Government

Community News

Andersen Trial Closes With Yet More Twists and Turns

Even in a trial of twists and turns, the closing arguments in the Andersen obstruction-of-justice trial were something of a surprise.
Technology

Annoying Pop-Up Ads Trigger E-Commerce Audit

A recent announcement by the Federal Trade Commission (FTC) shows how use of annoying pop-up ads can lead to e-commerce audits. The announcement describes a legal action taken by the FTC against an individual who subjected Web surfers to an unusual amount of pop-up ads.

European Commission Issues Accounting Proposal

On June 3, 2002, the European Commission released a proposed financial reporting directive. When approved by the member states, this new directive will amend the existing European Union Accounting Directives and complement the International Accounting Standards (IAS) Regulation that requires certain companies to adopt international accounting standards by 2005. The IAS regulation applies to publicly traded companies.
Community News

Legal Experts Mull The Impact of an Andersen Acquittal

As the Andersen shredding trial enters its fifth and possibly final week, legal experts are already discussing the implications for the Department of Justice (DOJ) and for Enron, if Andersen should be acquitted. The discussions follow a week of testimony in which a number of Andersen partners and staff explained their varying interpretations of the firm's document retention policy.

New GASB Statement Addresses Foundations

On May 28, 2002, the Government Accounting Standards Board (GASB) issued GASB Statement No. 39.

Bookkeeping Errors Contribute to $17.3 Billion Federal Loss

Making Enron's $600 million restated financial statements look like a mistake in a child's allowance, the U.S.
Tax

IRS Report Card: Grades Are Improving

Three years ago, the watchdog Federal Performance Project gave the Internal Revenue Service a passing - but not stellar - grade of a "C" average. On May 15, 2002, the Project announced that the IRS' grade has improved to a "B minus."The Federal Performance Project, which provides an independent management assessment of federal agencies, is a collaboration between Government Executive magazine and George Washington University’s public administration department.
Community News

Andersen Trial Scheduled to Begin Today

Unless there is a last-minute settlement, the federal government and Big Five firm Arthur Andersen, LLP are scheduled to begin jury selection on Monday, May 6, in an obstruction of justice trial stemming from Andersen's admitted destruction of documents relating to its audit of Enron Corp.The trial will be held in the Houston U.S. District Court presided over by U.S. District Judge Melinda Harmon. Arguing for the prosecution will be Chief of the U.S. Attorney's Criminal Division in Brooklyn, Andrew Weissmann, and Assistant U.S.
A&A

FASB Releases Flurry of Publications, Awaits Reform Bill

On May 1, 2002, as leaders of the House Energy Committee put the final touches on a radical reform bill to be titled the "Financial Accounting Standards Board Act," the standards board itself rushed to post a flurry of publications to its Web site. The Reform BillAlthough the reform bill is still subject to change, Reuters obtained a copy of the discussion draft of the proposed legislation.
A&A

Senate Bill of Rights To Address Audits, FASB, Options

On April 22, 2002, as the Financial Accounting Standards Board (FASB) prepared for a new chairman and the House of Representatives prepared for a vote on its leading accounting reform bill, Senator Carl Levin unveiled the Shareholders' Bill of Rights. Tougher and more comprehensive than the House bill, this new Senate bill will address audit reforms, accounting standard-setting, executive stock options, and more.Senator Levin is chairman of the Senate Permanent Subcommittee on Investigations.
Tax

Alert: Beware of Phony IRS Forms and Bank Letters

The Office of the Comptroller of the Currency (OCC) has issued an alert to banks, asking them to warn their customers about a new fraud scheme that uses fictitious IRS forms and bank correspondence.Under the scheme, bank customers receive a letter outlining the procedures that need to be followed to protect the recipient from unnecessary withholding taxes on their bank accounts and other financial dealings.
Tax

Congress Probes Taxes and Accounting for Stock Options

On April 18, 2002, the Senate Finance Committee heard testimony on the tax and accounting treatment of executive stock option compensation. Chairman Max Baucus said the objective of the hearing was to fully explore the issues that surfaced in the wake of Enron, even though some may fall under the jurisdiction of other committees.A key issue is whether the treatment of stock options is best handled as an accounting question or through the tax code. Senator Carl Levin argued that Congress has the responsibility for adopting a tax code.
Tax

Treasury Kicks Off New Tax Simplification Program

On April 15, 2002, Treasury Secretary Paul O'Neill announced the issuance by the Treasury Department of the first in a series of proposals to simplify the U.S. tax code. "Our tax code is so complicated," he said, "we've made it nearly impossible for even the Internal Revenue Service to understand."PrioritiesTopics of highest priority involve the tax treatment of families and children. Subsequent proposals will focus on the simplification of tax laws related to businesses.
Technology

FBI Identifies Most Common and Costly Internet Scams

The Federal Bureau of Investigation (FBI) and the National White Collar Crime Center have issued a report on the complaints filed during calendar year 2001, the first full year of operations for the Internet Fraud Complaint Center (IFCC). The report identifies the most common and costly types of Internet fraud and includes a list of best practices to prevent these types of fraud.Altogether, the IFCC received nearly 50,000 complaints in 2001.

House Set to Reconcile Competing Audit Reform Bills

On April 9, 2002, the House Committee on Financial Services held its final hearing on proposed legislation for accounting and auditing reforms. Witnesses were asked to compare the merits of two major bills now under consideration, the Oxley bill (H.R. 3763) and the LaFalce bill (H.R.
Community News

SEC Seen as Key to Success in DOJ-Andersen Talks

While Andersen employees were still trying to find their way through the political maze, former Securities & Exchange Commission (SEC) Chairman David Ruder took center stage on a televised Lou Dobbs show to explain how the maze got created and how the firm can get through it. A Sound Litigation Strategy Gone AwryAppearing on the April 2, 2002 Moneyline show, Mr.
Technology

FTC Cracks Down on Spam and Web-Based Scams

At a press conference on April 2, 2002, the Federal Trade Commission (FTC) announced its participation in Netforce, an international law enforcement initiative targeting deceptive spam and Internet fraud. Together, the Canadian and U.S. state governmental agencies that comprise Netforce have already achieved stunning results in some areas, and they are planning ground-breaking activities in others.
Tax

Federal Workers Owe Billions in Back Taxes

The Internal Revenue Service will announce this week that Federal employees owe more than $2.5 billion in back taxes, but overall are far less likely to be delinquent than the average US taxpayer.The IRS has compiled statistics on Federal workers for nine years now. Of the 8.7 million federal workers and retirees, 381,500 were behind on their taxes, or 2.8% of the total.
Community News

Andersen Suspended From New Government Contract Work

Following the Justice Department's indictment against Arthur Andersen last Thursday, the United States General Services Administration suspended Andersen from pursuing any new federal government work during the period that the indictment is in place.According to the GSA, indictments for criminal offenses, such as the one handed down to the Andersen accounting firm on Thursday, offers "adequate evidence of misconduct to support suspe
Community News

Next For Andersen: Indictment? Merger? Chapter 11?

Possible Indictment for Obstruction of JusticeAndersen's future took an unexpected turn for the worse last week as the Justice Department explored options that could result in a devastating blow to the accounting giant. The Wall Street Journal is reporting that federal prosecutors have alerted Andersen to the possibility of a criminal indictment leveled at the firm - not at individuals - on obstruction of justice charges. "It totally took us all by surprise," an Andersen spokesman told the Journal in reference to the developments with the Justice Department.

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