AccountingWEB Weekly News Wrap-Up - Issue 136

AccountingWEB Weekly News Wrap-Up - Issue 136

March 8, 2002

This News Wrap-Up Sponsored By:

Mangosoft, Inc.

Oracle E-Business

NEWS FOR ACCOUNTINGWEB MEMBERS

1. Lawmakers Draft Toughest Accounting Reform Bill Yet
2. AICPA's New Ads - Will the Media Get the Message?
3. IRS Offers Ice Storm Extensions - MO & KS
4. Andersen's Oversight Board Sets Reform Agenda
5. IRS Strikes Deal on Web-Filing for 1065s and 1041s
6. AICPA Masses Troops to Fight Auditor Reform
7. Andersen Left Out in the Cold by Lobbying Coalition
8. Dennis Nally Takes Helm of PwC-U.S.
9. Merrill Lynch Readies GAAP-Based Analytical Standards
10.Andersen Client Losses Continue

EDITORIAL

I was at a business networking event this week and was talking to a number of professionals, business managers, salesmen and IT directors. In my cluster of conversation was Bob, who introduced himself with a three-second introduction of "Hi, I'm Bob. I'm an accountant." Bob fit every bad stereotype of an accountant, and just assumed that his introduction would be enough to thwart off any additional conversation.

Later that evening I met Andrea, who wowed our group with tales of guerilla change management tactics she was trying to implement in a client's business, and passionately described the personal satisfaction of being a change agent in fast moving companies. It turns out that Andrea, too, is an accountant. Not only that, but she and Bob work together at the same firm, on many of these same client projects.

What's my point? Whether you are a Bob or an Andrea, there's always an opportunity to make a first impression and always an opportunity to tell a story. Make a conscious effort to practice your introduction and perfect your first-time-meeting story, and you too can capture the wonder and fascination of your audience.

Michael Platt, CEO

NEWS FOR ACCOUNTINGWEB MEMBERS

1. Lawmakers Draft Toughest Accounting Reform Bill Yet

Differences of opinion between House Democrats and Republicans have resulted in the introduction of a second bill in the House Financial Services Committee. Known as the Comprehensive Investor Protection Act, this new proposal is the toughest accounting reform bill yet. It was the result of close coordination with the Securities and Exchange Commission, and it is supported by the AFL-CIO, consumer groups, and former SEC Chief Accountant Lynn Turner.

2. AICPA's New Ads - Will the Media Get the Message?

The American Institute of CPAs has announced the launch of a new advertising campaign to help restore confidence in the profession. New print ads will begin to run on March 10 in The Wall Street Journal and other major newspapers. These ads will emphasize the roles of CPAs away from the headlines, engaged in the daily routine activities of auditing financial statements, providing tax services, and delivering business insight. A key message is, "We depend on your trust and work to earn it each day, every day."

3. IRS Offers Ice Storm Extensions - MO & KS

The IRS has issued tax deadline relief in 72 counties in Missouri and Kansas that were declared eligible for federal disaster assistance as a result of a devastating ice storm on January 30. Farmers, business owners, trusts, and tax-exempt organizations that normally are required to file tax returns in February and early March have until March 15 to file tax returns.

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4. Andersen's Oversight Board Sets Reform Agenda

At the first meeting of Arthur Andersen's Independent Oversight Board on February 27, 2002, Chairman Paul Volcker announced the formation of an Advisory Panel and established an agenda of priority issues. Some observers worry that changes in the firm's incentive plans will defeat the winning formula that helped Andersen achieve its leadership position in the first place.

5. IRS Strikes Deal on Web-Filing for 1065s and 1041s

An estimated five million businesses will be able to file their business tax returns via the Internet this year, thanks to an agreement between Internet Programming & Consulting (formerly Taxsoft) and the Internal Revenue Service. Under the terms of the agreement, IPC will promote the electronic filing of business tax returns, including Form 1065, U.S. Partnership Return of Income, and Form 1041, U.S. Income Tax Return for Estates and Trusts.

6. AICPA Masses Troops to Fight Auditor Reform

The American Institute of CPAs is building a lobbying campaign against Enron-related reform proposals being discussed in Washington and demanded by the private sector. According to an AICPA spokesman, an e-mail was distributed to 3,000 federal key people - AICPA members who have contact and/or access to lawmakers - urging their assistance in convincing lawmakers to temper the response to requests for reforms.

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7. Andersen Left Out in the Cold by Lobbying Coalition

The lobbying coalition of accountants formed by the American Institute of Certified Public Accountants and the Big Five firms is short one firm today as the group has voted to sever ties with Andersen for the time being. The group, which typically presents a united front when lobbying for issues before Congress, has agreed to let Andersen fight its own battles for now.

8. Dennis Nally Takes Helm of PwC-U.S.

PricewaterhouseCoopers LLP has announced that Dennis M. Nally has been selected as senior partner of the global organization's United States firm. Mr. Nally takes the helm amidst what many view as a "crisis of confidence" in the accounting profession in general and Big Five firms in particular.

9. Merrill Lynch Readies GAAP-Based Analytical Standards

In an effort to improve the quality of its research, Merrill Lynch has issued an internal memo telling its stock analysts to use a variety of metrics to gauge the state of corporate financial performance, rather than relying on pro-forma earnings.

10. Andersen Client Losses Continue

Beleaguered Andersen was dealt another blow Wednesday when mortgage giant Freddie Mac dropped the Big Five firm after a 30-year audit relationship. Freddie Mac joins a long and growing list of clients that are abandoning Andersen in the aftermath of the firm's involvement in the Enron collapse.

ACCOUNTINGWEB Q&A FORUM

Visit our Q&A Forum to post your questions and share your ideas with the members of AccountingWEB! Simply click on the "Add Comments" option at the bottom of any question to add your response and comments.

Here is a sample of the questions that have been posted this week on our Q&A Forum. Post your own questions and see if you can lend a hand to others looking for help.

1. Lease Option Accounting: Are there any circumstances that allow the deduction to the lessor for deposits on a commercial building lease option contract? Would the receipt of below market rent create a rent accrual for GAAP or tax? Would the lessor's requirement to pay taxes have any effect?

2. Jury Duty Pay: California Superior Court jury duty pay is taxable income for Federal Tax purposes. How is it handled for CA State Tax purposes? Is it a reduction of income on Schedule A?

3. Proceeds from Shareholders' Class Action Lawsuit: Are the proceeds received from a shareholders' class action lawsuit (for mismanagement by company officers/directors) treated as income or used to reduce the basis of shares held?

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AccountingWEB Inc.

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