Regulatory actions and programs

The American Institute of CPAs has urged the Internal Revenue Service to withdraw regulations the IRS and Treasury Department proposed in April for changing the open account debt rules between S corporations and shareholders.

The Securities and Exchange Commission's Enforcement Division came under fire in a report that criticized the division's oversight of its caseload.

The American Institute of CPAs and the Financial Accounting Standards Board have set a date for FASB's Private Company Financial Reporting Committee to meet.

Forensic accounting is hot for a number of reasons. The most obvious is that as a specialty it has become very lucrative. So much so, I know of firms that have stopped during traditional tax and accounting work. Also, accounting and auditing standards are increasingly delineating new obligations with regard to practitioners’ duty to protect against fraud.

The Center for Audit Quality named three of its first public board members, including a former SEC commissioner, Harvey Goldschmid.

Proxy researcher Glass Lewis & Co. has rolled out its ESG Watch List Service, a tool that enables Glass Lewis' proxy voting clients to track companies with environmental, social or governance policies and/or practices that may create operational, performance, financial, legal or accounting risks. The service incorporates ratings from IW Financial, a provider of research, analytics and consulting services that enable investors to incorporate ESG factors into the investment process. ESG Watch List Service notifies users when the practices or the ESG performance of a company within their portfolio approaches a level that may be of concern based on evaluation criteria established for the list by the client. Glass Lewis ViewPoint clients can set up one or more pre-set profiles, or can elect to create custom profiles for rating the 3,000 U.S. companies in the Glass Lewis-IW Financial databank.

The Securities and Exchange Commission has charged some 37 audit firms and 32 audit partners with reviewing the financials of public companies without undergoing mandatory registration with the Public Company Accounting Oversight Board.According to the regulator, the unregistered firms and partners conducted some 60 audits between November 2003 and October 2005.

Female business owners are increasingly more educated and more willing to take risks, according to a newly released survey.

The American Institute of CPAs has issued an exposure draft of a proposed audit and accounting guide for the airline industry and is looking for comments.

The Securities and Exchange Commission has approved a rule from the Financial Industry Regulatory Authority that would crack down on abusive sales of deferred variable annuities, particularly to senior citizens.

Computer Sciences Corp. said it would restate its fiscal 2007 results after examining the impact of FASB Interpretation No. 48, or FIN 48, and discovering accounting errors for fiscal 1997 through 2007.

DELOITTE DECLINES ATARI RE-ELECTIONBig Four firm Deloitte declined to stand for re-election as auditor to video game manufacturer Atari Inc. A regulatory filing did not give a reason for the decision. New York-based Atari said that its audit committee had received several proposals from other accounting firms. At press time a successor had not been named.

Big changes are coming for financial statements, if the Financial Accounting Standards Board's recent discussion with its advisory board is any indication.This spring, at a meeting of its Financial Accounting Standards Advisory Council, the board and staff discussed their working ideas on what statements could and should look like in the future if they are going to be useful. The discussion took place in the context of the board's joint project with the International Accounting Standards Board on financial statement presentation. It was held in anticipation of releasing a preliminary views document sometime this fall.

You might think that five years after a bill was passed, figuring out how to comply with it would be pretty much cut-and-dried. That's simply not the case with the Sarbanes-Oxley Act of 2002.While there is a good understanding of the kinds of excesses and vulnerabilities that its major sections are supposed to prevent, exactly how to go about implementing compliance procedures - and to what extent different-sized companies are responsible for compliance - is still very much up in the air.

While the Internal Revenue Service has issued a plan that adopts the IRS Oversight Board's goal of 86 percent voluntary compliance by 2009, National Taxpayer Advocate Nina Olson cautioned against IRS efforts to ramp up enforcement excessively and cut corners in its treatment of taxpayers if it is pressured to do too much too soon."For fiscal year 2008, both the Internal Revenue Service and the Taxpayers Advocate Service face similar challenges," she said, in the second of her two annual reports to Congress. "The IRS is under scrutiny for its efforts to close the tax gap, while the TAS is struggling to address taxpayer difficulties that arise as a result of these very efforts."

In what Chairman Christopher Cox termed "a second front in an all-out war on complexity in financial reporting," the Securities and Exchange Commission has formed a Committee on Improvements to Financial Reporting and called on it to formulate specific ways "to reduce complexity and all its costly burdens."The committee will have a year to search for solutions that have eluded standard-setters and regulators for decades. While fears of litigation have led to complex and detailed rules-based standards, a growing demand for simplicity has inspired calls for less specific standards that are based more on principles.

Responding to widespread uncertainties about the implementation of Financial Accounting Statement 133, Accounting for Derivative Instruments and Hedging Activities, the Financial Accounting Standards Board has issued a proposed implementation issue intended to make it easier for companies to use the "shortcut method" in accounting for many hedging transactions.It should also help those companies' confidence.

President Bush is considering the possibility of simplifying the corporate tax system, as long as the changes don't affect the amount of taxes the government collects.The president's announcement came on the heels of a conference convened by Treasury Secretary Henry Paulson in July, in which he proposed a cut in corporate taxes to make the U.S. more competitive.

Crowe Chizek said it plans to combine practices with Carter, Belcourt & Atkinson, expanding the Oak Brook, Ill.-based accounting firm's footprint in Florida.

Small businesses added 44,000 jobs in the United States in August, according to a new report, but large companies shed 6,000 jobs last month, bringing the total number of new jobs to 38,000.