Regulatory actions and programs

The Securities and Exchange Commission and the North American Securities Administrators Association said they would waive for nine months the initial set-up and annual renewal fees paid by investment adviser firms to join their registration system.

“As the economic slump deepens, more companies are expected to join General Motors in suspending matches of contributions to their employees' 401(k) retirement accounts. “GM last week became only the latest on a list of well-known companies trying to conserve cash to weather the downturn by halting 401(k) account matches. Also among them are Goodyear, Frontier Airlines, commercial real estate firm Cushman & Wakefield, broadcast group Entercom and rental car agency Dollar Thrifty Automotive Group. “ The above was from USA Today of October 28, 2008 and indicates a very interesting new, possible growing trend that will probably increase and become especially attractive to companies hardest hit in these tough economic times. The ramifications, if this becomes widespread, are extremely significant, and this is true even on the firm level, whether it involves business clients currently matching 401(k) employee contributions or individuals saving for retirement. Beside costs and retirement savings, there is the obvious concern of the impact on attracting and retaining talent, and the need for development of special compensation packages for key employees. It also indicates that businesses will be making some very tough decisions as a result of this extended, and continued financial and economic crisis. Some firms are already creating internal financial crisis teams. This is a time to be proactive and respond, not a time to wait and react. What is your firm doing?

The Public Company Accounting Oversight Board has fined a Big Four partner $25,000 for his audits of Navistar Financial Corp.

The International Accounting Standards Board has issued educational guidance from an expert advisory panel on the controversial issue of fair value measurement when markets become inactive.

JEFFERSON WELLS OFFERS IFRS READINESS CALCULATORMilwaukee - Consultancy Jefferson Wells has introduced an online IFRS Readiness Calculator to help companies assess their preparedness for the transition to International Financial Reporting Standards.

The Treasury Department's Advisory Committee on the Auditing Profession has released its final report with recommendations on how to improve the sustainability of the profession - but not without some dissension.The committee approved the report by a vote of 14-1, with the lone dissenting vote cast by Lynn Turner, a former chief accountant of the Securities and Exchange Commission.

The way things are going in Washington and Wall Street, we fully expect a decree from Congress that henceforth all photographs and mirrors will be outlawed.Why on earth would they do that? Well, it turns out that various powerful individuals are growing dissatisfied with their diet and personal fitness programs. They are growing a bit paunchy around the middle, and they're picking up wrinkles, while more of their scalps are showing than they would prefer.

American Institute of CPAs president and CEO Barry Melancon defended fair value accounting standards at a securities industry conference, but admitted the standards could be improved.

Fair value under fire Financial crisis spurs debate over standardAs the financial community scrambles to regain the trust of investors angered by the Wall Street crisis, fair value accounting continues to come under fire.

The financial rescue plan approved by Congress included many extensions of expiring tax credits and deductions that helped it win passage in the House, but it also left out some tax issues that will surely be bones of contention for the next Congress."It's safe to predict that not much will happen in a lame duck session," said Tom Ochsenschlager, vice president of taxation at the American Institute of CPAs.

In what can be seen as a cruel irony in the midst of the current financial crises, the Financial Accounting Standards Board has issued a proposed staff position - 144-d, Amending the Criteria for Reporting a Discontinued Operation.The proposal, issued as an exposure draft, redefines "discontinued operation" and matches a simultaneous proposal issued by the International Accounting Standards Board. The proposals also establish identical new disclosure requirements. The new definition would no longer include certain subsidiaries and asset groups.

Optimism among CFOs about the U.S. economy and their own companies fell precipitously in the third quarter, according to a new survey.

The House Committee on Small Business held a hearing on creating opportunities for small businesses in an economic recovery.

House Financial Services Committee Chairman Barney Frank, D-Mass., said he did not plan to have Congress suspend fair value accounting rules.

The Securities and Exchange Commission held the first of two roundtable discussions on fair value accounting standards, receiving input from accounting firms such as PricewaterhouseCoopers and Grant Thornton, along with other organizations.

The Securities and Exchange Commission plans to hold its annual forum on small business capital formation on Nov. 20 at its headquarters.

“An emperor of a prosperous city who cares more about clothes than military pursuits or entertainment hires two swindlers who promise him the finest suit of clothes from the most beautiful cloth. This cloth, they tell him, is invisible to anyone who was either stupid or unfit for his position. The Emperor cannot see the (non-existent) cloth, but pretends that he can for fear of appearing stupid; his ministers do the same. When the swindlers report that the suit is finished, they dress him in mime. (acting out a story through body motions, without use of speech—Ed.) The emperor then goes on a procession through the capital showing off his new ‘clothes.’ During the course of the procession, a small child cries out, ‘But he has nothing on!’ The crowd realizes the child is telling the truth. The Emperor, however, holds his head high and continues the procession.”

The International Auditing and Assurance Standards Board said it is getting close to completing an 18-month project aimed at making audit standards more understandable.

Finance and accounting staff will receive an average salary boost of 3.4 percent next year despite the economic downturn, predicts recruiting company Robert Half International.

Leaders of six business associations have written a joint letter to the Securities and Exchange Commission complaining that recent guidance about the use of judgment in fair value accounting "has the potential to cloud transparency."