Much of the election-year criticism of hedge funds misses the point when it focuses on the claim that hedge fund operators get unfair tax breaks, experts say.There is abuse in the current Tax Code when it comes to hedge funds, but it affects the investors, according to Alan Dlugash, a tax partner at New York-based CPA and business advisory firm Marks Paneth & Shron. They’re often subjected to taxes that wipe out nearly all — or more than all — of the income that they made from the fund, he observed.

New research from MassMutual Financial Group has revealed a surprising contrast in consumers’ confidence about retirement preparedness and their actual savings behavior that could help shape the next generation of retirement savings solutions. The study, conducted by Massachusetts Mutual Life Insurance Company (MassMutual), included responses from more than 17,000 individuals participating in some 2,300 employer-sponsored retirement savings plans administered by MassMutual’s Retirement Services Division. In examining the relationship between savings confidence and actual savings behavior, the study found that those who saved more and were active in managing their retirement savings actually were less confident in their retirement security and the retirement decisions they make compared to individuals with lower savings rates. A key finding showed that those who are more active in managing their retirement savings (79 percent) are also more eager for help and information about investments and investing versus those who are less active (47 percent). According to retirement experts at MassMutual, working with a financial professional may provide the kind of help these individuals want, as well as to help alleviate anxiety they may have regarding their investments for retirement. “Rather than just track what people are actually doing in terms of retirement savings, we are also deeply interested in the ‘Why,’” says Ian Sheridan, corporate vice president and chief marketing officer for MassMutual’s Retirement Services Division. “Our research shows that what individuals say and what they actually do are, at times, explicitly different.” Sheridan goes on to say that participants in the study were categorized as low, medium, and high savers based on their annual deferral rates of salary into a 401(k) savings plan. Low savers were those who deferred less than 4.0 percent, medium-savers between 4.0 percent and 7.99 percent, and high savers deferred 8.0 percent or more of their salaries. Individuals with the highest deferral rates said they enjoyed managing their finances more than the low and medium savers (57 percent of high savers versus 49 percent of medium and low savers). But, this fact notwithstanding, MassMutual said that those who take an active role in saving more and making investment decisions still lack confidence about those investment decisions and their financial security as they approach retirement. This is evidenced by the following findings:

The American Institute of CPAs is holding a conference for audit committee members to make them more aware of risk management.

Accounting firm BDO Seidman said corporate executives and board members should be prepared to address various questions about the effect of the credit market crisis on their companies at their upcoming annual shareholder meetings.

Big Four firm KPMG could be sued for professional negligence for its audits of New Century Financial and for helping the troubled mortgage company devise accounting strategies to hide the problems that led to its collapse last April, according to a report from an examiner for the bankruptcy court.

The Securities and Exchange Commission said it has settled with six former executives and employees of Riverstone Networks who had been accused of inflating revenues at the communications router maker after they agreed to pay penalties and fines.

McGladrey & Pullen has been sued for $550 million by a bankruptcy trustee for Sentinel Management Group.

A jury deadlocked last week in the second trial of former Arthur Andersen partner Daniel F. Stulac over the firm's audit of Peregrine Systems.

The Securities and Exchange Commission has charged Canadian pharmaceutical company Biovail and its former CEO and CFO and two current senior executives with engaging in fraudulent accounting schemes and making a series of misstatements to analysts and investors.

Software developer Compliance Coach introduced CompliancePal, a product intended to help businesses comply with new rules for safeguarding against identity theft.

The Financial Accounting Standards Board has issued a statement intended to improve financial reporting on derivative instruments and hedging activities.

The International Accounting Standards Board has issued a discussion paper, "Reducing Complexity in Reporting Financial Instruments," intended to be the first step in developing principles-based standards that are less complicated than existing standards for reporting on derivatives and other investments.

As we all know from all of the hoopla, there are some 77 million Baby Boomers headed toward retirement. As a result, every facet of corporate pension plans will now be subject to deep analysis and probably change. Keep in mind that the decline in defined benefit plans and the rise in defined contribution plans, along with increased longevity of one’s life, have started to create a growing risk among employees about their retirement benefits. The Conference Board has just issued a report, Pensions and Retirement Conference, which delved into this topic and noted that as retirement benefits are redesigned for today’s retirees, it’s become unclear whether employer programs can support long-term financial security. “The changing definition of retirement raises controversial questions, especially from a societal point of view. What is the responsibility of the corporation to provide a safe and secure retirement for its employees? The evolving social contact between employees and employers has resulted in many issues that plan sponsors, policymakers, and academics need to resolve.” In short, the report is asking employees, who it believes should be seen as consumers, not investors, to take on significant risks that they haven’t a clue on how to manage. For one, the report sees a pension and retirement dilemma. It notes that many experts disagree over whether the new rules for defined benefit plans (see “Pension Protection Act of 2006”) will help stabilize the system or encourage more companies to curtail their plans. Keep in mind that as more companies discontinue their defined benefit plans, they’ll need to change their overall retirement programs so that they work more effectively for employees. You’ve then got a twofold risk here: (1) Employees could outlive their retirement income and experience a significant decline in their standard of living. Many people simply underestimate their life expectancy and overestimate how much money they can draw from savings. (2) Employees are investing more than they should in equities, due in part to the limited options for their defined contribution monies, inflation, and market volatility. Then, you have to take a gander at redefining retirement along with mitigating risk. Remember, today’s aging Baby Boomers are the best educated, healthiest, and longest-living group to ever entire retirement. According to Anna Rappaport, senior fellow on pensions and retirement for the Board, when surveyed, seven out of 10 people in this population say that they want to continue working in retirement. Given these new parameters, she notes that new definitions and innovative employment options must be created for this phase of life. She calls it the “third age.” Finally, she points out that policymakers, employers, and individuals need to rethink how retirement fits into the way people actually live their lives. For further information or to request a copy of the report, e-mail courter@conference-board.org.

Accounting firm Berkowitz Dick Pollack & Brant said its $50,000 contribution would help provide four-year college scholarships for 30 low-income at-risk children in Florida.

Sen. Joseph Lieberman, I.-Conn., has written a letter to the Internal Revenue Service asking for an explanation of its investigation of a speech by Sen. Barack Obama, D-Ill., at the United Church of Christ.

Seymour Mann, co-founder of Mann Frankfort Stein & Lipp Advisors, which later became UHY Advisors TX, has died at the age of 87, only a few weeks after announcing his retirement from the firm he co-founded in 1971.

Sarbanes-Oxley has led to big improvements in audit quality, according to a newly released survey.

Deloitte & Touche's statements in an audit released last year of Bear Stearns may have given investors an inkling of the trouble to come at the investment firm, which was acquired this week by JPMorgan Chase for $2 a share in a Federal Reserve-backed deal that has averted a likely bankruptcy.

The California Society of CPAs said it would begin an educational initiative to help its 31,000 members cope with International Financial Reporting Standards.

By the time this column appears, CPAs everywhere are going to be tackling stacks of paperwork for income taxes. This will be true whether they are up to their necks in client returns, or struggling in an audit to reconcile book and tax income in Schedule M.With those pains in mind, it only makes sense that accountants would prefer GAAP accounting for income taxes to be relatively simple.