Regulatory actions and programs

Small and midsized businesses added 124,000 jobs in March, according to the ADP National Employment Report from payroll and benefits outsourcer ADP Inc.

If you think you understand IAS 39, "Financial Instruments: Recognition. and Measurement," then you haven’t read it, according to Sir David Tweedie, chairman of the International Accounting Standards Board.

Is Intuit on its way to becoming a major player in health care? Actually, one person not asking that question is the company’s CEO Steve Bennett who predicts that in five to 10 years Intuit’s healthcare software products will be bigger than the rest of the company. Bennett made that prediction in early March at the Morgan Stanley Technology Conference. Bennett told attendees that he and company founder Scott Cook now spend 10 percent of their time on health care Currently, Intuit’s entry in this market is the Quicken Medical Expense Manager, which is designed to let consumers track communications with insurance plans so that they know what they have paid and what they haven’t. As Bennett says, this isn’t something that is going to happen in the next two years. What Intuit is doing, however, is important in showing how the companies in the financial space are quickly evolving. Sage Software plunged into the medical market last year with the purchase of the Emdeon practice management business. While Intuit and Sage are taking different courses—Intuit is going after the consumers, Sage after professional practices—it underscores the potential they see in a business in which many operations aren’t fully automated, if at all. And of course it’s natural to link these to the banking and payment businesses that each company has entered. Intuit has its QuickBooks Merchants Services and Sage acquired Verus Financial Services at a premium price. The medical business is also behind much of the market in accepting credit cards, but is expected to catch up rapidly. Bennett’s message to the people at the Morgan Stanley conference was it’s quite a bit early to purchase his company’s stock based on its activities in health care. But keep your eyes open.

The Securities and Exchange Commission endorsed the recommendations of the agency's professional staff to eliminate, “waste and duplication,” in companies’ compliance with the Sarbanes-Oxley Act.The change is particularly aimed at providing relief for smaller companies.

The Department of Justice and the Internal Revenue Service put on a bit of a dog and pony show yesterday, holding a special press conference to announce highlights of their work during the past year to enforce federal tax laws.

The Public Company Accounting Oversight Board released a new auditing standard along with guidance targeting how tax services are provided to people in financial reporting oversight roles.

The Securities and Exchange Commission filed, and settled, civil fraud charges against Tenet Healthcare Corp. and four former senior executives.

IFACnet, a search engine developed by the International Federation of Accountants and its members, has expanded its resources to address the needs of small and midsized accounting practices.

The Securities and Exchange Commission announced that its six district offices will become regional offices and report directly to the commission's Washington headquarters as of April 2.

The Securities and Exchange Commission announced last week that Nicor Inc., a Chicago-area natural gas distributor, and Jeffrey Metz, its former assistant vice president and controller, will pay more than $10 million to settle charges that they engaged in improper transactions, made material misrepresentations, and failed to disclose material information.The SEC filed a settled civil injunctive action against Nicor and Metz, alleging financial fraud lasting from 1999 to 2002. The funds Nicor and Metz agreed to pay in disgorgement and civil penalties will be placed in a fund for distribution to affected shareholders. Nicor also agreed to be permanently enjoined from violating the antifraud and reporting provisions of the federal securities laws.

Plans by the Public Company Accounting Oversight Board to overhaul the organization's standards for internal control audits don't go far enough to correct the problems of the PCAOB's original ground rules - or they go too far in watering down the original Sarbanes-Oxley Act protections for investors by yielding to powerful business groups.Or they muddy the waters for accountants who are already swimming upstream to interpret and implement Auditing Standard No. 2, which governs audits of internal controls.

SHAW AUDITOR RESIGNSThe Shaw Group Inc., a Baton Rouge, La.-based multi-services provider for clients in the government and private sectors, said that Big Four firm Ernst & Young will resign as the company's auditor.

Following a long period of assimilation, the London-based International Accounting Standards Board has released an exposure draft on accounting principles under International Financial Reporting Standards for the small and midsized sector.The IASB's goal was to provide a simplified, self-contained set of accounting principles that are appropriate for smaller, non-listed companies, but nevertheless based on IFRS - the guidelines developed primarily for listed European Union companies that are now in use or being adopted by 100 different countries around the world. American and EU regulators are currently embroiled in an ongoing convergence project between IFRS and U.S. generally accepted accounting principles.

The Sarbanes-Oxley Act brought the tax manager into the financial statement reporting process as never before. As SOX Section 404 internal control certifications were made with respect to each input into the financial statements, it became clear that one of the weakest areas for SOX 404 compliance was accounting for income taxes.Under FASB Statement No. 109, Accounting for Income Taxes, the process of providing for deferred income taxes had become so subjective and subject to differing interpretations that certification of the results was difficult, and comparability across financial statements appeared to be lacking.

After much criticism and debate over the best approach to regulating business, in December the Public Company Accounting Oversight Board proposed a new audit standard for Sarbanes-Oxley Section 404 implementation.Concurrently, the Securities and Exchange Commission introduced interpretive guidance for management's assessment of internal control. Both exposure drafts, which solicited feedback through February, promise change through a risk-based approach.

A federal appeals court ruled that the Securities and Exchange Commission overstepped its authority in updating rules governing brokers who offer financial advice.

The Public Company Accounting Oversight Board has scheduled an open meeting on April 3 to consider proposing an auditing standard, “Evaluating Consistency of Financial Statements.”

The International Accounting Standards Board has issued a revised standard on borrowing costs.

Dallas-based law firm Jenkens & Gilchrist Corp. will pay $76 million to the Internal Revenue Service to settle charges over its aggressive marketing of questionably legal tax shelters to wealthy individuals.

Reversing a trend of declining optimism over the past three years, CPAs serving as chief executive officers, chief financial officers and in other executive financial positions have a favorable view of the economy, according to the first quarter 2007 Business and Industry Economic Outlook Survey.