Accounting Today - December 2011

ny found that state tax revenues increased 8. 4 percent on an annual basis for 46 states in the past fiscal year, giving them six consecutive quarters of growth and the best annual performance since 2005. Watch FroM PAge 6

The IRS is doing a better job of attracting and retaining qualified personnel, but it still needs to do a better job of complying with legal requirements. A report by the Treasury Inspector General for Tax Administration found that the IRS has improved its use of recruitment and retention incentives, but it needs better controls to ensure compliance with all legal requirements and guidelines.

Like other agencies in the federal government, the IRS has the flexibility to use payment compensation such as recruitment and retention incentives to attract and retain a high-quality workforce.

The House overwhelmingly passed legislation re-
pealing the 3 percent withholding mandate on govern-
ment contractors, along with a tax credit for hiring vet-
erans. Both measures have already been approved by
the Senate, allowing them to go to President Obama’s
desk for his signature
The House in a show of unanimity voted to pass the
bill by a margin of 422 to 0. The 3 percent withholding
rule would have required state, federal and local gov-
ernment agencies to withhold 3 percent of payments
owed to their contractors throughout the country as
a way to combat tax evasion by government contrac-
tors.

In a report from the Treasury Inspector General for Tax Administration, the IRS took the appropriate actions when an airplane piloted by an irate taxpayer crashed into one of its buildings in Austin, Texas last year.

The report found that the IRS adequately prepared for and took the necessary actions to evacuate and protect IRS employees. The agency secured taxpayer data and federal government property, and was able to resume business operations in the aftermath of the incident in February 2010. The crash killed one IRS employee, Vernon Hunter, and injured 13 other employees

IN OTHER NEWS

Cloud financial management and accounting soft- ware provider Intacct is eyeing the public market for its next financial move, according to chief executive Robert Reid. Reid revealed those plans at the company’s recent user and partner conference here, and admitted that despite being approached by “several” suitors for acquisition. He declined to reveal specific timing for an IPO.

Investors and financial executives are increas-
ingly feeling overloaded by the volume and complexity
of financial disclosure information in annual reports
and other financial filings, according to a new study.
The research report, by KPMG LLP and the Financial
Executives Research Foundation, a nonprofit affiliate
of Financial Executives International, found that the
volume of disclosure information has increased 16
percent during the past six years, while the volume
of footnotes has gone up 28 percent. The increased
volume and complexity of financial disclosure infor-
mation is causing a dilemma, especially for small in-
vestors who are trying to absorb the greater amounts
of data.

Confidence in the U.S. economy has plunged this past quarter among the CEOs and CFOs of private companies, according to a new survey by PwC. Only 27 percent of the 247 CEOs surveyed expressed optimism, down 16 percentage points from the previous quarter. The percentage of executives who expressed uncertainty continued to rise, increasing to 49 percent, up 7 points from last quarter and still well above the 24 percent who expressed outright pessimism. Among international private companies, pessimism about the global economy exceeded optimism by 28 percent to 21 percent, with 51 percent voicing uncertainty.

The Securities and Exchange Commission has re- leased two eagerly anticipated staff papers comparing International Financial Reporting Standards and U.S. GAAP and analyzing IFRS in practice in foreign countries. The two documents, posted on the SEC’s Web site are considered crucial steps in the SEC’s work plan for considering the possible incorporation of IFRS into the U. S. financial reporting system. The SEC commissioners are expected to issue a statement by the end of the year, and perhaps vote, on whether or not IFRS can be adopted by U.S. companies or whether the converged standards will be gradually endorsed, or “condorsed,” to make them part of U.S. GAAP. In May, the SEC staff issued a paper describing a possible method of incorporating IFRS through endorsement.

The Texas Society of CPAs weighed in on the Finan-
cial Accounting Foundation’s controversial proposal
to set up a Private Company Standards Improvement
Council and sent a letter expressing its “respectful dis-
agreement.”
The TSCPA avoided the divisive tone of the reso-
lution passed at the American Institute of CPAs’ Fall
Meeting of Council, in which the AICPA threatened to
give its board the option to set up its own committee
or board for setting private company GAAP unless the
FAF significantly modified its proposal.

However, the TSCPA still followed the AICPA’s urging that the state societies oppose the FAF proposal on the grounds that it does not go far enough in establishing a separate, independent board that could allow changes in accounting standards for private companies without the involvement of the FASB, which the FAF oversees.

Separately, SEC chief accountant James Kroeker criticized the AICPA’s resolution of disapproval against the Financial Accounting Foundation’s proposal to set up the PCSI Council, calling it “egregious.”

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