A&A news

A&A

‘Current Liability’ Rules Could Change Under FASB Plan

The Financial Accounting Standards Board (FASB) is considering a stricter definition of a "current liability," in a proposal to make U.S. rules more similar to international standards.The proposal, expected to be released within a few months, would require companies to use the balance-sheet date — not the date they issue their financial statements — as the only cutoff date for determining whether a liability is current or long-term.Current liabilities are obligations due within one year, while long-term, or noncurrent, obligations are payable over a longer time period.
A&A

Massachusetts Financial Strikes Tentative Deal with Regulators

Boston-based Massachusetts Financial Services Co. reached a tentative settlement last week with regulators whereby it will pay pay $225 million in penalties and cut its management fees by $125 million, according to people familiar with the talks, the Wall Street Journal reported.This would mark the second-largest penalty levied in the ongoing mutual fund investigations. MSF is a subsidiary of Sun Life Financial Services of Canada Inc.
A&A

Senate OKs Billions in Company Pension Aid

Over the objections of the Bush administration, the U.S. Senate on Wednesday approved billions of dollars in pension relief for companies, with extra help for airlines and steelmakers.The Senate voted 86-9 to give companies a two-year, $80 billion break over the current formula for funding pension plans. The bill is designed to give Congress time to develop a long-range solution to the problem of companies underfunding their defined benefit plans or abandoning them altogether.
A&A

IRS, Treasury to Shut Down S Corporation ESOP Abuses

This week, the Treasury Department and the IRS issued a ruling to shut down abusive transactions involving "S corporation ESOPs." The ruling makes these "listed transactions" for tax-shelter disclosure purposes.An employee stock ownership plan, or "ESOP," is a type of retirement plan that invests primarily in employer stock. Congress has allowed an "S corporation" to be owned by an ESOP, but only if the ESOP gives rank-and-file employees a meaningful stake in the S corporation.
A&A

Trader Testifies About Being Beaten at Mutual Fund Hearing

In a hearing before a Senate subcommittee considering legislation already passed by the House that aims to clean up the mutual fund industry, heard from one former trader who claims he was beaten with a brick after shining the light on abuses within his firm, Putnam Investments.Putnam has slipped from No. 5 to No.
Practice Management

Tips for Small Businesses to Protect Assets This Tax Season

Increased federal and state scrutiny of tax records in 2003 and budget deficits signal changes ahead for the recordkeeping practices of America's small businesses, according to Fiducial, an international provider of professional business and financial services. Fiducial says small businesses must pay close attention to recordkeeping this year, as the IRS steps up its auditing and enforcement efforts to reduce tax fraud and do its part to offset large budget deficits.
A&A

2003 a Record Year for Investor Claims Against Brokers

Investors filed more formal grievances against their brokers in 2003 than any other year, and the amount of damages they won nearly tied a 1998 record.The National Association of Securities Dealers (NASD) received 8,945 cases in 2003, which is 16 percent more than the year prior.
A&A

IESOC Urges Field Testing of FASB’s Proposed Stock Options Rules

The International Employee Stock Options Coalition is asking the Financial Accounting Standards Board (FASB) to "field test" stock-option valuation models before issuing new statements covering the issue.The group sent a letter to FASB Chairman Robert Herz on Thursday that said, "Investors, issuers and all stakeholders in the financial reporting system would be well-served by such testing," Dow Jones Newswires reported.Currently, FASB does not require companies to expense stock options, but a new standard under consideration would require the options to be expensed the same way other typ
Community News

CPA Turns to Toys and TVs to Help Him Compete

Wooing customers away from the giants of the tax preparation industry is never easy, but one creative CPA in Tennessee is hoping toy trains, Teletubbies and teddy bears will give him an edge.Stephen Nestor, with four children of his own, knows how hard it is to cart the kids from activity to activity while also running the necessary, but boring, errands of everyday life — filing taxes, for one."My wife can't seem to go anywhere without taking kids with her," Nestor told the Tennessean.
Technology

Goldman to Refund $9.5 Million to MCI

In a case of what might be called too little, too late, MCI will recoup $9.5 million it paid to Goldman Sachs for advice just prior to filing for bankruptcy in the wake of a massive accounting fraud at the company then known as WorldCom.Goldman was hired in 2002 to help with raising capital, arranging financing, discussing mergers and selling company assets, the Associated Press reported. A settlement between Goldman and MCI was reached in December was approved yesterday by U.S. Bankruptcy Judge Arthur J. Gonzales, who is supervising MCI’s Chapter 11 proceedings in New York.
A&A

The Top 10 Scams, Schemes & Scandals for 2004

State securities regulators forecast that investors will be challenged with increasingly complex and confusing investment frauds and identified the Top 10 schemes investors are likely to see in 2004. New to the NASAA annual survey of state securities enforcement officials are mutual fund practices, senior investment fraud, and variable annuities.“Investors face a complex maze of scams, schemes and scandals," said Ralph A. Lambiase, NASAA's president and director of the Connecticut Division of Securities.
Practice Management

How to Avoid Getting Burned by Document Forgery

An increasingly common form of fraud involves forging signatures on checks, wills, business forms, property deeds and other important documents.
A&A

IRS Launches a New Program for Business Taxpayers

On January 12, the Internal Revenue Service launched a new program for new business taxpayers designed to boost electronic payment of taxes. This development offers some taxpayers new, quicker access to an electronic payment system.This initiative will be available using the Electronic Federal Tax Payment System (EFTPS), a service offered free by two bureaus of the U.S. Department of the Treasury, IRS and the Financial Management Service (FMS).
A&A

Spitzer Suit Tests Validity of New Federal Banking Rules

In an effort to test the laws governing whether federally chartered banks fall under state consumer protection regulations, New York attorney general Eliot Spitzer filed suit on Friday on behalf of a bank customer.The Bush administration has championed laws that keep federally chartered banks insulated from state consumer laws, a stand that many Democrats and most of the state attorneys general take issue with.The new rules were issued on Jan.
A&A

Congress to Consider Withholding Taxes From Contractor Pay

The taxpayer advocate is recommending that independent contractors have taxes withheld from payments, similar to the system used to tax regular employees. The advocate, Nina E. Olson, holds a position created by Congress in 1998 to ensure taxpayers are treated fairly by the Internal Revenue Service. Olson’s office is required to produce an annual report to Congress that lists the most pressing concerns in order of importance.
A&A

Report Says Top Execs Failing to Pay Off Company Loans

Many top executives are failing to pay back money they borrowed from their employers before the Sarbanes-Oxley Act stopped the practice 18 months ago, according to a new report.The Corporate Library’s study, released Friday, says the average outstanding loan is $4.7 million for the 44 companies that disclosed the information. The Union Pacific Corp.
A&A

SBA Lending Program Gets Cash Influx, Restarts Popular Program

Thanks to an infusion of $470 million from Congress on Tuesday, the Small Business Administration was able to restart its popular 7(a) loan guarantee program, which was shut down earlier this month due to a lack of funding.The SBA’s program is caught in the middle of some unusually rancorous political haggling over the federal budget, which has left a number of agencies — including the SBA — operating without funding for the fiscal year that began Oct. 1. Without its appropriation, the agency had no choice but to suspend the program.
Tax

The Impact of Sarbanes-Oxley on Corporate Tax Departments

By Raj Kushwaha, EVP Products and Services, Velosant, LPThe United States’ Sarbanes-Oxley Act (U.S. Public Company Accounting Reform and Investor Protection Act) of 2002 marks the most significant reform in US public financial reporting of recent times. Designed to restore public confidence in the management of public companies following the outcry over Enron, WorldCom and others, Sarbanes-Oxley has impacted directly on the responsibilities and liabilities of Corporate Executives, Board of Directors, Audit Committees, Auditors and Analysts.
Community News

Survey: Workers Put Off by Favoritism, Hypocrisy

When employers play favorites among employees or look the other way on some questionable behaviors, they are doing more harm than they realize in an already ethically challenged society. They are setting a tone of unethical leadership within an organization.With most of the attention these days focused on high-level accounting frauds, a recent survey shows that most employees find hypocrisy and favoritism to be the most egregious of workplace ethical breaches.
A&A

SEC Proposes New Investment Rules, Fund Firms Oppose

On Wednesday, the Securities and Exchange Commission voted to propose three regulatory initiatives designed to better protect the 95 million investors in mutual funds. Later in the day, two of the nation's largest mutual fund groups, Fidelity Investments and Vanguard Group, said they oppose the plan by the US Securities and Exchange Commission to require chairmen of mutual fund boards to be independent.

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