Accounting standards

More than half of U.S. and European multinational companies will increase their compliance spending by an average of 23 percent over the next 12 to 24 months, according to a recent survey from Big Four firm PricewaterhouseCoopers. According to PwC's Management Barometer Survey, about 51 percent of those polled said that they would raise spending on compliance, while some 44 percent of senior executives revealed that their respective companies do not have a clear view of their total compliance spending. Overall, companies that responded to the survey indicated that they expect to increase their compliance spending by an average of 9.9 percent over the next 12 to 24 months. A large majority (90 percent) said that during the next 12 to 24 months, they are planning improvements to their company's compliance efforts including risk management, bolstering programs to reduce compliance costs and streamlining cost efficiency. According to the poll, 59 percent of executives surveyed admitted that their compliance programs are "somewhat inefficient," while an additional 5 percent said that their programs are inefficient and that their company spends more than it needs to. Only 32 percent considered their compliance programs "very efficient." Some 49 percent of U.S. and European multinational companies believed that their compliance programs need improvement, while a surprising 52 percent said that they don't understand clearly the value their company receives from compliance spending. The survey, as well as PDF versions of the U.S. and European findings, are available at http://www.barometersurveys.com.

The audit committee of financial services conglomerate American Express Co. approved the appointment of Big Four firm PricewaterhouseCoopers as its auditor for 2005, according to a federal filing. PwC succeeds Ernst & Young as the company's independent accountant. Ernst will remain as auditor for AmEx through Dec. 31. American Express engaged PwC following an extensive RFP process. The company's audit committee conducts a mandatory review of its outside auditor every 10 years. There were no disagreements between American Express and E&Y on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.

Two years ago, the Financial Accounting Standards Board announced that it would strive to write standards that depended more on principles than on specific rules or guidance.

The Financial Accounting Standards Board has issued FASB Statement No. 151, Inventory Costs. According to FASB, the new statement, an amendment to No. 43 Chapter 4, would improve financial reporting via clarification that abnormal amounts of idle facility expense -- i.e. freight, handling costs and spoilage -- should be recognized as current-period charges. The measure also requires the allocation of fixed production overheads to inventory based on a facility's normal capacity. The standard-setter, headquartered here, said in its clarification of ARB 43 that it adopted language used in International Accounting Standard No. 2 as part of its effort toward convergence to a single set of global accounting standards. FASB said that the guidance is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The statement may be accessed from the FASB's Web site at http://www.fasb.org.

A controversial tax return inspection provision contained in a Bush administration budget bill for fiscal 2005 will be removed before the legislation is sent to the White House for the president's signature.

Members of an advisory council to accounting rulemakers say that revenue recognition should be the Financial Accounting Standards Board's top priority.

A controversial tax return inspection provision contained in a Bush administration budget bill for fiscal 2005 will be removed before the legislation is sent to the White House for the president's signature.

A controversial tax return inspection provision contained in a Bush administration budget bill for fiscal 2005 will be removed before the legislation is sent to the White House for the president's signature.

A controversial tax return inspection provision contained in a Bush administration budget bill for fiscal 2005 will be removed before the legislation is sent to the White House for the president's signature.

The Financial Accounting Standards Board and its overseas counterpart, the International Accounting Standards Board, have formed a new joint international working group on performance reporting.

The Securities and Exchange Commission has barred Enron North America's former chief accounting officer from practicing before it for four years.

As expected, the Securities and Exchange Commission this week postponed for a year the final phase-in period for rules that would shorten the amount of time that larger companies, known as "accelerated filers," have to file their quarterly and annual reports.

Officials at the Public Company Oversight Board unveiled an aggressive agenda for the coming year that may result in as many as 11 new standards for auditors in areas ranging from corporate fraud detection and reporting to wrestling with related-party transactions.

Fannie Mae said that it won't file its third quarter earnings report with the Securities and Exchange Commission by the end of this week because its independent auditor, KPMG, wouldn't sign off on its financials until issues related to the SEC's investigation into the company's accounting are resolved.

As expected, the Securities and Exchange Commission this week postponed for a year the final phase-in period for rules that would shorten the amount of time that larger companies, known as "accelerated filers," have to file their quarterly and annual reports.

As expected, the Securities and Exchange Commission this week postponed for a year the final phase-in period for rules that would shorten the amount of time that larger companies, known as "accelerated filers," have to file their quarterly and annual reports.

As expected, the Securities and Exchange Commission this week postponed for a year the final phase-in period for rules that would shorten the amount of time that larger companies, known as "accelerated filers," have to file their quarterly and annual reports.

Smaller companies could get a reprieve from the Securities and Exchange Commission on filing internal control documentation, according to published reports.

The Council of the International Federation of Accountants, a group that sets international standards on ethics, auditing and assurance, education, and public sector accounting, has named PricewaterhouseCoopers partner Graham Ward, CBE, MA, FCA, as its new president for a two-year term.

The Securities and Exchange Commission voted this week to open to public comment proposed new rules related to the governance, transparency, oversight and ownership of the stock exchanges.