Legislation

Community News

SEC Makes Auditor Independence Transcript Available

The Securities & Exchange Commission has posted on its web site the entire transcript of Day One of the auditor independence hearings which occurred on July 26.AccountingWEB provided full coverage of the event throughout the day, and will do so again for the second day of hearings, scheduled for September 13.Speakers presenting testimony before the SEC in July included public accountants, industry accountants, educators, memb
Community News

SEC Accepting Applications for 2nd Hearing

The SEC is gearing up for Round Two of the auditor independence hearings, and applications are being accepted for those who wish to participate in the hearings.
Community News

Andersen Consulting: A Frankenstein Monster?

In 1989, Andersen Consulting was spun off from Arthur Andersen as a separate company for the sole purpose of performing technology consulting. The idea was that AC would perform the consulting services for Andersen's clients, and Andersen would stick to auditing, tax, and general accounting services. Because the consulting business was seen as being more lucrative, it was agreed that AC would pay a 15% percentage of its annual revenues to Andersen.
Community News

Senators Urge 'Caution' in Letter to SEC Chairman

Several members of the Securities Subcommittee of the Senate Committee on Banking, Housing and Urban Affairs are urging Securities & Exchange Commission Chairman Arthur Levitt to extend the comment period on the non-audit services portion of the proposed rules on auditor independence until after February 1, 2001.The extension, if granted, "will allow for careful analysis of the proposed changes," according to the letter. The letter was signed by Securities Subcommittee Chairman Senator Rod Grams, and Senators Evan Bayh, Phil Gramm, Charles E. Schumer, Mike Crapo, Robert F.
Community News

PwC Chief Faces Possible Probe over Audit Violations

PricewaterhouseCoopers partners - including present CEO James Schiro - face possible investigation after a US court refused to dismiss a claim alleging that the Big Five firm had misrepresented audit independence violations at electronic manufacturing firm Emcore. A New Jersey court heard that PwC partners had allegedly held on to shares in its audit client Emcore and so delayed a public offering of the firm in early 1999.

Auditors should audit. It’s that simple.

Among Wednesday’s speakers at the Securities and Exchange hearings on auditor independence was John H. Biggs, Chairman, President, and CEO of TIAA-CREF, the Teachers Insurance and Annuity Association and College Retirement Equities Fund.TIAA-CREF manages $300 billion for its participants and invests $1.5 billion in new fixed income every month and even more in common stock. Biggs told of an incident that occurred several years ago in which his company relied on audited financial statements in making a $12 million investment.

Auditors and managers have the same interests, says Yale Professor

Speaking before the Securities and Exchange Commission on Wednesday, Professor Rick Antle of the Yale School of Management indicated it is usually unreasonable to assume an auditing firm than performs non-audit services is going to compromise its audit.Antle has studied the issue of auditor independence at length and is co-author of the white paper, "An Economic Analysis of Auditor Independence for a Multi-client, Multi-service Public Accounting Firm" submitted to the Independence Standards Board (ISB) on behalf of the American Institute of Certified Public Accountants (AICPA).In an inte
Community News

KPMG Takes a Stab at SEC Auditor Independence Proposals

Terry Strange, Global Managing Partner of Audit for KPMG, took the podium yesterday at the SEC auditor independence hearings, and offered his reservations about the hurried nature of the proposed auditor restrictions as well as the inappropriateness of the barriers to auditing firms providing non-audit services.Noting his complete support of the SEC's desire to modernize independence rules, Strange expressed two troubling aspects of the proposals:The bundling of the much needed revisions of existing rules on investments and family relationships
Community News

CPA Firms Testify (Briefly) Before SEC

The SEC set aside one hour today for representatives from three of the Big 5 CPA firms to make their claims that proposed auditor independence guidelines would impede progress, prevent firms from attracting professionals with necessary specialized skills, reduce competition among CPA firms, increase costs of services, and in general make life miserable for CPA firms that provide consulting services along with traditional auditing services.Stating that CPA firms already enjoy a high level of independence standards and professional ethics, such standards and ethics being applicable to consult
Community News

Showdown with the SEC

Representatives from CPA firms, educational institutions, and accounting regulatory agencies will present testimony today before the Securities & Exchange Commission in an attempt to have their say about the proposed guidelines to limit the auditors’ scope of services.

Schedule of Witnesses for Wednesday's SEC Hearings

SEC Announces Schedule of Witnesses for Public Hearing on AuditorIndependenceSchedule of AppearancesPublic Hearing - July 26, 20009:00 am - 5:30 pmAs previously announced, the Commission is holding a public hearing on Wednesday, July 26, in connection with its proposed rule amendments regarding auditor independence. The hearing will take place in the William O. Douglas Room of the Commission's headquarters at 450 Fifth Street, N.W., Washington, D.C. 20549.
Community News

KPMG Slams 'Irrelevant' SEC Auditor Independence Rules

KPMG has attacked the Securities & Exchange Commission's rulings for auditor independence as "irrelevant and based entirely on misperception" on the eve of a public hearing looking into the proposals.The SEC is due to hear evidence from leading figures from the profession, including representatives of KPMG, Arthur Anderesen and Deloitte & Touche, in a marathon event scheduled for this Wednesday in Washington DC.Neil Lerner, head of European Risk Management at KPMG UK, said that the SEC's actions would be disastrous for the major fir
Tax

Effect of Marriage Tax Cut on $1.8 Trillion Surplus

Last week's vote to send tax cut legislation for married couples to the White House for consideration has fueled yet another battle between Democrats and Republicans in a very important election year.Democrats who voted against ending the marriage tax penalty are concerned that the passing of the tax cut will use up all of the projected 10-year, $1.8 trillion surplus.
Technology

Does Your Boss Read Your Email?

To date, courts have upheld an employer's right to monitor an employee’s email because the employee is using the employer’s computer equipment on the employer’s time. Employers are not required to inform employees of their intent to monitor email, voice mail, and other communications which may include personal content. However, members of Congress are considering legislation that would require employers to advise employees of their intent to monitor such communications.
Tax

Marriage Tax Bill Goes to White House

The Republican-controlled House and Senate have reached agreement on a marriage tax relief bill that would provide a more fair income tax rate for married couples where both spouses work. The bill changes the standard deduction for married couples to be twice the standard deduction for unmarred taxpayers, and this change would be retroactive to January 1, 2000.In addition, the bill provides for a change in the tax brackets so that single or married, the tax on income is the same.
Tax

Congress Votes to Change the Way We Look at Taxes

The week in Washington was anything but dull. Nearly every day we were presented with a new, more glorious bill and a gaggle of vote-hungry representatives and senators eager to vote 'yea.' There isn't a single issue here that won't please most of the American public - so why is it so likely that so few of these measures will actually make it into law?Marriage Tax Penalty. There are bizarre rules in the Internal Revenue Code that make it possible for two people to earn the same income at the same job but pay vastly different income tax on that income due to their marital status.
Tax

Third Time’s a Charm on Tax Legislation

The House voted 401-25, which of course means that Republicans and Democrats alike are in the same camp on this one, to increase the annual contribution limits to the nation’s most popular retirement plans, the IRA and the 401(k).
Tax

Marriage Tax Cut On to Next Step

A joint House/Senate conference committee will proceed with ironing out the differences between the two versions of the marriage tax cut bill that passed in the House and Senate.
Technology

Get that Junk Mail Out of Your e-Mailbox!

The House has passed H.R.3113, “Unsolicited Commercial Electronic Mail Act of 2000,” which may cause junk e-mailers to look for a new way to make a living. The bill nearly passed almost unanimously (427-1), and so should have an easy ride through the Senate. The dissenting vote was cast by former Libertarian turned Republican Representative, Ron Paul, of Texas.The provisions of the bill require that anyone sending an email message will be required to provide a valid return address, so that recipients may request that their name be removed from the mailing list.
Tax

Let’s Give Employees the Whole Truth

The House has paved the way for better employee understanding of just what goes on “behind the scenes” regarding employer contributions to Social Security and Medicare by passing a bill that will require this information to be disclosed on annual W-2 forms.The Right-to-Know Payroll Act, as it is presently called, would require an amendment to the IRS Tax Code calling for new areas on the W-2 form to display employer contributions that are made on behalf of employees. The bill was introduced by Rep.

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