Regulatory actions and programs

A group representing financial executives has written to the Financial Accounting Standards Board asking to exempt private companies from the requirements of FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes."

The Public Company Accounting Oversight Board has issued its latest inspection report on KPMG, listing deficiencies in several sample audits conducted by the firm.

More than 65 percent of the CFOs and 70 percent of the audit committee members surveyed by accounting firm Crowe Chizek cited managing enterprise risk as the biggest challenge facing their organizations over the next 12 months.

The Securities and Exchange Commission said it would distribute millions of dollars to investors harmed by market-timing trading violations in mutual funds managed by Putnam Investment Management and Janus Capital Management.

Real estate mortgage schemes, foreclosure activities, equity stripping and fraud are booming. Individuals mastermind multi-tiered structures designed to hide participants or obfuscate relationships. They often have intentionally incomplete or poor financial records. These cases ordinarily involve desperate or opportunistic actions by very bright individuals, all connected by ambiguous documentation and well-hidden trails. As a result, the research, discovery, assessments, valuations and case preparation can become extremely complex.With the advancement of technology, new avenues for fraud, criminal behavior and outright negligence are surfacing. Now e-mail, cell phones and electronic monitoring systems provide volumes of information that can be used to discover the “smoking gun” in fraud cases. Using this electronic data and other hard-copy archives, the forensic investigation team, working closely with case attorneys and clients, sift through enormous volumes of documents to identify the possibility of fraud, financial reporting negligence, “cooked books” or other potential corruption.

PARKWAY PROPERTIES DISMISSES E&YParkway Properties Inc., a Jackson, Miss.-based real estate investment trust, dismissed auditor Ernst & Young LLP and engaged KPMG as its new independent accountant.

Two years ago, Bob Bunting saw the writing on the wall for U.S. GAAP.As former chief executive and chairman of super-regional firm Moss Adams LLP, Bunting established resources to prepare for the reality of International Financial Reporting Standards becoming the future of financial reporting for public companies in the United States.

A company may take a position on its tax return in good faith, but due to the complexities of tax law, it’s never a sure thing that it will be sustained.The now two-year-old FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, or FIN 48, establishes a “more-likely-than-not” threshold for the reporting of uncertain tax positions on financial statements. Under the rule, an uncertain tax position may not be recognized on the financial statement unless it is more likely than not that it will be sustained on its technical merits, and then it is measured at the largest amount of benefit that is greater than 50 percent likely to be realized upon ultimate settlement.

National Taxpayer Advocate Nina E. Olson’s list of objectives — detailed in the first of her two annual required reports to Congress — zeroes in on the problems that she intends to focus on during the fiscal year ahead.At least one of the objectives — which focuses on the liabilities of incentive stock options under the Alternative Minimum Tax — has a good chance of being resolved, according to Tim Carlson, president of the Coalition for Tax Fairness and pro bono attorney for a number of victims of the anomaly. “Pending legislation will fix it, and it has support from both sides of the aisle,” he said.

With volatile economic times threatening, flexibility in all aspects of financial affairs, including charitable giving, is more desirable than ever. While there is an increased need for charitable donations, there are also fewer resources among potential donors. One charitable giving vehicle that has grown popular over the past ten years because of its efficiencies is the charitable remainder trust.A CRT can provide a new income stream for the donor and a benefit to charity — a classic win-win situation. CRTs should continue to have viability for present-day donors, especially those who maximize the flexibility that the rules allow. In pushing CRTs to their legal limit, however, taxpayers also must heed restrictions that, if not followed, can result in disastrous tax consequences.

It’s vacation season, and we’re buying some relief from the never-ending stream of deadlines by republishing our all-time favorite tongue-in-cheek column that sheds light on how ludicrous many important features of GAAP are.If financial statements really are scorecards for business, reporting real outcomes, as well as sources of information for predicting the future, it’s essential that they usefully describe what actually happens instead of what someone hoped would happen.

Apple's former general counsel, Nancy Heinen, agreed to pay $2.2 million to settle stock options backdating charges with the Securities and Exchange Commission.

The Internal Revenue Service has introduced a free e-mail service to provide tax information to small business owners and the self-employed.

Intuit said it would begin offering new online services for small businesses using QuickBooks software as part of its "Connected Services" strategy.

The American Institute of CPAs has released "Audit Sampling," a newly updated audit guide containing the latest requirements and practices for auditors.

The Securities and Exchange Commission said it has resolved its litigation with Sun Communities over the company's accounting practices and will impose a $25,000 penalty on the mobile home community developer's former CFO.

The Financial Accounting Standards Board has certainly been hearing an earful in recent days from a variety of organizations warning that the amendments it is proposing to two of its accounting statements could lead to a spate of lawsuits.

Several organizations are criticizing a proposed standard on accounting for loss contingencies, saying it could lead to possible abuses, including a flurry of spurious lawsuits.

The Securities and Exchange Commission said it would distribute over $48 million to more than 12,000 investors who had been affected by Vivendi Universal's fraudulent financial reporting.

Deloitte & Touche and its audit client General Motors agreed to settle a securities class-action lawsuit for a total of $303 million.