Economy

Community News

First Freddie Mac, Now Fannie Mae in the Hot Seat?

Just two weeks after a shake up at Freddie Mac led to the ouster of three executives in the nation’s No. 2 mortgage company, the No. 1 company, Fannie Mae, now finds itself under the microscope.The New York Times is reporting that industry insiders are asking about profits reported by Fannie Mae. They claim that Fannie Mae’s letter-of-the-law reporting may have shielded substantial losses last year, a statement Fannie Mae hotly contests.
Tax

Treasury Department Sues One of Nation's Largest Law Firms

The Treasury Department, on behalf of the IRS, sued one of the nation's largest law firms, Dallas-based Jenkens & Gilchrist, on Thursday, demanding that the firm turn over information about clients who participated in potentially abusive tax shelters that were promoted by the law firm.The lawsuit was filed in U.S. District Court in Chicago against the Chicago office of Jenkens & Gilchrist.
Practice Management

Corporate Failures Lead to ‘Feeding Frenzy’ For Professionals

While investors and creditors, burned in some of history’s most dramatic corporate meltdowns, wait to hear if they will ever see a dime of the money they are owed, one thing is certain — many of the legal and accounting firms investigating what went wrong in the first place are profiting handsomely from the situation.Enron, WorldCom, Tyco and Conseco all declared bankruptcy in the last two years, wiping out shareholders, employees and pensioners in the process.

Study: Citigroup Board Deemed Weakest of All Large Boards

The Corporate Library reported this week that Citigroup’s corporate board is the lowest rated among the 1,700 of the largest U.S. companies. The hit is the latest in a string of recent public relations disasters to befall the company.In April, Citigroup Chairman and CEO Sanford Weill agreed to pay a $400 million settlement in response to charges that Citi and nine other investment banks had allegedly floated Pollyanna stock research to impress investment-banking clients.After the embarrassing admission, Weill withdrew his nomination to the New York Stock Exchange Board of Directors.
Tax

Focus: Industry Sector Implications of Tax Cuts

Provided by CCH, Inc.The recent passage of the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) (P.L. 108-27) has left people wondering how effective these new tax cuts will be in stimulating the economy. According to various industry representatives, it appears that the stimulative effect of JGTRRA can be measured on two fronts: real and perceived, both of which are vital to their respective recoveries.

Survey: Pension Plan Shortfalls Plague Firms

Retired workers enjoying their golden years may be blissfully unaware of the epic struggle companies are engaged in to ensure that the pensions they rely upon continue uninterrupted.A recent survey found that about 25 percent of mid-sized firms in Britain, the United States, Canada and Holland — four of the world’s largest economies — are cutting capital spending to offset pension funding shortfalls. Half of the surveyed firms report that their pension burden is cutting into profits.

Bankruptcy Filings Continue to Break Records

Bankruptcy filings for the year ended March 31, 2003, rose 7.1 percent to reach record levels, according to statistics released by the Administrative Office of the U.S. Courts last week. As reported in February, the last three months of 2002 saw a slight dip in filings to 395,129 but that trend reversed itself during the first quarter of 2003 when bankruptcy filings increased to 412,968.

MCI/WorldCom Agrees to Record Settlement With SEC

Telecommunications giant MCI, formerly known as WorldCom, agreed on Monday to pay a record $500 million fine to the Securities and Exchange Commission, the latest step in the company's road to recovery from the largest corporate bankruptcy in U.S. history.The $500 million fine makes mincemeat out of the puny $10 million fine the SEC levied against Xerox last year for accounting irregularities. At the time, $10 million was the largest fine ever charged by the SEC against a non broker-dealer.
Community News

Economy Leaves Sporting Events Scrambling For Corporate Sponsors

On the face of it, corporate sponsorship of a prestigious golf event is a smart marketing move as it’s a cost-effective way to get a company’s name out in the media. But tough economic times are causing companies to pull the plug on sponsorships, leaving event organizers scrambling to find last-minute replacements.The PGA Tour has had to find new sponsors for 18 of its 48 events this year. One of the most stable sponsors of golf tournaments has been the accounting profession.
Tax

OMB Director Daniels Resigns . . . to Run For Indiana Governor?

U.S. Office of Management and Budget (OMB) Director Mitchell E. Daniels Jr., announced yesterday that he will step down from his post within the next 30 days. He is expected to soon launch a bid for governor of his home state of Indiana.Nicknamed "the Blade" by President Bush for his budget-cutting penchant, Daniels was popular with the President and Republicans, but mocked by Democrats who clashed constantly with the diminutive, spirited budget director. Sen.

A New Color of Money to be Unveiled This Month

"Greenbacks" may soon become an obsolete term. A new addition of background color on currency is on the way to the United States, starting with the newly designed $20 bill, which will be unveiled May 13. The design has not been announced yet, but one thing is certain - we will soon see some hint of color in our wallets.
Community News

PCAOB Requires Foreign Firms to Register

The Public Company Accounting Oversight Board (PCAOB) voted unanimously this week to require foreign accounting firms doing business in the United States to register with the Board by April 26, 2004. The European Commission had hoped for a total exemption from the registration requirements. U.S. accounting firms that generate audit reports for public companies must register with the Board by October 24 of this year. The PCAOB watchdog panel, created as part of the Sarbanes-Oxley Act of 2002, was launched late last year with a $1.9 million loan from the Treasury Department.

Recession, Internet Responsible For New Age of Business Meetings

A combination of a difficult economy, growing health concerns over SARS, and a high comfort level with the Internet has resulted in a significant change in the way in which businesses conduct meetings that will likely continue into the future, no matter how much the economy might improve.Those business people who must travel regularly now use the Internet to shop for the lowest airfares and hotel expenses.
Community News

Public Companies Are Increasingly Going Private

by Grant Thornton, LLPRecently, it was the mad rush for private companies to go public and offer initial public offerings (IPOs).
Tax

NYC Goes After Foreign Governments For Back Taxes

When economic times are tough, state and municipal taxing authorities get creative.
Tax

Intuit Stock Takes a Nose Dive

Shares of stock in Intuit Inc., known for its TurboTax, Quicken, and QuickBooks programs, dropped nearly 24% in trading on Friday after the company released news that it would not meet its 2003 growth targets due to unexpected weaker sales of software during tax season.Prudential Securities analyst Bryan Keane noted that Intuit's sales may be down due to the fact that many computer-using taxpayers have been diverted to the IRS's new FreeFile program that offers free online tax filing services to qualifying taxpayers.
A&A

War Uncertainty Shades CFOs' Revenue Predictions

For Chief Financial Officers of U.S. companies, a short successful war will mean positive revenue growth over the next year according to the March "CFO Outlook Survey," conducted this week by Financial Executives International (FEI) and Duke University's Fuqua School of Business. However, a prolonged war with Iraq would cause revenues to remain flat for the coming 12 months.

Bankruptcies Reached Record Heights in 2002

Last year was a record breaker for bankruptcy filings. There were a total of 1,577,651 bankruptcies in 2002, an increase of 5.7 percent over the previous year, according to data released by the Administrative Office of the U.S. Courts. The last three months of 2002 showed a slight improvement, with filings declining 1.5 percent from the third quarter.Personal bankruptcies rose 6 percent from 2001 to 2002 and accounted for the overwhelming majority of the filings, nearly 98 percent.
Tax

Enron Report - Tax Schemes Even the IRS Doesn't Understand

Last Thursday, the U.S. Senate's Joint Committee on Taxation published a three-volume, 2,700 page report describing what the committee had learned of the tax shelters used by Enron Corporation to reduce and in some cases avoid paying U.S. corporate income tax. The year-long investigation into Enron's shenanigans produced a high level of awe from Senators who knew big corporations use tax shelters to lower their tax bills but didn't know quite how much of an industry the practice is.

Visa, MasterCard Face Refunds Over Currency Conversion Fees

If a California judge gets his way, Visa and MasterCard customers who have used their cards overseas and paid currency conversion charges may get a portion of those fees returned. Alameda County Judge Ronald Sabraw ruled this week that the credit card companies have not properly disclosed the fees they charge for the conversion service. The judge's ruling is sealed while attorneys for both sides have an opportunity to offer written comments. A final ruling is expected on March 4.

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