News Wrap-Up - Issue 224

This News Wrap-Up Brought To You By:

Aspen's Accounting Research Manager

THIS WEEK'S NEWS

  1. Scrushy Attorneys to Seek Repeal of Sarbanes-Oxley
  2. SEC Looks Into Ernst & Young's Relationships With Audit Clients
  3. Justice Department Accuses KPMG of Withholding Documents
  4. AICPA Takes Steps to Improve Investor Confidence
  5. AICPA Chair Voynich Calls For More Changes
  6. Virginia Tracks Down Fake War Heroes Claiming Tax Deductions
  7. Board Adopts Rules For Non-U.S. Firms, July 2004 Deadline
  8. AICPA Chairman Responds to Foreign Outsourcing Concerns
  9. Freddie Mac Agrees to Pay $125 Million Fine
  10. Treasury Department Seeks to Offer Tax-Free Investment
  11. $32 Million Settlement Reached in Deloitte Hedge Fund Case

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*** PLATT’S PERSPECTIVE ***

We are a nation built on laws. When accounting scandals rocked the corporate landscape last year, Congress stepped in and quickly passed the Sarbanes-Oxley Act, a law with a host of rules, regulations and requirements to prevent corporate executives from taking advantage of the trust placed in them by the investing public.

But the very nature of checks and balances in our system of law may also lead to developments, which, frankly, just aren't right. Richard Scrushy, the ousted CEO of embattled HealthSouth, and the first CEO to be charged under Sarbanes-Oxley, decided this week that his defense will be to challenge the law itself. His lawyers will attack the Sarbanes-Oxley Act and will try to build their case around a premise that the law is unconstitutional.

In a nation of laws, the balance will always be between
empowering our government to create the law and empowering the judicial system to challenge the law. One can only hope that common sense will always - or at least most of the time - prevail. Click here to read more.

Happy Holiday's From AccountingWEB!

Michael Platt
AccountingWEB, Inc.

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THIS WEEK'S NEWS

  1. Scrushy Attorneys to Seek Repeal of Sarbanes-Oxley

Richard Scrushy, founder and ousted CEO of HealthSouth, may be the first corporate executive to be charged under the new Sarbanes-Oxley Act corporate governance rules, but he plans to challenge the act itself.

  1. SEC Looks Into Ernst & Young's Relationships With Audit Clients

A SEC rule that allows auditors to have business-related affiliations with audit clients only "as a consumer in the normal course of business" - which isn't clearly defined - is the impetus behind an investigation into Ernst & Young's relationships with three audit clients.

  1. Justice Department Accuses KPMG of Withholding Documents

Earlier this week, the Justice Department accused KPMG LLP of hiding documents from the IRS in order to cover up tax-sheltering activities. According to the report, the Justice Department is requiring the court to force the firm to hand over all the documents requested, not just those KPMG says aren't covered by privilege.

  1. AICPA Takes Steps to Improve Investor Confidence

Audits performed for periods beginning on or after Dec. 15 will have to comply with a new AICPA directive, which requires accounting firms to do more to prevent fraud. The new rule, Statement on Accounting Standards 99, or SAS 99, is part of the overall effort to boost investor confidence after a series of corporate scandals.

  1. AICPA Chair Voynich Calls For More Changes

S. Scott Voynich, Chair of the AICPA, said this week that further changes were necessary to regain the confidence of American investors. "It is not enough to embrace change," Voynich said to an audience of nearly 2,000 CPAs, regulators and reporters. "We have to drive it."

MORE NEWS...

  1. Virginia Tracks Down Fake War Heroes Claiming Tax Deductions
  2. Board Adopts Rules For Non-U.S. Firms, July 2004 Deadline
  3. AICPA Chairman Responds to Foreign Outsourcing Concerns
  4. Freddie Mac Agrees to Pay $125 Million Fine
  5. Treasury Department Seeks to Offer Tax-Free Investment
  6. $32 Million Settlement Reached in Deloitte Hedge Fund Case

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