A&A news

A&A

Management Shakeup May Lie Ahead for Fannie Mae

Days after Fannie Mae's federal regulator released a highly critical report on the mortgage giant's accounting practices, observers say top management may not survive the fallout.Fannie Mae's regulator, the Office of Federal Housing Enterprise Oversight (OFHEO), conducted an eight-month investigation and found such pervasive problems that OFHEO suggested a management change.“These findings cannot be explained as mere differences in interpretation of accounting principles, but clear instances in which management sought to misapply and ignore accounting principles," OFHEO Director Armand
Tax

Schedule C-EZ Change Means Savings for Small Businesses

The Internal Revenue Service announced this week that it will expand the number of small businesses eligible to file a simplified expense form, a move that will save money and reduce paperwork burden.
A&A

Wall Street Firms Take Issue with FASB's Fair-Market Standard

Several financial-services firms-including Citigroup and JP Morgan Chase & Co.-are asking the Financial Accounting Standards Board (FASB) to take another look at a requirement that would change the way companies calculate the fair-market value of assets and liabilities, Dow Jones Newswires reported.Currently, derivatives and trading securities are the types of debt that would be covered by the rule.
A&A

Mesirow Financial Acquires KPMG's U.S. Corp. Recovery Practice

Mesirow Financial, the diversified financial services firm, and KPMG LLP, announced this week that Mesirow Financial has acquired KPMG’s U.S. Corporate Recovery practice. Terms of the transaction were not disclosed. Now called Mesirow Financial Consulting, the unit of more than 100 corporate recovery professionals will be managed by former KPMG partner Ralph S. Tuliano, who becomes president of Mesirow Financial Consulting and will be appointed to Mesirow Financial’s Executive Committee.
A&A

Unique Staffing Strategies For Your Firm

by L. Gary Boomer, CPA, CITP, CEO - According to the Bureau of Labor Statistics, the Baby Boomers comprise 60% of the prime-workforce today. A year ago it appeared accounting might follow a shortage in IT talent around the year 2005 or 2006. Today it looks like the shortage will occur in the accounting industry first and has already started in selective parts of the country. This is particularly true with auditing and accounting skills. California firms are reporting shortages of experienced accountants and auditors.
Tax

Treasury and IRS Grant Relief In Student Loan Rules

The Treasury Department and the Internal Revenue Service today issued a notice relating to information reporting for the deduction of interest paid on qualified education loans. "The notice issued today provides administrative relief to lenders and borrowers," said Acting Assistant Secretary for Tax Policy Greg Jenner. "Penalties will be waived for lenders who need additional time to update their reporting systems.
A&A

CEOs Face Tough Options: When to Hire Independent Investigators

Chief executives are increasingly likely to consider conducting independent investigations to help resolve major legal and regulatory dilemmas and challenges to their companies' integrity, The Conference Board notes in a report released this week. Howard T. Anderson and Edwin Stier, authors of the report, are attorneys whose firm Stier Anderson, LLC, specializes in carrying out independent investigations.
A&A

Enron Sells Pipelines, Uses Proceeds to Fund Pension Plans

As part of an agreement with the federal government's Pension Benefit Guaranty Corporation (PBGC), beleaguered energy giant Enron Corp. has agreed to place $321 million in an escrow account in order to fully fund four defined-benefit pension plans. The money will come from proceeds of the $2.45 billion sale of the company's U.S. pipeline business.
A&A

Democrats, Unions Hail Vote Against New Overtime Rules

Democrats were joined by 22 Republicans Thursday to block new overtime regulations that critics say would deny overtime pay for at least 6 million workers.The vote was 223-193, defying a veto threat from the White House. The sweeping overtime rules were attached as an amendment to a $142 billion measure funding education, worker training and health programs.The administration believes the rules would improve overtime protection for many more workers than would lose them, the Los Angeles Times reported. The U.S.
A&A

Banks Cheer FASB's Delay of Rule on Writing Down Debt

The Financial Accounting Standards Board (FASB) on Wednesday delayed a rule that would force companies to reduce the value of debt securities because of rising interest rates.The new guideline called for financial services firms to recognize certain losses in their bond holdings each quarter, even if the losses are caused only by higher interest rates, the Wall Street Journal reported.The delay is "a sigh of relief" to banks, said Donna Fisher, the director of tax and accounting at the American Bankers Association.
Practice

Companies Choose Consumer-Driven Health Plans to Curb Costs

Nearly one in five companies (19 percent) of 314 firms surveyed offer a consumer-driven health plan, up from 11 percent in 2003, according to Deloitte Consulting LLP.
A&A

FASB May Delay Rule Change on Debt Securities

The Financial Accounting Standards Board (FASB) may delay a rule change that would require financial institutions to reduce the value of debt in their bond holdings when interest rates fluctuate.The proposal would force banks and financial institutions to record declines in the value of mortgage-backed securities in their income statements even if the losses are caused only by rising interest rates rather than falling credit quality, the Wall Street Journal reported.The proposed requirement is part of a group of guidelines called EITF 03-1, which are designed to clarify when companies mu
A&A

New Financial Designation is Geared towards Serving High Net Worth Clients

The College for Financial Planning (CFP) recently announced it’s enrollment for the College’s new Accredited Wealth Management Advisor (AWMA) Designation, is now open.John Sears, College President said, "As the leader in financial planning education, we are proud to offer this innovative new program for those who have high net worth clients and wish to serve them better, or financial professionals who seek to add high net worth clients."
A&A

Workers Reveal Top Barriers to Career Progress in Latest Survey

In addition to picnics and parties, three-in-ten workers have thoughts of a better career on their minds this Labor Day weekend.
Technology

Lucent to Receive $816 Million Tax Refund

Lucent Technologies Inc. and the Internal Revenue Service have tentatively agreed that the telecommunications-equipment maker should receive an $816 million tax refund.Lucent is among the first companies to seek tax refunds under a 2002 statute that aims to help companies harmed when the technology bubble burst at the end of the 1990s, the Wall Street Journal reported. Massive layoffs resulted, and some companies closed or went bankrupt.Under the new statute, companies can apply losses in 2001 against taxes paid on profits earned during the profitable 1990s.
A&A

Former Invesco Executives Settle Market Timing Abuses

The Securities and Exchange Commission (SEC) announced this week settled enforcement actions against Timothy J. Miller, the former chief investment officer and a portfolio manager for Invesco Funds Group, Inc. (IFG); Thomas A. Kolbe, the former national sales manager of IFG; and Michael D. Legoski, a former assistant vice president in IFG's sales department. The Commission issued orders alleging that Miller, Kolbe and Legoski violated federal securities laws by facilitating widespread market timing trading in certain Invesco funds in contravention of those funds' public disclosures.
A&A

FASB Will Allow Companies to Decide How to Value Stock Options

The Financial Accounting Standards Board (FASB) took a big step toward finalizing a rule on expensing stock options Wednesday by agreeing to let companies choose their own method for calculating value.FASB had previously singled out one approach as the preferred method for estimating the fair value of stock options.
A&A

Judge Tells Freddie Mac to Stop Withholding $60M in Ex-CEO's Pay

The former chief executive of mortgage giant Freddie Mac will receive about $60 million in compensation that was withheld by the company on orders from its regulator.A federal judge ruled Monday that the Office of Federal Housing Enterprise Oversight lacks the legal authority to freeze the assets of Leland Brendsel, who was ousted during last year's accounting scandal. The regulator told Freddie Mac to stop all pay and benefits for Brendsel while it was pursuing a civil lawsuit against him, the Wall Street Journal reported.U.S. District Court Judge Richard J.
A&A

Study: CEOs Who Outsourced More Took Home Larger Salaries

A new study on executive compensation found that chief executives who sent the most service jobs overseas made more money last year than other CEOs.At the 50 companies that outsourced the most service jobs, average CEO compensation rose 46 percent in 2003. CEOs at the 365 big companies surveyed by Business Week saw an overall 9 percent increase in 2003, according to the study by the Institute for Policy Studies and United for a Fair Economy.The two groups put out an annual “Executive Excess” report.

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