Financial Reporting

SEC Moves to Curb Reporting and Trading Abuses

As part of its efforts to restore confidence in the capital markets, the U.S. Securities and Exchange Commission (SEC) tentatively approved several new curbs aimed at the types of reporting and trading abuses involved in recent accounting scandals. The curbs will be formalized in releases and exposed for a 30-day comment period.
Technology

Ethics Discussion Forum Goes Live on New Web Site

A new Web site is available for those interested in learning more about the corporate scandals and participating in a discussion of possible solutions. Art Berkowitz, columnist for The Wall Street Journal and author of the recently released book, ENRON: A Professional's Guide to the Events, Ethical Issues, and Proposed Reforms has established a Web site to promote a discussion of the ethical issues involved in the scandals.The site was designed to coordinate with the online version of his book that will be released in November.

California Panel Studies Changing Accounting Profession

Faced with tough new national and state reform legislation, a high-profile group of Californians is launching an ambitious project to study the impact of the evolving political, cultural and regulatory environment on CPAs and their clients.Under the chairmanship of John Lacey, a professor of accounting at California State University, Long Beach, the group expects to produce a report with recommendations for California's accounting professionals, as well as the political and regulatory bodies a
Tax

Procedures Clarified For Accounting Period Changes

provided by CCHThe IRS has issued Notice 2002-72 which clarifies certain procedures for obtaining approval of an adoption, change or retention of an annual accounting period.
A&A

IASB and FASB Tout Their 'Norwalk Agreement'

Accounting standard-setters and regulators in the U.S. and Europe jointly announced an agreement to stamp out differences in accounting standards. The pact was reportedly made in Norwalk, Connecticut last month by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB).
A&A

Results of 2002 Survey on FASB's Priorities

The Financial Accounting Standards Board (FASB) got an earful this year, when it conducted its annual survey on priorities. As in prior years, members of the Financial Accounting Standards Advisory Council (FASAC) and others were asked their views. But, this year, everyone was asked to start with a clean sheet of paper, rather than the usual list of projects to rubber stamp.
Community News

PwC Pays $21.5M to Settle Case With Anicom

Facing accusations of acting recklessly by certifying the books of Anicom, Inc., PricewaterhouseCoopers has opted to settle a pending lawsuit from shareholders for $21.5 million, rather than seeking a protracted legal battle.Anicom, formerly a national distributor of wire and cable products based in Rosemont, Illinois, filed for bankruptcy under Chapter 11 in January 2000. The company had been the target of several lawsuits, including SEC administrative proceedings over the past few years.

IFAC Forms Panel to Restore Accountants' Credibility

The International Federation of Accountants (IFAC) announced the formation of a global task force to help rebuild public confidence in financial reporting. The task force is chaired by John Crow, former governor of the Bank of Canada.The task force's mission is to identify and analyze the causes of the recent loss of credibility in financial reporting and consider ways to restore credibility.

Independent Public Body Established to Oversee Canadian Auditing Standards

Canada’s Chartered Accountants have announced the establishment of an independent public body to oversee the setting of auditing and assurance standards in Canada, and at the same time announced its first Chair.Prominent business and commercial lawyer James C.

Born of Bitter Debate, PCAOB Gets a Rocky Start

All five members of the new Public Company Accounting Oversight Board (PCAOB) were named, despite a bitter debate at an open meeting of the U.S. Securities and Exchange Commission (SEC). At the core of the controversy were concerns that the new board would start off in a "deep hole," faced with a steep learning curve that would slow the pace of badly needed reforms. The new board will consist of: William H. Webster, chairman for a five-year term expiring in 2007.

GAO Reports on Financial Restatements And Reforms

The U.S. General Accounting Office released a 262-page report on "Financial Statement Restatements, Trends, Market Impacts, Regulatory Responses, and Remaining Challenges." The report contains the results of an 8-month study. The findings confirm the concerns addressed by the Sarbanes-Oxley Act and underscore the sense of urgency in filling the oversight board with reform-minded individuals.Key findings:The number of restatements due to accounting irregularities has grown significantly.

AICPA Elects New Chairman, Releases XBRL Draft

The American Institute of CPAs (AICPA) elected William F. Ezzell, as its new chairman for a one-year term, succeeding James G. Castellano. In his inaugural speech, Mr. Ezzell, a partner at Deloitte & Touche, announced that "restoration" will be the theme of his chairmanship.As examples of matters that need restoring, Mr.
Community News

Testimony of Ex-Tyco Exec Passes Blame to PwC

Last week, PricewaterhouseCoopers was assured that individual auditors would not face criminal charges from New York prosecutors investigating the undisclosed "secret bonuses" at Tyco International.

Cable Companies Set Industry Reporting Standards

In a bid to regain the trust of investors, companies in at least one industry group have banded together to set their own industry-wide reporting standards. The reaction on Wall Street was largely positive, despite the accounting scandals at WorldCom and bankruptcy of industry giant Adelphia earlier this year.

Six Lessons Accountants Can Learn From 'Customers'

Speaking to a local chapter of the New York State Society of CPAs on October 16, 2002, former Securities and Exchange Commission (SEC) Chief Accountant Lynn Turner blasted some of the today's accounting and auditing reforms as "intentionally misguided." If accountants really want to regain their trust, Mr. Turner suggested, the best approach is to lose their tin ears, listen to their "customers" (investors, creditors and the general public) and redesign their products and standards accordingly.The lessons paraphrased from Mr.
A&A

FASB Wants Your Vote on 'Principles-Based' Standards

The Financial Accounting Standards Board (FASB) is putting some flesh on the bones of the much idealized but little understood "principles-based" approach to U.S. standard-setting. The board wants your reaction to a proposal that provides an indication of what you can expect from the new approach:Fewer exceptions. In the past, as part of its "rules-based" approach, FASB made lots of exceptions. Some were designed to limit volatility in earnings; others to ease the transition to new standards.

Report Measures Human Costs of Accounting Scandals

The "No More Enrons" Coalition was formed to push for aggressive implementation of accounting reforms. At a recent press conference, the Coalition presented a report of the human costs of accounting scandals.
Practice

SEC Proposes Disclosures About Ethics and Controls

The U.S. Securities and Exchange Commission unanimously agreed to issue for public comment proposed rules that would implement recent legislative reforms enacted in response to accounting scandals. The proposed rules will require public companies to report on their internal controls, codes of ethics, and the financial expertise of their audit committees.
Practice Management

Former Execs File Lawsuits Over Accounting Disputes

During the past week, two more companies found themselves facing lawsuits from former executives for wrongful discharge after incidents involving ethics and financial reporting. Attorneys say it is a growing area of litigation.The lawsuits were filed against Solectron and Ovitz's Artists Management Group.
A&A

FASB Moves Toward IASB, Big Investors Disagree

The Financial Accounting Standards Board (FASB)

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