Regulatory actions and programs

ABAXIS DISMISSES D&T: Blood-analysis systems manufacturer Abaxis Inc. dismissed Big Four firm Deloitte & Touche as its outside auditor, and retained Burr, Pilger & Mayer LLP as its successor.A federal filing did not state a reason for the auditor change, and there were no disagreements with Deloitte on accounting matters.

It's another busy season for us with the beginning of the academic year. As a result, we're buying some time by bringing back an all-time favorite tongue-in-cheek column that sheds light on how ludicrous many important features of GAAP are.If financial statements really are scorecards for business, reporting real outcomes, as well as sources of information for predicting the future, it's essential that they usefully describe what actually happens, instead of what someone hoped would happen.

Houses and offices under water. Looting in the streets. Factories on fire. What's an accountant to do?According to the Financial Accounting Standards Board's Emerging Issues Task Force, treat the situation as ordinary.

The Streamlined Sales Tax Project, in labor since 2000, officially gave birth on Oct. 1, 2005, when the threshold of 10 states representing at least 20 percent of the population was crossed."There are now 13 full-member states and five more associate states," said SSTP co-chair Scott Peterson, of the South Dakota Department of Revenue and Regulations. The associate-member states are those that have passed the requisite implementing legislation, but where the legislation had not yet gone into effect by October 1.

Following the inevitable rounds of infighting, European Union countries are taking the final steps to enact legislation to bring their auditing standards into line with best international practices as set out by the International Auditing and Assurance Standards Board.At press time, the European Parliament was expected to rubber-stamp an upgraded version of the EU's Eighth Directive on statutory auditing, which got through the committee stage in September. The agreed-upon package will be published before the end of the year, leading on to official enactment by the EU national governments.

Repealing the federal estate tax could end up choking off billions of dollars in contributions to charities whose resources have been stretched thin by the Hurricane Katrina relief effort, a top tax policy researcher warned Congress.Testifying on behalf of the Brookings Institution's Tax Policy Center, economist William Gale cited a variety of studies suggesting that "estate tax repeal would reduce charitable bequests by between 22 and 37 percent" - a drop that would drain between $3.6 billion and $6 billion each year from the nation's charities.

Calling the proposal for a "return-free" filing system "flawed" and "dangerous to taxpayers," 14 groups have written the President's Advisory Panel on Tax Reform to urge that it be taken off the table in any final report.While the timetable for a final report has been delayed by Hurricane Katrina relief efforts, with the final two scheduled meetings postponed, the return-free concept is one of the proposals under consideration by the panel.

New guidance from Securities and Exchange Commission regulators sets limits on ways to determine the cost of stock options, though the new SEC chairman said that the report was "tentative."Chief accountant Donald Nicolaisen, who will leave the SEC in October, wrote in a statement that he had doubts as to whether the creation of a financial instrument to mimic employee stock options would be an accurate tool. And chief economist Chester Spatt wrote in a memo from the SEC's Office of Economic Analysis that such an instrument would face the inherent difficulty of reconciling market price with the fair value of stock options.

Environmentalism has arrived, and it's here to stay. And apparently the time to account for it has also come. The question is how.Many corporations have seen real, market-driven reasons to report on their environmental impact and sustainability. Consumers are paying attention. Investors are worried about what they're investing in and how environmental liabilities could impact their investments. In many countries, environmental regulation agencies are requiring some degree of reporting.

BearingPoint Inc., a spinoff of Big Four firm KPMG's former consulting business, said that the Securities and Exchange Commission has launched a formal investigation of the company.Along with providing an update to the progress of the company's plans to release its 2004 financial statements, BearingPoint said that the SEC has issued a formal order of investigation into the company. In a statement, BearingPoint said that it believes the matters involved are the same as the informal investigation that it announced in March.

The Securities and Exchange Commission released a request for information on interactive financial data as part of its ongoing efforts to make financial disclosure more useful and accessible to investors.

PricewaterhouseCoopers was ordered to pay $182.9 million in connection with audits it performed for Ambassador Insurance Co., more than 20 years after the company collapsed into bankruptcy.

The Louisiana Division of Administration is soliciting accounting firms to provide oversight of the federal funds received to rebuild in the wake of Hurricanes Katrina and Rita. Proposals are due Oct. 6.

The Securities and Exchange Commission charged two accountants in connection with auditing the financial statements of bankrupt cable company Adelphia Communications Corp.

After agreeing to pay some $195 million in a settlement to roughly 280 investors in its tax shelters, Big Four firm KPMG is under fire again, this time from a critical inspection report from the Public Company Accounting Oversight Board, which identified a number of deficiencies in some 18 of 76 audits that it examined.

The Financial Accounting Standards Board said that it would assemble an investor task force -- a group comprised of top-level asset managers who will help advise the standard-setter on accounting issues relevant to Wall Street.

William McDonough, chairman of the Public Company Accounting Oversight Board, cautioned auditors not to expect lawmakers to cap liability claims until they have won back public confidence.

The International Auditing and Assurance Standards Board, a unit of the International Federation of Accountants, has approved a revised standard that the governing body says will enhance audit quality via stricter requirements for documentation.

The European Parliament approved the controversial Eighth Directive, a sweeping reform measure that mandates new oversight rules for auditors.

In a ruling that may affect the future of state job creation strategies across the nation, the Supreme Court will rule on how states can use tax incentives to entice large concerns such as car companies to make capital investments.