Grassley Okays GAO Investigation into CPA Firm Tax Shelter Transactions

In 2002, Sen. Chuck Grassley, chairman of the Committee on Finance, tried to amend the Sarbanes-Oxley accounting standards improvement bill to prohibit public auditors from rendering an audit opinion on the financial statement effects of any tax shelter arrangements that the auditing firm sells to an audit client.

The initiative was meant to target shelters that have the potential to manipulate financial statement results, such as overstating profits or understating liabilities. Other senators blocked Grassley from offering his amendment. Now, Grassley has given permission for the General Accounting Office to receive key information from the Internal Revenue Service that will aid a GAO review of this issue. Sen. Carl Levin, ranking minority member, Permanent Subcommittee on Investigations, Committee on Governmental Affairs, requested the GAO review. Grassley made the following comment on this issue.

"Sometimes interest in reform ends when headlines die down. In this case, there's still a lot of interest among key senators in stopping financial statement manipulation. We need to make sure accounting firms aren't signing off on abusive tax shelters and then selling them to their auditing clients. These clients need good counsel from an impartial observer before they put themselves on the line. The law should protect them if the accounting firms won't. I'm glad to help my fellow senator in this effort."

You may like these other stories...

Boehner addresses GOP priorities ahead of midterm electionsHouse Speaker John Boehner (R-OH) on Thursday delivered what amounted to closing arguments ahead of the November elections, laying out a list of Republican...
As anyone who's ever been through a divorce can attest, the pain of parting with your spouse isn't just emotional—the fallout from divorce can wreak financial havoc as well long after the dust in the courtroom...
Former DOJ Tax Division head Kathryn Keneally joining DLA Piper in New YorkGlobal law firm DLA Piper announced on Thursday that Kathryn Keneally, the former head of the US Justice Department Tax Division, is joining the firm...

Already a member? log in here.

Upcoming CPE Webinars

Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 21
Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience's communication style.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.