional earnings (wages or self-employment income) may also increase the benefits that will be received after retirement.

Accounting for derivatives has never been easy, but the Governmental Accounting Standards Board has proffered some thoughts on how it might be done, and 85 concerned industry professionals generally agreed - but not completely.GASB project manager Randy Finden said that the bulk of the board's complex preliminary views document could be boiled down to two sentences: "Put all derivatives in the balance sheet at fair value. Fair-value changes will be reported as gains and losses in income, except for hedging gains and losses, which will be reported on the balance sheet as deferrals."

The selection by an entity of its company structure, its fiscal year and its method of accounting are the three main mechanisms that a company can employ in performing substantial tax planning, according to Nicholas Crocetti, CPA, a partner in CBiz Accounting Tax & Advisory."The concept of an accounting method is much broader than what many people believe," he said. "Most companies employ a number of accounting methods. First, they have an overall method of accounting - for example, the cash method, accrual or some form of hybrid method. Additionally, companies need accounting methods for every timing item they encounter in their business, such as how to account for inventory, bad debts, vacation pay and self-insured medical expenses."

A previous article discussed several of the new terms that the new risk assessment standards have introduced to the audit process (Sept. 4-17, 2006, page 36). The following discussion expands on that by addressing in more detail some of the more significant differences between the requirements of the new risk assessment standards and past audit practice.* Audit plans and programs. The audit program is now called the audit plan, but it is still required. The auditor must develop an audit plan in which the auditor documents the audit procedures to be used. The audit plan is more detailed than the audit strategy, and includes the nature, timing and extent of audit procedures to be performed, including risk assessment procedures and planned further audit procedures.

As part of the recently signed pension bill, the Treasury Department and the Internal Revenue Service will have to better define what constitutes "good" condition for donations of clothing or household items.The IRS can deny deductions for donated items such as furniture, appliances, linens or electronics if the items aren't in appropriate condition.

The Financial Accounting Standards Board has issued a standard providing guidance for using fair value to measure assets and liabilities.

Billionaire tycoon Ricardo Salinas Pliego and the Securities and Exchange Commission reached a settlement last week, marking the end of the first lawsuit against a foreign company under the corporate governance rules of the Sarbanes-Oxley Act.

The newly released 2006-2007 Internal Revenue Service Priority Guidance Plan, designed as the agency's own blueprint for its guidance projects during the coming year, ranges in scope from consolidated returns to tax-exempt bonds.The Guidance Plan contains 10 more projects than last year's plan, and includes projected rulings on corporations and shareholders, employee benefits, executive compensation, excise taxes, exempt organizations, estate and gift taxes, partnerships, S corporations, and international issues.

In another lifetime, I lived and worked in Rome. It was quite an adventure and last week I returned to the city after an absence of some 30 years. Unfortunately for me, Thomas Wolfe is definitely right.