Accounting standards

The Securities and Exchange Commission has proposed setting a roadmap for transitioning from U.S. GAAP to International Financial Reporting Standards by 2014.The SEC plans to issue a concept release setting several milestones for the transition, with the option for some large companies to make the transition earlier if they are leaders in their industries.

The Financial Accounting Standards Board once again finds itself on the horns of a dilemma.At issue are proposed amendments to Financial Accounting Standard 5, on disclosure of loss contingencies. If adopted as presented in an exposure draft issued earlier this year, the amended standard would require companies to disclose the extent of their exposure to loss in lawsuits and environmental matters, including not only the amount of litigation claims, but also of predicted court costs and possible punitive damages.

The Securities and Exchange Commission has issued an addendum to an earlier letter it has sent to the CFOs of some public companies asking them to provide additional information about their fair value measurements, including credit risks and broker quotes.

The Securities and Exchange Commission issued a statement clarifying the accounting treatment for money market mutual funds amid the growing turmoil in the financial markets.

The Securities and Exchange Commission charged American Italian Pasta Co. and its former senior executives with participating in a fraudulent accounting scheme to artificially increase the company's stock price, and the company agreed to pay $7.5 million to settle the charges.

Tax preparers in Oregon may set a standard for future regulation of tax preparers nationwide, according to a new report from the Government Accountability Office.

The Financial Accounting Standards Board has issued three exposure drafts of proposed financial standards and amendments relating to accounting for transfers of financial assets.

As one investment bank after another falls prey to the expanding crisis in the credit and mortgage markets, accounting regulators are trying to get a handle on the mess.

The American Institute of CPAs has issued a proposed update to its audit guide for the gambling industry that takes into account some recent issues faced by casinos.

The Financial Accounting Standards Board has issued a staff position aimed at improving disclosures about credit derivatives.

The International Accounting Standards Board and the Financial Accounting Standards Board have updated their 2006 memorandum of understanding and set a goal of completing their major joint projects on convergence of International Financial Reporting Standards with U.S. generally accepted accounting principles by 2011.

Accounting and auditing software developer CaseWare is protesting the Securities and Exchange Commission's recent introduction of its IDEA interactive financial-filing system, claiming the name infringes on the trademark of CaseWare's own IDEA software.

The Securities and Exchange Commission has charged three former senior executives from software developer Embarcadero Technologies with stock options backdating.

United Rentals has agreed to pay $14 million to settle charges that it engaged in financial fraud and a broad range of improper accounting practices.

PricewaterhouseCoopers has released three new guides to help companies make the transition to International Financial Reporting Standards.

Former Securities and Exchange Commission Chairman Arthur Levitt will chair a Governance Leadership Council formed by risk management service provider RiskMetrics.

The Foreclosure Prevention Act of 2008, recently signed without fanfare by President Bush, contains provisions that will, according to insiders, complicate tax returns for years ahead.The tax portion of the bill, the Housing Assistance Tax Act of 2008, contains over $15 billion in tax incentives that are offset by a number of revenue raisers.

Congressional tax reformers are taking aim at one of the most cherished tax breaks available to working Americans — employer-paid health insurance coverage.During the latest round of tax reform hearings before the Senate Finance Committee, experts in both taxation and health care presented their case for eliminating — or at least sharply reducing — the federal tax subsidies given for employer-provided health insurance, which now provide the average U.S. taxpayer with nearly $3,000 a year in benefits.

Ernst & Young has settled charges with the Securities and Exchange Commission for $2.9 million alleging a conflict of interest in its audits of three companies.The case involved a series of interviews that Ernst & Young distributed on audio CDs with the chief executives of various companies. The interviews were conducted by executive coach Mark C. Thompson, who was also a board member of three companies audited by the firm.

In a pair of proposals that may eliminate much of the confusion surrounding audits of companies that outsource certain functions, such as payroll processing, the Auditing Standards Board has approved the issuance of an exposure draft that splits Statement of Auditing Standards 70 into two separate kinds of standards.Chuck Landes, American Institute of CPAs vice president of professional standards and services, said that the new standards follow the natural lines of division between types of audits — those of audit clients, and those of “service organizations” that perform outsourced functions.