Financial reporting

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.

Accounting firm WithumSmith+Brown has introduced a new consulting service to help businesses deal with the troubled economy.

As President-elect Barack Obama continues to name members of his cabinet who will have to quickly deal with pressing national and economic security issues, people are beginning to wonder if he will be able to fulfill the promises he made in his campaign.

The Treasury Department's Troubled Asset Relief Program needs to do a better job of ensuring integrity, accountability and transparency, according to a report from the Government Accountability Office.

A group that maintains the beginning and ending dates of U.S. recessions announced that the economy officially entered a recession a year ago.

Treasury Secretary Henry Paulson announced a program to allocate $20 billion to back a $200 billion Federal Reserve facility for consumer lending.

Lately we’ve been hearing so many contradictory statements from Treasury Secretary Henry Paulson in such a short period of time that I’m beginning to wonder if we have two look-alikes running around Washington testifying on Capitol Hill and giving impromptu news conferences where they say exactly the opposite.

President-elect Barack Obama announced the key members of his economic team on Monday, including his pick for Treasury Secretary, New York Federal Reserve president Timothy Geithner.

Pessimism about the U.S. economy among CFOs and senior-level executive CPAs hit an all-time high this quarter, according to a new survey, with most of them not expecting a turnaround for at least another year.

Reality TV addicts, here’s an interesting nugget for you. Rockville, Md.–based Aronson & Company sponsored one of their clients, Dan Ryan Builders, in a project with ABC’s Extreme Makeover: Rockville, Md.–based Aronson & Company sponsored one of their clients, Dan Ryan Builders, in a project with ABC’s Extreme Makeover: Home Edition television show, which remodels homes of struggling families.

For those who couldn’t find the proposed roadmap released by the SEC when they went to the Commission’s site last week, don’t blame yourself. You need an actual roadmap to find it.