Financial reporting

In the current financial turmoil, what might help is a more presentable presentation of financial statements.

I received some interesting information from Brian Meehan of Celtic, Inc. regarding a little practical advice on how to weather a volatile market when it comes to college savings. He notes that if you are like most people, the current market conditions can cause concern when you see your long-term investment accounts, including college savings and retirement plans, losing their value. He points out that the College Savings Plans Network, a non-profit association representing states who administer 529 college savings and prepaid plans, and an affiliate of the National Association of State Treasurers, encourages people to keep the following principles in mind when making decisions about their college savings accounts during tough economic times: Stay Focused on Long-Term Objectives: As the market moves in up and down cycles, it is vital that one keep emotions out of affecting financial decisions. Look at the performance of your college savings account since inception as well as shorter-term performance. Diversify Your Investments: You need a mix of stocks, bonds, and cash investment options or in an age-based option which typically provides this sort of mix. Make Changes, if at all, Gradually: Invest any new funds into more conservative options and reallocate equity options to more conservative ones. Move funds gradually so as to not lock in, or realize, all of your losses and to be able to take advantage of a market recovery. Limit Reallocations: All 529 plans have a one-time-per-calendar-year rule on making reallocations between investment options. If you have already made a reallocation of your account this year, you cannot make another change until next year. However, you can always redirect new contributions at any time. Make Regular Investments: Often referred to as “dollar-cost averaging,” this approach lessens the risk of investing a large amount in a single investment at the wrong time. Invite Family to Help: Ask your family and friends to help build the college savings by contributing to your account as a holiday or birthday gift. Many plans offer gift certificate forms or contribution slips to facilitate making a contribution as a gift. Talk to your Plan Provider: If you have specific questions abut your 529 savings or prepaid plan, call your plan provider. To learn more about the College Savings Plan Network and 529 college savings plan across the country, visit collegesavings.org.

The Internal Revenue Service has given schools and tax-exempt organizations more time to finish writing their retirement plans.

Accounting firm Weiser LLP has hired an unemployed investment banker and Massachusetts Institute of Technology graduate who gained fame last summer for wearing a sandwich board on New York's Park Avenue that advertised, "Experienced MIT Grad for Hire."

The Financial Accounting Standards Board has issued new standards that increase the disclosure requirements that public companies need to make about their financial asset transfers and variable-interest entities.

To mark World Accountancy Week, the International Federation of Accountants has released the results of a survey that sought the views of leaders of accounting institutes worldwide on the current credit crisis and other top issues for the profession.

International Accounting Standards Board Chairman Sir David Tweedie said that the U.S. Financial Accounting Standards Board would still continue to play an important role in the standard-setting process, even after the transition to International Financial Reporting Standards in the U.S.

The College for Financial Planning plans to add renewal requirements to some of its professional designations starting next spring.

The Public Company Accounting Oversight Board has issued an alert highlighting how the current economic crisis could increase various audit risks such as fraud.

Worries about the financial crisis are spreading rapidly, with job losses hitting levels not seen in over three decades, and people are wondering if CPAs have the answers to help them get through the turmoil.

The sour headlines lead. Ford wants billions in loans. Car makers’ sales are tumbling, like a too-tall SUV on a tight curve. Delta’s slashing service. Staples and Sears are staggering. GE and Goldman Sachs say their decks are awash.

The Teamsters Union has written to the Internal Revenue Service taking issue with proposed regulations that would change the public approval requirements for tax-exempt private activity bonds and potentially undermine the public approval process.

iPro One and American Business have teamed up to offer insurance products that wealth management advisors at CPA firms can market to their clients.

Accountants and banking industry officials hoping for looser financial reporting standards in response to the economic downturn received a reality check from the keynote speakers at the American Institute of CPAs’ National Conference on Current SEC/PCAOB Developments.

Business optimism among U.S. business leaders has plummeted to its lowest level yet, according to a survey by Grant Thornton.

The Virginia Society of CPAs is offering a free financial wall calendar for consumers, developed in partnership with the American Institute of CPAs.

The success of financial advisors in profitability, revenue growth, and attracting clients was the overriding theme in the 14th edition of the 2008 Moss Adams LLP Financial Performance Study of Advisory Firms, recently released and sponsored by Genworth Financial Wealth Management. For the average firm, new assets from new clients accounted for about two-thirds of growth, expanding assets under management by 13.5 percent. However, the study shows that only one in four firms has a well-defined succession plan and many firms, some 44 percent, have no plan at all. Actually, Dan Inveen of Moss Adams, who prepared the excellent release, said that while the current flux in performance of the financial markets may be causing advisors concern, the demand for objective financial advice is likely to increase. “Forward-thinking firms will recognize this as a time of opportunity and will continue to improve their effectiveness and show value in serving the market. Plenty of potential exists for further growth.” Looking at this in greater depth, the study turned up the fact that advisors in the top performing firms spend the most time on client service and business development. Actually, the top 25 percent of solo firms (meaning firms with one owner/professional) spend 56 percent of their time on client service and business development, compared to other firms that only spend 46 percent of their time on these activities. Moreover, top-performing ensemble firms also gain leverage with non-professional staff. The smallest multi-professional firms (less than $2 million in revenue) employ 1.2 non-professionals for every professional. The same ratio applies for the larger firms ($2 million - $5 million in revenue), which is double at 2.4, thereby allowing professionals to focus more time on business development and client activities, and less time on administrative and operations tasks. Of course, expansion for advisory firms raises new and impending issues as a significant number of firm owners are nearing retirement. Though firms have been trying to recruit and retain experienced professionals, the demand has outweighed the supply. As a result, this could leave firm owners holding concentrated positions in a valuable asset with no ownership transition plan. The 2008 study shows that only one in four firms has a well-defined succession plan and 44 percent have no plan at all. In addition, the aging advisor population, coupled with strong growth in the advisor industry, indicates that transactions will be prevalent in coming years. In fact, within the past two years, 29 percent of firms considered a sale, with 37 percent citing succession as the primary motivation behind this consideration. On the opposite side, more than half (55 percent) of the firms expressed an interest in acquisition, with most citing growth and efficiency as the driving factors. For more information, visit www.mossadams.com/2008advisorstudy.

The Financial Accounting Standards Board plans to introduce a new official accounting standards codification on July 1 that will supersede other sources, including the AICPA.

Employment in the private sector fell by 250,000 in November, according to the latest monthly report by payroll processor ADP.

This live, one-hour seminar, the first in a series covering aspects of our current economic crisis, is essential for all accountants who offer financial planning services. It will feature practical, hands-on insight and information you can put to work for your firm immediately.