Accountants Eye New Income in 'Going Paperless'
Consulting opportunities abound in growing niche for small and medium-sized businesses overwhelmed by regulations and paperwork.
“We are uniquely situated for helping clients with questions like that,” according to Susan Bradley, CPA, a practicing accountant in Fresno, Calif., and one of the profession’s leading technology experts. “Who would a client rather take advice from, a retail salesman, or their accountant?”
Now published at the January 2004 HP/CPA Tech Advisor, News and Trends Exclusively for CPAs from Hewlett-Packard by Rick Telberg, Special for Hewlett-Packard
Monday, December 29, 2003
Happy New Year! Yes, It Really Could Be
... Rick Telberg/At Large
Economic signals point to a prosperous and healthy 2004 for the CPA profession.
... Rick Telberg/At Large
Economic signals point to a prosperous and healthy 2004 for the CPA profession.
Thursday, December 18, 2003
Making Money With Basic Accounting Software
... in the January 2004 Journal of Accountancy
Clients who need help with entry-level programs represent a healthy market for CPA services.
... in the January 2004 Journal of Accountancy
Clients who need help with entry-level programs represent a healthy market for CPA services.
Friday, December 12, 2003
Who Would-a Thunk It?
Accounting and baseball clash in Milwaukee
Blame Bud Selig. Everyone else is. But the fact remains that Brewers fans and Milwaukee citizens deserve a full accounting of how their tax dollars and subsidies for a new stadium are being spent. Worse: The team is still a losing team -- in money AND games. So Selig has promised to open the books. Let the accounting tell the tale. More at In Milwaukee, a Bookkeeping Brouhaha
Accounting and baseball clash in Milwaukee
Blame Bud Selig. Everyone else is. But the fact remains that Brewers fans and Milwaukee citizens deserve a full accounting of how their tax dollars and subsidies for a new stadium are being spent. Worse: The team is still a losing team -- in money AND games. So Selig has promised to open the books. Let the accounting tell the tale. More at In Milwaukee, a Bookkeeping Brouhaha
Sarbanes-Oxley Adds Pressure to Go Digital
New edition of HP/CPA Tech Advisor says new recordkeeping regs spur accountants toward paperless offices.
In this new era of disclosure, comes too a new era for document management. It is imperative now that every company create and maintain an enterprise-wide record-keeping system for paper, email and electronic files.
New edition of HP/CPA Tech Advisor says new recordkeeping regs spur accountants toward paperless offices.
In this new era of disclosure, comes too a new era for document management. It is imperative now that every company create and maintain an enterprise-wide record-keeping system for paper, email and electronic files.
Wednesday, December 10, 2003
Well, It's About Time.
But Is It enough?
The Internal Revenue Service is auditing two dozen companies to make sure they followed the rules for compensating executives, scrutinizing corporate perks such as stock options and the use of private jets and luxury apartments, according to the AP.
The examinations will focus on more companies and possibly mean auditing the personal tax returns of some corporate leaders, said Keith Jones, the agency's director of field specialists.
"Executive pay packages have become much more complex. We're taking a close look at these vehicles to make sure they fully comply with the law," IRS Commissioner Mark Everson said.
The IRS started its inquiries this summer to find out whether companies were following the rules for fringe benefits and other forms of paying top officers. The review came as corporate bankruptcies exposed the lavish lifestyles of some executives. The audits, geared toward companies with $10 million or more in assets, intensified this fall. The IRS, which is not identifying the companies, plans to use its findings from the first batch of audits and expand the investigations.
The agency identified eight areas of scrutiny. The list includes rules regarding the business and personal use of fringe benefits such as private jets, vacation homes, golden parachutes, deferred compensation programs and stock options.
Sounds like a new niche for savvy tax accountants and lawyers: The pre-audit audit.
But Is It enough?
The Internal Revenue Service is auditing two dozen companies to make sure they followed the rules for compensating executives, scrutinizing corporate perks such as stock options and the use of private jets and luxury apartments, according to the AP.
The examinations will focus on more companies and possibly mean auditing the personal tax returns of some corporate leaders, said Keith Jones, the agency's director of field specialists.
"Executive pay packages have become much more complex. We're taking a close look at these vehicles to make sure they fully comply with the law," IRS Commissioner Mark Everson said.
The IRS started its inquiries this summer to find out whether companies were following the rules for fringe benefits and other forms of paying top officers. The review came as corporate bankruptcies exposed the lavish lifestyles of some executives. The audits, geared toward companies with $10 million or more in assets, intensified this fall. The IRS, which is not identifying the companies, plans to use its findings from the first batch of audits and expand the investigations.
The agency identified eight areas of scrutiny. The list includes rules regarding the business and personal use of fringe benefits such as private jets, vacation homes, golden parachutes, deferred compensation programs and stock options.
Sounds like a new niche for savvy tax accountants and lawyers: The pre-audit audit.
Tuesday, December 09, 2003
Can 40 State Tax Agencies Be Wrong?
Maybe, maybe not. But a lot of tax professionals have a lot to say about what happens after states turn over tax-collection work to private companies. Is yours one of the 40 states? How's it going?
-- New at Rick Telberg/At Large
Maybe, maybe not. But a lot of tax professionals have a lot to say about what happens after states turn over tax-collection work to private companies. Is yours one of the 40 states? How's it going?
-- New at Rick Telberg/At Large
Monday, December 08, 2003
Would You Trust the Government to Do Your Tax Returns?
Maybe, But Not Likely.
Which is why it's good news that in California, the Franchise Tax Board may shelve its fledgling NetFile program at the request of the tax software industry.
The software makers are understandably concerned by competition from the government. But just as as valid, I think, is the system of checks and balances built into a sytem of an educated citizen taxpayer and the power of government.
Calfornia's NetFile would provide a direct link to the Franchise Tax Board. State officials said that although the program offers few of the bells and whistles of privately produced products, it allows many people to file directly with the state, according to the LA Times. But the program excludes taxpayers earning more than $265,000 and anyone with certain types of income or deductions. As a result, about 8 million taxpayers cannot use NetFile.
Still, state tax officials have suspended work on software that would allow every taxpayer to file directly. The software firms want the state to provide free electronic filing only through partnerships with private industry, similar to an approach used by the federal government.
But don't exhale yet. The state has only called for a two-year moratorium on NetFile.
Maybe, But Not Likely.
Which is why it's good news that in California, the Franchise Tax Board may shelve its fledgling NetFile program at the request of the tax software industry.
The software makers are understandably concerned by competition from the government. But just as as valid, I think, is the system of checks and balances built into a sytem of an educated citizen taxpayer and the power of government.
Calfornia's NetFile would provide a direct link to the Franchise Tax Board. State officials said that although the program offers few of the bells and whistles of privately produced products, it allows many people to file directly with the state, according to the LA Times. But the program excludes taxpayers earning more than $265,000 and anyone with certain types of income or deductions. As a result, about 8 million taxpayers cannot use NetFile.
Still, state tax officials have suspended work on software that would allow every taxpayer to file directly. The software firms want the state to provide free electronic filing only through partnerships with private industry, similar to an approach used by the federal government.
But don't exhale yet. The state has only called for a two-year moratorium on NetFile.
Friday, December 05, 2003
How Big, Bad, and Ugly is SOX Compliance, Really?
Either Sarbanes-Oxley is not as costly and complicated to implement as the Cassandras were saying, or a lot of companies are simply turning a blind eye to the realities of the requirements.
Many CPA firms and back-office services outfits appear to be very busy getting client companies up to speed. But now comes a study from Meta Group Inc. that finds 57 percent of IT vendors are failing to meet their SOX-inspired sales targets. In fact, they "failed to see any substantial sales movement resulting from companies' need to become SOX compliant," according to WebCPA. Still, 97 percent view ongoing SOX compliance as a future business driver. Meta suggests that companies are getting their own houses in order before seeking outside help. Internal analysis and documentation efforts account for an average of 75 percent of total SOX compliance investments, Meta said.
Either Sarbanes-Oxley is not as costly and complicated to implement as the Cassandras were saying, or a lot of companies are simply turning a blind eye to the realities of the requirements.
Many CPA firms and back-office services outfits appear to be very busy getting client companies up to speed. But now comes a study from Meta Group Inc. that finds 57 percent of IT vendors are failing to meet their SOX-inspired sales targets. In fact, they "failed to see any substantial sales movement resulting from companies' need to become SOX compliant," according to WebCPA. Still, 97 percent view ongoing SOX compliance as a future business driver. Meta suggests that companies are getting their own houses in order before seeking outside help. Internal analysis and documentation efforts account for an average of 75 percent of total SOX compliance investments, Meta said.
Thursday, December 04, 2003
So Where Were the Accountants?
According to a new KPMG survey, more companies, spurred by new regs and investor scrutiny, are finding more problems with internal controls than they were before.
KPMG said it's survey showed that 75 percent of respondents report they have uncovered fraud in their organizations in the last year, compared with 62 percent of executives responding to a similar survey in 1998. Employee fraud occurred the most frequently, according to survey respondents, although financial reporting and medical/insurance fraud were much more costly. KPMG's 2003 report surveyed executives at 459 U.S. public companies, with revenues of more than $250 million, and at state and federal government agencies.
And still, KPMG said, "despite heightened awareness and broader implementation of fraud detection controls," 22 percent of executives said they do not plan to implement new controls. "This finding was regrettable," said a KPMG'er. No kidding.
According to a new KPMG survey, more companies, spurred by new regs and investor scrutiny, are finding more problems with internal controls than they were before.
KPMG said it's survey showed that 75 percent of respondents report they have uncovered fraud in their organizations in the last year, compared with 62 percent of executives responding to a similar survey in 1998. Employee fraud occurred the most frequently, according to survey respondents, although financial reporting and medical/insurance fraud were much more costly. KPMG's 2003 report surveyed executives at 459 U.S. public companies, with revenues of more than $250 million, and at state and federal government agencies.
And still, KPMG said, "despite heightened awareness and broader implementation of fraud detection controls," 22 percent of executives said they do not plan to implement new controls. "This finding was regrettable," said a KPMG'er. No kidding.
Tuesday, December 02, 2003
Should IRS Hire Bounty Hunters?
Most CPAs say 'No,' citing concerns with government waste, the potential for fraud and possible legal-rights abuses. But 40 states are doing it already. What do you think?
-- More Rick Telberg/At Large
Most CPAs say 'No,' citing concerns with government waste, the potential for fraud and possible legal-rights abuses. But 40 states are doing it already. What do you think?
-- More Rick Telberg/At Large
Monday, November 24, 2003
Auditing-Reform Movement Reaches U.K.
The U.K. Auditing Practices Board is issuing a plan that would put a stop to handling non-audit work for audit clients. The APB would also limit 'success fees' in audit, tax and some forms of corporate finance work, according to Accountancy Age magazine.
The U.K. Auditing Practices Board is issuing a plan that would put a stop to handling non-audit work for audit clients. The APB would also limit 'success fees' in audit, tax and some forms of corporate finance work, according to Accountancy Age magazine.
Wednesday, November 19, 2003
The Problems with Tax Shelters are Bigger than Just the Big CPA Firms
Local firms are getting caught in the scandal.
In Syracuse, N.Y., several investors have joined a nationwide class action suit against lawyers and accounting firms, including Texas law firms Jenkens & Gilchrist and Cantley & Sedacca LLP; three accounting firms, BDO Seidman LLP, Pasquale & Bowers LLP and Dermody, Burke and Brown; and Deutsche Bank AG and Deutsche Bank affiliates. Suyacuse-based Dermody, Burke and Brown is named in the suit only because in 2002 it acquired and absorbed the Pasquale & Bowers firm, which worked with the clients. More
Local firms are getting caught in the scandal.
In Syracuse, N.Y., several investors have joined a nationwide class action suit against lawyers and accounting firms, including Texas law firms Jenkens & Gilchrist and Cantley & Sedacca LLP; three accounting firms, BDO Seidman LLP, Pasquale & Bowers LLP and Dermody, Burke and Brown; and Deutsche Bank AG and Deutsche Bank affiliates. Suyacuse-based Dermody, Burke and Brown is named in the suit only because in 2002 it acquired and absorbed the Pasquale & Bowers firm, which worked with the clients. More
Monday, November 17, 2003
Ssssh! Don't Tell the Terrorists
The U.S. Treasury Dept. has flunked agan a General Accounting Accounting Office security audit of its computer systems.
Of course, most tax professionals probably already knew the systems were a rickety pastiche. But the GAO reports that little more than bailing wire wire is holding all 708 seperate systems in place. The GAO identified 765 general control weaknesses. In addition, the GAO conducted five application control reviews and found 112 weaknesses. More
The U.S. Treasury Dept. has flunked agan a General Accounting Accounting Office security audit of its computer systems.
Of course, most tax professionals probably already knew the systems were a rickety pastiche. But the GAO reports that little more than bailing wire wire is holding all 708 seperate systems in place. The GAO identified 765 general control weaknesses. In addition, the GAO conducted five application control reviews and found 112 weaknesses. More
New Ventures Surge with Lower Startup Costs
The losers: Banks, because less capital is needed by a new breed of entrepreneur.
The winners: the American economy, which again shows the power of productivity to create new jobs and opportunities.
According to the Small Business Administration, entrepreneurs starting new ventures expect low startup costs that will not require bank loans. Individual entrepreneurs expect startup costs will average $6,000, while teams of entrepreneurs project higher startup costs that average $20,000. Eighty percent of the more than 800 budding entrepreneurs surveyed said they did not expect to take out a bank loan to cover the startup costs. "Not all ventures require large infusions of capital," said Dr. Chad Moutray, chief economist for the SBA Office of Advocacy. "Everyday ordinary Americans strike out on their own to grab a piece of the American Dream. It doesn't take a lot of savings to participate in the ownership society, just a good idea and lots of hard work and perseverance." The survey also showed, on average, individual entrepreneurs expect a $90,000 income after five years, while team ventures expect $125,000. According to the Office of Advocacy, the higher team average makes it more likely that these new ventures will result in new job creation. Source: NFIB.
The losers: Banks, because less capital is needed by a new breed of entrepreneur.
The winners: the American economy, which again shows the power of productivity to create new jobs and opportunities.
According to the Small Business Administration, entrepreneurs starting new ventures expect low startup costs that will not require bank loans. Individual entrepreneurs expect startup costs will average $6,000, while teams of entrepreneurs project higher startup costs that average $20,000. Eighty percent of the more than 800 budding entrepreneurs surveyed said they did not expect to take out a bank loan to cover the startup costs. "Not all ventures require large infusions of capital," said Dr. Chad Moutray, chief economist for the SBA Office of Advocacy. "Everyday ordinary Americans strike out on their own to grab a piece of the American Dream. It doesn't take a lot of savings to participate in the ownership society, just a good idea and lots of hard work and perseverance." The survey also showed, on average, individual entrepreneurs expect a $90,000 income after five years, while team ventures expect $125,000. According to the Office of Advocacy, the higher team average makes it more likely that these new ventures will result in new job creation. Source: NFIB.
Tuesday, November 11, 2003
New at HP.com: Accounting Professionals Make the Leap to Scanning
The latest HP/CPA Tech Advisor
Surprise, surprise! It may be hard to believe from behind that mountain of paper, you, as a accounting professional, may be part of one of the most digitized professions in business today." More...
The latest HP/CPA Tech Advisor
Surprise, surprise! It may be hard to believe from behind that mountain of paper, you, as a accounting professional, may be part of one of the most digitized professions in business today." More...
Fly-by-Night Tax Preparers Escape Punishment
The IRS has ordered $2.4 million in penalties against tax preparers in the past two years but has collected only $291,000. The IRS is clearly outgunned.
GAO findings to be released later this week are expected to demonstrate that the Internal Revenue Service needs to reorder its priorities. Tax officials reportedly told the auditors "they cannot afford to make these low-dollar paid-preparer cases a priority given their responsibility for addressing billions of dollars in uncollected taxes." So, now that more than half the people filing tax returns use paid preparers, some in Congress are finally starting to agree with practitioner groups, which have long fought to get all preparers registered or licensed. More...
The IRS has ordered $2.4 million in penalties against tax preparers in the past two years but has collected only $291,000. The IRS is clearly outgunned.
GAO findings to be released later this week are expected to demonstrate that the Internal Revenue Service needs to reorder its priorities. Tax officials reportedly told the auditors "they cannot afford to make these low-dollar paid-preparer cases a priority given their responsibility for addressing billions of dollars in uncollected taxes." So, now that more than half the people filing tax returns use paid preparers, some in Congress are finally starting to agree with practitioner groups, which have long fought to get all preparers registered or licensed. More...
Monday, November 10, 2003
NEW AT LARGE: Here Comes Tax Season 2004
It's time to start loading up on the coffee and donuts, as practitioners look with hope toward a busy, successful year.
More...
It's time to start loading up on the coffee and donuts, as practitioners look with hope toward a busy, successful year.
More...
Small Biz Pushes IT Spending
AMI Partners reports that 74% of small businesses expect to increase revenues over the coming year. AMI warns, however, that SBs may be overly optimistic about the future, as they have expanded their workforce by 5% over the past year and have increased IT spending by 11% over the same time. Nonetheless, the numbers are favorable for small businesses, as AMI finds that 84% of SBs now have Internet access, 43% have Web sites and 53% have high-speed Net access. " .... More.
AMI Partners reports that 74% of small businesses expect to increase revenues over the coming year. AMI warns, however, that SBs may be overly optimistic about the future, as they have expanded their workforce by 5% over the past year and have increased IT spending by 11% over the same time. Nonetheless, the numbers are favorable for small businesses, as AMI finds that 84% of SBs now have Internet access, 43% have Web sites and 53% have high-speed Net access. " .... More.
Wednesday, November 05, 2003
Not-for-Profits Largely Ignore Sarbanes-Oxley Movement
"Rather surprisingly," says Grant Thornton in a study, "only 20 percent said that they have made some changes to their board governance policies as a result of the Sarbanes-Oxley Act. ... More
"Rather surprisingly," says Grant Thornton in a study, "only 20 percent said that they have made some changes to their board governance policies as a result of the Sarbanes-Oxley Act. ... More
Tuesday, November 04, 2003
McGladrey in Hot water over a Non-profit Food Bank's Audit
While the group fed thousands of South Florida's needy, one of its former officials pilfered as much as $591,000 from the organization between 1999 and 2001, according to documents attached to the Palm Beach County Circuit Court lawsuit.... More
While the group fed thousands of South Florida's needy, one of its former officials pilfered as much as $591,000 from the organization between 1999 and 2001, according to documents attached to the Palm Beach County Circuit Court lawsuit.... More
Wednesday, October 15, 2003
Is There Light at the End of the Tech Slump Tunnel?
Or is that an oncoming train?
Worldwide spending on information technology should grow 5 percent to $916 billion next year, while purchases of telecom services are expected to rise 4 percent to $1 trillion, according to International Data Corp. ... More.
Or is that an oncoming train?
Worldwide spending on information technology should grow 5 percent to $916 billion next year, while purchases of telecom services are expected to rise 4 percent to $1 trillion, according to International Data Corp. ... More.
Tuesday, October 07, 2003
From the Weird-but-True Dept.: IRS Goes to Grave to Get It's Share:
The IRS wants to reach into a Boston banker's grave to collect $1.9 million it claims he owes. But the family of John J. Ryan, who lived in Framingham, says the estate never got the money that the Internal Revenue Service wants to tax, and claims the agency picked its number out of thin air. The IRS figured the amount based on a presumed $4 million medical malpractice award on a case that remains unresolved, a lawyer for Ryan's estate said. Ryan died of a pulmonary embolism on Sept. 29, 1999, nine days after he suffered a ruptured spleen in a fall at his Framingham home. Ryan's estate subsequently sued three doctors, claiming they failed to properly diagnose Ryan's condition before he died. Even though the malpractice case isn't expected to go to trial until next year, the IRS demanded Ryan's estate pay the $1.9 million in additional 2000 estate taxes, penalties and interest - presuming that Ryan's estate would receive $4 million from the case. Ryan's estate has asked the U.S. Tax Court to void the IRS demand.
The IRS wants to reach into a Boston banker's grave to collect $1.9 million it claims he owes. But the family of John J. Ryan, who lived in Framingham, says the estate never got the money that the Internal Revenue Service wants to tax, and claims the agency picked its number out of thin air. The IRS figured the amount based on a presumed $4 million medical malpractice award on a case that remains unresolved, a lawyer for Ryan's estate said. Ryan died of a pulmonary embolism on Sept. 29, 1999, nine days after he suffered a ruptured spleen in a fall at his Framingham home. Ryan's estate subsequently sued three doctors, claiming they failed to properly diagnose Ryan's condition before he died. Even though the malpractice case isn't expected to go to trial until next year, the IRS demanded Ryan's estate pay the $1.9 million in additional 2000 estate taxes, penalties and interest - presuming that Ryan's estate would receive $4 million from the case. Ryan's estate has asked the U.S. Tax Court to void the IRS demand.
Monday, September 29, 2003
The IRS Ponders Privacy Issues. Should We Worry?
The Internal Revenue Service is reportedly exploring ways to share personal taxpayer information with law-enforcement agencies, particularly the Immigration and Naturalization Service. Congressional critics say any such move, though taken in the name of national security, could violate rules established after the 1970's Nixon White House used IRS records to intimidate enemies. At the same time, the IRS is continuing to consider using private collection agencies to dun taxpayers. More in a Boston Globe report and at KTVU
The Internal Revenue Service is reportedly exploring ways to share personal taxpayer information with law-enforcement agencies, particularly the Immigration and Naturalization Service. Congressional critics say any such move, though taken in the name of national security, could violate rules established after the 1970's Nixon White House used IRS records to intimidate enemies. At the same time, the IRS is continuing to consider using private collection agencies to dun taxpayers. More in a Boston Globe report and at KTVU
Thursday, September 25, 2003
Tax-Scam CPA Busts Out of Jail
Former Cooperstown, N.Y., CPA James Broten escaped from a federal prison camp in Estill, N.C., while serving a 70-month sentence in connection with the filing of false income tax returns. In a seven-day trial in July 2002, Broten, now 42, was found guilty with two others in a $2.8-million phony refund scheme. The plot involved seeking tax refunds in the names of dummy companies. But tax agencies caught on before sending out any refund checks.More...
Former Cooperstown, N.Y., CPA James Broten escaped from a federal prison camp in Estill, N.C., while serving a 70-month sentence in connection with the filing of false income tax returns. In a seven-day trial in July 2002, Broten, now 42, was found guilty with two others in a $2.8-million phony refund scheme. The plot involved seeking tax refunds in the names of dummy companies. But tax agencies caught on before sending out any refund checks.More...
Wednesday, September 24, 2003
What About that $10-Trillion Inheritance Windfall for Baby Boomers? Don't bet on It!
Back in the early '90s, two economists at Cornell University predicted that 'baby boomers' were going to be the beneficiaries of the largest transfer of wealth in the history of the world: $10.4 trillion. "That's 12 zeros," points out CPA Michael Deschamps in a newspaper column.
In fact Boomers' bequests from parents could even exceed $10.4 trillion, according to Dr. Neal E. Cutler, and Dr. Steven J. Devlin of the Boettner Center of Financial Gerontology at the University of Pennsylvania. Currently more than half of all the wealth in the United States is held by people over the age of 55.
However, Cutler and Devlin go on to point out that this $10.4 trillion hand off won't happen all at once. There will be a 45-year bequest period from 1995 though 2040. And if you were already thinking of ways to spend the windfall, consider this: when you divide $10.4 trillion by the number of potential recipients, the amount of the average bequest falls considerably. Substantial numbers of boomers will receive little or no inheritance.
On the yes side, however, is new research from the Social Welfare Research Institute. SWRI forecasts a wealth transfer of $41 trillion, four times greater than the previously predicted $10.4 trillion. How can this be, when people are living longer and presumably continuing to spend during that time? SWRI's John Havens found two key trends: a later retirement age and the increased numbers of retirees who continue to work. So, retirees can spend without affecting the wealth transfer. Even the $41 trillion estimate could be a conservative figure, according to the SWRI.
Well, whether it's $10.5 trillion or $41 trillion (what's a few trillion between generational soulmates), the key thing to remember is this: Boomers will receive a relatively small part of the transfer, with the larger portion being transferred to succeeding generations.
The lesson: active retirement planning is not a luxury for Boomers, but a necessity.
From the Long Beach Press Telegram: "
Back in the early '90s, two economists at Cornell University predicted that 'baby boomers' were going to be the beneficiaries of the largest transfer of wealth in the history of the world: $10.4 trillion. "That's 12 zeros," points out CPA Michael Deschamps in a newspaper column.
In fact Boomers' bequests from parents could even exceed $10.4 trillion, according to Dr. Neal E. Cutler, and Dr. Steven J. Devlin of the Boettner Center of Financial Gerontology at the University of Pennsylvania. Currently more than half of all the wealth in the United States is held by people over the age of 55.
However, Cutler and Devlin go on to point out that this $10.4 trillion hand off won't happen all at once. There will be a 45-year bequest period from 1995 though 2040. And if you were already thinking of ways to spend the windfall, consider this: when you divide $10.4 trillion by the number of potential recipients, the amount of the average bequest falls considerably. Substantial numbers of boomers will receive little or no inheritance.
On the yes side, however, is new research from the Social Welfare Research Institute. SWRI forecasts a wealth transfer of $41 trillion, four times greater than the previously predicted $10.4 trillion. How can this be, when people are living longer and presumably continuing to spend during that time? SWRI's John Havens found two key trends: a later retirement age and the increased numbers of retirees who continue to work. So, retirees can spend without affecting the wealth transfer. Even the $41 trillion estimate could be a conservative figure, according to the SWRI.
Well, whether it's $10.5 trillion or $41 trillion (what's a few trillion between generational soulmates), the key thing to remember is this: Boomers will receive a relatively small part of the transfer, with the larger portion being transferred to succeeding generations.
The lesson: active retirement planning is not a luxury for Boomers, but a necessity.
From the Long Beach Press Telegram: "
PCAOB Says CPA Firms Are Toeing the Line
Public Company Accounting Oversight Board chairman William McDonough testified at the Senate Banking Committee that the initial round of firm inspections is proceeding without a hitch. He told the panel firms are cooperating without any "twisting of arms" at accounting firms, and investors' confidence may be restored if serious wrongdoing doesn't recur.
McDonough also gave a general status report on the PCAOB's activities, saying that the firm inspection process gave his board its best chance to peer inside an auditor's processes and culture.
"There are a number of areas on which our inspections will focus that have not been the traditional focus of the peer review process," he said, itemizing:
-- An evaluation of the “tone at the top” of registered firms. We want to know the nature of the messages that are coming from the highest levels of the firms and their frequency;
-- We are going to look at partner compensation and promotion. We are going to look into what behaviors are rewarded – and thus reinforced – through compensation and promotions; and
-- We will consider the firms’ overall communication and training practices with regard to all firm professionals.
Get his, and the testimony of others on the panel, at U.S. Senate Committee on Banking, Housing, and Urban Affairs
Public Company Accounting Oversight Board chairman William McDonough testified at the Senate Banking Committee that the initial round of firm inspections is proceeding without a hitch. He told the panel firms are cooperating without any "twisting of arms" at accounting firms, and investors' confidence may be restored if serious wrongdoing doesn't recur.
McDonough also gave a general status report on the PCAOB's activities, saying that the firm inspection process gave his board its best chance to peer inside an auditor's processes and culture.
"There are a number of areas on which our inspections will focus that have not been the traditional focus of the peer review process," he said, itemizing:
-- An evaluation of the “tone at the top” of registered firms. We want to know the nature of the messages that are coming from the highest levels of the firms and their frequency;
-- We are going to look at partner compensation and promotion. We are going to look into what behaviors are rewarded – and thus reinforced – through compensation and promotions; and
-- We will consider the firms’ overall communication and training practices with regard to all firm professionals.
Get his, and the testimony of others on the panel, at U.S. Senate Committee on Banking, Housing, and Urban Affairs
Monday, September 22, 2003
'We're No. 1!' Where? Bozeman!
Montana State University accounting students had the highest pass rate -- 85 percent -- in the nation for graduate students taking the 2002 exam for the first time. More from MSU.
Who's No. 2? Click here.
Montana State University accounting students had the highest pass rate -- 85 percent -- in the nation for graduate students taking the 2002 exam for the first time. More from MSU.
Who's No. 2? Click here.
Wednesday, September 17, 2003
The Top 4 CPA Issues in Mobile Technology
With the onset of the computer age, CPAs rushed madly to get wired. Now the rush is in the opposite direction: CPAs are getting un-wired. Here's my take on the subject, sponsored by the Hewlett-Packard accounting channel.
With the onset of the computer age, CPAs rushed madly to get wired. Now the rush is in the opposite direction: CPAs are getting un-wired. Here's my take on the subject, sponsored by the Hewlett-Packard accounting channel.
Monday, September 15, 2003
GAAP Lags in Cash Flow Reporting
Most financial execs don't believe GAAP provides sufficient information about their company's liquidity. And 75 percent admit the data they do get about their own companies should be better. More at SunGard,: which sponsored the survey.
Most financial execs don't believe GAAP provides sufficient information about their company's liquidity. And 75 percent admit the data they do get about their own companies should be better. More at SunGard,: which sponsored the survey.
Thursday, September 11, 2003
XBRL Is the Future, Says PwC
PricewaterhouseCoopers says in its "Technology Forecast: 2003-2005, The Intelligent Real-Time Enterprise," that eXtensible Business Reporting Language (XBRL) is going to be one of the next big things, according to XMLmania.
Eric M Berg, director in the PricewaterhouseCoopers' Global Technology Centre and Technology Forecast editor-in-chief said the technology could even settle the controversy over accounting for stock options. "If you had the information in the XBRL format, you could go back and reorganize the data and tag all of the components," he said. "Anyone who looks at it can set up the document to treat stock options as an expense if they want, reflecting the users opinion about stock options.
PricewaterhouseCoopers says in its "Technology Forecast: 2003-2005, The Intelligent Real-Time Enterprise," that eXtensible Business Reporting Language (XBRL) is going to be one of the next big things, according to XMLmania.
Eric M Berg, director in the PricewaterhouseCoopers' Global Technology Centre and Technology Forecast editor-in-chief said the technology could even settle the controversy over accounting for stock options. "If you had the information in the XBRL format, you could go back and reorganize the data and tag all of the components," he said. "Anyone who looks at it can set up the document to treat stock options as an expense if they want, reflecting the users opinion about stock options.
Monday, September 08, 2003
Hey, Who Would-a Known? Accounting IS a Career Your Mother Would Have Liked!
Salaries in finance are showing signs of holding strong in the face of economic adversity. But you can send your thank-you notes to Messrs. Sarbanes and Oxley.
The year is seeing sizable salary growth, according to an annual survey conducted by the Association for Financial Professionals. "New compliance requirements such as those generated by Sarbanes-Oxley pushed the responsibilities and salaries of finance and accounting professionals to new levels in 2003," according to the Association for Financial Professionals. "Pay increased by 6.3 percent across the finance function in the United States." The report contains a job-by-job breakdown, with cash managers earning 10 percent raises this year.
Other findings:
-- Treasury and finance professionals employed by publicly traded companies earn an average of 29 percent more than their peers who work for private firms.
-- Despite a weak economy, 87 percent of participating companies offer performance bonuses.
More at afponline.org
Salaries in finance are showing signs of holding strong in the face of economic adversity. But you can send your thank-you notes to Messrs. Sarbanes and Oxley.
The year is seeing sizable salary growth, according to an annual survey conducted by the Association for Financial Professionals. "New compliance requirements such as those generated by Sarbanes-Oxley pushed the responsibilities and salaries of finance and accounting professionals to new levels in 2003," according to the Association for Financial Professionals. "Pay increased by 6.3 percent across the finance function in the United States." The report contains a job-by-job breakdown, with cash managers earning 10 percent raises this year.
Other findings:
-- Treasury and finance professionals employed by publicly traded companies earn an average of 29 percent more than their peers who work for private firms.
-- Despite a weak economy, 87 percent of participating companies offer performance bonuses.
More at afponline.org
Bonus Question for the CPA Exam
Here's a question missing from the new computerized exam: Who gets the the $600 fee from the candidates?
The Nashville Business Journal has the answer: AICPA receives $180, Prometric gets $250, NASBA receives $40 and a state board gets about $130.
That's still a bargain for a great career. More
Here's a question missing from the new computerized exam: Who gets the the $600 fee from the candidates?
The Nashville Business Journal has the answer: AICPA receives $180, Prometric gets $250, NASBA receives $40 and a state board gets about $130.
That's still a bargain for a great career. More
Saturday, August 30, 2003
Have a Fallback Plan
Take a lesson from the Boy Scouts and “be prepared.”
Just published: My latest article in the Journal of Accounancy describes the practice continuation plan, its key elements, how it helps a sole practitioner and his or her dependents and clients, and how to take the first steps in implementing a plan.
Take a lesson from the Boy Scouts and “be prepared.”
Just published: My latest article in the Journal of Accounancy describes the practice continuation plan, its key elements, how it helps a sole practitioner and his or her dependents and clients, and how to take the first steps in implementing a plan.
Friday, August 29, 2003
New CPA Exam Gets Rolling
About 200 people will take the CPA exam electronically in a pilot set in New York City in November, and then be available to all candidates officially on April 5, 2004.
While the current exam is offered during two days in May and November, the electronic version will be available six days a week over a two-month period every quarter. The questions will be refreshed the third month of the quarter. Overall, the test is an hour and a half shorter than the 14-hour current version, because of the efficiencies of computerization. Candidates can take all portions of the exam at a couple of sittings or space them out over the course of 18 months.
More at... CPAs go high tech with new exam
About 200 people will take the CPA exam electronically in a pilot set in New York City in November, and then be available to all candidates officially on April 5, 2004.
While the current exam is offered during two days in May and November, the electronic version will be available six days a week over a two-month period every quarter. The questions will be refreshed the third month of the quarter. Overall, the test is an hour and a half shorter than the 14-hour current version, because of the efficiencies of computerization. Candidates can take all portions of the exam at a couple of sittings or space them out over the course of 18 months.
More at... CPAs go high tech with new exam
Thursday, August 28, 2003
From the Big 8 to the Last 88 . . . ?
CPA firms must register by next week with the PCAOB. As of Monday, only 88 firms had. "People just didn't want to risk their entire career for one bad audit," one managing partner, Lou Grassi in New York, tells the Washington Post.
CPA firms must register by next week with the PCAOB. As of Monday, only 88 firms had. "People just didn't want to risk their entire career for one bad audit," one managing partner, Lou Grassi in New York, tells the Washington Post.
Tuesday, August 26, 2003
Judge rules in CPAs’ favorIn the legal dispute that pitted two prominent local accountants against an Indianapolis city-county councilman, the accountants have prevailed.
Wednesday, August 20, 2003
Gallup Poll: Accounting's Image Recovers
Noting "a significant increase" over the last year in the positive image of most segments of American business and industry, Princeton, N.J.-based Gallup pollsters say the public's image rating of accounting has jumped 14 points compared to last August.
Overall, Gallup said, the computer industry continues to be the highest rated of any industry tested in Gallup's assessment of industry images, followed by the restaurant and grocery businesses. The three industries with the most negative images of those tested include the oil and gas industry, healthcare, and the legal field.
"The one industry whose image has improved the most compared to last year is accounting," Gallup said. Accounting rose from a net rating of 0 percent last year, when as many people gave it a negative rating as a positive one, to a positive 31 percent this year. "This obviously represents a significant improvement," Gallup said, noting, at the same time, that the industry has still not recovered to the positive 39 percent rating it received in 2001, in the pre-Enron era.
Other industry sectors whose positive images have risen significantly compared to last year include healthcare, the telephone industry, the legal field, pharmaceuticals, advertising and public relations, and the sports industry. (Many of these remain near the bottom of the image list, despite their relative gains.)
Only two sectors have slightly lower image ratings this year than they did last year: the retail industry, and farming and agriculture, both of which dropped by 3 points.
Perhaps more importantly, there are no industries rated this year whose images are nearly as negative as several measured in the 2001 survey. At that point, the oil and gas industry had a negative 30 percent rating, and the legal field and electric and gas utilities had negative 16 mpercent ratings.
Child Tax Credit Drives Traffic to IRS
Nielsen//NetRatings reports that traffic to the U.S. Department of Treasury jumped 77 percent during the week ending July 27. With the first set of refund checks mailed out on July 25, surfers from home logged on to check the status of their refunds. Traffic to the U.S. Department of Treasury jumped from 742,000 surfers during the week ending July 20, to more than 1.3 million unique visitors during the week ending July 27. More than 65 percent of the site’s audience visited the IRS Web page containing information about the Child Tax Credit Refund.
Oklahoma State Web Site Launches Online Services for Accountants
The Oklahoma Accountancy Board has launched an online service for accountants to apply for certification examinations and renew their professional licenses and permits. The new suite of services also allows the public to search for licensed accountants across the state. more at www.youroklahoma.com.
Despite One-Year Reprieve, Most Companies Hew to Sarbanes-Oxley Schedule
Most U.S. multinational companies are moving ahead with preparations for compliance with internal financial control provisions of the Sarbanes-Oxley Act of 2002, even though implementation of the provisions has been delayed by a year, according to PricwwaterhouseCoopers. And, more than a third are moving faster than required and are either planning or considering compliance for fiscal 2003, a year early, the firm says based on a survey. According to the survey, 60 percent of senior executives said their company plans to retain their original schedule for most Sarbanes-Oxley Section 404 preparation, despite the extension, while 37 percent said they would need more time. In addition, 76 percent are reporting that audit committees are expecting more extensive testing now.
Noting "a significant increase" over the last year in the positive image of most segments of American business and industry, Princeton, N.J.-based Gallup pollsters say the public's image rating of accounting has jumped 14 points compared to last August.
Overall, Gallup said, the computer industry continues to be the highest rated of any industry tested in Gallup's assessment of industry images, followed by the restaurant and grocery businesses. The three industries with the most negative images of those tested include the oil and gas industry, healthcare, and the legal field.
"The one industry whose image has improved the most compared to last year is accounting," Gallup said. Accounting rose from a net rating of 0 percent last year, when as many people gave it a negative rating as a positive one, to a positive 31 percent this year. "This obviously represents a significant improvement," Gallup said, noting, at the same time, that the industry has still not recovered to the positive 39 percent rating it received in 2001, in the pre-Enron era.
Other industry sectors whose positive images have risen significantly compared to last year include healthcare, the telephone industry, the legal field, pharmaceuticals, advertising and public relations, and the sports industry. (Many of these remain near the bottom of the image list, despite their relative gains.)
Only two sectors have slightly lower image ratings this year than they did last year: the retail industry, and farming and agriculture, both of which dropped by 3 points.
Perhaps more importantly, there are no industries rated this year whose images are nearly as negative as several measured in the 2001 survey. At that point, the oil and gas industry had a negative 30 percent rating, and the legal field and electric and gas utilities had negative 16 mpercent ratings.
Child Tax Credit Drives Traffic to IRS
Nielsen//NetRatings reports that traffic to the U.S. Department of Treasury jumped 77 percent during the week ending July 27. With the first set of refund checks mailed out on July 25, surfers from home logged on to check the status of their refunds. Traffic to the U.S. Department of Treasury jumped from 742,000 surfers during the week ending July 20, to more than 1.3 million unique visitors during the week ending July 27. More than 65 percent of the site’s audience visited the IRS Web page containing information about the Child Tax Credit Refund.
Oklahoma State Web Site Launches Online Services for Accountants
The Oklahoma Accountancy Board has launched an online service for accountants to apply for certification examinations and renew their professional licenses and permits. The new suite of services also allows the public to search for licensed accountants across the state. more at www.youroklahoma.com.
Despite One-Year Reprieve, Most Companies Hew to Sarbanes-Oxley Schedule
Most U.S. multinational companies are moving ahead with preparations for compliance with internal financial control provisions of the Sarbanes-Oxley Act of 2002, even though implementation of the provisions has been delayed by a year, according to PricwwaterhouseCoopers. And, more than a third are moving faster than required and are either planning or considering compliance for fiscal 2003, a year early, the firm says based on a survey. According to the survey, 60 percent of senior executives said their company plans to retain their original schedule for most Sarbanes-Oxley Section 404 preparation, despite the extension, while 37 percent said they would need more time. In addition, 76 percent are reporting that audit committees are expecting more extensive testing now.
Tuesday, August 19, 2003
SEC Answers Thorny Auditor Questions
The staff has issued an FAQ page, with questiions like these:
-- Can an accounting firm license or sell its proprietary income tax preparation software to an audit client?
-- Can the audit committee of the parent company function as the audit committee of the wholly-owned subsidiaries?
-- Would fees paid to the audit firm for operational audit services be included in "Audit-Related Fees"?
-- Are there circumstances where a tax or other specialty partner would be included within the definition of "audit partner"?
-- What are the rotation requirements for the "relationship" partner who is not the "lead" or "concurring" partner?
There are about 30 more at SEC Staff Responds to Frequently Asked Questions Regarding Auditor Independence; Press Release 2003-94
The staff has issued an FAQ page, with questiions like these:
-- Can an accounting firm license or sell its proprietary income tax preparation software to an audit client?
-- Can the audit committee of the parent company function as the audit committee of the wholly-owned subsidiaries?
-- Would fees paid to the audit firm for operational audit services be included in "Audit-Related Fees"?
-- Are there circumstances where a tax or other specialty partner would be included within the definition of "audit partner"?
-- What are the rotation requirements for the "relationship" partner who is not the "lead" or "concurring" partner?
There are about 30 more at SEC Staff Responds to Frequently Asked Questions Regarding Auditor Independence; Press Release 2003-94
A Few Spineless Auditors Peril Whole Profession
Sir David Tweedie, the chairman of the London-based International Accounting Standards Board, is rarely at a loss for strong opinions or memorable ways of expressing them.
In his latest remarks, he says it's time for auditors to dig in their heels against smarmy clients.
"You need auditors who aren't invertebrates," Tweedie told an Australian newspaper. "They are going to have to have bags of backbone. If they can't now stand up to clients, the profession is finished. You could almost say: 'Why do you need an audit?' "
To be sure, Tweedie agrees that the profession is stiffening fast. And yet, some accounting firms could still meet the same fate as Arthur Andersen.
Meanwhile, under Tweedie the IASB is pushing for a global set of standards based not on thick rule books, but on a relatively compact set of principles -- a concept embraced by some at the U.S. Securities and Exchange Commission. The IASB's changes are set to start coming into effect in 2005. The main opposition appoears to be from France's President Jacques Chirac, who's worried about the effect on banks.
More at 'Spineless' Auditors, SEC Study on Principles-Based Accounting, and the IASB.
CPA Partnership Battle Turns from Nasty to Ridiculous
Partnership breakups are never pretty. But in Johnson County, Ind., two CPAs are charging in court that their former partner -- who happens to be a prominent elected official -- hired a stripper as a personal assistant and used the firm's computers to surf for porn.
In one corner is Curtis L. Coonrod, a CPA whose firm, CLC Services, performs accounting for municipal and county government boards throughout central Indiana. Coonrod also holds a seat on the Indianapolis City-County Council.
In the other corner are CPAs Eric Reedy and Jeffrey Peters, who left CLC last year to start their own firm.
It might have been a routine contract dispute, but Reedy and Peters are accusing Coonrod of hiring an exotic dancer as his personal assistant, and allowing her to use firm funds for, among other things, lipstick, perfume and oil changes. More at the Daily Journal.
And Speaking of Backbone...
Bending over backwards may be necessary in business, but it's bad for your health, according to a CPA-turned-yoga-guru, who has ideas on better ways to bend.
Bruce Van Horn, a CPA with a Big 4 pedigree, is a management consultant with a difference: He prescribes yoga.
"Business organizations, he says, "have failed to honor the individual as a complete being with unfortunate consequences. Emotions in the workplace such as grief, depression and anger are repressed until they explode, producing disastrous results."
His company offers yoga classes to corporations to help them develop a more effective motivational model. He is the CEO of Yoga for Business, Stress Consultant, author of "Yoga for Men" and the "Healthy Living Wellness Series." More at yogaforbusiness.com.
Who knows? Maybe it's good for auditors' backbones too.
Sir David Tweedie, the chairman of the London-based International Accounting Standards Board, is rarely at a loss for strong opinions or memorable ways of expressing them.
In his latest remarks, he says it's time for auditors to dig in their heels against smarmy clients.
"You need auditors who aren't invertebrates," Tweedie told an Australian newspaper. "They are going to have to have bags of backbone. If they can't now stand up to clients, the profession is finished. You could almost say: 'Why do you need an audit?' "
To be sure, Tweedie agrees that the profession is stiffening fast. And yet, some accounting firms could still meet the same fate as Arthur Andersen.
Meanwhile, under Tweedie the IASB is pushing for a global set of standards based not on thick rule books, but on a relatively compact set of principles -- a concept embraced by some at the U.S. Securities and Exchange Commission. The IASB's changes are set to start coming into effect in 2005. The main opposition appoears to be from France's President Jacques Chirac, who's worried about the effect on banks.
More at 'Spineless' Auditors, SEC Study on Principles-Based Accounting, and the IASB.
CPA Partnership Battle Turns from Nasty to Ridiculous
Partnership breakups are never pretty. But in Johnson County, Ind., two CPAs are charging in court that their former partner -- who happens to be a prominent elected official -- hired a stripper as a personal assistant and used the firm's computers to surf for porn.
In one corner is Curtis L. Coonrod, a CPA whose firm, CLC Services, performs accounting for municipal and county government boards throughout central Indiana. Coonrod also holds a seat on the Indianapolis City-County Council.
In the other corner are CPAs Eric Reedy and Jeffrey Peters, who left CLC last year to start their own firm.
It might have been a routine contract dispute, but Reedy and Peters are accusing Coonrod of hiring an exotic dancer as his personal assistant, and allowing her to use firm funds for, among other things, lipstick, perfume and oil changes. More at the Daily Journal.
And Speaking of Backbone...
Bending over backwards may be necessary in business, but it's bad for your health, according to a CPA-turned-yoga-guru, who has ideas on better ways to bend.
Bruce Van Horn, a CPA with a Big 4 pedigree, is a management consultant with a difference: He prescribes yoga.
"Business organizations, he says, "have failed to honor the individual as a complete being with unfortunate consequences. Emotions in the workplace such as grief, depression and anger are repressed until they explode, producing disastrous results."
His company offers yoga classes to corporations to help them develop a more effective motivational model. He is the CEO of Yoga for Business, Stress Consultant, author of "Yoga for Men" and the "Healthy Living Wellness Series." More at yogaforbusiness.com.
Who knows? Maybe it's good for auditors' backbones too.
Not Just Chicken Feed
The ignominius distinction of being the first company to be snagged under the Sarbanes-Oxley certification rules falls to Rica Foods Inc. The Miami company, which grows chickens in Costa Rico for McDonald's, Burger King, and KFC, had filed with the SEC saying Deloitte & Touche had signed off on the books. D&T hadn't. Needless to say, Rica has a new auditor. The SEC let off the CFO without a fine because, it said, she cooperated. But the chief exeutive paid a $25,000 fine. www.sec.gov.
The ignominius distinction of being the first company to be snagged under the Sarbanes-Oxley certification rules falls to Rica Foods Inc. The Miami company, which grows chickens in Costa Rico for McDonald's, Burger King, and KFC, had filed with the SEC saying Deloitte & Touche had signed off on the books. D&T hadn't. Needless to say, Rica has a new auditor. The SEC let off the CFO without a fine because, it said, she cooperated. But the chief exeutive paid a $25,000 fine. www.sec.gov.
Monday, August 18, 2003
Accounting's Image Recovers, according to New Gallup Poll
There has been a significant increase over the last year in the positive image of most segments of American business and industry -- particularly for accounting, whose positive rating has jumped 14 points compared to last August.
There has been a significant increase over the last year in the positive image of most segments of American business and industry -- particularly for accounting, whose positive rating has jumped 14 points compared to last August.
Saturday, August 16, 2003
2 CPA mergers in Tennessee called part of national trend
EFS/Marlin & Edmondson P.C. of Nashville was acquired by Blankenship CPA Group PLLC and moved to Blankenship's Brentwood offices, effective June 1. And Indianapolis-based Crowe Chizek and Co. is buying Brentwood firm Kruse & Associates P.C. in a deal expected to close Sept. 1.
''It's an indication of consolidation in that industry that's going on all over the country really,'' said Troy Waugh, a consultant to the accounting profession. ''I'm seeing this in lot of cities out there.''
EFS/Marlin & Edmondson P.C. of Nashville was acquired by Blankenship CPA Group PLLC and moved to Blankenship's Brentwood offices, effective June 1. And Indianapolis-based Crowe Chizek and Co. is buying Brentwood firm Kruse & Associates P.C. in a deal expected to close Sept. 1.
''It's an indication of consolidation in that industry that's going on all over the country really,'' said Troy Waugh, a consultant to the accounting profession. ''I'm seeing this in lot of cities out there.''
Attorneys, execs cringe at rule for whistle-blowing
Corporate lawyers and executives may be alarmed at new rules for lawyers to blow the whistle on corporate fraud. But post-Enron, their arguments were thin shrill.
"Lawyers should be held to the same standards of professional conduct as certified public accountants," says Carlos Heilemann, CPA and controller at Amerop Sugar in Miami. "Lawyers' main interest should be the preservation of the capital markets and investor interest."
Corporate lawyers and executives may be alarmed at new rules for lawyers to blow the whistle on corporate fraud. But post-Enron, their arguments were thin shrill.
"Lawyers should be held to the same standards of professional conduct as certified public accountants," says Carlos Heilemann, CPA and controller at Amerop Sugar in Miami. "Lawyers' main interest should be the preservation of the capital markets and investor interest."
The State Fiscal Crisis: What Can the States Do?
Maybe Warren Buffet, Arnold Schwarzenegger's celebrity financial advisor, had it right when he suggested Prop 13 stood in the way of needed tax increases in California.
A new study, unrelated to the California crisis, from the nonpartisan Urban Institute, suggests, government spending cuts do more damage to local economies and state budgets than tax hikes. "Indeed, from a short-term macroeconomic perspective, tax increases geared to high-income households are the least harmful option," says the report.
Maybe Warren Buffet, Arnold Schwarzenegger's celebrity financial advisor, had it right when he suggested Prop 13 stood in the way of needed tax increases in California.
A new study, unrelated to the California crisis, from the nonpartisan Urban Institute, suggests, government spending cuts do more damage to local economies and state budgets than tax hikes. "Indeed, from a short-term macroeconomic perspective, tax increases geared to high-income households are the least harmful option," says the report.
Tax Protester Faces Justice Dept.
LAS VEGAS — Can a man be held in contempt of court and jailed for selling copies of public records?
Irwin Schiff, the nation's best-known proponent of the idea that people are not required to pay income taxes, has put that provocative question to Lloyd D. George, a federal district judge who held a hearing here on Thursday on a Justice Department request that Mr. Schiff be put behind bars for civil contempt.
LAS VEGAS — Can a man be held in contempt of court and jailed for selling copies of public records?
Irwin Schiff, the nation's best-known proponent of the idea that people are not required to pay income taxes, has put that provocative question to Lloyd D. George, a federal district judge who held a hearing here on Thursday on a Justice Department request that Mr. Schiff be put behind bars for civil contempt.
IRS Grants Tax Relief to Power Blackout Victims
WASHINGTON — The Internal Revenue Service announced tax relief for those hit by the power blackout in the Northeastern United States. The IRS will consider as timely any tax returns or payments due from today through next Friday, Aug. 22, if they are completed by Aug. 22, 2003. However, the law does not allow the agency to abate interest on any overdue taxes during this period. (IR-2003-100)
WASHINGTON — The Internal Revenue Service announced tax relief for those hit by the power blackout in the Northeastern United States. The IRS will consider as timely any tax returns or payments due from today through next Friday, Aug. 22, if they are completed by Aug. 22, 2003. However, the law does not allow the agency to abate interest on any overdue taxes during this period. (IR-2003-100)
Tuesday, August 12, 2003
CPA Partnership Battle Turns from Nasty to Ridiculous
Two Johnson County, Ind., CPAs who are being sued by their former partner have countersued, claiming he hired a stripper as a personal assistant and used the firm’s computers to look at porn on the Web.
In one corner, according to the Daily Journal, is Curtis L. Coonrod, a CPA whose firm, CLC Services, performs accounting for municipal and county government boards throughout central Indiana. Coonrod also holds a seat on the Indianapolis City-County Council. He is a well-known figure in central Indiana government and political circles. A former Marion County auditor, he is on his second term on the city-county council and is running for re-election this fall.
In the other corner are CPAs Eric Reedy and Jeffrey Peters, former partners in Coonrod’s firm. They left CLC last year to start their own accounting firm, Reedy & Peters LLC.
The accountants said Coonrod hired a former exotic dancer as his personal assistant and escort. Coonrod allowed her to purchase lipstick, perfume and oil changes with CLC funds, they said. Moreover, those gifts and Coonrod’s car loan to the woman were not reported to the IRS as income for tax purposes, which violates tax laws, the men said.
Their counterclaim includes affidavits from two other former employees of CLC. The affidavits claim Coonrod billed clients for the hours of his personal assistant, even though the woman did little meaningful work.
One affidavit states the former stripper “would almost daily clip the split ends from her hair, one strand at a time, for hours at a time, while sitting at the reception desk at the front of the office.” The woman “would often sleep with her head down on the reception desk.”
Peters and Reedy go on to say that Coonrod used the firm’s computers to visit a Web site called www.jailbabes.com and contact female prisoners, visited another site called the Sugar Daddy chat room and openly displayed in the office his personal letters with incarcerated women.
Peters and Reedy resigned from CLC last fall because they felt Coonrod’s behavior put their CPA licenses and professional credibility in jeopardy, their counterclaim says.
“It’s personal conduct unless the individual conducting it allows it to permeate the workplace,” said Sandra Blevins, attorney for the two accountants.
“It’s not just the fact that Mr. Coonrod hired a stripper to come in as an assistant; Mr. Coonrod had this assistant review Mr. Reedy’s and Mr. Peters’ work for mathematical and grammatical changes. This person is not educated in the accounting field. Mr. Coonrod would bill this time to clients.
“That, and the fact that Mr. Coonrod allowed this individual to represent the firm in public, and in general created a very unprofessional atmosphere in the workplace, not only was in violation of their contract, but these actions had implications for tax purposes,” Blevins said.
“Anytime an accountant is in partnership with another individual, and that individual has improper conduct, it can have an effect on the other accountant,” she said. “As we learned from Arthur Andersen, it can have an effect on the entire group.”
Caught in the middle are seven taxpayer-supported government entities that are clients of Reedy & Peters. On May 19, Coonrod filed a lawsuit against Reedy and the Reedy & Peters firm. The suit claims Reedy violated a non-compete clause in his employment contract with CLC.
The contract said that if Reedy left CLC, he agreed not to compete against his former firm, solicit its clients or attempt to take away any of its business for two years after leaving. Reedy signed the contract in March 1999. He and a fellow CLC partner, Peters, resigned Oct. 31 to start their own firm. The lawsuit claims the two ex-partners lured government clients away from CLC to their new firm, depriving CLC of business.
Two Johnson County, Ind., CPAs who are being sued by their former partner have countersued, claiming he hired a stripper as a personal assistant and used the firm’s computers to look at porn on the Web.
In one corner, according to the Daily Journal, is Curtis L. Coonrod, a CPA whose firm, CLC Services, performs accounting for municipal and county government boards throughout central Indiana. Coonrod also holds a seat on the Indianapolis City-County Council. He is a well-known figure in central Indiana government and political circles. A former Marion County auditor, he is on his second term on the city-county council and is running for re-election this fall.
In the other corner are CPAs Eric Reedy and Jeffrey Peters, former partners in Coonrod’s firm. They left CLC last year to start their own accounting firm, Reedy & Peters LLC.
The accountants said Coonrod hired a former exotic dancer as his personal assistant and escort. Coonrod allowed her to purchase lipstick, perfume and oil changes with CLC funds, they said. Moreover, those gifts and Coonrod’s car loan to the woman were not reported to the IRS as income for tax purposes, which violates tax laws, the men said.
Their counterclaim includes affidavits from two other former employees of CLC. The affidavits claim Coonrod billed clients for the hours of his personal assistant, even though the woman did little meaningful work.
One affidavit states the former stripper “would almost daily clip the split ends from her hair, one strand at a time, for hours at a time, while sitting at the reception desk at the front of the office.” The woman “would often sleep with her head down on the reception desk.”
Peters and Reedy go on to say that Coonrod used the firm’s computers to visit a Web site called www.jailbabes.com and contact female prisoners, visited another site called the Sugar Daddy chat room and openly displayed in the office his personal letters with incarcerated women.
Peters and Reedy resigned from CLC last fall because they felt Coonrod’s behavior put their CPA licenses and professional credibility in jeopardy, their counterclaim says.
“It’s personal conduct unless the individual conducting it allows it to permeate the workplace,” said Sandra Blevins, attorney for the two accountants.
“It’s not just the fact that Mr. Coonrod hired a stripper to come in as an assistant; Mr. Coonrod had this assistant review Mr. Reedy’s and Mr. Peters’ work for mathematical and grammatical changes. This person is not educated in the accounting field. Mr. Coonrod would bill this time to clients.
“That, and the fact that Mr. Coonrod allowed this individual to represent the firm in public, and in general created a very unprofessional atmosphere in the workplace, not only was in violation of their contract, but these actions had implications for tax purposes,” Blevins said.
“Anytime an accountant is in partnership with another individual, and that individual has improper conduct, it can have an effect on the other accountant,” she said. “As we learned from Arthur Andersen, it can have an effect on the entire group.”
Caught in the middle are seven taxpayer-supported government entities that are clients of Reedy & Peters. On May 19, Coonrod filed a lawsuit against Reedy and the Reedy & Peters firm. The suit claims Reedy violated a non-compete clause in his employment contract with CLC.
The contract said that if Reedy left CLC, he agreed not to compete against his former firm, solicit its clients or attempt to take away any of its business for two years after leaving. Reedy signed the contract in March 1999. He and a fellow CLC partner, Peters, resigned Oct. 31 to start their own firm. The lawsuit claims the two ex-partners lured government clients away from CLC to their new firm, depriving CLC of business.
Sir David Tweedie: 'Spineless' Auditors Could Kill Off the Profession
Sir David Tweedie, the London-based chairman of the International Accounting Standards Board, which sets the rules for the way companies prepare accounts, said it was time for auditors to dig in when clients put them under pressure to approve dodgy accounts, according to the Australian newspaper The Age.
If they didn't, he warned, the auditing profession faced extinction.
"You need auditors who aren't invertebrates," Sir David said. "They are going to have to have bags of backbone.
"If they can't now stand up to clients, the profession is finished. You could almost say: 'Why do you need an audit?' "
He said some accounting firms could still meet the same fate as Andersen, which imploded following a parade of accounting scandals led by clients including Enron, WorldCom, Waste Management and, in Australia, HIH.
"It was the market that killed Andersen. People just pulled away from it and it couldn't defend itself and the parts of Andersen that weren't affected just dived for cover with somebody else," he said.
"That's going to happen to any other firm, and one of the big dangers is that there are only four of them left. There must be a risk that some time in the future, one of them collects two or three of them (scandals) on the trot and away it goes. It's in their interest to be tough."
He said, however, that the big firms now seemed to realize that the profession was at the crossroads and that it was in their interests to be more rigorous in enforcing the accounting rules.
Sir David's board is now forcing companies and auditors around the world to embrace radical changes that aim to make financial accounts more transparent to investors.
Instead of relying on thick rule books that have allowed companies to seek out accounting loopholes, accountants and companies will have to get used to thinner documents that focus on generic principles. The aim is to keep loopholes to a minimum.
He conceded that the changes when they came into force in 2005 would show that some of the world's biggest companies, including some Australian corporates, are less healthy than previously thought. But despite pressure from business leaders and politicians - including France's President Jacques Chirac - he said the board would not water down its reform agenda.
The future, however, lay in the hands of the Big Four, he said. "This is where professional ethics and professionalism come in. Now can you (accountants) deliver?"
This story was found at TheAge.com.au.
Sir David Tweedie, the London-based chairman of the International Accounting Standards Board, which sets the rules for the way companies prepare accounts, said it was time for auditors to dig in when clients put them under pressure to approve dodgy accounts, according to the Australian newspaper The Age.
If they didn't, he warned, the auditing profession faced extinction.
"You need auditors who aren't invertebrates," Sir David said. "They are going to have to have bags of backbone.
"If they can't now stand up to clients, the profession is finished. You could almost say: 'Why do you need an audit?' "
He said some accounting firms could still meet the same fate as Andersen, which imploded following a parade of accounting scandals led by clients including Enron, WorldCom, Waste Management and, in Australia, HIH.
"It was the market that killed Andersen. People just pulled away from it and it couldn't defend itself and the parts of Andersen that weren't affected just dived for cover with somebody else," he said.
"That's going to happen to any other firm, and one of the big dangers is that there are only four of them left. There must be a risk that some time in the future, one of them collects two or three of them (scandals) on the trot and away it goes. It's in their interest to be tough."
He said, however, that the big firms now seemed to realize that the profession was at the crossroads and that it was in their interests to be more rigorous in enforcing the accounting rules.
Sir David's board is now forcing companies and auditors around the world to embrace radical changes that aim to make financial accounts more transparent to investors.
Instead of relying on thick rule books that have allowed companies to seek out accounting loopholes, accountants and companies will have to get used to thinner documents that focus on generic principles. The aim is to keep loopholes to a minimum.
He conceded that the changes when they came into force in 2005 would show that some of the world's biggest companies, including some Australian corporates, are less healthy than previously thought. But despite pressure from business leaders and politicians - including France's President Jacques Chirac - he said the board would not water down its reform agenda.
The future, however, lay in the hands of the Big Four, he said. "This is where professional ethics and professionalism come in. Now can you (accountants) deliver?"
This story was found at TheAge.com.au.
Thursday, August 07, 2003
And Now for Something Completely Different...
Bending over backwards may be necessary in business, but it's bad for you, according to a CPA-turned-yoga-guru, who has ideas on better ways to bend.
Bruce Van Horn, a CPA with a Big 4 pedigree, is a management consultant with a difference: He prescribes yoga.
"Business organizations, he says, "have failed to honor the individual as a complete being with unfortunate consequences. Emotions in the workplace such as grief, depression and anger are repressed until they explode, producing disastrous results."
His company offers yoga classes to corporations to help them develop a more effective motivational model. He is the CEO of Yoga for Business, Stress Consultant, author of "Yoga for Men" and the "Healthy Living Wellness Series, at his website www.yogaforbusiness.com.
"Many healthcare problems are caused or triggered by workplace issues, especially in the context of fear-based motivational systems. Stress triggers the fight/flight hormonal response which has been linked to short and long term increases in illness," says Van Horn. "Our entire industrial complex is at risk for massive litigation as workplace stress now costs our society $400 billion annually."
Van Horn believes that excess quantities of the hormones adrenaline and cortisol are rampant in our business organizations, and are literally killing us. "Men are especially vulnerable in the workplace because they view their jobs as their life," he says. "Mankind's first organizations as human beings some 6 million years ago were based on fear and the need to form groups for survival. Our stress response, which was the key to our early survival, has now become our greatest health threat and the single most important limiting factor in our longevity."
He says he has a cadre well-known names behind him, including Patch Adams, M.D., played by Robin Williams in the movie. "I am fascinated by your work," Dr. Adams is quoted as saying. "Our society surely needs it." Other luminaries: Dr. Bernie Siegel, Dr. Andrew Weil, and Dr. Deepak Chopra.
Bending over backwards may be necessary in business, but it's bad for you, according to a CPA-turned-yoga-guru, who has ideas on better ways to bend.
Bruce Van Horn, a CPA with a Big 4 pedigree, is a management consultant with a difference: He prescribes yoga.
"Business organizations, he says, "have failed to honor the individual as a complete being with unfortunate consequences. Emotions in the workplace such as grief, depression and anger are repressed until they explode, producing disastrous results."
His company offers yoga classes to corporations to help them develop a more effective motivational model. He is the CEO of Yoga for Business, Stress Consultant, author of "Yoga for Men" and the "Healthy Living Wellness Series, at his website www.yogaforbusiness.com.
"Many healthcare problems are caused or triggered by workplace issues, especially in the context of fear-based motivational systems. Stress triggers the fight/flight hormonal response which has been linked to short and long term increases in illness," says Van Horn. "Our entire industrial complex is at risk for massive litigation as workplace stress now costs our society $400 billion annually."
Van Horn believes that excess quantities of the hormones adrenaline and cortisol are rampant in our business organizations, and are literally killing us. "Men are especially vulnerable in the workplace because they view their jobs as their life," he says. "Mankind's first organizations as human beings some 6 million years ago were based on fear and the need to form groups for survival. Our stress response, which was the key to our early survival, has now become our greatest health threat and the single most important limiting factor in our longevity."
He says he has a cadre well-known names behind him, including Patch Adams, M.D., played by Robin Williams in the movie. "I am fascinated by your work," Dr. Adams is quoted as saying. "Our society surely needs it." Other luminaries: Dr. Bernie Siegel, Dr. Andrew Weil, and Dr. Deepak Chopra.
Wednesday, August 06, 2003
IFAC Calls For Audit Firms Worldwide to Open Books, Shut Down Conflicts
The report, titled Rebuilding Public Confidence In Financial Reporting, was compiled by a taskforce chaired by John Crow, a former governor of Canada's central bank, and commissioned by the International Federation of Accountants.
It proposes:
-- Accounting firms must dump more high-risk clients.
-- Audit partners should not be rewarded for selling non-audit services.
-- Firms should disclose their finances, including how much they depend on particular clients.
-- A tougher "tone at the top" at accounting firms.
More at IFAC.
The report, titled Rebuilding Public Confidence In Financial Reporting, was compiled by a taskforce chaired by John Crow, a former governor of Canada's central bank, and commissioned by the International Federation of Accountants.
It proposes:
-- Accounting firms must dump more high-risk clients.
-- Audit partners should not be rewarded for selling non-audit services.
-- Firms should disclose their finances, including how much they depend on particular clients.
-- A tougher "tone at the top" at accounting firms.
More at IFAC.
Tuesday, August 05, 2003
PCAOB Starts Sending Out Bills
The Public Company Accounting Oversight Board is notifying publicly traded companies, investment companies and other equity issuers of the accounting support fees that they will pay to fund the operations of the PCAOB. The PCAOB will also be collecting fees for the first time for the FASB.
The largest 1,000 companies will be paying 87 percent of the board's $68-million annual budget. The biggest, thought to be GE, may get a $1.3 million bill for the PCAOB and another one for $500,000 for FASB.
They say good accounting doesn't come cheap. But this seems worth the money.
Monday, August 04, 2003
Dixon Odom Loses Forensics Unit
Blame Sarbanes-Oxley, says Ralph Summerford, head of the group that has broken away from Dixon Odom PLLC, a 16-office firm based in High Point, N.C.
"Anytime you have a large organization, there is the potential for conflicts of interest," Summerford tells the Birmingham, Ala., local business weekly. "Some of the cases we would normally work on we couldn't. We were starting to have problems accepting clients because of their relationship with Dixon Odom."
Summerford was blocked from working in the Enron bankruptcy because the law firm had once been involved in a malpractice case against Dixon Odom.
Both sides say the split was amicable.
More
Blame Sarbanes-Oxley, says Ralph Summerford, head of the group that has broken away from Dixon Odom PLLC, a 16-office firm based in High Point, N.C.
"Anytime you have a large organization, there is the potential for conflicts of interest," Summerford tells the Birmingham, Ala., local business weekly. "Some of the cases we would normally work on we couldn't. We were starting to have problems accepting clients because of their relationship with Dixon Odom."
Summerford was blocked from working in the Enron bankruptcy because the law firm had once been involved in a malpractice case against Dixon Odom.
Both sides say the split was amicable.
More
Friday, August 01, 2003
Nearly 20% in US Laid Off in Past Three Years
Is there any wonder about why people are worried? Workers in the Services industry have been the hardest hit, with 15% of laid off workers saying they worked in Services. Another 14% say they worked in the Technical arena before being laid off, while 13% were Clerical/Sales workers. On the other hand, only 3% of workers who have been laid off worked in the Healthcare industry. More (pdf)
Is there any wonder about why people are worried? Workers in the Services industry have been the hardest hit, with 15% of laid off workers saying they worked in Services. Another 14% say they worked in the Technical arena before being laid off, while 13% were Clerical/Sales workers. On the other hand, only 3% of workers who have been laid off worked in the Healthcare industry. More (pdf)
Thursday, July 31, 2003
GAO Study Dissects Market for Final 4
A long-awaited study from the General Accounting Office shows the Big 4 auditing firms may be both more powerful and more vulnerable because of their growing consolidation of the market.
Powerful -- because they could, although there is no evidence that they have, amass the economic influence of any oligopoly. But vulnerable, too -- because they remain bitter and vicious competitors.
Still, concentration in some industries is marked. The GAO noted, for instance, that Ernst & Young holds 61 percent of the building contractors and 48 percent of air transports, that PricewaterhouseCoopers has 76% of the petroleum and coal business, and that KPMG audits 60 percent of the non-bank financial institutions.
With new independence rules barring auditors from a host of consulting engagements, it could take years for auditors and companies to sort it all out.
Full report in pdf
A long-awaited study from the General Accounting Office shows the Big 4 auditing firms may be both more powerful and more vulnerable because of their growing consolidation of the market.
Powerful -- because they could, although there is no evidence that they have, amass the economic influence of any oligopoly. But vulnerable, too -- because they remain bitter and vicious competitors.
Still, concentration in some industries is marked. The GAO noted, for instance, that Ernst & Young holds 61 percent of the building contractors and 48 percent of air transports, that PricewaterhouseCoopers has 76% of the petroleum and coal business, and that KPMG audits 60 percent of the non-bank financial institutions.
With new independence rules barring auditors from a host of consulting engagements, it could take years for auditors and companies to sort it all out.
Full report in pdf
Wednesday, July 30, 2003
Sign-Offs on Financials 'Trickle Down' to Other Finance Staff
One year after the Sarbanes-Oxley Act required CFOs and CEOs to certify their company's financial statements, a new survey by the Association for Financial Professionals (AFPonline.org) reveals that companies are asking lower-ranking financial staffers to put their names on the line as well. Roughly one-third of the staffers who provide information for Securities and Exchange Commission filings are not the chief financial executives. And 80% say they worry about their liability.
One year after the Sarbanes-Oxley Act required CFOs and CEOs to certify their company's financial statements, a new survey by the Association for Financial Professionals (AFPonline.org) reveals that companies are asking lower-ranking financial staffers to put their names on the line as well. Roughly one-third of the staffers who provide information for Securities and Exchange Commission filings are not the chief financial executives. And 80% say they worry about their liability.
Tuesday, July 29, 2003
SEC Staff Recommends Principles-Based Accounting System
The staff of the Securities and Exchange Commisssion is pushing adoption of a new "principles-based" system of accounting standards. More at the SEC.
While there's little proof that "principles-based" rules would have prevented any of the Enrons of the past few years, there's no disagreement that shifting to a new system of accounting would generate new and untold amounts of work for corporate lawyers and accountants. And even then, it might take another generation for courts and juries to sort it all out.
Only the study is required by the Sarbanes-Oxley Act. Don't hold your breath waiting for it to actually happen.
The most important principles are not in the accounting rules, but in the integrity of the individuals using them. Maybe we should be talking not of "principles," but of "principals."
The staff of the Securities and Exchange Commisssion is pushing adoption of a new "principles-based" system of accounting standards. More at the SEC.
While there's little proof that "principles-based" rules would have prevented any of the Enrons of the past few years, there's no disagreement that shifting to a new system of accounting would generate new and untold amounts of work for corporate lawyers and accountants. And even then, it might take another generation for courts and juries to sort it all out.
Only the study is required by the Sarbanes-Oxley Act. Don't hold your breath waiting for it to actually happen.
The most important principles are not in the accounting rules, but in the integrity of the individuals using them. Maybe we should be talking not of "principles," but of "principals."
Sunday, July 27, 2003
Feds Warn: No One is Safe in Fraud Crackdown
High-profile CEOs and CFOs get the big headlines. But private companies and low-level staffers need to worry too, according to this week's At Large column.
More At Large
High-profile CEOs and CFOs get the big headlines. But private companies and low-level staffers need to worry too, according to this week's At Large column.
More At Large
Friday, July 25, 2003
First Praise, Now Hisses at S.E.C.
If the New York Times says the honeymoon is over, then the honeymoon is over.
Just six months into the job as SEC Commissioner, William Donaldson is facing flak from a toughened business community that says regulatory reform is going too far, and from state regulators, led by New York's Eliot Spitzer, who battled and won against an SEC plan to usurp their authority.
More second-guessing:
In this corner, there's
Has hunt for corporate criminals gone too far? (USA Today).
And in the other corner, here's Investors need more protection, not less (CBS MarketWatch).
If the New York Times says the honeymoon is over, then the honeymoon is over.
Just six months into the job as SEC Commissioner, William Donaldson is facing flak from a toughened business community that says regulatory reform is going too far, and from state regulators, led by New York's Eliot Spitzer, who battled and won against an SEC plan to usurp their authority.
More second-guessing:
In this corner, there's
Has hunt for corporate criminals gone too far? (USA Today).
And in the other corner, here's Investors need more protection, not less (CBS MarketWatch).
Thursday, July 24, 2003
Post-Enron Malpractice Worries on the Rise
Get set for a new round of premium increases as underwriters try to compensate for a lousy stock market, the new regulatory risks, and consolidation among insurers.
More: Accounting malpractice insurance coverage -- A changing landscape (pdf) (free log-in req.)
Get set for a new round of premium increases as underwriters try to compensate for a lousy stock market, the new regulatory risks, and consolidation among insurers.
More: Accounting malpractice insurance coverage -- A changing landscape (pdf) (free log-in req.)
Wednesday, July 23, 2003
Georgia (as in Russia) Selects Auditors for 3 Top Companies
The Russian Interfax news agency reports from Tbilisi that the government has selected auditors for three of the country's major companies -- and they are all United States-based CPA firms.
Ernst & Young was selected for the Georgian Railroad, Deloitte & Touche for Poti Port, and PricewaterhouseCoopers for the Madneuli mining company, the finance ministry told Interfax. Nine firms, the rest unnamed, competed for the work.
The winning bids: Ernst & Young got $395,000; PricewaterhouseCoopers, $240,000; and Deloitte & Touche, $120,000.
But the bigger meaning is the seemingly instoppable globalization of U.S.-based auditing and accounting standards and practices.
More... Interfax
The Russian Interfax news agency reports from Tbilisi that the government has selected auditors for three of the country's major companies -- and they are all United States-based CPA firms.
Ernst & Young was selected for the Georgian Railroad, Deloitte & Touche for Poti Port, and PricewaterhouseCoopers for the Madneuli mining company, the finance ministry told Interfax. Nine firms, the rest unnamed, competed for the work.
The winning bids: Ernst & Young got $395,000; PricewaterhouseCoopers, $240,000; and Deloitte & Touche, $120,000.
But the bigger meaning is the seemingly instoppable globalization of U.S.-based auditing and accounting standards and practices.
More... Interfax
Tuesday, July 22, 2003
XBRL Gears Up for Next Step with PR Maven at Helm
PR Newswire, a business and financial news distribution service, has become a member of XBRL-U.S., which is hosted by the AICPA, and taken on a leading role to gain widespread adoption of the new financial-reporting standard.
XBRL, which digitizes financial information to make it readable across the Internet globally, is quickly moving from the research-and-development stage to the implementation stage. So PR Newswire's involvement could be exactly what's needed at this time. PR Newswire staffer Michelle Horowitz, who has a background in working internationally and with technology companies, becomes the chairperson of the Adoption Committee. She succeeds Paul Penler of Ernst & Young, whose term expired, but who remains active in the XBRL movement.
More... XBRL, PR Newswire
PR Newswire, a business and financial news distribution service, has become a member of XBRL-U.S., which is hosted by the AICPA, and taken on a leading role to gain widespread adoption of the new financial-reporting standard.
XBRL, which digitizes financial information to make it readable across the Internet globally, is quickly moving from the research-and-development stage to the implementation stage. So PR Newswire's involvement could be exactly what's needed at this time. PR Newswire staffer Michelle Horowitz, who has a background in working internationally and with technology companies, becomes the chairperson of the Adoption Committee. She succeeds Paul Penler of Ernst & Young, whose term expired, but who remains active in the XBRL movement.
More... XBRL, PR Newswire
Monday, July 21, 2003
The SEC, Ernst & Young, and... Harry Potter?
In another salvo at Ernst & Young, The Securities and Exchange said in court on Friday that the firm's defenses in a conflict-of-interest case involving Peoplesoft were a work of "fantasy" akin to Harry Potter. The SEC charges Ernst violated independence rules in both acting as auditor of Peoplesoft in the 1990's and as a dealer of Peoplesoft software. Ernst could be barred for six months from taking on new clients. Only KPMG has ever suffered such a fate, and that was about two decades ago, for about 90 days. "Fantasy" or not, the SEC case could rival this summer's best-selling Harry Potter 5 for drama.
More: Reuters, the NY Times, and the WSJ.
Last year, the SEC won a round against Ernst for "improper professional conduct" in the Netherlands. And it marked two firsts: (1) a win against a foreign firm, and (2) the first time the SEC collected (in this case, $400,000) from a foreign firm.
More: SEC
More Ernst in court (all documents in pdf): Complaint and Demand For Jury Trial (FDIC v. Ernst & Young) (Nov. 1, 2002) and
Findings of Fact, Conclusions of Law, Decree of Dissolution, and Judgment Entry (CEO's divorce decree) (In Re: Marriage of Bobrow) (Sept. 20, 2002)
In another salvo at Ernst & Young, The Securities and Exchange said in court on Friday that the firm's defenses in a conflict-of-interest case involving Peoplesoft were a work of "fantasy" akin to Harry Potter. The SEC charges Ernst violated independence rules in both acting as auditor of Peoplesoft in the 1990's and as a dealer of Peoplesoft software. Ernst could be barred for six months from taking on new clients. Only KPMG has ever suffered such a fate, and that was about two decades ago, for about 90 days. "Fantasy" or not, the SEC case could rival this summer's best-selling Harry Potter 5 for drama.
More: Reuters, the NY Times, and the WSJ.
Last year, the SEC won a round against Ernst for "improper professional conduct" in the Netherlands. And it marked two firsts: (1) a win against a foreign firm, and (2) the first time the SEC collected (in this case, $400,000) from a foreign firm.
More: SEC
More Ernst in court (all documents in pdf): Complaint and Demand For Jury Trial (FDIC v. Ernst & Young) (Nov. 1, 2002) and
Findings of Fact, Conclusions of Law, Decree of Dissolution, and Judgment Entry (CEO's divorce decree) (In Re: Marriage of Bobrow) (Sept. 20, 2002)
Friday, July 18, 2003
Global Boom in CPA Demand Reaches Japan
Tokyo's Chuo University launched the Chuo Graduate School of Accounting in April, and Kwansei Gakuin University in Hyogo Prefecture intends to set up its own accounting school in April 2005. Meiji University in Tokyo and Kansai University in Osaka Prefecture will also set up CPA schools, and Tokyo's Aoyama Gakuin University is considering the possibility. The institutions are anticipating a Financial Services Agency plan to increase the number of CPAs to 50,000, in an effort to fall into line with global expectations for corporate transparency. With only 14,000 CPAs, Japan lags far behind the United States, which has 330,000.
Tokyo's Chuo University launched the Chuo Graduate School of Accounting in April, and Kwansei Gakuin University in Hyogo Prefecture intends to set up its own accounting school in April 2005. Meiji University in Tokyo and Kansai University in Osaka Prefecture will also set up CPA schools, and Tokyo's Aoyama Gakuin University is considering the possibility. The institutions are anticipating a Financial Services Agency plan to increase the number of CPAs to 50,000, in an effort to fall into line with global expectations for corporate transparency. With only 14,000 CPAs, Japan lags far behind the United States, which has 330,000.
Thursday, July 17, 2003
The CPA Economy is Coming Back
The only real questions dividing CPAs are "when," "for whom," and "how much?" More.... CPAs Bet on New Business Uptick
The only real questions dividing CPAs are "when," "for whom," and "how much?" More.... CPAs Bet on New Business Uptick
Wednesday, July 16, 2003
It's Official: Auditors Must Register
CPA firms must get registered by Oct. 22 to continue issuing audit reports on public companies. The Securities and Exchange Commission today approved the new registration rules, originally issued by the Public Company Accounting Oversight Board... More at... PCAOB, SEC
CPA firms must get registered by Oct. 22 to continue issuing audit reports on public companies. The Securities and Exchange Commission today approved the new registration rules, originally issued by the Public Company Accounting Oversight Board... More at... PCAOB, SEC
Tuesday, July 15, 2003
Computer Associates CEO Sees More Consolidation
Sanjay Kumar admitted at the company's annual dealer convention that they need to focus on issues important to its customers, even as the company's accounting is being investigated by the Securities and Exchange Commission and the Justice Department.
Sanjay Kumar admitted at the company's annual dealer convention that they need to focus on issues important to its customers, even as the company's accounting is being investigated by the Securities and Exchange Commission and the Justice Department.
Monday, July 14, 2003
Junior Fraud-Busters on Campus
The new rules of the accounting game are generating new jobs and, better yet, more challenging opportunities. You can see the changes every day on college campuses, where fraud-busting is as sexy today as saving the environment was once before.
Friday, July 11, 2003
Sharp Increase in SBA Loans
The Administratiuon says it added 411,000 to the economy. The economy (and the Administration) clearly need it. But here's another question: what does that uptick in the debt load say about the private sector's ability to create jobs?
Comments?
The Administratiuon says it added 411,000 to the economy. The economy (and the Administration) clearly need it. But here's another question: what does that uptick in the debt load say about the private sector's ability to create jobs?
Comments?
Accountants Shun New Software
The story is from London, but it could play in Peoria just as well: Fear of new software is seeing the vast majority of UK accountants choosing not to learn new packages, a survey has revealed.
The story is from London, but it could play in Peoria just as well: Fear of new software is seeing the vast majority of UK accountants choosing not to learn new packages, a survey has revealed.
Spitzer-style Probes Face Curtailment
The New York attorney general is collecting $1.4 billion from Wall Street greedsters, but House Republicans are moving to make it so no other state prosecutor could ever do that again. Is it too cynical to note that he's a rising Democrat in a "blue" state on the political map and the effort at curtailment is being led by Republicans? You tell me.
The New York attorney general is collecting $1.4 billion from Wall Street greedsters, but House Republicans are moving to make it so no other state prosecutor could ever do that again. Is it too cynical to note that he's a rising Democrat in a "blue" state on the political map and the effort at curtailment is being led by Republicans? You tell me.
How do you know when you're clueless?
Too often we don't. And in a business situation, it can cost us money. "Our guess is that because we understand what something means to us, it must mean the same to everyone else," according to the consultants at Franklin Covey. "We may assume not only that we know what they mean, we assume they know what they mean, and neither of us may have a clue."
Too often we don't. And in a business situation, it can cost us money. "Our guess is that because we understand what something means to us, it must mean the same to everyone else," according to the consultants at Franklin Covey. "We may assume not only that we know what they mean, we assume they know what they mean, and neither of us may have a clue."
Wednesday, January 29, 2003
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