Regulatory actions and programs

A prominent southern Illinois automobile dealer and three promoters of a tax fraud scheme in the U.S. Virgin Islands were indicted on a variety of tax and wire fraud-related charges, the Justice Department and the Internal Revenue Service recently announced.A federal grand jury in East St. Louis, Ill., returned the 21-count indictment, which charges James A. Auffenberg Jr. of Swansea, Ill., Peter G. Fagan of De Leon, Texas, James W. Ferguson III of Amarillo, Texas, and J. David Jackson of St. Croix, U.S. Virgin Islands, as well as a number of alleged business fronts held by the men. They face conspiracy, income tax evasion, wire fraud and aiding in the filing of false individual and corporate income tax returns charges.

The Securities and Exchange Commission announced it will hold an open meeting on April 4, to discuss the Public Company Accounting Oversight Board’s proposed auditing standard for Section 404 of the Sarbanes-Oxley Act and the coordination of the proposed changes with the SEC’s own guidance concerning implementation.

In a recent interview with Practical Accountant, Judith O’Dell, the recently-appointed chairwoman of the Private Company Financial Reporting Committee, explained the mandate that the committee will be following as it explores the need for different reporting standards for public and private companies in the following months.

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The Financial Accounting Foundation said that it will give the Securities and Exchange Commission the opportunity to propose and review candidates for open positions at either the foundation, or the board the foundation oversees, the Financial Accounting Standards Board.

The Securities and Exchange Commission has charged two former in-house lawyers at Enron Corp. with securities fraud over a Brazilian scheme to move losses off the company’s balance sheet.

The Justice Department said that a California marketer has pleaded guilty to a conspiracy charge of defrauding the United States for his involvement in a tax fraud scheme.Todd Eugene Strand of Murrieta, Calif., pleaded guilty today in a Kansas City federal court this week. According to the government’s indictment, between June 1997 and April 2002, Strand and a trio of co-defendants -- Daniel Joel Gleason, Michael Craig Cooper and Jesse Ayala Cota -- operated a scheme to defraud the Internal Revenue Service and taxpayers.

The U.S. Supreme Court will hear a case that could clarify whether outside vendors can be sued under securities laws for participating in transactions that were part of another company's accounting fraud.The lawsuit before the court was brought against suppliers for St. Louis, Mo.-based Charter Communications Inc., a cable company which was tied to a $17-million revenue-inflation scheme in the late-1990s. Charter paid cable box vendors extra cash for their boxes, if the companies promised to purchase advertising from the company in return. Several of the company’s top executives were later indicted on accounting fraud charges.

Avalara, a provider of Internet-based sales tax compliance services for small and midsized businesses, announced that it has more than 10,000 registered users -- doubling the company’s year-ago figure.

In a strategy designed to help modernize the business-reporting model, board members of the American Institute of CPAs’ recently restructured Center for Audit Quality will embark on a multi-city “listening tour."The aim of the tour is for members to engage investors, regulators, academics and business leaders and, subsequently, offer a series of recommendations.

The Securities and Exchange has censured Ernst & Young, ordering the Big Four firm to pay $1.6 million to settle charges of compromising its independence and contributing to faulty accounting by a client in 2001.As part of the settlement, E&Y neither admitted nor denied the agency’s allegations, made in connection with the firm’s audit work for Pittsburgh-based regional bank PNC Financial Services Group.

The Securities and Exchange Commission's Office of the Chief Accountant has selected four professional accounting fellows to serve two-year terms beginning this summer.

The Certified Financial Planner Board of Standards Inc. has released a second exposure draft of proposed changes to its, “Standards of Professional Conduct.”

Representatives from the Public Company Accounting Oversight Board meet with its Japanese, Korean and Chinese counterparts last week, as well as accepting an invitation to become a member of the newly-formed International Forum of Independent Audit Regulators.Chairman Mark Olson and board member Charles Niemeier participated in a meeting of the forum in Tokyo, where they discussed ways to foster cooperation between regulators responsible for the oversight of public company auditors. They also met privately with the PCAOB’s counterpart in Japan, the Certified Public Accountants and Auditing Oversight Board and the Japanese Financial Services Agency.

The Securities and Exchange Commission censured the American Stock Exchange last week, along with the exchange’s former chairman and chief executive, for failing to enforce securities laws and maintain proper records.

Marcum & Kliegman LLP has launched a new Women’s Leadership Development Program with neighboring law firm Farrell Fritz PC.The program, which is open to employees of both firms but not open to the public –yet -- was developed to provide a supportive venue for female professionals to explore issues that affect them in the workplace and develop skills to enrich their careers, said Marcum manager of training and development, Nancy Chen.

A federal judge has dismissed a lawsuit filed by a small Nevada audit firm challenging the constitutionality of the Public Company Accounting Oversight Board.

The main council that provides guidance to the Financial Accounting Standards Board doesn’t agree that the accounting profession’s rulemaking structure is in need of reshaping.

Business-information provider D&B Corp. has acquired First Research for $22.5 million in cash.

A local accounting firm has alerted its 4,000 clients that their private financial records -- including Social Security numbers, addresses, credit card information and signature documents -- have been stolen.Santa Rosa, Calif.-based Tax Service Plus told authorities that thieves stole the business’s back-up computer on March 7, which contained data on thousands of tax returns filed over the past three years.