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The American Institute of CPAs will urge the Internal Revenue Service to delay, by at least a year, implementation of mandatory electronic filing procedures for large corporations and exempt organizations at a hearing before the IRS on March 16, 2005. The IRS's recently released regulations will generally require corporations with total assets of $50 million or more and tax-exempt organizations with total assets of $100 million or more to e-file their tax returns to the IRS starting in January 2006. In addition, smaller corporations and exempt organizations face an e-filing requirement starting in January 2007 under the regulations. Beginning in January 2007, corporations and exempt organizations with total assets of $10 million or more and all private foundations and charitable trusts, regardless of asset size, will generally be required to electronically file tax returns. "We view this as a dramatic change, with inadequate lead time," said Deborah J. Pflieger, former chair of the AICPA's Practice and Procedure Committee and a managing director in PricewaterhouseCoopers' National Tax Office. "The affected corporations and tax-exempt organizations, software developers and tax practitioners will have to make significant process and technology changes in order to comply with mandatory e-filing requirements," Pflieger said. "The changes require substantial collaboration and coordination by the IRS with all impacted parties, but the taxpayers and tax practitioners who prepare and file the majority of affected returns have not been provided ample opportunity to share their corporate e-file issues."

The American Institute of CPAs named Mark Gardner Peterson to the post of vice president of government affairs. In his new role, Peterson will oversee key lobbying efforts on behalf of the institute. He will report to James A. O'Malley, senior vice president of public affairs and head of the AICPA's Washington office. Prior to joining the AICPA, Peterson served as vice president with the Alpine Group -- a lobbing and government consulting concern -- and as a government affairs executive for former Big Five firm Andersen and for Toyota Motors North America. From 1992 though 1999, Peterson worked in the House Republican leadership in several capacities, including special assistant to then-Speaker of the House Newt Gingrich.In that capacity, he coordinated high-level projects and communications with GOP lawmakers.

As an overhaul of the Social Security program takes center stage during the second term of the Bush administration, the American Institute of CPAs has released a comprehensive analysis of factors that should be considered in a reform strategy. The institute said that the catalyst for the report -- developed by economic, tax and accounting experts -- was the Social Security Administration's estimate that the Social Security Trust Fund balance will peak in 2028 and be exhausted by 2041. Benefits would then be limited to the then-current cash flow into the system. Current actuarial calculations indicate that the trust fund will need an additional $3.5 trillion to pay anticipated future benefits over the next 75 years. "The debate surrounding Social Security reform brings to the forefront philosophical differences, varying opinions, and the age-old trade-offs between fairness, simplicity, economic growth and social policy. We at the AICPA strongly urge policymakers and the public to thoroughly understand the issues surrounding Social Security reform before taking a position," said the AICPA's vice president of taxation, Tom Ochsenschlager. The report, available online at www.aicpa.org/members/socsec.htm, addresses the pros and cons of such issues as: _ The current financial condition of Social Security; _ The relationship between Social Security and the elderly living in poverty; _ The redistribution of income inherent in the current system and how changes might affect that in the future; _ How changes to the current system might affect decisions about when to retire, the amount of work performed in retirement and personal savings rates; _ The tradeoff between additional risk and higher rates of return; and, _ Potential issues related to transition funding.

The Big GAAP vs. Little GAAP debate rages on. An American Institute of CPAs' task force charged with examining private company financial reporting standards wants to begin a process to implement changes in generally accepted accounting principles for private issuer companies. "Fundamental changes should be made in the current GAAP standards-setting process to ensure that the financial reporting needs of private company constituents are met," read the report issued by the institute's task force. The task force, established last year and headed by former AICPA chairman James Castellano, made its determinations based on the input of some 3,700 business owners, public practitioners, financial managers, lenders, investors and sureties. The research was conducted by Omaha, Neb.-based MSR Group, an independent market research firm. "This group did not approach its research with a preconceived notion that issues or problems with GAAP financial reporting for private companies existed," Castellano said. "We wanted to understand if what many of us had been hearing was simply the opinion of a vocal minority or the true expression of concerns by stakeholders of private company financial reporting." Public issuers are required to prepare financials in accordance with GAAP, and privately held companies -- which comprise an overwhelming majority of the roughly 5 million companies in the U.S. -- have traditionally used GAAP as well, thus fueling the protracted public-versus-private-standards debate. The AICPA board -- subject to input from Council -- along with accounting standard-setter the Financial Accounting Standards Board and its overseer, the Financial Accounting Foundation, have agreed to collaborate on possible courses of action. However, FASB and the FAF neither endorsed nor rejected the task force's conclusions. The AICPA, the FAF and FASB agreed that any proposal would need to be fully exposed for public comment and debate. A complete copy of the task force report can be found at: http://www.aicpa.org/members/div/acctstd/pvtco_fincl_reprt/index.htm.

With two of its top executives departing, the American Institute of CPAs announced a series of top management changes.The AICPA said that chief operating officer Clarence Davis, who has relocated his family to Savannah, Ga., will step down effective March 31, as he works towards retirement. Alan Anderson, senior vice president of both the member and public interest teams, is leaving the AICPA at roughly the same time to join Franklin Templeton Investments as senior vice president of global project management and strategy.

The American Institute of CPAs' Auditing Standards Board is poised to issue an exposure draft of five proposed statements and amendments to statements relating to auditors' risk assessment.

In the wake of a number of national restaurant operators having to restate earnings due to lease accounting errors, the Securities and Exchange Commission advised restaurant companies to assess the impact of such errors in order to determine whether restatements are necessary, according to The Wall Street Journal. In a letter sent to the American Institute of CPAs, SEC chief accountant Don Nicolaisen wrote that restaurateurs who "determine their prior accounting to be in error should state that the restatement results from the correction of errors, or, if restatement was determined by management to be unnecessary, state that the errors were immaterial to prior periods." Operators such as Red Lobster and Olive Garden parent Darden Restaurants Inc.; Brinker International, operator of the Chili's and Macaroni Grill concepts; and Carl's Jr. parent company CKE Restaurants Inc., have all restated financials due to lease accounting errors.

Some 71 percent of CPAs currently serving as chief executives and chief financial officers are optimistic about the nation's economy and its outlook for 2005, according to results from the Business and Industry Economic Outlook Survey conducted by the American Institute of CPAs. The semi-annual poll represented the views of 631 AICPA decision-makers, including 351 CFOs and 104 CEOs in privately held and public companies, not-for-profits, and other organizations. The goal of the survey is to gauge the level of confidence in the economy as a whole; prospects for organizations for the upcoming six months; spending, capital funding and workforce plans; and their level of concern about issues of importance. In addition, 62 percent of those participating in the survey indicated that the results of the 2004 presidential election will have a positive impact on the 2005 outlook. Other findings included: o 73 percent of the respondents said that they were at least optimistic, if not very optimistic, about their own company's prospects; o 12 percent of those surveyed projected substantial growth during the first half of 2005, while moderate growth is expected by 52 percent. o 31 percent said that workforce increases are in the offing, while 10 percent expected cuts in the workforce. However, in comparison to the June 2004 survey, the percentage of small companies with plans for increased capital spending declined to 40 percent, from 50 percent, while the percentage of small companies expecting to increase the size of their workforce declined to 30 percent, from 41 percent. When asked to weigh in on specific issues, the majority of CPA executives indicated greater concern about inflation than unemployment, greater concern about federal deficits than Social Security and Medicare reform, and greater concern about health care reform than tax reform.

The American Institute of CPAs has officially rolled out a new tagline to accompany the CPA logo.

The Internal Revenue Service can use the efforts of CPAs and other tax practitioners as a springboard to leverage IRS initiatives to improve taxpayer compliance, Tom Purcell, chair of the American Institute of CPAs' Tax Executive Committee, told the IRS Oversight Board.

With two of its top executives departing, the American Institute of CPAs announced a number of organizational changes.

The American Institute of CPAs named Ben Neuhausen, national director of accounting at BDO Seidman, as chairman-elect of its Accounting Standards Executive Committee.Neuhausen will succeed KPMG's Mark Bilstein in that post following the conclusion of the next AcSEC meeting.As an AcSEC member, Neuhausen chaired the AICPA task force on real estate time-share transactions. He also has served as a member of FASB's Interpretation 46 Resource Group and its Liabilities and Equities Resource Group. From 1979 to 1981, he was a Financial Accounting Standards Board fellow.Prior to joining BDO in 2002, Neuhausen was a partner in the Professional Standards Group at Andersen.The institute's AcSEC unit provides accounting guidance and serves as the organization's voice on financial reporting matters. It includes members from academia, business and industry, and public practice.

With the audit implosion at the Roslyn, N.Y., school district still reverberating in the profession's ears, American Institute of CPAs president and chief executive Barry Melancon warned some 400 attendees at a conference here that the resulting backlash of a nonprofit scandal could be as devastating to the profession as the ruins left by Enron and WorldCom.

The American Institute of CPAs' Auditing Standards Board is poised to issue an exposure draft of five proposed statements and amendments to statements relating to auditors' risk assessment.

As part of its fraud prevention program, the American Institute of CPAs has expanded its portfolio of resources for audit committees with new guides on understanding management override of internal controls and issues related to whistleblowers.

Accounting, finance, and banking professionals who hold a professional credential of some type earned 30 percent more on average than employees in those fields working without a credential, according to a survey by CareerBank.com.

For the third consecutive year, information security - the processes and procedures designed to protect information technology systems from internal and external threats - has remained the country's No. 1 technology concern, according to the results of the 2005 Top Technologies Survey of the American Institute of CPAs.

As part of its efforts to promote the Personal Financial Specialist designation, the American Institute of CPAs at its 2005 Personal Financial Planning Conference this week announced a new online financial planning resource targeted at CPA/financial planners and consumers seeking financial planning guidance.

What four words cause public accountants to cringe more than, "Where were the auditors?"

For the third consecutive year, information security - the processes and procedures designed to protect information technology systems from internal and external threats - remained the country's No. 1 technology concern, according to the results of the 2005 Top Technologies Survey of the American Institute of CPAs. The poll, now in its 16th year, attempts to define the 10 most important technology-critical issues for the upcoming year. This year's poll surveyed some 300 participants, 30 percent more than the number surveyed in the 2004 poll. Predictably, in second place for 2005 was document management - reflecting the snowballing trend toward a paperless or less-paper office. Electronic document management captures, indexes, stores retrieves and manages documents in such formats as Adobe's PDF. Data integration - the ability to update one field and have it automatically synchronize between multiple databases - finished as the third most-cited technology issue. Data integration also involves the application-neutral exchange of information - such as the increased use of the Extensible Business Reporting Language, or XBRL by companies worldwide - which provides for an exchange and aggregation of financial data using different applications to read, present and analyze data. The remaining top 10 technology issues for 2005 were: 4. Spam technology 5. Disaster recovery 6. Collaboration and messaging applications 7. Wireless technologies 8. Authentication technologies 9. Storage technologies 10. Learning and training competency. Each year the institute also compiles a "watch list" list of emerging technologies that are currently flying just below the radar screen but have the potential to impact businesses and individuals in the ensuing 24 to 36 months. The top three emerging technologies for 2005 are: 1. Radio frequency identification 2. Search 3. Fuel cells For more information visit: www.aicpa.org/infotech/technologies/toptechs.htm.