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

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...

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: "

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

'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.

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.

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.

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.

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

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