Regulatory actions and programs

Two accounting statements from the Financial Accounting Standards Board could have a large impact on accounting firms and their business clients, said accounting firm BDO Seidman.

The Governmental Accounting Standards Board has a host of complex projects on the docket for 2008. The first half of the year will see a few new documents, while the second half will entail mostly discussions.

A new report finds that the cost of compliance with Sarbanes-Oxley Section 404 internal control audit requirements for smaller public companies is actually about 14 percent lower than originally estimated.

The Internal Revenue Service hopes that new interim guidance for tax preparers will ease concerns over the expanded preparer penalties and heightened standards of conduct that must be met to avoid the penalties.

The Mortgage Forgiveness Debt Relief Act of 2007 has introduced a new paradigm of tax strategies for those who are falling behind on their home mortgage payments (or anticipate falling behind as the result of a pending adjustable rate mortgage reset).

The pace of accounting standards convergence is accelerating, and is being driven primarily by an investment community that is rapidly embracing International Financial Reporting Standards.

Larry Rodda, a former principal and managing director of KPMG Consulting, has agreed to pay an $80,000 penalty to the Securities and Exchange Commission to settle charges that he deceived investigators over accounting fraud at Peregrine Systems.

The Financial Accounting Standards Board has decided to issue final guidance that would defer for a year the effective date on which private and public entities would have to account for fair value measurements.

An advisory committee to the Securities and Exchange Commission intends to make its decision on Feb. 11 on whether to issue an eagerly anticipated report on improvements to financial reporting.

The IASC Foundation has set four principles for a funding system in 2008 for its activities, which include its work overseeing the International Accounting Standards Board.

The American Institute of CPAs has written to the Treasury Department and the Internal Revenue Service about proposed regulations for automatic contributions to 401(k) plans, as well as cafeteria plans.

Every once and a while you come across a firm that knocks your socks off. Dezan Shira & Associates (dezshira.com) is just such a firm.

Securities and Exchange Commission Chairman Christopher Cox said he expects to see the SEC start allowing U.S. companies to file financial statements in accordance with International Financial Reporting Standards in the year ahead.

The Public Company Accounting Oversight Board released expanded versions of two reports it had originally issued in 2005 on two audit firms, highlighting problems with technical competence.

The Securities and Exchange Commission has begun a cost-benefit study of the upcoming attestation requirement for smaller companies under Section 404(b) of the Sarbanes-Oxley Act.

The Internal Revenue Service warned taxpayers to beware of several current e-mail and telephone scams that use the IRS name as a lure.The goal of the scams is to trick people into revealing personal and financial information, such as Social Security, bank account or credit card numbers, which the scammers can use to commit identity theft. Typically, identity thieves use a victim's personal and financial data to empty the victim's financial accounts, run up charges on the victim's existing credit cards, apply for new loans, credit cards, services or benefits in the victim's name, file fraudulent tax returns or even commit crimes. Most of these fraudulent activities can be committed electronically from a remote location, including overseas. Committing these activities in cyberspace allows scammers to act quickly and cover their tracks before the victim becomes aware of the theft. The most recent scams brought to IRS attention are the rebate phone call, in which a bogus IRS employee tells the consumer he is eligible for a sizable rebate for filing his taxes early; a link for a refund that is e-mailed to tax-exempt organizations bearing the supposed signature of the IRS Exempt Organizations business division; and an e-mail inviting recipients to click on a series of links to download information on changes in the tax law, but which downloads malware onto the recipient's computer. A new scam, not seen before by the IRS, notifies the recipient by e-mail that his or her tax return will be audited. The e-mail instructs the recipient to click on links to complete forms with personal and account information that the scammers will use to commit identity theft.

David B. Duncan, former global engagement partner for Enron at the defunct audit firm Arthur Andersen, agreed to an injunction by the Securities and Exchange Commission to settle charges that he broke securities laws when he signed false and misleading audit reports.

The Public Company Accounting Oversight Board has voted to adopt Auditing Standard No. 6, "Evaluating Consistency of Financial Statements," and an accompanying set of amendments to its interim auditing standards.

MIAMI NAMES MCGLADREY

Since 1939, when the Tax Code's treatment of inventory was modified to permit LIFO, managers and accountants have faced a tri-lemma in that they have to choose among FIFO, LIFO and average flow assumptions. The Committee on Accounting Procedure issued Accounting Research Bulletin 29 in 1947 to provide guidance for this choice, but said two things that have hampered financial reporting ever since. (These provisions were subsequently integrated into ARB 43 in 1953, and remain in force 60 years later.)