AccountingWEB Weekly News Wrap-Up - Issue 150

AccountingWEB Weekly News Wrap-Up - Issue 150

June 14, 2002

This News Wrap-Up Sponsored By:

Oracle E-Business

FRx Software

NEWS FOR ACCOUNTINGWEB MEMBERS

1. Andersen Jury Still Deadlocked
2. PwC Consulting to Change Its Name to "Monday"
3. SEC Starts Rule-Making Process For Post-Enron Reforms
4. Deloitte Consulting Announces Plans to go Private
5. Auditing Standards Board Issues SAS95, Critics Want More
6. Health Care Expenses Will Rise Dramatically in 2003
7. Senate Kills Death Tax Repeal
8. PwC Finds Accounting Lawsuits Broke Records in 2001
9. NYSE Proposes Rules to Calm "Moments of Madness"
10.Andersen Pays Off Baptist Foundation Fine

EDITORIAL

Whether or not they believe that Andersen is guilty of obstruction of justice, professionals across the U.S. are paying close attention to the legal issues raised in this case. CPA firm owners shudder at the thought that an entire firm can be found guilty based on the activities of a single individual. But that is exactly the criteria that jurors have been given to convict the entire firm - if they believe that any ONE individual in the firm obstructed justice.

Last week we released the results of an AccountingWEB survey of hundreds of small, medium and large firms, which, among many other findings, pointed to a startling level of complacency among smaller firms that the post-Enron effect wouldn't really affect their practices. (See survey results for details.)

In light of these results, I would encourage ALL practices to at least check with legal counsel to ensure that you are doing everything you can to ensure that not even one individual in your firm can vary from your policies, because, like with Andersen, that one individual's actions may be enough for a jury to find your entire firm guilty of a crime.

Michael Platt, CEO

Our Mission: "To inform, to enrich, to enlighten, to entertain."

NEWS FOR ACCOUNTINGWEB MEMBERS

1. Andersen Jury Still Deadlocked

Five weeks of trial and eight days of jury deliberations have left the Andersen jury still indecisive. The New York Times and the Houston Chronicle speculated late Thursday that the jury might be leaning toward a guilty verdict after being instructed to continue deliberating in spite of stating they could not reach a unanimous decision.

Related stories from the past week:

Markets Did Not Reward Decision to Dump Andersen

Andersen Jury Continues to Deliberate

Two Firms Await Results of Document Destruction Cases

2. PwC Consulting to Change Its Name to "Monday"

PwC Consulting has announced its new name. When the consulting arm separates from PricewaterhouseCoopers, the new firm will be known as Monday. Click on the link above and tell us your thoughts on the new name.

3. SEC Starts Rule-Making Process For Post-Enron Reforms

The Securities and Exchange Commission has proposed rules designed to improve corporate reporting and restore investor confidence. The proposed rules would require senior executives to vouch for their company's reports, and they would expand the types of events that must be reported as they occur, rather than weeks or months later. Read the highlights of the SEC's proposed rules by following the link above.

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4. Deloitte Consulting Announces Plans to go Private

At the firm's annual partner meeting in San Francisco, Deloitte Consulting CEO Doug McCracken announced a decision to move forward with plans to become the "consulting firm of the future." The operating model will be that of a privately-held company.

5. Auditing Standards Board Issues SAS95, Critics Want More

To help accounting practitioners come to grips with an expanding and increasingly complex body of literature, the Auditing Standards Board recently crafted a layered-approach to understanding generally accepted auditing standards.

6. Health Care Expenses Will Rise Dramatically in 2003

Consulting firm Hewitt Associates has released survey results showing an anticipated 20 percent increase in health care costs for 2003. Increases may be even greater for small businesses. Get details and additional ideas on how your company can lower its health insurance costs.

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7. Senate Kills Death Tax Repeal

Senators supporting the repeal of estate taxes, currently scheduled to be fully reinstated in 2011 after a 10-year phase-out period, were six votes short of their goal when the measure came to a vote on Wednesday, June 12.

8. PwC Finds Accounting Lawsuits Broke Records in 2001

PricewaterhouseCoopers released the results of its 2001 securities litigation study on June 10. The results show a marked increase in the number of initial public offering lawsuits, along with record-breaking percentages and settlements for suits involving allegations of improper accounting.

9. NYSE Proposes Rules to Calm "Moments of Madness"

The New York Stock Exchange has drafted proposed rules and recommendations designed to guide the markets past a crisis of confidence that NYSE Chairman Richard Grasso calls "moments of madness" in the days following the Enron collapse. Some of the NYSE's points have already proven controversial within the business community, but Securities and Exchange Commission Chairman Harvey Pitt hails them as "a significant step in addressing major concerns raised by the investing public."

10. Andersen Pays Off Baptist Foundation Fine

Andersen's on-again off-again on-again settlement in the Baptist Foundation of America case has been brought to a conclusion with the payment of a $217 million fine this week.

UPDATE YOUR MEMBER PROFILE

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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.

1. Proper Treatment for Irregular Large Expenses: A company mainly advertises through trade shows that are quite expensive and occur about four times per year. Currently the costs are expensed as they occur. Would it be proper to accrue these until the month of the trade show and then expense them evenly over the next 12 months?

2. Tax Deduction - CPA Review Course: A recent graduate is doing some part-time accounting work for a sole proprietor who has indicated he will pay for the candidate's CPA review course. Is this individual able to take a tax deduction (business expense) for his payment for the review course?

3. Subchapter S Construction Companies: A student is looking for input from practitioners who handle construction companies who have taken the Subchapter S election.

THANKS TO OUR SPONSORS

We would like to thank Oracle E-Business and FRx Software for making this AccountingWEB Weekly Newswire possible. This newswire is a free service provided by AccountingWEB. Visit our sponsors and show your support to help keep this valuable service FREE!

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