AccountingWEB Weekly News Wrap-Up - Issue 153

AccountingWEB Weekly News Wrap-Up - Issue 153

July 12, 2002

NEWS FOR ACCOUNTINGWEB SUBSCRIBERS

  1. SEC Orders Corporate Officers to Certify Financial Statements
  2. New IRS Program Will Encourage Taxpayers to Report Income
  3. KPMG, BDO Seidman Under Fire From IRS
  4. S&P Lists Top 10 Companies With Most 'Inflated Profits'
  5. Small Business Owners Still Favorable Towards The Accounting Industry
  6. President Bush Plans to Move Accounting Out of The Shadows
  7. Rating Agency Initiates Report Cards on Auditors
  8. GAO Announces New Compliance Date For Independence Rules
  9. Accenture and Cap Gemini Announce Job Cuts
  10. Lawmakers Advance Anti-Fraud Rules And FASB Act
  11. The Accounting Profession's Laugh-a-Minute Lobbying Effort

EDITORIAL

From Wall Street to Main Street to Pennsylvania Avenue, shockwaves of accounting scandals and talks of "cooking the books" are now front-page headlines and lead stories on the nightly news. This week's Weekly News Wrap-Up covers the story from a number of angles, and the full news articles on the Web site, identified by the hyperlinks in this newswire, attempt to sort through the issues, how they will affect you, and what you should be doing now.

We dare say that the worst isn't over yet, but we reaffirm our commitment to providing you with as much information as we can to keep you in front of the shockwave. Go to AccountingWEB News for all the latest articles.

Michael Platt, CEO

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NEWS FOR ACCOUNTINGWEB SUBSCRIBERS

1. SEC Orders Corporate Officers to Certify Financial Statements

CEOs of publicly traded companies have been told that the must now personally certify that their most recent filings with the SEC are both accurate and complete or risk penalties, fines or even jail terms.

2. New IRS Program Will Encourage Taxpayers to Report Income

The IRS has implemented a new computer program that will efficiently match financial information on K-1 forms with information reported on taxpayers' 1040 forms, encouraging more compliance with accurate reporting by American taxpayers.

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3. KPMG, BDO Seidman Under Fire From IRS

Seeking ways to crack down on abusive tax shelters, the IRS has filed a lawsuit against KPMG and BDO Seidman, alleging that they are withholding critical information about tax shelters and the clients who use them. Does this fall under accountant-client privilege?

4. S&P Lists Top 10 Companies With Most "Inflated Profits"

Who will play the starring role in the next "accounting irregularities" confession game? Standard & Poor's thinks it has a pretty good way of measuring company profitability that can identify the next likely problem.

5. Small Business Owners Still Favorable Towards The Accounting Industry

As the accounting profession continues to get skewered in the media and on Capitol Hill, there is still at least one constituency that continues to hold it in somewhat high esteem when ranked against other professions. But the numbers from America's small business owners overall aren't terribly encouraging.

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6. President Bush Plans to Move Accounting Out of The Shadows

What was once viewed as a boring back office function now is caught in the cross-hairs of the Commander-in-Chief as President Bush laid out his new ethic of corporate responsibility this week. How will a presidential initiative to regulate accounting change the debate on audit reform?

7. Rating Agency Initiates Report Cards on Auditors

A new report card is being developed to measure the performance of major auditing firms in identifying ongoing-concerns and potential accounting problems in financial statements issued prior to companies going bankrupt. While auditors might think the numbers are acceptable, American investors might not.

8. GAO Announces New Compliance Date For Independence Rules

The new Yellow Book rules covering audits of governmental entities were supposed to take effect October 1, 2002. But a lot of auditing organizations either don't know about them or have lingering questions, causing a delay in implementation.

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9. Accenture and Cap Gemini Announce Job Cuts

Ex-Big Five consulting practices Accenture and Cap Gemini both announced worldwide job cuts over the last couple of weeks in anticipation of some restructuring efforts now underway. Find out where the opportunities are and where they see the need to cut back.

Accenture Article Gap Gemini Article

10.Lawmakers Advance Anti-Fraud Rules And FASB Act

The Senate this week, overwhelmingly approved several elements of President Bush's plan, including harsh new penalties for corporate fraud, and a House subcommittee on consumer protection passed the Financial Accounting Standards Board (FASB) Act.

11. The Accounting Profession's Laugh-a-Minute Lobbying Effort

We end this week's News Wrap-Up with a look at Washington Post columnist Sebastian Mallaby's overtly negative view of what he sees as the "comical" lobbying effort to protect the accounting profession.

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