Accounting standards

The U.S. Chamber of Commerce had offered up a number of recommendations for changes to the country’s legal and regulatory framework -- taking aim at Securities and Exchange Commission and the Sarbanes-Oxley Act in the process.

After two years of compliance with the internal control provisions of the Sarbanes-Oxley Act, proxy researcher Glass Lewis & Co. says that public companies are reporting fewer material weaknesses in their internal controls.

The Private Company Financial Reporting Committee announced its inaugural members on Tuesday.

The heads of the major accounting regulators in the United States and the European Union agree that they are on the same page in heading towards convergence of standards.

For the past year, the Securities and Exchange Commission has been investigating how Google accounted for its income taxes, according to the online search giant’s 2006 annual report.

A board within the International Federation of Accountants is seeking comment on its exposure draft that addresses what auditors should consider when dealing with related parties and related-party transactions.

In a return to the office’s roots, the Securities and Exchange Commission has named a director for its Office of Legislative and Intergovernmental Affairs. Meanwhile, the Internal Revenue Service has appointed a new head of its Office of Professional Responsibility, which was created in the wake of the Enron implosion.

In a unanimous vote, 412-0, the House said that it will require a trio of accounting regulators to provide regular updates on the work being done to reduce the complexity of financial reporting and develop principles-based accounting standards.Through 2012, either the chairmen or other designees from the Securities and Exchange Commission, the Public Company Accounting Oversight Board and the Financial Accounting Standards Board will now provide annual testimony to the House Financial Services Committee.

The International Federation of Accountants is seeking nominations for members of its boards and committees in 2008.

The Internal Revenue Service may not reach the 80 percent e-filing goal for the 2007 fiscal year set by Congress in 1998, but it continues to advance with the help of improved technology, wider perception of its benefits, and both state and federal mandates for taxpayers and preparers.Last year, more than 73 million tax returns were filed electronically - nearly 54 percent of all tax returns - while the Free File Alliance, a partnership between the IRS and software vendors, continues to help drive taxpayers toward e-filing, serving about 4 million individuals last year. This year, the program has been expanded, with 70 percent of taxpayers - those with an adjusted gross income of $52,000 or less - now eligible.

The odds are looking better for Senate approval of legislation to increase the minimum wage, but reconciling that bill with a House version - which contains no tax breaks for businesses - figures to take some negotiating.Senate debate on the bill ended in late January with an 87-10 vote, and final Senate passage of the bill was expected in early February.

The Internal Revenue Service Oversight Board said that the agency still has a ways to go before fully reaching the vision outlined in the IRS Restructuring and Reform Act of 1998. The board's "foremost concern" remains the tax gap - estimated at $290 billion, according to 2001 tax returns.In 2006, the board examined a variety of recommendations to reduce the gap, finally concluding that there was no one "silver bullet" that will solve the problem. According to the board, reducing the tax gap requires a comprehensive set of strategies balancing prevention and correction - similar to the recommendations suggested by other groups. Among the board's recommendations are a simpler tax code, more complete information reporting to more IRS audit and collection personnel, and quality customer service. The IRS must also address information technology modernization and human capital challenges as it continues to modernize itself.

The recent decision by the Financial Accounting Standards Board not to defer the effective date of FASB Interpretation No. 48, despite appeals from companies and industry groups to postpone its implementation, spotlights the radical changes in approach required of financial-statement preparers, auditors and tax advisors.FIN 48, Accounting for Uncertainty in Income Taxes, is effective for fiscal years beginning after Dec. 15, 2006. It establishes a "more-likely-than-not" threshold for the reporting of uncertain tax positions on financial statements. Under the rule, an uncertain tax position may not be recognized unless it is more likely than not that it will be sustained on its technical merits, and there is a more than 50 percent likelihood that it would be sustained if it were challenged and considered by the highest court in the particular jurisdiction.

The Internal Revenue Service has released a fact sheet explaining the 2006 alternative motor vehicle credit allowed for the 44 automobiles certified as eligible.The credit, enacted under the Energy Policy Act of 2005, provides up to $3,150 for taxpayers who purchased qualified vehicles and placed them in service during 2006.

There’s an old joke that no doubt circulates through the Trial Lawyers Association, and it goes something like this:

The European Union's 2007 agenda encompasses a range of activities aimed at achieving cohesion in accounting, auditing and finance, with taxation in particular receiving as much attention as anything else, as the focus of a number of planned efforts.For instance, the European Commission's work program cited the ongoing issue of sales tax, where examples of massive fraud have been building to a head. By March, the commission is anticipating the results of two studies: one on reducing rates, and the other dealing with how to tackle fraud.

Raymond James Financial will pay $2.75 million to a brokerage firm regulator for poor supervision of its more than 1,100 branch managers who manage their own offices.

The Internal Revenue Service and the Treasury Department announced that they will work on creating detailed LIFO guidance for automobile wholesalers, manufacturers and dealers.The accounting issue confronting the automobile industry -- which involves the proper treatment of the dollar-value, last-in, first out inventory method for pooling purposes of “crossover vehicles,” which have characteristics of both trucks and cars -- was selected for the Industry Issue Resolution Program, which provides guidance to help clarify complex tax issues

The International Accounting Standards Board has published an exposure draft of a slimmed-down handbook outlining its international financial reporting standard for small and midsized companies.

The Financial Accounting Standards Board has issued a standard providing companies with an option to report selected financial assets and liabilities at fair value.