Accounting standards

Speaking to an American Institute of CPAs conference, Securities and Exchange Commission Chairman Christopher Cox suggested that accounting rules need to be simplified in order to ensure that financial irregularities aren't hidden.

Ameriprise Financial -- the entity spun off by former parent American Express -- and its broker-dealer arm agreed to pay $57.3 million to settle charges of illegal trading and brokerage misconduct.

The European Commission said that it might delay accepting U.S. accounting standards as being equivalent to those used in the European Union.

The Securities and Exchange Commission unanimously voted to request public comment on rules that will allow companies to use the Internet to satisfy proxy material delivery requirements.

Diane M. Rubin, a partner at San Francisco-based Novogradac & Co. LLP, was recently installed as chairwoman of the National Association of State Boards of Accountancy for 2005-06.

Krispy Kreme Doughnuts Inc. has again put off filing financial statements with the Securities and Exchange Commission.

Giovanni Prezioso, general counsel at the Securities and Exchange Commission, said he would leave the regulator to return to a post in the private sector.

After opposition from business and the accounting profession, the International Accounting Standards Board has shelved its plans to fast-track changes to its technical corrections policy.

Yet another piece in the jigsaw of legislation controlling corporate governance, accountancy and auditing, aimed at boosting investor confidence in European Union business, is coming into focus as upgrades are being considered to the 4th and 7th Directives on risk management and internal control for unlisted companies.Those enhancements cover both off-balance-sheet arrangements and company transactions with related parties such as family members.

If the Committee of Sponsoring Organizations of the Treadway Commission has succeeded in doing what it set out to do, small public companies may soon have an easier time of documenting their internal controls.Back in 1992, COSO issued a set of recommendations, "Internal Control - Integrated Framework." Ten years later, the Sarbanes-Oxley Act of 2002 required companies to certify the adequacy of their internal controls, and the COSO framework became a de facto standard.

Tax practice for CPAs is changing. Recent modifications to Circular 230, the U.S. Treasury Department regulations that govern practice before the Internal Revenue Service, have established several changes that leave CPAs with a new standard for the practice of taxation.The rationale for the revised regulations is part of an IRS effort to promote ethical tax practices and curb abusive tax avoidance programs promoted by some tax professionals. Some CPA and law firms were coming up with tax-motivated transactions for clients and then packaging those transactions to sell to other companies.

Advanced degrees are being obtained by a higher percentage of the middle- and upper-class population than ever before. Many of these students hold full-time jobs. The recent development of online universities has only served to fuel this trend. The ability of working students to take a business expense deduction for tuition expenses likewise has grown in importance.With MBAs being one of the hot degrees to have as of late, because of its apparent ticket to success in many different business settings, it's a small wonder that a recent Tax Court decision has attracted more than its share of attention. That case (Allemeier Jr., T.C. Memo. 2005-207) appears to have opened up the possibility that the expense for obtaining a larger number of MBA degrees can be written off as a trade or business expense.

As the American Institute of CPAs' director of auditing and attestation, Chuck Landes has guided the Auditing Standards Board through the upheavals of the Sarbanes-Oxley Act, and in late October, he saw the board issue 11 inaugural standards for the audits of private companies."This was a monumental meeting," Landes said of the most recent ASB meeting. "I am just thrilled. I'm very proud of the technical staff, who have worked very hard and are finally seeing the fruits of all their labor come to fruition in the issuance of these new auditing standards. These standards make significant changes in how some auditors perform their work, and clearly they will improve the quality of auditing."

The Public Company Accounting Oversight Board will meet prior to the Thanksgiving holiday in order to address a number of items.

The Securities and Exchange Commission's 2005 financial statements got a clean bill of health from the Government Accountability Office, after the SEC accelerated its financial reporting schedule to issue the documents.

Securities and Exchange Commission Chairman Christopher Cox named Scott Taub as the agency's acting chief accountant.

While the Internal Revenue Service has made "great strides" in addressing financial management challenges and internal control deficiencies, a report from the Government Accountability Office stated that the service still faces substantial hurdles in that area.

The Internal Revenue Service has issued Notice 2005-88, which explains steps that large corporations and tax-exempt organizations can take to seek waivers from electronic filing requirements.

The Financial Accounting Standards Board will add a new project to its agenda and reconsider its accounting guidance for pensions and other retirement benefits.

Bond insurer MBIA Inc. will restate its earnings for the past seven years, as well as set aside $75 million in anticipation of settling with regulators over an accounting probe into defaulted bonds.