Financial reporting

Executives from the nation’s largest banks pledged their cooperation and commitment to President Obama and his administration in order to begin the recovery process.

President Obama and his top economic advisors have determined that neither General Motors nor Chrysler have put forth acceptable plans to receive more bailout funds, which could effectively shut down the two auto giants.

Frank Brosens, a founding partner at hedge fund concern Taconic Capital Advisors, has withdrawn his nomination as overseer of the $700 billion bank bailout program.

American families are said to have a newfound commitment to cutting household expenses and saving money, according to the First Command Financial Behaviors Index that was just released. Results indicate that these families are shaving down costs in a number of areas. Fifty-four percent of respondents said they are spending less on leisure activities, 48 percent are cutting their utility bills, 40 percent are increasing their use of coupons, 46 percent are shopping at discount stores, 39 percent are buying generic products, and 38 percent canceled or postponed the purchase of high-ticket items. As they trim expenses, consumers are putting more money into savings. Short-term savings for the typical family totaled $883 in January, up 13 percent from $783 in December. And long-term savings totaled $335 in January, up 83 percent from $183 in December. These behaviors are consistent with the increased intention to save more in 2009 that consumers expressed in December; the Intentions sub-index jumped 25 points in December to 105--an eight-month high, and the increased savings behaviors followed in step this January. American families are continuing to feel the impact of current economic conditions. Sixty-three percent of respondents said they lost money in their retirement accounts and 47 percent lost money in stocks. On a promising note, seven percent said they have reacted to the economic turmoil by opting to work with a financial planner. One of the continuing trends revealed by the Index is that people who have a financial plan through a financial planner report greater confidence in their ability to retire comfortably, greater financial security on a day-to-day basis and they report feeling less financially stretched than those without a plan. In fact, as the economy deteriorated in late 2008, households with a financial plan actually reported an increase in feelings of financial security. In December more than 53 percent of respondents with a financial plan said they did not feel financially stretched, up from 48 percent in September. “The proactive financial behaviors revealed in the First Command Financial Behaviors Index appear to reflect a growing commitment to fiscal responsibility in middle-class America,” says Scott Spiker, CEO of First Command. “Consumers are concerned about their own economic situations, and they are taking concrete steps to improve their family finances.” (Compiled by Sentient Decision Science, LLC, the First Command Financial Behaviors Index assesses trends among the American public’s financial behaviors, attitudes, and intentions through a monthly survey of approximately 1,000 U.S. consumers aged 25 to 70 with annual household incomes of at least $50,000. Results are reported quarterly. The margin of error is +/- 3.1 percent with a 95 percent level of confidence. For more information, visit www.firstcommand.com/research.)

As part of its previously announced Power to Get More Done Initiative, which aims to help firms deal with the shaky economy by giving them money to hire extra staff and invest in their business, financial and tax software provider Intuit has announced the co-sponsors and judges for the effort.

While confidence both in the U.S. economy and national leadership remains at low levels, many CFOs are taking action to protect their businesses, as 70 percent of financial executives surveyed revealed they are exploring strategies such as salary and benefits freezes and layoffs, while 58 percent have reported less confidence in President Barack Obama’s ability to deal with the financial crisis since he took office.

Despite the economic slump, a high number of executives are continuing to pursue divestitures or carve-outs, according to a survey conducted by Deloitte Corporate Finance.

More than 40 percent of internal auditors within the financial services sector felt that better risk management practices could have helped prevent their organization’s current financial situation, according to a just-released study from the Institute of Internal Auditors.

Treasury Secretary Timothy Geithner did his best at filling in the blanks on the Obama administration’s plan for cleaning up the so-called “toxic assets” clogging the balance sheets of banks.

In a hearing before the House Financial Services Committee, Treasury Secretary Tim Geithner asked lawmakers to grant the Treasury Department more power to seize failing financial firms.

From Accounting Technology editor Bob Scott’s most recent popular e-letter “Consulting Insights" comes this Random Thought: “I’ve decided if I were a public official, I would run government like a business, meaning I would invest in financial instruments, treat my employees as disposable, and pay out enormous and unmerited bonuses.”

About 89 percent of the 150 audit committee members at a recent KPMG conference said that the financial crisis had caused their company’s board or audit committee to change the nature and scope of its oversight.

ADP has launched ADP Access, a retirement program that combines the benefits of ADP’s 401(k) plan recordkeeping services and the guidance of a financial advisor.

The Congressional Budget Office has revised its projection of the 2009 deficit, adding another $400 million and bringing the total to a numbing $1.7 trillion.

The Obama administration has revealed the latest measure in its colossal financial rescue plan, enticing private investors to buy up to $1 trillion in troubled assets carried by banks.

Global CPA and business-advisory firm Grant Thornton is gearing to launch a new practice unit — hedge fund internal control, governance and regulatory compliance services.

Today is the first day of spring and it’s a welcome sight for those of us in the Northeast. It’s been a rather interesting winter, to say the least. Although spring cleaning moves to the front burner, one does note that many people begin to look carefully at whether they have the right financial plan. During the winter, they kind of hibernate but with the advent of spring and the April 15th tax deadline looming, people generally start to take stock, much like they do on January 1st with New Year’s resolutions. My friend, John Napolitano, who is the chief executive officer of U.S. Wealth Management located in Braintree, Mass., and who is the author of the best-selling book Success as a Personal Financial Planner (published by Alpha), knows quite well how to build a thriving career in one of today’s hottest fields. So he has set forth specific questions that one should ask when looking for a financial planner. I should also say that John is quite blunt when it comes to financial planning. “Anyone with a pulse can call themselves a financial planner, and many people have hired planners who later turned out to be salesmen who didn't give a darn about their long-term plan.”

Ernst & Young and Swiss bank UBS have been sued by a group of investors in Luxembourg who put money in a fund that directed 95 percent of their assets to Bernard Madoff’s firm.

The economic crisis is prompting more and more small-business owners to turn to their accountants for advice, according to a new survey.

A federal court in Texas has ruled in favor of the Internal Revenue Service as it seeks $226.6 million worth of back taxes from Sir Allen Stanford, the banker who has been accused of defrauding investors of $8 billion.