Regulatory actions and programs

Many firms conduct surveys and issue releases summarizing them hoping for the maximum press coverage. Grant Thornton is one of the “best” at it.

Fitch Ratings has released a report on the recent disruptions in the credit market and the effect of two new accounting standards.

"They'll isolate you, exclude you, encourage you to leave the company and to move," said Cynthia Cooper, former vice president of the internal audit department at WorldCom, talking about her experience as a whistleblower.

Truck maker Navistar International said it would strengthen its internal controls and financial reporting as it announced a $1.12 billion financial restatement.

A majority of CFOs and senior comptrollers do not agree with proposals to allow companies to file financial statements in International Financial Reporting Standards instead of U.S. generally accepted accounting principles, according to a newly released survey by accounting firm Grant Thornton.

The Senate Banking Committee held a hearing on allowing U.S. companies to use International Financial Reporting Standards.

SEC Commissioner Paul Atkins told U.S. business leaders in Japan that a recently issued auditing standard should have the effect of cutting audit fees.

A former Arthur Andersen audit partner has settled charges brought against him by the Securities and Exchange Commission alleging that he assisted in a $300 million fraud committed by an audit client in 2000.Without admitting or denying the charges, Fred Gold agreed to a $100,000 fine, a permanent anti-fraud injunction, and an administrative order barring him from appearing or practicing before the commission.The SEC alleged that Gold should have known that the 2000 financial statements of American Tissue -- the audit of which he supervised and approved -- included fraudulently inflated assets and earnings, and also that in 2001 Gold altered work papers to prevent discovery of the fraud in a peer review, and later tried to hide the audit failure by destroying documents and e-mails after another accounting firm discovered American Tissue's overvalued inventory.Earlier, former Andersen audit manager John Parson and senior accountant Brendon McDonald settled SEC charges in the same matter; Parson for $50,000 and permanent suspension from practicing before the commission, and McDonald for a $30,000 penalty and a five-year suspension.

The Treasury Department has selected a Kansas professor to study the effects of financial restatements.The department picked Susan Scholz, a professor at the University of Kansas, to carry out the study, which will look at the impact of public company financial restatements and the reasons behind them. Treasury Secretary Henry Paulson discussed the need for a better understanding of these issues back in May.While Sarbanes-Oxley requirements and tougher auditing standards have forced companies to issue a growing number of restatements, some observers have questioned whether immaterial restatements might unnecessarily harm investor confidence.Scholz will examine the factors triggering public company financial restatements, describe the restatements, analyze their impact, and evaluate their significance.The Treasury Department chose Scholz through the competitive bidding process. She is an associate professor and Harper Faculty Fellow at the University of Kansas School of Business, and received her doctorate in business administration from the University of Southern California.

Software developer Paisley has announced an updated version of its governance, risk and compliance software, Paisley Enterprise GRC.

The Public Company Accounting Oversight Board released a report on the issues it has identified from inspections of U.S. firms that audit 100 or fewer public companies.

Because of the thousands upon thousands of press releases that I have seen, very few impress or take me by surprise. But the one at www.healthsouth.com/who_we_are/press_releases.asp did just that. In the release, HealthSouth Corporation announced that it has received a $440 million tax recovery from the IRS “for overstatements of taxable income attributable to financial fraud perpetrated by members of prior management.” This recovery includes a $296 million tax refund for the tax years 1996 through 1999, and $144 million of associated interest income.

BIOFUEL ENGAGES GRANT THORNTONBioFuel Energy Corp., a Denver-based producer of ethanol, has named Grant Thornton as its new independent accountant.

Regular readers know that we often challenge financial reporting participants to "tell the truth, the whole truth, and nothing but the truth."This ancient oath covers all the bases by binding witnesses to tell what they know to be true, not diminished by leaving something out and not augmented by adding something extraneous. One or even two out of three simply isn't good enough.

Dietary supplement developer Mannatech has fired Grant Thornton as its auditor and appointed BDO Seidman in its place after a dispute over the company's chairman.

PricewaterhouseCoopers has several significant deficiencies with its auditing, according to an inspection report issued by the Public Company Accounting Oversight Board.

1987: A TOUGH ENTRANCEIt was not, perhaps, the best of times for the accounting profession: Scandals, including the implosion that summer of the brazenly fraudulent ZZZZ Best, had tarnished auditors' reputations, malpractice insurance rates were soaring, college students were staying away in droves, and the Federal Trade Commission claimed that the American Institute of CPAs' rules on professional activities violated restraint-of-trade rules.

Investors harmed by financial shenanigans at mortgage lender Fannie Mae will collectively receive a whopping payout of $356 million, thanks to the Securities and Exchange Commission.

As tax prep suites have evolved to meet the needs of the particular market segment targeted by each product, practitioners now have a variety of products from which to choose - each of which will do the job."The desktop market is becoming extremely competitive, with each producer giving as much new functionality and offering it as cheaply as they can," said John Vora, chief executive of Parsippany, N.J.-based TaxSimple.

Securities and Exchange Commission chair Christopher Cox said that data tags have been developed for the entire system of U.S. generally accepted accounting principles, advancing the use of the Extensible Business Reporting Language for automating financial reporting.XBRL will allow investors and analysts to download financial information filed with the SEC into Excel spreadsheets and other software, so they can more easily compare the information across companies and industries. Preparers can also automate the process of closing a company's books and submitting statements to the SEC.