Maintaining Public Credibility: An Interview with Charles D. Niemeier
Acting chairman PCAOB Chair Charles D. Niemeier sees the audit as a fundamental element of credible corporate financial reporting at a time when investors need reassurance about the integrity of capital markets. He considers the Sarbanes-Oxley Act to be the most significant securities legislation in decades, and believes that it will serve as the foundation for overhauling corporate governance and the auditing culture. Niemeier acknowledges the concerns that some have about the unintended consequences of the act, but says the PCAOB will seek input and tackle problem areas-and do it on schedule.
Enron and the Raptors
Enron's troubles can be traced to special purposes entities (SPE), dubbed the Raptors, that it established to shield itself from mark-to-market losses in its equity investment business. The authors detail the Raptors' byzantine structures and the attempts by Enron management to hide the losses from the company's balance sheet once the equity investments went south.
Perils of Unclaimed Property
Businesses holding unclaimed property are required to remit the property to the state until the rightful owner can be found. Given the current fiscal environment, many states may see unclaimed property as an untapped revenue source. Early tracking and notification, diligent record-keeping, and awareness of applicable state laws will ensure that unclaimed property issues are resolved in a satisfactory manner.
Testing Hedge Effectiveness Under SFAS 133
SFAS 133, Accounting for Derivative Instruments and Hedging Activities, marked a large step forward in FASB's quest to record financial instruments at fair value. Interpreting the standard's definition of a "highly effective" hedge, however, is a complex proposition. The authors analyze the three most commonly used methodologies: the dollar-offset method, the variability reduction method, and the regression method.
A Long-Term Investment: The CPA Firm Retreat
Firm retreats have a mixed reputation: Many view them as an exercise in futility, but others use them as a tool for improving communications, solving problems, and developing ideas. The CPA Journal sat down with Fred E. Shapss, managing partner of Rosen Seymour Shapss Martin & Co. LLP (RSSM), and Allan D. Koltin, president and CEO of Practice Development Institute, Inc., to discuss their experiences and views on retreats for accounting firms.