Administrative

Practice Management

Survey: Audits Up for Wage-and-Hour Violations

One in five employers has been audited at least once for violating the federal wage-and-hour law, according to a recent survey by Business and Legal Reports Inc.Advertisement
Tax

Federal Judge: IRS Can't Have BDO Seidman Tax Shelter Papers

A federal judge ruled last week that the Internal Revenue Service had failed to prove that Chicago accounting firm BDO Seidman had engaged in widespread illegal tax shelter practices and the firm does not have to turn over sensitive documents to the government, the New York Times reported.The ruling last Wednesday by Judge James F.
A&A

Certified Divorce Financial Analysts Ease the Way for Couples

Ending a marriage is a painful prospect for most couples but it becomes even more complicated for those with extensive financial assets. Enter the certified divorce financial analyst to simplify matters.The Springfield (MO) News-Leaders reported that more and more couples, especially those who own businesses together, are seeking the services of CDFAs to help them navigate the often-tricky path to divorce. The certification is offered by the Institute for Divorce Financial Analysts, which was founded in 1993.

Accounting Oversight Boards Proposes Flexible Reporting Option

The Public Company Accounting Oversight Board (PCAOB) voted unanimously on Thursday to propose a measure to give corporations and auditors flexibility in reporting when material weaknesses in their internal financial control have been corrected. The PCAOB will vote again at the conclusion of a 45-day comment period.
A&A

FASB Issues Final Interpretation of Accounting for Conditional Asset Retirement Obligations

The Financial Accounting Standards Board (FASB) on Wednesday published FASB No. 47, Conditional Asset Retirement Obligations. Interpretation No. 47, clarifies that the term “conditional asset retirement obligations” as used in FASB Statement No. 143, Accounting for Asset Retirement Obligations, refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity.

Buffet Faces Questioning in AIG Flap

The nation's second wealthiest man, billionaire investor Warren Buffet, has indicated he will cooperate in the investigation into a deal made by one of his companies, but claims he was never briefed on the details of the deal, according to his company Berkshire Hathaway Inc.Executives of both Berkshire Hathaway and its insurance arm, General Reinsurance, have "voluntarily given interviews" with investigating authorities, and Buffett himself will do so "shortly," the company's statement said.

New Roth 401(k) Adds to Workers' Investment Options

Whether it makes more sense to pay taxes now or at retirement is a question many workers will be pondering if their employers offer them a new Roth 401(k) investment option.Starting next year, the Internal Revenue Service will allow employers to offer a Roth 401(k), which has been described as a cross between the Roth IRA and a traditional 401(k).
Tax

Fannie Mae Facing Another Class Action Lawsuit

On Friday, March 24, 2005, a class action lawsuit was filed against Fannie Mae in the District of Columbia federal court. Attorneys from the Law Office of Frank J. Johnson filed the complaint on behalf of traders in Fannie Mae stock options against the mortgage giant.The complaint alleges Fannie Mae and its top executives misrepresented or failed to disclose the troubled company’s true financial condition in public statements between April, 2001 and September, 2004.
A&A

Family Partnerships are Under the Microscope

Tread carefully if you are thinking of moving family estate assets into a partnership to reduce your tax burden. A U.S.
Tax

FDIC Wants Banks to Notify Customers of Identity Theft

On Friday, March 18, 2005, regulators at the Federal Deposit Insurance Corp. (FDIC) voted 5-0 to approve a ruling that would force U.S.
Tax

Smaller Accounting Firms Reap the Benefits of New Mandates

Midsize firms are more than happy to scoop up the audit clients being rapidly discarded by the larger accounting firms, the East Bay (CA) Business Times reported.With the large firms focused on the more lucrative consulting work-which limits their ability to audit the same clients under Sarbanes-Oxley Act rules-midsize firms are filling the gaps in audit and other areas.Advertisemen
Tax

Some Accountants Spend Weekends Doing Taxes for Free

Some accountants make tax season even more hectic by taking on the tax returns of friends and family members, often at no charge.Jennine Anderson, for example, who works at the PCA Group in Columbia, Md., spends her limited personal time preparing tax returns for her three children, their spouses, her sister and her father. She does the work at no charge. "Some people may charge, but I surely don't," she told the Baltimore Business Journal. And she is far from alone, the newspaper reports.Many tax accountants take on tax preparation work for their immediate family or close friends.
Technology

AICPA Launches Online Resource for IT Community

The American Institute of Certified Public Accountants (AICPA) unveiled a new Information Technology (IT) community Web site that contains resources, tools and guidance for CPAs interested or practicing in IT.The site is designed to assist CPAs in the AICPA IT community who want to leverage information technology to increase efficiency and boost profits.
Tax

Board Members Pay to Settle WorldCom Suit

In a settlement that has sent shock waves through corporate boardrooms, 11 former WorldCom Inc. board members have agreed to pay $20.2 million of their own money to settle a lawsuit tied to the company's $11 billion accounting fraud.The Wall Street Journal reported that the settlement, once sidelined by a legal technicality, was reached on Friday.It is highly unusual for board members to have to tap into their own resources to pay settlements such as this, and the WorldCom settlement, first announced in January, shocked many corporate boards.
Tax

IRS Clarifies AMT Deduction for Home Mortgage Interest

Qualified housing interest, which generally is deductible for alternative minimum tax purposes, includes interest paid on a mortgage that has been refinanced more than once, the Internal Revenue Service confirmed late last week.In Revenue Ruling 2005-11, the IRS stated that interest paid on a loan that is refinanced more than once will retain its status as qualified housing interest, to the extent that the amount of the loan is not increased.This ruling may affect the amount some taxpayers report as a home mortgage interest adjustment on Form 6251, Alternative Minimum Tax-Individuals.
Community News

Bankrupt Airline Sues Ernst & Young for Accounting Fraud

Ernst & Young defrauded creditors of bankrupt airline Tower Air by helping the airline inflate profits and understate losses, a lawsuit claims.The creditors, who are seeking more than $380 million in damages, allege that the auditors hid the airline's debts and improper business practices, formed a too-close relationship with the CEO and destroyed evidence in the case, the Baltimore Business Journal reported.The creditors include Fleet Business Credit, General Electric, the Port Authority of New York and New Jersey, and Annapolis-based aviation firm ARINC.
A&A

Survey Finds Workers Average Only Three Productive Days per Week

Unclear objectives, lack of team communication and ineffective meetings are among the top time wasters that workers around the world say make them feel unproductive for as much as a third of their workweek on average, according to results of an online Microsoft(R) Office survey announced last week.

CalPERS to Adopt PCAOB Audit Independence Proposal

The CalPERS Board adopted a three-pronged plan to advocate majority vote election procedures for corporate directors. Currently, a plurality vote system is used in most corporate elections, in which directors can be elected by the vote of a single share unless they are opposed by a dissident candidate. "Majority vote will give shareowners the power to hold directors accountable for their actions and their performance, and elect the best person for the job," said Rob Feckner, CalPERS Board President.
Tax

Settling WorldCom Lawsuit Will Cost J.P. Morgan $2 Billion

J.P. Morgan Chase will pay $2 billion to settle a class-action investor lawsuit that alleges the bank failed to investigate WorldCom's financial health when it sold bonds just before the company imploded amid scandal.J.P. Morgan Chase is the last of 14 bond underwriters to settle the case, led by New York Comptroller Alan Hevesi, who oversees the New York State Common Retirement Fund.

High Compliance Costs Outweigh Benefits Say Investors

Most investors applaud recently instituted reforms intended to prevent corporate abuse, however they express deep reservations about the costs to implement them, according to a poll of institutional investors conducted in February by Broadgate Consultants LLC.In addition, with bonuses soaring for CEOs at the nation's top corporations, investors also believe that transparency surrounding executive compensation is not sufficient and should be improved.An overwhelming majority (83%) of the 105 institutional analysts and portfolio managers from across the U.S.

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