Alongside the release of President Bush's budget proposal for 2007, the White House asked Congress to create a new regulator for home mortgage giants Fannie Mae and Freddie Mac. The regulator would be directed to cut the $1.4 trillion investment portfolios held by the companies.

Insurer American International Group is expected to announce a settlement with federal and state regulators requiring the company to pay $1.6 billion in order to settle charges covering a range of regulatory issues, according to reports.

Stricter pension accounting rules from the Financial Accounting Standards Board could cost billions for shareholders, HR company Towers Perrin said.

Five former executives at the reinsurance unit of Berkshire Hathaway Inc. and insurer American International Group Inc. have been charged in a fraud probe of the two companies, the Securities and Exchange Commission and Justice Department announced.

Consulting firm BearingPoint Inc., the spinoff of KPMG's former consulting business, reported a $546.2 million loss for 2004 and said that it still faces liability issues under the Foreign Corrupt Practices Act.

The Governmental Accounting Standards Board issued an exposure draft that would require governments to account for all the obligations and costs related to pollution remediation.

The head of the European Commission's financial markets division said that public companies from the United States and Japan will be given another year to bring their accounting standards closer to new European Union standards.

In mid-January, the Public Company Accounting Oversight Board issued reports on its 2004 inspections of Grant Thornton LLP and Crowe Chizek & Co. LLC -- outlining "audit deficiencies" similar to other recently released reviews from the board.

In an effort to address major gaps in international accounting requirements for governments, the International Public Sector Accounting Standards Board of the International Federation of Accountants has issued a proposed standard on the financial reporting of revenue from non-exchange transactions, including taxes and transfers.

Corporate executives are still manipulating stock options, say researchers at the University of Michigan's Ross School of Business.

The Securities and Exchange Commission and the Japan Financial Services Agency announced terms for increased cooperation and collaboration.

PWC RESIGNS AS ALLIANCE AUDITOR: Big Four firm PricewaterhouseCoopers resigned as accountant to Alliance Semiconductor Corp. At presstime, a replacement had not been named. Santa Clara, Calif.-based Alliance, a provider of analog and mixed-signal and chip-to-chip connectivity products, networking controllers and high-performance memories, reported no disagreements with its former auditor. However, PwC said that its accounting staff lacked skill and depth with relation to applying generally accepted accounting principles, and added that Alliance has ineffective controls over inventory and the accounting for an equity-method investment.AEHR ENGAGES BURR, PILGER & MAYER: Aehr Test Systems, a Fremont, Calif.-based manufacturer and developer of test equipment for the semiconductor industry, retained the firm of Burr, Pilger & Mayer as its new auditor, replacing PwC. PwC's reports on the company's financial statements for the years ended May 31, 2005 and 2004, did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principle.

It's hard to believe 10 years and 220 columns (without missing a deadline) have passed since the debut of The Spirit of Accounting, but that is indeed so.Born out of a collaboration between Ed Ketz of Penn State University and Paul Miller of the University of Colorado at Colorado Springs, it has brought issues to the attention of a wide range of accounting professionals, from neophytes still in college up to those in corner suites in corporations, public accounting firms, professional associations and regulatory agencies.

MORNINGSTAR TO PURCHASE IBBOTSON: High-profile investment research and products provider Morningstar will buy privately held Ibbotson Associates - an asset allocation service concern - for $83 million. The deal is expected to close in the first quarter of 2006. Morningstar said that it would retain the Ibbotson brand and is currently in the process of assembling a transition team."Ibbotson's expertise in asset allocation and Morningstar's expertise in security selection and investment research is a powerful combination," said Joe Mansueto, chairman and chief executive officer of Morningstar, in a statement. "Our companies share many similarities, and we have a firm commitment to helping investors reach their financial goals."

Consumer-driven health plans?The plans loom large in strategic decision-making for employers. Most firms have heard of the plans by now, and feel compelled to think about offering one to their employees. Health reimbursement arrangements are the most commonly implemented plan, but the newly available health savings accounts are generating plenty of interest, too.

Tax law changes, a surge in business e-filing, and a move by practitioners toward greater use of the Internet will impact the type of filing season that tax preparers have this year."It will be typical year in terms of filing," observed John Hewitt, chief executive officer of Virginia Beach, Va.-based Liberty Tax Service. "About a million-and-a-half to two million more people will file returns than last year."

The Internal Revenue Service was singled out by congressional auditors for slow-footed implementation of federal accounting rules requiring government agencies to implement effective management reporting for cost information.In a report to the House Government Reform Subcommittee on Government Management, Finance and Accountability, investigators at the Government Accountability Office concluded that, overall, the federal bureaucracy is doing only a mediocre job in complying with government accounting standards that call for the development and implementation of managerial cost accounting.

The Governmental Accounting Standards Board has published a Guide to Implementation of GASB Statement 44 on the Statistical Section.The guide was prepared to assist preparers and auditors of governmental financial statements as they implement the updated and expanded statistical section. The statistical section is the part of a state or local government's comprehensive annual financial report that presents trend information for the last 10 years about a government's financial results, major revenue sources, outstanding debt, economic and demographic indicators, and operating activities.

Although tax experts from across the spectrum predict that a real tax reform is in our future, they are divided on how soon it will happen or what form it will take.Mark Weinberger, former Treasury assistant secretary for tax policy, said during a recent Tax Analysts-sponsored Webcast that tax reform will eventually happen. However, said Weinberger, currently Americas vice chair for tax services for Ernst & Young, the structure and timing are still up in the air.

Congress, in the waning days of its 2005 session, after failing to carry out significant parts of its tax agenda for the year, has managed to pass a Gulf Coast recovery tax act. As is common with the "last stagecoach out of town" for the year, a lot of things managed to "jump on."The hurricane provisions take up 84 pages of bill text, but the legislation goes on for another 100 pages. Among the areas addressed beyond hurricane recovery and relief are a few extensions of expiring provisions, a couple of miscellaneous items, and a huge package of technical corrections covering 10 pieces of tax legislation going back as far as 1987.