Regulatory actions and programs

As the renowned Baby Boomer generation inches its way into the retirement years, employers are beginning to consider how this vast purge of experienced workers is going to affect the workplace.

Depreciation would be a joke if it weren't such a disgrace ... but that's precisely what happens when accountants calculate depreciation expense in advance and then report it on future income statements. There is no valid justification for reporting assumed depreciation instead of actual observed amounts (including appreciation)."

Tax reform under the second Bush administration will most likely take the form of piecemeal tax cuts, according to participants in a tax panel sponsored by the Council for Electronic Revenue Communication Advancement, a government-private industry trade association. President Bush has said that he would appoint a panel to recommend changes to the tax code that would make it simpler, fairer and less burdensome.

The Council of the International Federation of Accountants, a group that sets international standards on ethics, auditing and assurance, education, and public sector accounting, has named PricewaterhouseCoopers partner Graham Ward, CBE, MA, FCA, as its new president for a two-year term.

More than half of U.S. and European multinational companies will increase their compliance spending by an average of 23 percent over the next 12 to 24 months, according to a recent survey from Big Four firm PricewaterhouseCoopers.According to PwC's Management Barometer Survey, about 51 percent of those polled said that they would raise spending on compliance, while some 44 percent of senior executives revealed that their companies do not have a clear view of their total compliance spending.

The Financial Accounting Standards Board has begun to deliberate again on one of its most far-reaching and controversial projects - that of fair value measurement.

The Financial Accounting Standards Board and its overseas counterpart, the International Accounting Standards Board, have formed a new joint working group on performance reporting.

The Public Company Accounting Oversight Board has reportedly opened an investigation into KPMG's audits of mortgage finance company Fannie Mae.

As part of efforts to tighten ethical standards for tax professionals and curb abusive tax shelters, the Treasury has issued final regulations amending Treasury Circular 230, which governs the practice of attorneys, accountants and other tax professionals before the Internal Revenue Service.

The Securities and Exchange Commission has established an advisory committee to gauge the impact of the Sarbanes-Oxley Act and other aspects of the federal securities laws on the nation's smaller public companies.

Thanks to some fast footwork by regulators at the Securities and Exchange Commission and the Public Company Accounting Oversight Board, accounting firms and many of their smaller audit clients gained an additional 45 days of breathing room to comply with complex new Sarbanes-Oxley Act internal control reporting rules.

Officials at the Public Company Oversight Board unveiled an aggressive agenda for the coming year that may result in as many as 11 new standards for auditors in areas ranging from corporate fraud detection and reporting, to wrestling with related-party transactions.

The Governmental Accounting Standards Board is wrapping up a year in which it has been simultaneously returning to basics and promulgating specifics - both of which include projects of long-term significance to government financial operations.

Concerns that the outsourcing of finance and accounting functions impedes the ability to control key processes related to compliance and governance appear to have abated, according to a survey commissioned by Accenture.

Following a review of Fannie Mae's accounting practices, the Securities and Exchange Commission said that the mortgage concern didn't comply with two major accounting rules and asked it to restate past earnings.

At long last, the Financial Accounting Standards Board has issued its final rule mandating that companies expense at fair value the stock options that they grant to their employees.

Despite acknowledging the impact of higher producer prices, chief financial officers expect higher capital and technology spending at their companies during the next 12 months, according to a recent survey.

Time Warner Inc. reached a $210 million settlement with the Justice Department to end a probe into whether its America Online unit improperly booked ad sales, and proposed a $300 million settlement with the Securities and Exchange Commission to end an investigation into accounting irregularities at AOL.

Triggered by congressional concerns over the marketing of abusive tax shelters by some accounting firms, the Public Company Accounting Oversight Board has proposed new rules restricting the ability of accountants to provide tax services to audit clients.

While a majority of financial executives polled feel that compliance with the sweeping Sarbanes-Oxley Act was beneficial for shareholders and has bolstered internal controls at their respective companies, just as many think Congress needs to revisit the legislation in the near future.