Accounting standards

The recent release of the long-awaited final regs on nonqualified deferred compensation under Code Sec. 409A did not bring a much-hoped-for extension of the effective date for full implementation of the rules. The final regs - all 209 pages of them, and the 186 pages it took to explain the changes made or not made to the proposed regs - do not extend the transition relief for compliance beyond Dec. 31, 2007.That does not leave much time for compliance, let alone formulating tax strategies that take maximum advantage of the small leeway that the final regs provide to employers. Compensation plans drafted under the proposed regulations must be compared against the final regs. Decisions on whether a plan should be terminated must be made. Final plan designs must be drafted and adopted. And then an explanation of the terms of the compliant plan must be explained (and sold) to the key executives who the plan has been adopted to keep happy in the first place.

Two years ago, I thought that the strategy of outsourcing tax returns overseas had prompted some fairly spirited debates within the accounting profession and made slam dunk opinion pieces and commentary for Accounting Today.

In a sweeping macro-view of major accounting issues poised to impact the profession, Financial Accounting Standards Board chairman Robert Herz said that the profession can get to a better reporting system, but it’s going to take some changes to get there.

As expected, the Treasury Department has created a new committee that will be charged with studying problems in the accounting industry.

The Public Company Accounting Oversight Board will vote on a final standard on auditing internal control over financial reporting next week, as well as taking up a related independence rule and conforming those amendments to the board’s auditing standards.

Only 6 percent of companies have assessed how statement No. 157, “Fair Value Measurement,” will impact the valuation of their assets and liabilities, according to a recent online poll conducted by Deloitte Financial Advisory Services LLP.

The Securities and Exchange Commission will drop its fight against a court decision putting more restrictions on Wall Street brokers who oversee $300 billion in clients' cash.

Penthouse International Inc. has settled charges of accounting fraud and financial reporting violations, the Securities and Exchange Commission announced last week.Former Penthouse executive Charles Samel and former shareholder Jason Galanis will both pay $60,000 to settle accounting fraud charges and be barred for five years from serving as officers or directors of any public company, although neither man admitted or denied wrongdoing as part of the settlement.

Like many of you who were once college freshman, I can vividly recall my first formalized session of “orientation,” those mandated get-togethers where a group of impressionable 17-and 18-year-olds receive a veritable laundry list from upperclassman and administrators of the do’s and don’ts in academe.

Treasury Secretary Henry Paulson is set to act more formally on efforts to make the United States an easier place to do business, according to published reports.

The Securities and Exchange Commission's Office of the Chief Accountant announced the selection of three academic accounting fellows, who will serve one-year terms beginning this summer.

Prabhat Goyal, the former chief financial officer of software manufacturer McAfee Inc., was convicted on 15 counts of securities fraud last week.

The Securities and Exchange Commission plans to issue a proposal to have new rules in place for corporate annual meetings in 2008, according to published reports.

Criticism is nothing new to either the Financial Accounting Standards Board or the Governmental Accounting Standards Board. They get it from investors who want more information. They get it from corporations that say they already offer too much information. And recently, they've gotten it from both the Securities and Exchange Commission and from a former SEC chairman.

The Securities and Exchange Commission endorsed the recommendations of the agency's professional staff to eliminate "waste and duplication" in companies' compliance with Sarbanes-Oxley. The change is particularly aimed at providing relief for smaller companies.

In recent hearings before the House Ways and Means Subcommittee on Select Revenue Measures, both the American Institute of CPAs and the New York State Society of CPAs called for the repeal of the oft-debated alternative minimum tax.

Appointed to serve as the first executive director of the Center for Audit Quality, Cindy Fornelli is guiding the new organization in its mission to bolster confidence in the audit process, and to aid investors by promoting constructive suggestions for change.Still affiliated with the American Institute of CPAs, the center is the revamped version of the AICPA’s former Center for Public Company Audit Firms. The CAQ Governing Board consists of representatives from the AICPA, the major public company auditing firms and independent public members.

The International Accounting Standards Board has published its preliminary views on accounting for insurance contracts in a discussion paper.

The Public Company Accounting Oversight Board is soliciting nominations and re-nominations for members of its Standing Advisory Group. Created in 2003, the 31-member SAG assists the audit firm overseer in carrying out its standards-setting responsibilities. The PCAOB is currently seeking nominations and re-nominations annually to fill 15 positions. Appointments are for two-year terms. Nomination forms are available on the PCAOB Web site, www.pcaobus.org. The deadline for submissions is June 15, 2007. Appointments will be announced by the end of October, and the new terms will begin in January 2008. The group, chaired by the PCAOB chief auditor and director of professional standards, Thomas Ray, meets roughly three times a year.

In the ongoing movement toward the convergence of U.S. and international accounting standards, President Bush and German Chancellor Angela Merkel have sealed an agreement that would clear a path toward a unified set of accounting standards by 2009. The agreement will establish a "Transatlantic Economic Council" to help lower regulatory barriers between the U.S. and the European Union. The council, will co-chaired by White House economic adviser Allan Hubbard and European Commission vice president Guenter Verheugen and will submit annual reports on the progress top both EU and U.S. leaders. The signing comes as the Securities and Exchange Commission is mulling whether to allow foreign companies registered in the U.S. to file their statements using international financial reporting standards in lieu of generally accepted accounting principles.