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House Panel Calls For Investigation of Andersen Attorney

Adding yet another chapter to the open book of accusations against Arthur Andersen and its partners in connection with the Enron collapse, the House Energy Committee on December 17, 2002 asked Attorney General John Ashcroft to investigate a possible perjury by Andersen attorney Nancy Temple. The House panel wants to know if Ms. Temple intentionally misrepresented her reasons for sending email reminders about the firm's records retention policy.

GASB Issues Two New Exposure Drafts

The Governmental Accounting Standards Board (GASB) has published two new exposure drafts (EDs) for comment. One relates to "Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries." The other is entitled "Budgetary Comparison Schedules -- Perspective Differences."The first ED would require governments to report the effects of capital asset impairment in their financial statements when they occur.
Practice Management

States Want Tax-Dodging Companies Ousted From S&P 500

A coalition of state officials demanded that Standard & Poor's remove ten companies from the S&P 500 because all ten have moved their legal addresses to locations considered offshore tax havens.

President to Nominate New SEC Chief in Two Weeks

The Wall Street Journal has reported that the Bush administration has begun background checks on its choices to replace Harvey Pitt as Chairman of the Securities and Exchange Commission. The President is expected to name the nominee within two weeks. The incoming chairman will still need to be confirmed by the Senate.Names of those rumored to be on the short list now include: Stephen Hammerman, deputy commissioner of legal matters at the New York Police Department and former vice chairman and general counsel at Merrill Lynch & Co.T.

State Surveys Confirm Widespread Revenue Shortfalls

provided by CCHStates are in the worst fiscal situation since World War II, caused in part by outdated tax systems, according to National Governors Association (NGA) executive director Raymond C. Scheppach. States "continue to have tax systems built for a manufacturing economy in the 1950s, not for the high-tech, international economy of the 21st Century," he said at a November 25, 2002 press briefing in Washington to announce the release of "The Fiscal Survey of States."Scheppach said the explosion of health care costs also has led to overextended budgets.
Tax

Homeland Security Act Signed With Tax-Related Provisions

President Bush signed the Homeland Security Act on November 25. The Act unites various federal agencies into a new Department of Homeland Security. It also introduces a new type of charitable trust and imposes a ban on federal contracts to unpatriotic U.S.
Tax

IRS Launches Newsletter to Help Government Entities Comply With The Law

Internal Revenue Service officials today announced the launch of a new electronic newsletter designed to help federal, state and local government entities understand and comply with federal tax laws.The new quarterly “Federal, State and Local Governments Newsletter” is available on the IRS Web site at www.irs.gov/govtsThe site features an electronic subscription service that enables those interested to sign up to receive automatic notification of subsequent newsletters as soon as they are issued."Officials in state and loca

Enron's Retirement Fund Trickery is Not Unique

In these weeks leading up to the one-year anniversary of Enron's declaration of bankruptcy, attention is focused once again on what happened and what went wrong at the energy giant. But while last year's Enron collapse grabbed all the headlines, the reality is that thousands of civil cases are reported annually where the issue at hand is alleged retirement and health plan fraud.Speaking at a conference earlier this month, Ann L.
Community News

Sarbanes-Oxley Raises Red Flag For Not-for-Profits

Source, Healthcare Financial ManagementNot-for-profit providers that do not hold themselves to the same standard as their for-profit peers risk being perceived as having betrayed the trust of their communities. Criminal fraud. CEO greed. Lax corporate governance. Questionable accounting practices. These were familiar phrases in the public discourse this year, accompanied by mounting outcry for congressional action.

Andersen's Prosecutor Considered for SEC Chairman

It's hard to say whether this is good news or bad for accountants.

Federal Reserve Board Eyes Accounting Weaknesses

Speaking at a national industry conference sponsored by the American Institute of CPAs, Federal Reserve Board Governor Susan Bies said the Fed stands ready to challenge accounting practices it sees as too aggressive, and she gave examples of areas being eyed by the Fed in an effort to help overcome today's accounting weaknesses.

Harvey Pitt Resigns - PCAOB Controversy Continues

Things continue to change very rapidly in the opening days of the new Public Company Accounting Oversight Board. Here are the latest developments in the continuing saga of our government's efforts to protect the public from the accounting misdeeds of corporate America:Harvey Pitt, under fire for failure to disclose to the other SEC Commissioners about William Webster's involvement on the audit committee of US Technologies, a company under investigation for financial fraud, has resigned.
Community News

FDIC Seeks to Blame Bank Failure on Auditor

In an attempt to recover its losses in connection with the failure of Superior Bank, the Federal Deposit Insurance Corporation (FDIC) filed a lawsuit against Ernst & Young (EY), alleging that actions by EY contributed to the bank's collapse. Superior Bank, a $1.8 billion thrift based in a Chicago suburb, failed in July 2001, causing the FDIC to pay out in excess of $750 million. It was the biggest failure of an FDIC-insured bank in nearly a decade.

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

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.
Practice

California Law Beefs Up Disclosure Requirements

Ground-breaking new state legislation will soon require certain corporations doing business in California to disclose more information, including the names of their independent auditors. The information will be made available for public viewing by the end of 2004 through an online system.

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.
Tax

Social Security Administration Announces Cost-of-Living Adjustment

The Social Security Administration has announced a cost of living adjustment of 1.4% for social security benefits. The increase will begin in January 2003."Today’s news tells us that inflation continues to be low, which is certainly good news for the elderly and disabled," said Social Security Commissioner Jo Anne B. Barnhart. "Inflation is one of the biggest challenges for people living on a fixed income.

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.

Gambling With The Fair Labor Standards Act: A Multi-Million Dollar Wager

By, Kimberli Aboyade, Esq., Eckert Seamans Cherin & Mellott, LLC U-Haul, $7.5 million; Pizza Hut, $10 million; Starbucks, $18 million; Taco Bell, $13 million; Bank of America, $22 million; Rite Aid, $25 million; Pacific Bell, $35 million; Farmers Insurance, a whopping $90 million. Verdicts like these are causing employers across the country to take a close look at a Depression-era federal law, the Fair Labor Standards Act (FLSA).

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