Financial Reporting

CFOs would nix SEC position on international reporting

In a national survey of chief financial officers and senior comptrollers conducted by Grant Thornton LLP, the U.S. member firm of Grant Thornton International, 56 percent do not agree with the SEC's proposal to permit foreign firms listed on U.S. exchanges to file financial statements prepared according to International Financial Reporting Standards (IFRS) without reconciliation to U.S. Generally Accepted Accounting Principles (GAAP).

Financial Executives International speaks out on international financial reporting

In recent months, issues surrounding international reporting have received heightened interest among financial executives. In response, Financial Executives International (FEI) released two comment letters regarding regulation efforts around global financial reporting.
Technology

XBRL delivers taxonomy for electronic accounts

The Security and Exchange Commission has taken a step toward automated filing of "interactive" accounts data with the completion of a project to create an extended business reporting language (XBRL) taxonomy for U.S. GAAP. At a press conference in New York last week, XBRL U.S. president Mark Bolgiano symbolically handed SEC Chairman Christopher Cox a memory stick containing the taxonomy, which is made up of thousands of XML tags that define the classifications used in U.S.

Adopting IFRS will be expensive for U.S. companies

Before the dust had even settled on their ruling to end the requirement that foreign companies listing in the U.S. reconcile financial statements based on International Financial Reporting Standards (IFRS) to U.S. generally accepted accounting principles (U.S. GAAP), the Securities and Exchange Commission (SEC) last month signaled its intention to consider allowing U.S. companies the option to use IFRS in place of U.S. GAAP. The commission initiated discussion through a "Concept Release on Allowing U.S.

IASB issues revision to IAS 1, <i>Presentation of Financial Statements</i>

The International Accounting Standards Board (IASB) has issued a revised version of IAS 1 Presentation of Financial Statements. The revision is aimed at improving users' ability to analyze and compare the information given in financial statements.The changes made are to require information in financial statements to be aggregated on the basis of shared characteristics and to introduce a statement of comprehensive income.
A&A

A Conversation with Bruce Pounder: The Impact of Convergence on U.S. GAAP

Internationally recognized convergence expert, Bruce Pounder, explains what we can expect to see in financial reporting and the financial statements of the future. To start off, can you briefly describe the phenomenon of "Convergence?"The word Convergence refers to the process of eliminating differences in accounting standards among countries. But Convergence also refers to the goal of that process - the absence of differences in accounting standards among countries. So Convergence is both a process and a goal.

SEC to discuss improvements to financial reporting

Securities and Exchange Commission Chairman Christopher Cox has announced the appointment of the following members to the SEC Advisory Committee on Improvements to Financial Reporting. The advisory committee, established last month, will hold its first meeting on Thursday, August 2, at 10 a.m. at the SEC's Washington D.C. headquarters.Denny Beresford, Ernst & Young Executive Professor of Accounting, J.M. Tull School of Business, University of Georgia, Athens, Ga. Mr.
Technology

SEC Will Not Require XBRL Data Audits

Securities and Exchange Commission Chairman Christopher Cox announced that companies adopting eXtensible Business Reporting Language (XBRL) for regulatory filings will not need an additional audit of the conversion of their data, reported Reuters. As part of an XBRL roundtable discussion Monday, Cox said requiring an audit on converted financial data could result in "crib death" for the XBRL project.Currently, only about two dozen companies, including Comcast Corp. and General Electrics Co., are participating in the SEC's voluntary XBRL pilot program.
Technology

Deloitte Survey: Mandatory e-Filing Costs More Time & Money

U.S. companies required to e-file are spending more time and money on compliance than before the electronic process was made mandatory, a new survey conducted by Deloitte Tax LLP has found. A majority of those surveyed said the time they spent on compliance (61 percent) and the costs (68 percent) in filing their 2005 federal tax returns had increased by as much as 19 percent.Recent changes in e-file transition rules and the expansion of the e-file mandate make planning for e-filing an important aspect of compliance planning for tax year 2006.
Tax

Double-Check Creative, Risky Tax Arguments

Anyone who has ever felt used and abused by the government because they have to fork over hard-earned wages will recognize the protests listed on the IRS document, The Truth about Frivolous Tax Arguments. Just in case you were thinking of challenging Uncle Sam’s authority to impose taxes, you may want to check the results for the many individuals and groups who’ve gone before you in attempting to avoid compliance with federal tax laws, recommends the National Association of Enrolled Agents.
Community News

E&Y Promotes Insurance Standardization

Ernst & Young believes the global insurance industry could capitalize on its successful introduction of International Financial Reporting Standards (IFRS) by standardizing presentation and disclosure to improve the value of financial reporting. "Insurance companies have clearly made a big investment to comply with IFRS standards. Yet, due to complexity and scope of the reports, it is still difficult to understand relative performance," said James Dean, IFRS practice leader for Ernst & Young’s Global Insurance Center.
Tax

Non-Profits Service Fund Software Launched

Kintera Inc. has unveiled its first software as a service fund accounting system for non-profits.Built on its social constituent relationship management platform, Kintera Sphere Fundware will allow non-profit and government organizations to track the flow of funds from end to end, integrating with business applications such as e-commerce, utility billing and management for grants and donors.“One of the things in the back of people’s minds is where is the money going,” said Harry Chiu, senior vice president of product management for Kintera.

Foreign Criminal Extraditions

We hear about criminal indictments stemming from accounting violations in our own country but do not hear about foreign extraditions from the U.S. or to the U.S. from other countries.

New SEC Regulations on Pay and Perk Disclosures Go Into Effect

In mid-December of 2006, new Securities and Exchange Commission (SEC) rules became effective that require more information to investors by public companies in their filings about the pay packages and perks of executives. At a time of widespread backdating of options and the ever-widening divide between salaries of employees and executives, the changes are aimed at increasing corporate transparency. The new requirements will be added to existing disclosure tables found in the SEC filings.
Tax

The New York Yankees Receive $26 Million Luxury Tax Bill

New York Yankees have clinched their ninth straight American League East title, and for their troubles have received a $26 million luxury tax bill from Commissioner Bud Selig, according to the Associated Press. Their tax payment is due in the commissioner’s office by Jan. 31. Their four-year total now comes to $97.75 million.The tax threshold also increased $8.5 million, to $136.5 million this year and only New York and Boston exceeded the threshold, according to the New York Times. Boston will pay only $497,549, while the exact figure for the Yankees is $26,009,039.

3 Former Fannie Mae Execs Face Lawsuit

Fannie Mae’s regulator contends in a civil lawsuit that three former executives overstated profits by $6.3 billion to meet earnings targets and boost their bonuses.The regulator, The Office of Federal Housing Enterprise Oversight (OFHEO), filed a complaint with an administrative law judge on Monday, seeking $215 million from ousted Chief Executive (CEO) Franklin Raines, former Chief Financial Officer (CFO) Timothy Howard and former Controller Leanne Spencer.

Two Federal Budget Deficit Estimates; Two Accounting Methods

According to the Financial Report of the United States Government for the year ending September 30, 2006, which was released by the Treasury Department (DoT) on Friday, the federal budget deficit totaled $449.5 billion, nearly 81 percent higher than the $247.7 billion in the President’s annual budget report published two months ago.
A&A

Restatements Rise for Companies Bypassing SOX's 404 Provision

In what may be a cautionary notice to auditors of small public companies, recent research shows that financial report restatements are increasing at small businesses that have been exempt from the onerous 404 provision of the Sarbanes-Oxley (SOX) accounting reform act, but dropping for companies that do follow 404.The number of restatements filed by public companies to correct accounting errors during the first nine months of this year versus the same period in 2005, rose 45 percent for small “micro-cap” companies, that have been exempt from 404, according to a recent report.

PCAOB Adds Inspection Rules Changes to Open Meeting Agenda

The Public Company Accounting Oversight Board (PCAOB) will consider whether to adopt a rule temporarily adjusting the minimum frequency with which the Board inspects registered public accounting firms having 100 or fewer issuer audit clients, at the open meeting scheduled for 9:30 a.m. Tuesday, December 19, 2006, in Washington, D.C.
A&A

SEC Proposes Risk-Based Analysis of Financial Controls

The Securities and Exchange Commission (SEC) voted unanimously on Wednesday to allow public companies subject to the requirements of Sarbanes-Oxley (SOX) to evaluate the design of only those financial controls that might carry the risk of having a material impact on financial statements.

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