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Financial Reporting

Practice Management

Internal Review of Fannie Mae Cites “Attitude of Arrogance”

In a 1996 internal memo to Timothy Howard, Chief Financial Officer of Fannie Mae, Leanne Spencer, Vice President of Financial Reporting wrote, “What do I have up my sleeve to solve an earnings shortfall?” She adds in the same document, according to, “I recognize (and thought about it yesterday) that we might want to show the board $2.48. I made the decision that I wanted to show you the real answer and the let you decide if you wanted me to make any adjustment.
Community News

CCH Disclosures Checklist Available on the Center

Members of the American Institutes of Certified Public Accountants (AICPA) Center for Public Company Audit Firms (CPCAF or the Center) will now have access to CCH’s SEC Disclosures Checklist tool to assist them in performing high quality public company audits by ensuring they are complying with the disclosure requirements under the rules and regulations of the Securities and Exchange Commission (SEC).

Canadian Think Tank Calls for Auditor Oversight Reform

A Vancouver-based economic think tank has called for reform of the watchdogs overseeing the North American auditing industry.Advertisement
Community News

XBRL Movement Gains More Tech Vendor Support

The bandwagon for EXtensible Business Reporting Markup Language (XBRL), the rapidly-evolving Internet-based software code for financial reports, has added two new key technology members over the past week.Advertisement

FASB Responds to SEC Study

The Financial Accounting Standards Board (FASB) last week responded to the Security and Exchange Commission’s (SEC’s) Off Balance Sheet Report by identifying forces causing complexity and impeding financial transparency, as well as providing an update on the FASB’s activities intended to address complex accounting standards.

Audit Slams Accounting Practices at VA

The U.S. Department of Veterans Affairs used misleading accounting methods to wrongly state that it had saved more than $1.3 billion, according to the Government Accountability Office (GAO).Those “savings” were used to justify smaller budget requests, which led to cuts in health care services to eligible veterans, according to GAO, the investigative arm of Congress."It's unconscionable," said Rep. Lane Evans, D-Ill., the ranking Democrat on the House Veterans' Affairs Committee, who requested the audit.

FASB Issues Final FSP for Cash Settlements on Contingent Events

Last week the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) No. FAS 123(R)-4:Classification of Options and Similar Instruments Issued as Employee Compensation That Allow for Cash Settlement upon the Occurrence of a Contingent Event. The guidance in this FSP amends paragraphs 32 and A229 of FASB Statement No.

GASB Exposure Draft Adds Pollution to Financial Statements

On the eve of the Association of Government Accountants’ (AGA) Fourth Annual Leadership Conference, the Government Accounting Standards Board (GASB) has issued an exposure draft identifying five key circumstances when pollution remediation must be accounted for. “Today’s proposal intends to improve financial reporting by fostering more transparent and more consistent accounting that encourages comparability,” Robert Attmore, Chairman of the GASB said in announcing the exposure draft.

SEC’s EDGAR Database RFP Cites XBRL in the Future

In seeking a new manager for its Electronic Data Gathering, Analysis, and Retrieval (EDGAR) database, the Securities and Exchange Commission has widely opened the door for that system to use the eXtensible Business Reporting Markup Language (XBRL) software code being developed by an accounting profession-led group.

IFAC Issues Exposure Draft for Non-Exchange Revenue

The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) this week issued an exposure draft (ED) on the financial reporting of revenue from non-exchange transactions, including taxes and transfers.

IPTV Service Providers Seek Accounting and Settlement Practice Standards

As regional bell companies like Verizon and AT&T begin commercial rollouts of Internet Provided TV (IPTV) services that bundle telephony, video and internet, the Internet Protocol Detail Record Organization ( an industry consortium, has announced a new initiative to standardize accounting and settlement practices. says on its Web site that the telecommunications industry cannot use the accounting and billing information standards (e.g. CDR) that were “designed for yesterday’s services” for this next generation of services.
Practice Management

FASB Clarifies When Leases Should be Reclassified

The Financial Accounting Standards Board (FASB) has answered questions relating to lease accounting.The way it stands now, FAS 13 requires that a lease should be recalculated when a change in a key assumption affects the net income.

Proposed Pension Rules May Threaten Defined Benefit Plans

The Financial Accounting Standards Board (FASB) announced late last year that it planned to make significant changes in the way companies report pension liabilities, the Associated Press reports. The first step will be to require companies to show on their balance sheets the total assets of their plans in comparison to what is owed to workers.

Enron’s Lasting Influence

With the former Enron executives finally coming to trial, we are reminded again of the long shadow cast by the implosion of the company that helped enact the Sarbanes-Oxley (SOX) Act of 2002. Section 404 has added teeth to SOX, making regulation more expensive and staff intensive and the Public Company Accounting Oversight Board (PCAOB) has been created to aid in the governance and enforcement of the accounting industry.

Conditional Asset Retirement Obligations and FIN 47

In the past, companies were not required to report environmental liabilities, such as contaminated property, except in cases where a pending or threatening legal action involved the environmental liability, according to

Implementation Guide for GASB Statement 44 Offers New “Specialty” Guidance

The Governmental Accounting Standard Board (GASB), last week introduced the Guide to Implementation of GASB Statement 44 on the Statistical Section. The Guide, developed to assist preparers and auditors implementing the expanded statistical section of state and local government’s comprehensive annual financial report (CAFR), contains 120 questions and answers relevant to important aspects of Statement 44.“Statement 44 revises the statistical section for the first time in twenty-five years, so governments have been seeking help in adopting the new guidelines,” says GASB project

CPA Firms Brace for SOX 404 Small Biz Exemption

Exempting smaller publicly-traded companies from the onerous 404 section of the Sarbanes Oxley (SOX) accounting reform law, -- a prospect being pondered by the Securities and Exchange Commission (SEC) –may cause some CPA firms to reposition resources.Charles Jones, a partner with Marshall Jones & Co. CPA firm in Atlanta and operator of a 404 boutique practice, says that group is already planning to shift its focus from 404 compliance to helping smaller companies with their internal audits.

SEC Hails XBRL in Meeting With Microsoft, Oracle and Other Vendors

The Securities & Exchange Commission has expanded its support of XBRL, the software language that allows for instantaneous retrieval of detailed information within business reports, by telling a select group of software developers that it supports the technology’s expanded use in new generations of business software.

European Parliament Passes New Accounting Rules

The European Parliament has passed strengthened accounting rules to increase transparency and to avoid some of the pitfalls of the Enron and Parmalat scandals. The Financial Times reports that companies in the European Union will have to disclose off-balance sheet arrangements and their financial impacts. Listed EU companies will be required to publish annual corporate governance statements, as well.

Accountants and the Art World: From Supporting Artists to Recording Assets

Frances Dittmer, who built an art collection at the now bankrupt Refco, Inc., a company her ex-husband Thomas Dittmer founded, said she thought that “as long as we have to put something on the wall, it might as well be good art,” the Chicago Tribune reports.


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