Accounting standards

While corporate scandals in the U.S. have received a great deal of attention, Europe has its own versions of Enron and WorldCom. Parmalat, the Italian agribusiness giant, and Ahold, the Dutch retailer, are two recent examples. The scandals and the resulting loss of investor confidence have increased global efforts to create a regulatory framework that improves transparency in financial reporting for both publicly traded companies and government agencies.

The Securities and Exchange Commission has released a report recommending that the Financial Accounting Standards Board reform accounting standards for such front-burner issues as pension and lease accounting.

Mortgage finance giant Freddie Mac said that it expects to post a loss because of anticipated claims likely to stem from various lawsuits and enforcement actions related to its multi-billion-dollar earnings restatement.

The Securities and Exchange Commission has opened a formal investigation into OfficeMax Inc.'s accounting for vendor income, the company disclosed.

HealthSouth Corp. will pay $100 million to settle charges brought against it by the Securities and Exchange Commission alleging that it cooked its books by more than $2 billion over several years.

Tax and accounting software provider CCH has added Securities and Exchange Commission comment letters to its Accounting Research Manager 10-K Lookup tool.

Hiring ceilings at the Securities and Exchange Commission have reportedly been cut by 10 percent across the board amid facility cost overruns and an anticipated lower budget for fiscal 2006.

Overseas accounting rule makers are kicking off the summer with a series of road shows across Europe to talk with members of the business community there about International Financial Reporting Standards, which are now mandatory for listed companies in all 25 member states of the European Union.

Almost overnight, lease accounting has morphed into one of the profession's biggest headaches, as more than 300 companies have had to restate their financials, citing, among other issues, corrections to lease accounting errors.

Doubts are hovering over the timely implementation of the Basel II capital adequacy mandate in Europe, as the possibility lingers that the European Parliament will fail to clear the ruling smoothly.

With its role in standard-setting now clearly defined, the Auditing Standards Board has been making up for lost time as it moves toward a series of new proposed standards.

The Internal Revenue Service has been shifting its priorities from taxpayer service to enforcement and its management of the Business Systems Modernization program - an ongoing umbrella program of upgrades - from contractors to IRS staff.

The next few months should pump a little excitement into the profession as the Financial Accounting Standards Board moves to issue as many as 20 new documents - most of them exposure drafts - with some proposing significant changes to financial reporting.

In addition to its ongoing work on the implementation of Auditing Standard No. 2, the Public Company Accounting Oversight Board will focus on rules related to auditor independence and tax services and strengthening its enforcement staff during the second half of the year, according to its chairman.

The Securities and Exchange Commission Advisory Committee on Smaller Public Companies will hold its second meeting next week in New York to finalize its agenda, to consider suggestions on defining the term "smaller public company" and to hear testimony on methods to scale securities regulations for smaller public companies.

As part of its broader effort toward convergence with international reporting standards, the Financial Accounting Standards Board has issued Statement No. 154, "Accounting Changes and Error Corrections."

The U.S. Department of Labor and the Securities and Exchange Commission have published tips to assist fiduciaries of employee benefit plans in reviewing conflicts of interest of pension consultants.

A day after Securities and Exchange Commission Chairman William Donaldson announced that he would step down from his post at the end of the month, President Bush announced his nomination of Republican Congressman Christopher Cox of California as the next head of the SEC.

Securities and Exchange Commission Chairman William H. Donaldson announced that he would step down at the end of the month.

Following the completion of an internal review, insurer American International Group Inc. finally filed its repeatedly delayed 2004 annual report.