Accounting standards

Global CPA and business-advisory firm Grant Thornton is gearing to launch a new practice unit — hedge fund internal control, governance and regulatory compliance services.

The American Institute of CPAs said that it backs the creation of a monitoring board that would link the International Accounting Standards Board to government regulators in different countries.

The Financial Accounting Standards Board and the International Accounting Standards Board are working together on resolving the knotty problems involved in lease accounting.

The Public Company Accounting Oversight Board has raised the aggregate 2009 fee it assesses to public companies and other issuers to $157.4 million from $151.8 million.

The Internal Revenue Service says that small businesses with deductions exceeding their income in 2008 can use a new net operating loss tax provision to get a refund of taxes paid in prior years. The IRS says it will work to issue refunds within 45 days or less “to the degree possible.”

Lawmakers continue to apply pressure to the Securities and Exchange Commission to reinstate a Depression-era rule that prevents traders from short-selling stocks whose share prices are falling.

The Financial Accounting Standards Board has issued a pair of proposed fair value staff positions written to provide additional guidance regarding measurements and impairments of securities, after coming under pressure at a congressional hearing to ease mark-to-market accounting standards.

David Friehling, the accountant who ran the tiny auditing firm that serviced Bernard Madoff’s broker/dealer firm, has been arrested and charged with securities and investment advisor fraud.

The nation's small businesses are squarely in Washington's crosshairs - targeted for more rigorous, more painful scrutiny by both federal tax enforcement officials and the nation's auditing standard-setters.The first whiff of the shift in increased enforcement to smaller business came last summer, with a new study by tax researchers at Syracuse University's Transactional Records Access Clearinghouse that discovered that the number of federal tax audits targeting small businesses with between $10 million and $50 million in assets increased by 29 percent from 2005 to 2007. Among the smallest companies - those with assets under $10 million - Internal Revenue Service investigations increased a whopping 41 percent.

As the Financial Accounting Standards Board tinkers with amendments to its Statement 140 and Interpretation 46R, the FASB staff has issued a staff position that expands disclosures about corporate involvement with variable-interest entities and transferred financial assets.The FSP is a stopgap statement, and will likely become part of the more extensive amendments now being deliberated.

One of the many problems the ongoing financial crisis has brought to light is the fact that generally accepted accounting principles do not necessarily give investors all the information they need to foresee the perils that a company faces. And though auditors have to certify that an entity is a "going concern," they do not have to note that the concern is going over a cliff.Eleanor Bloxham, chief executive officer of the Corporate Governance Alliance, a governance advisory concern, said that the problem lies in the failure of financial reports to report a crucial fact: a company's actual financial condition.

We have a perennial puzzle we just can't explain to our satisfaction.Here it is: Why are managers so willing to go overboard in product development and promotion, yet so blissfully content in doing the least required when it comes to financial reporting?

Internal Revenue Service Commissioner Doug Shulman has announced guidance for Ponzi scheme victims and their tax preparers. The guidance, which Shulman emphasized is not specific to the Madoff case, is in the form of a revenue ruling and a revenue procedure.

The Financial Accounting Standards Board and its parent organization, the Financial Accounting Foundation, sent a comment letter to the Securities and Exchange Commission giving a thumbs-up to the proposed roadmap to International Financial Reporting Standards, but they urged more consultation and study.

American Institute of CPAs’ president and chief executive Barry Melancon reiterated his organization’s stance that fair value accounting was not a primary cause of the current economic distress and that the private sector — rather than Congress — should continue to set accounting standards.

Financial Accounting Standards Board Chairman Robert Herz was pressed to make changes in mark-to-market accounting standards in as soon as three weeks during a contentious congressional hearing.

The adoption of International Financial Reporting Standards in the U.S. looks to be increasingly in doubt.

Accounting firm BDO Seidman anticipates that shareholder meetings this year will be dominated by concerns about excessive executive compensation, recession plans and credit concerns.

Federal Reserve Chairman Ben Bernanke said that accounting standards need to be modified to deal better with valuing illiquid assets.

Many financial executives in the U.S. have begun the initial stages of convergence with International Financial Reporting Standards at their companies, but early adoption in 2009 for qualifying companies will be difficult, if not impossible, due to the significant time requirements, according to a new report.