AccountingWEB Weekly News Wrap-Up - Issue 149
June 7, 2002
This News Wrap-Up Sponsored By:
Our Mission: "To inform, to enrich, to enlighten, to entertain."
- Andersen Trial Closes With Yet More Twists and Turns
- PwCC Names New CEO, MBO Rumors at Deloitte
- European Commission Issues Accounting Proposal
- IRS Unveils New TEAMs to Turbocharge Its Aging TAMs
- Microsoft and SEC Settle 'Cookie Jar Accounting' Case
- IIA Forms New Group For Financial Services Auditors
- NY Indictment Shines Spotlight on Sales Tax Avoidance
- A Tale of Two Cities – AccountingWEB Andersen/Enron Survey
- Ex-Andersen CEO Speaks Out on Audit Fees, Reforms
- PCPS Celebrates Its 25th Anniversary
I attended the AICPA's Practitioner's Symposium in Las Vegas this week and listened to AICPA President Barry Melancon update the audience on the status of audit reforms and changes to the profession in this post-Enron era. This is a man who has been at the center of a firestorm for a number of months now, and the fact that the stress of the job has not snapped him yet is a testament to the strength of Mr. Melancon as an individual. I had the chance to speak with a number of practitioners, and feedback ranged from true supporters to those who feel deceived, cheated and abandoned by the AICPA.
The zealousness of the positions of both sides reminded me of watching debates on CNN by Palestinians and Israelis as to who is right in their approach. There continues to be a great degree of pent up anger and venom aimed at the AICPA and its leaders, but, like the Palestinian and Israeli debates, the rhetoric sounds like too many pre-planned sound bites that are fed to the membership to mold common opinions. The true supporters of Mr. Melancon and his management team do have one thing in common with their vocal adversaries - they both believe passionately in their opinion of the AICPA.
My message today is not to those passionate believers but to those of you in the middle, those who may not have strong beliefs, and those that really don't care about what's happening in the leadership ranks. Find out what the issues are, and determine for yourself what your opinions are about the AICPA and its leadership of the profession. Figure out how all this national politicking affects you and then decide for yourself if it is even an issue worth caring about. The debate will continue and AccountingWEB will assist, and hopefully it can be a more thoughtful discussion than just a canned recital of party lines.
NEWS FOR ACCOUNTINGWEB MEMBERS
The government has rested in its prosecution of Andersen in its obstruction of justice trial. In a strange turn of events, testimony of David Duncan, the lead witness for the prosecution, was hardly mentioned in closing arguments by the government, but was featured prominently by the defense. Will Duncan's testimony prove to be the winning evidence for Andersen?
These stories recap the week's events:
It's no surprise that PricewaterhouseCoopers and Deloitte Touche Tohmatsu are both taking steps to separate their consulting arms. But two recent developments this week on how they are progressing has surprised some industry observers. In late breaking news, Deloitte Consulting has announced plans to go private.
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The European Commission has proposed a new accounting directive that will bring member states in line with International Accounting Standards and current best practices in financial reporting. Find out what is likely to change.
The Taxpayer Advice Memoranda (TAM) system, which provides binding guidance for specific taxpayer situations, has been perceived in recent years as too slow for taxpayers to benefit from. The IRS has listened, and has re-engineered the process, now known as Technical Expedited Advice Memoranda (TEAM) to deliver value to taxpayers.
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On June 3, 2002, the SEC and Microsoft settled an "administrative enforcement" that accused Microsoft of smoothing earnings to meet forecasts and satisfy stockholder demands. This particular case focused on charges of actually understating revenues in some years, and Microsoft has agreed to stop the practice, commonly known as "cookie jar accounting."
The National Association of Financial Services Auditors has announced that it will dissolve its association and merge into the larger Institute of Internal Auditors. A new Financial Services Auditor group will be established to carry on the work of the dissolved association.
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Vendors of pricey and easily portable products are watching closely as New York State indicted former Tyco International CEO this week on charges of sales tax avoidance. The government case could give art dealers some muscle when buyers request a simple favor - that of shipping products to an office address instead of a home address to save sales tax.
Results were released this week of a recent AccountingWEB survey of over 300 practitioners highlighting the actions, attitudes, and changes CPA firms are making in response to audit reform discussions in this post Enron era. The survey, co-sponsored by Sommella Market Strategies, points to complacency in smaller firms, and formal changes in larger firms. Find out what we uncovered in "The Impact of Enron: How Far Will It Go?"
In his first public appearance since resigning as CEO of Andersen in March, Joseph Berardino this week spoke out against low audit fees, the dangers of placing all the responsibility for accurate financial reporting in the hands of the auditors, and the various systems available for GAAP, pro-forma statements and financial analyst models.
PCPS, AICPA's Alliance for CPA Firms, celebrated its 25th anniversary in style this week with a gala at the Guggenheim Museum in Las Vegas, Nevada. PCPS members attending the AICPA Practitioners Symposium attended the members-only event to celebrate PCPS accomplishments and share the vision for the future.
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"To inform, to enrich, to enlighten, to entertain."