This News Wrap-Up Brought To You By:
Association of Government Accountants
THIS WEEK'S TOP NEWS
- US Senators Urge FASB to Reconsider Stock Options Stance
- Former Andersen Auditor Arrested, Charged With Obstruction of Justice
- Majority of Private Companies Adopting Corporate Governance Changes
- Microsoft Pays First-Ever Dividend
- 200 Million Later, KPMG Settles With Rite Aid, Oxford Shareholders
- Massachusetts Takes Aim at Rapid Refund Loans
- Techies Warn Self-Filing Taxpayers of Possible Identity Theft Threat
- Merger Will Create Largest Regional CPA Firm in Northeast
- Sierra Club Pushes IRS For SUV Audits
- Tax Professionals Can Now E-File Employment Tax Forms
- Busy Season Stress Busters Part Four!
"To inform, to enrich, to enlighten, to entertain."
Seventeen years ago this week, March 13, 1986, ten-year old Microsoft completed its successful initial public offering. The opening price of the stock was $21 a share, and ended its first day of trading up 33% at $28 a share, instantly creating great wealth for many of its young employees.
To save you the trouble, here are the numbers: If you had purchased one share of stock on the first day of trading, your $21 investment would be worth over $6,500 today.
While some believe the "good old days" of the stock market are behind us, and opportunities like investing in a Microsoft IPO are gone, keep one thing in mind. When Microsoft was founded in the mid-1970s, the Dow Jones Industrial Average had just come off its seventh worst year in history, down over 27% in 1974. Somewhere out there today, in this down economy, a couple of nerdy, budding young businessmen are feverishly working in their garage to create the next big opportunity. I don't know about you, but I'm ready and anxious to dive back in to the market. Microsoft II, where are you?
Michael Platt, CEO
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THIS WEEK'S TOP NEWS
A bi-partisan coalition of United States Senators, led by former accountant Sen. Mike Enzi (R-WY), is urging the Financial Accounting Standards Board to more fully consider the question of expensing stock options, and suggested that the deliberation process currently underway is "basically flawed."
In yet another black mark against the now-defunct accounting firm of Arthur Andersen, LLP, a former senior auditor of the firm has been arrested in connection with the audit of American Tissue, the nation's fourth-largest tissue maker.
A newly released survey of private companies in the United States indicates that although the Sarbanes-Oxley Act is primarily geared towards public companies, 58% of private companies are instituting changes to ensure greater control of their accounting processes.
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Last week, Microsoft Corp. did something it's never done before: paid dividends to shareholders. In all, on March 7, the company shelled out $850 million to shareholders, with nearly $100 million going to co-founder and chairman Bill Gates.
Big Four accounting firm KPMG has agreed to pay $125 million as a result of a class action lawsuit filed by shareholders of Rite Aid, the nation's third-largest drugstore chain. In addition, KPMG has agreed to pay $75 million to shareholders of Oxford Health Plans after a computer snafu at Oxford in 1977 resulted in collection and payment delinquencies.
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The State of Massachusetts has ordered tax preparation giant H&R Block as well as other tax preparers to file for a license that will prevent the tax companies from collecting exorbitant interest rates on the popular tax refund anticipation loans. The Massachusetts law would limit tax preparers and banks to an annual interest rate of 23% on the rapid refunds.
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Leading tax software companies Intuit (TurboTax) and H&R Block (TaxCut) may be producing software that puts customer tax data at risk, according to some data security experts. Both TurboTax and TaxCut leave taxpayer data files unencrypted and thus unprotected from hackers, and some people are concerned about the possibility of identity theft.
New Jersey-based CPA firm J.H. Cohn, LLP and The Videre Group have announced an agreement to merge the two firms to create the largest regional accounting firm in the Northeast. J.H. Cohn is about three times the size of The Videre Group, and will continue to be the name of the combined entity.
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As one of the country's leading conservation organizations, the Sierra Club often asks the Environmental Protection Agency to enforce federal laws to protect the environment. Now, the club wants the Internal Revenue Service (IRS) to step up its auditing efforts on certain SUV owners and to help the environment in the process.
Tax professionals are able to file employment taxes for business clients for the first time as part of a new Employment Tax e-filing System offered by the Internal Revenue Service.
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TAX TIP: Gift Giving
If you gave any one person gifts valued at more than $11,000 in 2002, it is necessary to report the total gift to the Internal Revenue Service. You may even have to pay tax on the gift. Find out more.
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"To inform, to enrich, to enlighten, to entertain."