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 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

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

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.

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...

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...

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...

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.

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

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