Financial Reporting

SEC Announces Members of Advisory Committee on Small Public Cos

Securities and Exchange Commission (SEC) Chairman William H. Donaldson this week announced the appointment of 19 additional members of the SEC Advisory Committee on Smaller Public Companies. The additional appointments bring the total number of members of the advisory committee to 21. Chairman Donaldson previously had announced the appointment of Herbert S. Wander, a prominent Chicago securities lawyer, and James C. Thyen, President and CEO of Kimball International, Inc., as Co-Chairs of the advisory committee.
Community News

FASB to Propose Expensing M&A Fees

The Financial Accounting Standards Board (FASB) will propose that companies change the way they account for professional fees associated with mergers and acquisitions.According to the Wall Street Journal, the FASB will release a draft proposal this summer that would require the fees to be booked as expenses.

CFOs Must Still File Internal-Control Certifications, Despite SOX Extension

The chief executive officers (CEOs) and chief financial officers (CFOs) of certain midsize and foreign public companies must still execute and file certifications about their internal controls under Section 302 of the Sarbanes-Oxley Act, even though the Securities and Exchange Commission (SEC) last week gave them an extra year to comply with Section 404, says one of the country's largest corporate governance consulting units.

Delphi Accounting Errors Lead to CFO's Departure

The U.S. auto industry, previously untouched by scandals that have rocked other sectors, was brought into the fray on Friday when Delphi Corp., the nation's largest auto-parts company, disclosed accounting errors that led to the resignation of its chief financial officer.The Detroit Free Press reported that an investigation showed accounting errors have occurred in every year since Delphi spun off from General Motors Corp. in 1999.

SEC Grants One-Year Extension for SOX Compliance

The Commission has further extended the compliance dates for non-accelerated filers and foreign private issuers regarding amendments to its rules under the Securities Exchange Act of 1934 that were adopted on June 5, 2003, pursuant to Section 404 of the Sarbanes-Oxley Act. The amendments require a company to include in its annual reports a report by management on the company's internal control over financial reporting and an accompanying auditor's report. The Commission extended the original Section 404 compliance dates for all issuers in February 2004 (see Release No. 33-8392).

International Board Created to Set Auditing Standards

A group of international regulators is seeking to restore investor confidence by forming the Public Interest Oversight Board to set auditing standards, the New York Times reported.The new body was established by the International Organization of Securities Commissions, the Basel Committee of Banking Supervisors, the International Association of Insurance Supervisors, the World Bank and the Financial Stability Forum.

AICPA Task Force Recommends Changes to GAAP for Private Companies

A task force comprised of key constituents of private company financial reporting has unanimously recommended that a process be established to evaluate potential changes to Generally Accepted Accounting Principles (GAAP) in order to improve the usefulness of private company financial reporting.

SEC Uncovers Wide-Scale Lease Accounting Errors

Where were the auditors?That is the question being asked as more than 60 companies face the prospect of restating their earnings after apparently incorrectly dealing with their lease accounting, Dow Jones reported.Companies in the retail, restaurant and wireless-tower industries are among those affected in what is being called the most sweeping bookkeeping correction in such a short time period since the late 1990s.Among the companies on the list are Ann Taylor, Target and Domino's Pizza.
Community News

PCAOB Announces Leaders of Chicago, Denver Offices

The Chicago office is led by Deputy Director of Inspections, Greg Wilson. Mr. Wilson retired in December 2003 as an audit partner from Ernst & Young. He began his auditing career in 1969, specializing in the audits of publicly held retail, consumer and industrial products clients. He also served in various management and administrative positions including Director of the Chicago office audit practice and Regional Director of Human Resources. Mr. Wilson, a CPA, graduated from the University of Illinois with a Bachelor of Science degree in Accountancy.

More Accounting Questions Dog Fannie Mae

Fannie Mae's federal regulator has raised new concerns about the mortgage giant's accounting practices and internal controls.Fannie Mae announced Wednesday that its regulator, the Office of Federal Housing Enterprise Oversight, is raising questions about how it classifies and transfers securities, the Washington Post reported.These concerns are in addition to the accounting problems revealed last year that have already resulted in a $9 billion restatement of earnings and the resignation of two top executives.Specifically, OFHEO is questioning whether Fannie Mae has classified some of
Community News

Defense of WorldCom's Ebbers Begins with Whistleblower

Lawyers for former WorldCom Inc. Chief Executive Bernard Ebbers launched their defense Wednesday afternoon with testimony from the whistleblower credited with alerting WorldCom's board to the massive accounting fraud.Cynthia Cooper, the former head of internal auditing at WorldCom, testified that auditors at Arthur Andersen gave a "green light" rating to the company's accounting for 2000 and 2001, the Associated Press reported.
Community News

Nonprofit that Collapsed Amid Scandal Sues Accounting Firm

A San Francisco nonprofit that went out of business after failing to account for $19 million in donations is suing its auditor.The suit, filed by PipeVine's court-appointed receiver, seeks unspecified damages as a "result of the acts, omissions and breach of duty by defendant Grant Thornton,” according to the San Francisco Business Times.

SEC Sets Date for Internal Controls Roundtable

On Feb. 7, 2005, the Commission announced that it would host a roundtable discussion and would solicit written feedback regarding the experiences of registrants, accounting firms and others in implementing the new internal control requirements under Section 404 of the Sarbanes-Oxley Act of 2002. See Press Release 2005-13. Today the Commission announced that the roundtable will be held on Wednesday, April 13, 2005, in the William O.
Community News

GAO Report: Effective Internal Control is Key to Improving Accountability

Internal control is at the heart of accountability for our nation’s resources and how effectively government uses them.
Technology

Fraud Prevention Tops Corporate Boards' To-Do Lists

FIRSTGlobal Investigations, a division of BDO Seidman LLP, predicts that fraud prevention will top priority lists for many corporate boards in the coming year.Boards had to focus on complying with the internal control requirements of the Sarbanes-Oxley Act last year, but putting training programs in place to prevent fraud should attract greater attention this year, the Sarbanes-Oxley Compliance Journal reported.
Community News

Companies Pushing For Lower Audit Fees for 2005

U.S. public companies are looking for a price break from their auditors this year.The internal control requirements of the Sarbanes-Oxley Act forced many companies to spend more than twice what they budgeted last year, so they're looking to pay far less this year, according to a study given to Reuters by CFO Executive Board, a division of Washington research group Corporate Executive Board Co.Section 404 of SOX requires that the companies' external auditors produce details of their internal controls and how those controls will combat fraud by next month.

Verizon Chief Testifies About Buyout Offer of WorldCom

The chairman and chief executive of Verizon said in court Thursday that he repeatedly approached former WorldCom Chief Executive Bernard Ebbers in 2001 about buying the company.Advertisement
Tax

Treasury, IRS Issue Guidance on Net Operating Loss Carrybacks

On Friday of last week, the Treasury Department and IRS issued a notice that provides guidance on carrybacks of net operating losses that arise in taxable years ending prior to October 22, 1998. In general, a taxpayer must first carry a net operating loss back to each of the three taxable years preceding the taxable year of the loss. However, certain portions of a net operating loss may be eligible to be carried back to each of the ten taxable years preceding the taxable year of the loss.

OfficeMax CEO Resigns, Six Others Fired in Accounting Scandal

The nation's No.3 office supply store chain has announced the resignation of its chief financial officer and termination of six other employees after an internal investigation yielded accounting irregularities, the Associated Press reported.OfficeMax Inc. announced the resignation of CEO Christopher C. Milliken and said George J. Harad, the company's executive chairman, would replace him on an interim basis. The Itasca, IL, company said it would begin a search for a permanent CEO, a task that could be hampered by a simultaneous chief executive search by No.

Don't Wait for Tax Time to Look at the Bottom Line

By C.J. Hayden, MCC - A curious thing happens to entrepreneurs in the spring of every year. They wake up one day and realize they had better figure out how much money they made last year so they can pay their taxes. But wait, shouldn't a business owner already KNOW how much money he or she made last year, last quarter, or last month? If you don't keep track of how much money you're making, you have no idea whether your business is successful or not. You can't tell how well your marketing is working.

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