SEC grows suspicious of declining auditor fees
During a Practising Law Institute conference in Washington, DC, on February 22, Paul Beswick, chief accountant for the US Securities and Exchange Commission (SEC), said regulators grow “worried” when auditor fees appear to fluctuate with economic cycles, Emily Chasan, senior editor of the Wall Street Journal’s CFO Journal, wrote yesterday.
“In financial crises, it is common for companies to say they are cutting payments to vendors by a certain percentage across the board, but Mr. Beswick says he’s heard ‘horror stories’ about companies applying the same pay cuts to their auditors,” the article stated.
“When companies switch their audit firms they often receive initial year fee discounts from auditors, but Mr. Beswick cautioned that companies should be careful that a lower audit fee isn’t the primary motivation for switching firms.”
Republicans fret over tax reform
House Ways and Means Committee Chairman Dave Camp (R-MI) is expected to roll out his comprehensive tax reform draft plan on Wednesday.
“For Camp, it’s a dream come true. Every Ways and Means chairman’s goal is rewriting the tax code – and Camp doesn’t have much time left, as he is in his last year with the gavel,” wrote Jake Sherman and Lauren French of Politico.
But what should be a moment of uncontrolled glee for Republicans has instead left many of them skeptical.
“It’s not that Republicans have soured on tax reform – in fact, it was one of the only areas of agreement at the party’s retreat last month,” the article stated.
“But, put bluntly, Republicans think they will expand their majority in the House – and perhaps take the Senate – by spending the remainder of 2014 concentrating on a still-struggling economy, cutting a raft of regulations, and Obamacare’s woes. Many senior figures see no need to open up a new policy discussion in February of an election year without a partner in the Senate and White House.”
Chamber, Tea Party find common foe
According to Bernie Becker of The Hill, the US Chamber of Commerce is siding with the Tea Party’s efforts to stop IRS regulations it derides as a “stalking horse for chilling political speech.”
“A Chamber official says the group plans to file ‘extensive comments’ on the new proposed rules for tax-exempt 501(c)(4) groups, which the Treasury Department and the IRS put forward in November, after it was revealed that the IRS had given extra scrutiny to politically engaged organizations,” Becker wrote today.
Unlike many Tea Party groups, business organizations, such as the Chamber, wouldn’t be covered under the proposed rules because they aren’t registered as 501(c)(4), the article stated.
“But the Obama administration is seeking comment on the possibility of expanding the rules to groups with different tax exemptions, alarming the Chamber and other trade associations that have long fought to keep their donors secret,” Becker wrote.
Most taxpayers support tax preparer competency standards
According to the 2013 Taxpayer Attitude Survey, a whopping 96 percent of respondents told the IRS Oversight Board it’s important that tax preparers meet basic competency standards, Kay Bell reported yesterday in her blog, Don’t Mess With Taxes.
“The IRS had proposed regulation of certain tax preparers to ensure that they met a minimum level of competency. That ability to file federal taxes would be measured by mandatory continuing education courses and tax tests. CPAs, enrolled agents, and tax attorneys would be exempt from the IRS-planned oversight program since they already must meet professional standards for their professions,” she wrote.
“Three tax preparers filed suit (Loving vs. IRS) to stop the IRS plan. A series of court rulings, the latest issued by the US Court of Appeals for the DC Circuit on February 11, sided with the tax pros.”
[Click here for AccountingWEB’s article on the court’s decision against the IRS.]
AICPA, CPA Canada to collaborate in forensics, technology advisory services
Journal of Accountancy Senior Editor Ken Tysiac reported that members of the Chartered Professional Accountants of Canada (CPA Canada) will have access to a broad portfolio of specialized information through the American Institute of CPAs (AICPA) Information Management and Technology Assurance Section and its Forensic and Valuation Services Section.
CPA Canada members can join those sections and will have the opportunity to obtain the Certified in Financial Forensics (CFF) and Certified Information Technology Professional (CITP) credentials, according to an agreement announced on February 21. Previously, those credentials have been available only to AICPA members.
Practice aids, webcasts, newsletters, and online forums related to the specialty areas also will be available to CPA Canada members who join those sections, the article stated.
Massive robbery and poor accounting kills off Mt. Gox
Cyrus Farivar of Wired UK wrote today: “As of late Monday evening (February 24), the embattled Bitcoin site Mt. Gox appears to have pulled the plug entirely in the wake of sustained DDOS attacks and the ‘transaction malleability’ problem that has plagued other websites. The site is gone and the company's Twitter account appears to have been erased entirely.”
According to an undated document, believed to have come from Mt. Gox that circulated on Twitter, the plan was to “shut down Mt. Gox for one month, with a rebranded landing page” by the morning of February 25 in Japan, where the Bitcoin exchange is based. However, this deadline has already passed.
“Regardless of malleability and regulatory issues, Mt. Gox's main problems are massive robbery and poor bitcoin accounting,” the document states. “However, the business as an exchange is highly profitable and healthy when run properly.”