Legislation

Tax

President Bush Signs Identity Theft Bill into Law

On Thursday, President Bush signed into law, the Identity Theft Penalty Enhancement Act, creating stiffer criminal penalties for identity theft. The goal of this bill is to prevent identity theft by increasing the punishments associated with the crime and establishing a new crime of aggravated identity theft, which is the use of a stolen identity to commit certain criminal acts. Though solid numbers are hard to come by, identity fraud has been called one of the fastest-growing crimes in the U.S, touching millions of people at a cost of billions of dollars a year.

U.S. Corporations Struggling to Meet First Sarbanes-Oxley Filing Deadline

Despite an extension in the deadline from June 15, 2004 to November 15, 2004, half of large U.S. companies polled are still less than 60 percent complete in meeting their Sarbanes-Oxley (SOX) Section 404 filing requirements, according to a survey conducted by ACL Services Ltd. and the Center for Continuous Auditing (CCA). The poll of 248 senior audit professionals at corporations with more than $1 billion in revenues reports considerable challenges meeting SOX Section 404 filing requirements.
Technology

Software Companies Blaming Sarbanes-Oxley for Lagging Earnings

Some software companies are missing second quarter earnings estimates and are blaming the time, energy and money companies are spending on Sarbanes-Oxley Act requirements for slowing software purchase decisions, Reuters reported.The Sarbanes-Oxley reform legislation was enacted in 2002 after Enron imploded taking its auditing firm Arthur Andersen down with it. Veritas Software Corp.

GAO Debuts New Name, New Pay System

The U.S. General Accounting Office has a new name: the Government Accountability Office.Last week President Bush signed the GAO Human Capital Reform Act, which also gives Comptroller General David M. Walker the authority to institute a new compensation program for agency employees, the Washington Post reported.Introduced nearly a year ago by Rep. Jo Ann S. Davis (R-VA) and Sen. George V. Voinovich (R-OH), the law allows Walker to use a pay system that is based on performance, separating the agency from the federal general schedule system.

Illinois CPA Society Wins Legislative Victory for CPAs and Public

A new law promoted by the Illinois CPA Society (ICPAS) will alter the state's Public Accounting Act with tougher ethics requirements and disciplinary enforcement. The accounting scandals of the past two years prompted the Society to take a long hard look at the profession.
Technology

Consumers Don't Have a Clear Image of Check 21 Law and Its Impact

An online consumer poll conducted by Harris Interactive® for NCR Corporation (NYSE:NCR) confirmed what many financial industry insiders already know: Most consumers are completely unaware of the Check Clearing for the 21st Century Act (Check 21), and its potential impact on their current banking practices. Grounded planes on 9/11 halted check processing throughout the United States, costing the industry billions and accelerating the need for a dramatic change in the check processing system. The resulting law takes effect October 28, 2004.
A&A

FASB Issues Proposal on Fair Value Measurements

In response to requests from constituents to improve the current guidance for measuring fair value, the Financial Accounting Standards Board (FASB) has published an Exposure Draft, Fair Value Measurements. The Exposure Draft seeks to establish a framework for measuring fair value that would apply broadly to financial and nonfinancial assets and liabilities, improving the consistency, comparability, and reliability of the measurements.

Majority of Internal Auditors Identified Gaps in Internal Controls

Jefferson Wells International, a leader in providing professional services including those related to Sarbanes-Oxley compliance and corporate governance, says a recent survey shows 92% of internal auditors polled have identified gaps in their own organization's internal controls. These gaps will need to be remediated and retested prior to Section 404 deadlines in November. "This survey shows that many companies still have significant ground to cover regarding Sarbanes-Oxley compliance," said Jefferson Wells CEO Owen Sullivan.
A&A

House Passes Bill Allowing More Child Care Savings

The House passed a bill on Tuesday that would allow families to keep unspent money they saved that year in tax-free child care accounts.Currently, employees have to give up any money that remains unspent in their flexible spending accounts at the end of the year. Under the bill, passed by voice vote, families will be able to roll over up to $500 in unused child care savings to the next year, the Associated Press reported.Flexible spending accounts are offered by employers so families can set aside pre-tax money for health care or child care expenses.

Accenture Contract Moves Forward

It became less likely Friday that Congress would punish Accenture for being incorporated in Bermuda when lawmakers voted to give the consulting firm part of a $10 billion Homeland Security Department contract, MarketWatch.com reported.The five-year Homeland Security contract comes with an option for a five-year extension and involves a system called US-Visit, which will track non-citizens through digital finger scans and photographs taken at more than 400 air, sea and land points of entry.Accenture’s parent corporation is nominally incorporated in Bermuda, some say so the company can d
Tax

IRS Confirms it is Unlawful for Same-Sex Married Couples to File Jointly

In response to an inquiry about tax filings, the Public Advocate of the United States, Inc. received a letter from the Internal Revenue Service (IRS) confirming that it is unlawful for same-sex couples to file their taxes under any married status, even if the jurisdiction in which the couple lives, recognizes such a union.The text of the letter is as follows:Mr. Eugene A. DelgaudioPresidentPublic Advocate of the United States, Inc.5613 Leesburg Pike, Suite 17Falls Church, VA 22041-2912Dear Mr.
Tax

Perk-Heavy Tax Bill for Corporations Gets Nod from House Panel

The House Ways and Means Committee has approved a bill that would give corporations huge tax benefits while repealing a tax break on exports that was ruled illegal by the World Trade Organization.The European Union has levied harsh tariffs on U.S. goods as a response to the Extraterritorial Income export-tax regime. The House bill attempts to swap the now-illegal export subsidies with new tax breaks for business. The bill would lower the top tax rate for U.S.

New White Paper Examines Business of Law and Sarbanes-Oxley Impact

New trends within the legal profession are reshaping the practice of law as law firms rethink their traditional structures and employ corporate business models to enhance client service, streamline operations and manage growth. These key findings are made available by Robert Half Legal, a legal staffing service specializing in attorneys, paralegals and other highly skilled legal professionals, in a just-released white paper titled "New Perspectives on the Business of Law." The white paper is part of the company's continuing Future Law Office project.
Tax

Senate Passes Tax Administration Overhaul Bill

Taxpayers will have more time to fight IRS levies, be allowed to make partial installment payments and deal with a less-complicated tax code under a measure passed unanimously by the Senate.The bill gives taxpayers more rights, overhauls tax administration, clarifies the definition of "qualifying child" for the Earned Income Tax Credit and eliminates more than 60 obsolete tax code rules, the Wall Street Journal reported.

Strong Capital Management Executives Barred from Mutual Fund Industry, Fined $140M

The Securities and Exchange Commission announced today a settled enforcement action against Strong Capital Management, Inc. (SCM), its founder and majority owner, Richard S. Strong, two affiliated entities and two other SCM executives, for allowing and, in the case of Strong, engaging in undisclosed frequent trading in Strong mutual funds in violation of their fiduciary duties to the Strong funds and their investors. The settled order requires the payment of more that $140 million in monetary remedies, and imposes regulated industry bars and other reliefStephen M.
Tax

E-mail Scammer Gets Stiffest-Ever Penalty for Online Fraud

A Houston man who fooled e-mail recipients into turning over 473 credit card numbers was sentenced Tuesday to almost four years in jail, one of the toughest penalties ever handed down for online fraud.U.S. District Court Judge Vanessa Gilmore in Houston gave Zachary Hill, 20, "one of, if not the longest-ever" sentences against an e-mail scammer, Justice Department spokesman Michael Kulstad told the Washington Post. Hill used a so-called "phishing" scheme to make his e-mail look like it came from Internet service provider America Online or PayPal, which eBay uses for online payments.
A&A

House Subcommittee Votes to Dilute Stock Option Rule

Congress may once again stymie the Financial Accounting Standards Board (FASB) efforts to require companies to show stock options as an expense on company financial statements. A decade ago Congress forced the accounting standards setting board to settle for footnotes in the financial statements addressing stock options. This time, Congress may end up requiring that only the options paid to a company’s top five executives be shown as an expense.The controversial FASB proposal was considered last week by a House Financial Services Subcommittee, taking up a bill sponsored by Rep.

PCAOB Auditing Standard No. 1 Effective May 24

The Public Company Accounting Oversight Board announced that its Auditing Standard No. 1, References in Auditors' Reports to the Standards of the PCAOB, has been approved by the U.S. Securities and Exchange Commission. PCAOB Auditing Standard No. 1 requires that auditors' reports on audits and other engagements relating to public companies and other issuers include a reference that the engagement was performed in accordance with the standards of the PCAOB. This replaces the previous reference to generally accepted auditing standards.

Regulatory Burdens of Nation’s Community Banks Topic of Testimony

Abernathy Testimony before the House Financial Services Financial Institutions and Consumer Credit Subcommitte: Chairman Bachus, Ranking Member Sanders, and Members of the Financial Institutions and Consumer Credit Subcommittee, I would like to thank you for this opportunity to testify on the regulatory burden faced by the nation’s community banking institutions.Small banks and thrifts provide households and small businesses services that are greatly valued by the communities in which they are located, particularly for the continuity of service that they present as well as for the

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