A&A news

A&A

Small Firms Getting Big Slice of Sarbanes-Oxley Pie

When Frank Lordi started getting calls from accounting giants PricewaterhouseCoopers and KPMG, he knew he was onto something big.Lordi’s small financial consulting firm, Lordi Consulting in West Chester, Pa., had developed an expertise in helping companies comply with the Sarbanes-Oxley Act. In the fall of 2002, the phone started ringing."They were asking us to come help their clients because they didn't want the other big firms to make inroads with them," Lordi told the New York Times.
A&A

Atlanta, Tampa Rank Least-Expensive Large U.S. Cities for Business

Low labor and tax costs make San Juan, Puerto Rico the least-costly place to do business among 24 U.S. and affiliated cities with populations exceeding 1.5 million, according to a study by KPMG LLP, the audit, tax and advisory firm. San Jose, Calif., and New York were the most expensive places to do business among large U.S. cities.In the continental United States, Atlanta and Tampa, Fla., emerged the most cost-competitive locations behind San Juan, closely ranked second and third, respectively, in the large-cities category. Other large cities with business costs below the U.S.
A&A

Tax Tip: Early Distributions From Retirement Plans

An early distribution from an Individual Retirement Arrangement (IRA) or a qualified retirement plan need not be a “taxing” experience.Any payment that you receive from your IRA or qualified retirement plan before you reach age 59½ is normally called an “early” or “premature” distribution. As such, these funds are subject to an additional 10 percent tax. But there are a number of exceptions to the age 59½ rule that you should investigate if you make such a withdrawal. Some of these exceptions apply only to IRAs, some only to qualified retirement plans, and some to both.
A&A

Company to Offer Free Access to Credit Scores, Advice

Credit card issuer Providian Financial Corp. plans to offer all its customers free online access to their credit scores, with tips on how to improve them.The program, called "Real Information," allows cardholders to see their FICO credit score online. FICO is the most widely used score, which is computed from monthly credit data. Customers can plug hypotheticals into a score simulator to see how actions such as a missed payment or payoff of a balance can affect the score.Customers can look at their scores anytime they like, as often as they like, at no charge.
A&A

More Errors in 1099s Expected Due to Confusing Dividend Tax Cut

A tax cut that was welcome nine months ago is now creating confusion and hassles for financial companies and taxpayers.Last week, the Treasury Department and the IRS agreed to make certain provisions of the Tax Technical Corrections Act of 2003 related to dividend income available to taxpayers in advance of its passage.
Technology

Companies Lose Revenue Due to Network Downtime

Companies participating in a new study by Infonetics Research experience an average of 501 hours of network downtime every year, and as a result are losing millions of dollars in annual productivity and revenue losses, study results show."Overall downtime costs average 3.6% of annual revenue, a significant number, and one likely to surprise many large organizations," said Jeff Wilson, principal analyst of Infonetics Research and author of the study, titled The Costs of Enterprise Downtime, North America 2004.
A&A

Regulators, Specialists Reach Tentative Agreement

The New York Stock Exchange's five largest "specialist" firms reached a preliminary agreement Tuesday to pay about $240 million to settle a civil case claiming they failed to oversee traders who improperly traded ahead of their customers, The Wall Street Journal reported.The Journal reported that the deal could still unravel at the 11th hour, but if it stands, it would represent the biggest fine involving Big Board specialists ever.
A&A

FASB Sets New Rules for Cash-Balance Benefits

The Financial Accounting Standards Board (FASB) last week adopted a definition for cash-benefit pension plans, giving companies new rules for measuring these controversial retirement vehicles.As reported in the Wall Street Journal, the definition says, "A cash-balance pension plan is a defined-benefit pension plan that defines the promised employee benefit by reference to a notional account balance.
A&A

FEI's Top 11 Financial Reporting Issues For 2004

In a year of unprecedented regulation, FEI President and CEO Colleen Sayther offers the following list of 11 financial reporting issues that require the attention of financial executives during 2004. She notes they are not listed in any particular order, as the level of importance is certain to vary among companies. Internal Controls. Ensure that you have complied with Sarbanes-Oxley Section 404, which requires management to assess its internal control environment and the external auditor to attest to the internal control environment. Variable Interest Entities (VIEs).
A&A

Free Report: FAQ’s On The Family And Medical Leave Act

This free report gives employers practical and legal advice on how to help employees handle work and family demands, while balancing the bottom line with retention and morale efforts. You also get a state-by-state look at which states require school visitation or parental leave. When employees are faced with conflicts between their work duties and obligations to their family, their employers are often faced with a dilemma also.
A&A

Firms to Pay Over $21.5 Million in Penalties to Settle SEC, NASD Charges

The Securities and Exchange Commission (SEC) and NASD announced this week enforcement and disciplinary actions against a total of 15 firms for failure to deliver mutual fund breakpoint discounts during 2001 and 2002. Breakpoint discounts are volume discounts applicable to front-end sales charges on Class A mutual fund shares (front-end loads). SEC and NASD each brought cases against a group of 7 firms, and NASD separately brought actions against the other 8 firms.
A&A

FASB Confirms Existing Rules on Medicare Accounting

The Financial Accounting Standards Board (FASB) on Wednesday cleared up some of the confusion surrounding accounting for the effects of the new Medicare law.The Medicare Act, signed into law in December, has sparked not only political arguments but also an accounting debate over how companies should book the amount of federal subsidy they expect to receive in their financial statements.FASB’s Wednesday vote confirmed that existing rules governing post-retirement benefit costs should be used.
A&A

IRS Highlights Information to Combat Retirement Plan Tax Shelter Schemes

As part of its effort to combat abusive tax shelter schemes and transactions, the IRS launched a new section on IRS.gov containing important information about abusive schemes involving employee retirement plans.
A&A

Tough Senate Bill Would End Three Mutual Fund Practices

Three U.S. senators on Monday unveiled the Mutual Fund Reform Act of 2004 (MFRA), which would ban three questionable, but legal, practices that bill sponsors say hurt investors and create conflicts of interest.The bill, sponsored by Sens. Peter Fitzgerald, R-Ill., Carl Levin, D-Mich., and Susan Collins, R-Maine, is considered the toughest to date on the $7.4 trillion mutual fund industry, United Press International reported.The bill says: "Three practices — soft dollar arrangements, revenue sharing, and directed brokerage — ought not clutter any mutual fund prospectus.
A&A

Businessmen Specialize in Catching Tax Preparers’ Mistakes

Tax clients often worry that their preparers may have missed something, or that they’re not getting the full refund they deserve.Capitalizing on those worries are two Colorado Springs, Colo. businessmen who are building a booming business by specializing in filing amended tax returns. Entrepreneur Brace Barber and Darren Oliver, a former securities and insurance broker, claim they are recovering up to $700,000 a month for their clients, who are mainly small to mid-sized businesses.
Education & Careers

Does Corporate America Need CPOs?

First there was the chief executive officer and the chief financial officer. With scandals and fraud came the advent of the chief accountability officer and the chief ethics, knowledge, regulatory and disclosure officers, to name a few. Technology brought us the chief information officer.
A&A

Consumer Alert: Check Carefully Before Applying for Offers in Compromise

The Internal Revenue Service has issued a consumer alert advising taxpayers to beware of promoters’ claims that tax debts can be settled for "pennies on the dollar" through the Offer in Compromise Program.Some promoters are inappropriately advising indebted taxpayers to file an Offer in Compromise (OIC) application with the IRS. This bad advice costs taxpayers money and time. An Offer In Compromise is an agreement between a taxpayer and the IRS that resolves the taxpayer's tax debt.
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.

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