AccountingWEB Weekly News Wrap-Up - Issue 128
January 11, 2002
This News Wrap-Up Sponsored By:
NEWS FOR ACCOUNTINGWEB MEMBERS
1. Andersen Admits Destroying Enron Documents
2. FASB Forges Ahead on Three New Frontiers
3. Software Amnesty Program Offered in Seven Cities This Month
4. New Considerations for Financial Statement Prep This Year
5. IRS "Misplaces" Over 2,300 Computers
6. Andersen Gets "Thumbs Up" on Peer Review
7. Homestore.com Trips on Barter Accounting: Who's Next?
8. U.S. Supreme Court Narrows Definition of "Disability"
9. Xerox Takes on the SEC
10.Contribute Your Expertise to New CPA Exam
2002 has been a tough year so far for the accounting profession. The Enron investigation has expanded to the U.S. Senate and Justice Department; auditors are coming under fire as other big companies face accounting-related scrutiny; the controversial Global Business Credential proposal was killed by the AICPA membership; and questions are starting to be raised again about the value of the self-regulatory Peer Review process in the wake of Deloitte's opinion that Andersen's processes are clean.
As we look forward to navigating the environment in 2002, the profession will be challenged to address some critical questions. Marty Rosenberg, President of the Illinois CPA Society, thoughtfully addresses these questions as he prepares to step down from that position after twenty-five years of service. Please take a moment to read Mr. Rosenberg's comments, as he looks back at 2001 and poses some thought provoking questions for the future of the profession.
NEWS FOR ACCOUNTINGWEB MEMBERS
On Thursday, Big Five firm Andersen notified government agencies investigating the Enron situation that in recent months members of the firm destroyed documents relating to the Enron audit. The Justice Department announced it has begun a criminal investigation of Enron Corp., and members of the Bush administration acknowledged they received early warning of the trouble facing the world's top buyer and seller of natural gas.
At its January 9, 2002 meeting, following a rash of well-publicized complaints about the slowness of the accounting standard-setting process, the Financial Accounting Standards Board decided to forge ahead on three new frontiers.
The Business Software Alliance (BSA) has announced its Software Grace Period for seven major U.S. cities during the month of January. Is your city on the list?
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The Big Five accounting firms, in cooperation with the American Institute of CPAs, have issued a detailed list of risk factors to consider when preparing and communicating financial results for 2001. The document, "Impact of the Current Economic and Business Environment on Financial Reporting," also includes suggestions for how management, audit committees and auditors can contribute to a clear understanding of a company's health.
A Treasury Department audit late last year has uncovered the fact that the IRS can't find over 2,300 computers from its inventory of over 163,000. The computers were either lost, stolen, or lost "due to bookkeeping errors" over the past three years. The IRS has indicated that they are "reasonably sure" that there is no sensitive or private information stored on those machines.
EIGHT NEW INDUSTRY PROFILES ADDED
Professionals across the nation have discovered the client service benefits of Industry Profiles from First Research. If you have been hesitating or have not yet discovered the benefit of industry profiles, now is the time to act. We have recently added eight new profiles which include Paper Products Manufacture; Public Schools K-12; Gambling Operations; Pest Control Services; Travel Agencies & Travel Services; Apparel Manufacture; Meat Products Manufacture; and Sporting Goods Retailers. Check them out today.
In an exercise that is sure to capture the attention of the SEC, the Peer Review Committee of the American Institute of Certified Public Accountants' SEC Practice has accepted a "clean" Peer Review of Big Five accounting firm Andersen. Deloitte & Touche, the firm issuing the report, offered an "unmodified" opinion of the firm's accounting and auditing practices.
U.S. retail and property service Homestore.com joins the list of companies investigating possible accounting irregularities. In a recently-filed Form 8-K, the company said that it expects to restate its nine-month financial results and reduce the revenue figure by as much as $95 million to better reflect the nature of on-line advertising transactions that should have been accounted for as barter transactions.
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Employers scored a major victory this week as the United States Supreme Court limited the definition of "disability" for employees under the American with Disabilities Act. Under the ruling, a person qualifying as "disabled" must be found to have an impairment that affects his or her daily life, not simply the tasks required in a specific job.
Xerox Corporation served notice on Monday that it plans to dispute the Securities and Exchange Commission's ruling of improper treatment of accounting for leases. The SEC has been investigating Xerox for the past 18 months and has concluded that the method Xerox uses for accounting for sales leases has resulted in financial reporting that is not in accordance with generally accepted accounting principles.
In conjunction with the conversion to a computerized Uniform CPA Examination, the American Institute of Certified Public Accountants (AICPA) is looking for volunteers who can help with writing and/or reviewing portions of the exam.
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. Check out all the questions at our Q&A Forum and see if you can lend a hand.
1. 457(k) Disbursement - What are the implications of receiving a check for a complete disbursement from a 457(k) plan, and what are the tax implications of reinvesting this money in a 401(k) plan?
2. Web site design costs - Should the cost of Web site design by capitalized?
3. FAS 133/138 CPE Course - Does anyone know of a comprehensive CPE course for FAS 133/138, preferably computer-based?
4. LIFO Inventories - A reader is looking for software providers or companies that perform calculations for automobile dealers' LIFO calculations.
5. Outlook - Is there a way to have Outlook messages automatically forwarded to another e-mail address?
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