accounting knowledge

Road map prepared for micro businesses

2009-06-11T00:07:00.000-07:00

The Indonesian Chamber of Commerce and Industry (Kadin) is drawing up measures to empower small and micro businesses, including efforts to address problems of limited access to financing.

The measures would be derived from inputs from relevant stakeholders - small and micro businesses, the banking sector and regulators - and put together under a road map for MSMEs, Kadin deputy chairman for small and medium enterprises and cooperatives Sandiaga S. Uno said Wednesday.

"Most of the country's more than 40 million micro, small and medium enterprises have little or no access to bank loans. The reasons vary from tight regulations on collateral necessities, to high interest rates," Sandiaga said after a Kadin technical meeting to discuss the concept of the road map.

Home sweet home

2009-06-11T00:03:00.000-07:00

By Emily Twinch

However, as the Chartered Institute of Housing gathers for its June 2009 annual conference, help might be on its way as council house building returns.

It effectively stopped when the Conservatives’ Local Government Act 1988 pushed public finance towards housing associations, but now Labour has started to encourage councils to build once more.

Prime minister Gordon Brown spoke about plans to relax restrictions on council borrowing at the New Local Government Network annual conference in January 2009.

“If local authorities can convince us they can deliver quickly and cost effectively more of the housing that Britain needs,” he said, “we will… put aside any of the barriers that stand in the way of this happening.”
In the same month, housing minister Margaret Beckett announced a consultation on whether councils might keep
rental income and receipts from homes sold through right-to-buy to reinvest in building, rather than having to pay it into the subsidy system.

Such announcements have raised hopes, although the consultation has yet to report its conclusions.

In the meantime, however, Chancellor Alistair Darling has allocated £100m for council house building in the 2009 Budget — although local authorities will have to raise half of this through prudential borrowing.
The way forward

So is this the best way forward for councils? John Perry, policy adviser for the Chartered Institute of Housing, believes it is.

“Waiting lists are going up and councils want to replace stock lost through right-to-buy,” he says. “Councils can borrow more cheaply than housing associations at the moment. Their problem is that their borrowing counts as public borrowing, whereas that of housing associations doesn’t.”

But he says this needn’t be the case. “In most EU countries, the equivalent of council housing is outside ‘general government’ for accounting purposes.”

Mr Perry says councils have lost about 1.8 million properties since 1980 through right-to-buy, and the money allocated in the Budget would allow fewer than 1,000 homes to be built.

But he says councils are unlikely to go back to building the single-tenure estates so widely criticised in the past, as they would only be able to build in small quantities.
Wipe out

In a cross-party move, leaders from Barking & Dagenham LBC, Portsmouth City Council and Waverley Borough Council have written to the Treasury asking for the government to wipe out their housing debts and give them control over their rental incomes.

They say this would allow them to build 309,000 homes over the next decade, compared with today’s council house building rate of fewer than 300 homes a year.
Local Government Association environment board chair Paul Bettison (Con) says: “Councils could be using the money they collect in rent to build thousands of new homes to help solve the housing crisis and to improve the homes of existing tenants.

“The rent tenants pay should be spent entirely on their housing needs and the needs of local people. None of it should be funnelled through to Whitehall.”
Programmes

Westminster City Council is about to start a building programme of just over 500 homes through its arm’s-length management organisation CityWest Homes, using a £125m grant from the Homes & Communities Agency (HCA).

Philippa Roe (Con), the council’s cabinet member for housing, says: “The advantage is control over the properties longer term. I would much rather give the money to CityWest than to a housing association.

“We have more influence over the qualityof services. I am not a great fan of the RSL [housing association]structure. There are some that are extremely good but some are less good.”

In a pilot led by the HCA, 14 councils are setting up local housing companies (LHC) in which the council teams up with private developers.

Barking & Dagenham’s partnership with First Base is the furthest advanced of these and aims to build a total of 6,500 homes over the next 15 years.
Control

Programme director Ken Jones says the model will give the council greater control over what is built than have previous agreements with developers or associations.

“In the past, you have had a development agreement, a joint venture with a housing association and a developer, but quite often you don’t end up with the deal you originally embarked on,” he says.

“We have had cases where we have had to argue in the trenches with the developer over mixes in terms of tenure and size of properties.”

Mr Jones says the LHC approach will bring together a mix of skills and capabilities, which will involve “sharing teams of staff working next to each other”.

It is clear that collaboration will be important for councils as they start trying to build homes again after a 20-year gap.

As Tom Dacey, group chief executive of Southern Housing Group, points out: “There might be an issue on the skills side. Most councils haven’t built homes since 1987 and don’t employ the staff to do it.”

He believes council house building is “not something that’s going to take off quickly and significantly”.
Geared

He also thinks that the government’s £100m will not go far because many councils are not geared up to use it.

“In the short term, they would have to use development agency agreements with housing associations,” says Mr Dacey.

He acknowledges that housing associations might be disadvantaged if councils use land they would have built on. But he says: “At present, anyone else who can come to the party and deliver more affordable housing has to be welcome.”

David Orr, chief executive of the housing associations’ trade body the National Housing Federation, agrees that it is desirable to have “all hands to the pump” at the moment. “The first job we have to do is build as many new affordable homes as we can,” he says. “If by having councils building we can contribute to that, then let’s go for it.”

Mr Orr points to several positive outcomes to the possible new arrangement. “It might release land more quickly than would otherwise have been the case and mean that we can get houses built more quickly,” he says.
Opportunity

If the government creates the right funding rules, Mr Orr says, council house building provides an opportunity for “proper partnerships” between housing associations and councils, in which councils provide land and local knowledge, while housing associations provide the “finances, development capacity and expertise”.

Steve Turner, spokesman for the builders’ trade body the Home Builders Federation, suggests a model by which councils supply the land, builders build the homes and housing associations manage them.

“Councils have the gift of providing land with planning permission,” he says. “House builders have the capacity and skills to produce the bricks and mortar buildings. And housing associations have the experience in terms of management.”

There is a clear consensus that council house building presents a promising way forward for providing much-needed homes and for giving councils greater control over these properties.

The pressure is now on the government to improve the borrowing situation and the subsidy system. And the pressure is on councils to ensure that they do not return to building mono-tenure estates but use this as an opportunity to create thriving, sustainable communities.

Leading Litigator Steve Kramer Joins Sheppard Mullin Los Angeles

2009-06-03T12:43:00.000-07:00

Partner Further Expands Firm's Business Trial Practice Group and Headquarter Office
Steven O. Kramer has joined the Los Angeles/Downtown office of Sheppard, Mullin, Richter & Hampton LLP as a partner in the firm's Business Trial practice group. Kramer most recently practiced at Mayer Brown in Los Angeles.

Kramer focuses his practice on civil litigation, primarily complex business and securities litigation, SEC enforcement actions, and white-collar criminal defense. He has handled a variety of civil litigation, including class actions, derivative cases, securities, banking, commercial, contract, environmental, accountant's liability, RICO, ERISA, and other complex litigation. Kramer has represented clients in Justice Department investigations, SEC enforcement proceedings, and investigations by various federal, state, and local government departments and agencies. He has tried a significant number of civil and criminal cases as well as administrative proceedings.

Prior to entering private practice, Kramer was an Assistant United States Attorney with the United States Attorney's Office for the Central District of California and a member of the Fraud and Special Prosecutions Unit. While at the U.S. Attorney's Office, he served as an instructor at the advanced criminal trial course given by the Department of Justice, Trial Advocacy Institute in Washington, DC. Kramer also served as a trial attorney with the Division of Enforcement of the United States Securities and Exchange Commission. At the SEC, he handled a number of civil and administrative proceedings, involving violations of the federal securities laws by public and privately held companies, broker/dealers, investment advisers, investment companies, and accounting firms.

"Steve brings a strong litigation background that includes his formidable trial experience. His knowledge and expertise will enhance our Business Trial practice group and expand our civil litigation capabilities to better serve client needs," said Guy Halgren, chairman of the firm.
"I am thrilled to be joining Sheppard Mullin, a highly respected firm with a large Los Angeles presence. It's great to be practicing with friends and rejoining some of my former partners, and helping to grow the firm's litigation practice with them," Kramer said. "I am impressed with Sheppard Mullin's collegial atmosphere and democratic management style."

In January, Bryan Daly, Chuck Kreindler and Peter Morris joined the Los Angeles office of Sheppard Mullin as partners in the firm's Business Trial and Government Contracts practice groups, specializing in white collar criminal defense and complex civil litigation. The group also joined from Mayer Brown in Los Angeles.

Sheppard Mullin has more than 200 attorneys based in its Los Angeles offices and the firm's Business Trial practice group includes 200 attorneys firmwide.

About Sheppard, Mullin, Richter & Hampton LLP

Sheppard Mullin is a full service AmLaw 100 firm with more than 560 attorneys in 11 offices located throughout California and in New York, Washington, D.C. and Shanghai. The firm's California offices are located in Los Angeles/Century City, Los Angeles/Downtown, Orange County, San Diego/Del Mar, San Diego/Downtown, San Francisco, Santa Barbara and Silicon Valley. Founded in 1927 on the principle that the firm would succeed only if its attorneys delivered prompt, high quality and cost-effective legal services, Sheppard Mullin provides legal counsel to U.S. and international clients. Companies turn to Sheppard Mullin to handle a full range of corporate and technology matters, high stakes litigation and complex financial transactions. In the U.S., the firm's clients include more than half of the Fortune 100.

source : Blogzone

NDP return alterations 'not appropriate': former campaign worker

2009-06-03T12:25:00.000-07:00

A former campaign worker says the NDP altered election returns without his knowledge after the 1999 election, cashing in on $76,000 the party later had to repay.

Jim Treller, who was the official agent and money manager for former Rossmere MLA Harry Schellenberg’s campaign, said he filed the paperwork properly following the 1999 election. He counted union workers as donations-in-kind in his return, but says the party later changed that accounting to list union workers as expenses.

In a complex backing-and-forthing of cheques between that party and big unions, the change netted the NDP $76,000 in taxpayer-funded campaign rebates it didn’t deserve.

"We were charging for expenses we didn’t have," said Treller, now a math teacher at the University of Winnipeg Collegiate. "That’s not appropriate."

Treller said a public inquiry into the mess ought to be called, a notion Premier Gary Doer dismissed last week when word of the rebate controversy erupted.

source: Winnipeg free press

Google and others urge inventory of national airwaves

2009-05-05T21:44:00.000-07:00

By Elise Ackerman

In a rare show of unity over national communications policy, Google, the wireless industry and consumer advocates have come together to support a bill that would require the federal government to take a complete inventory of the national airwaves to determine what spectrum is being used, how it is being used and who is using it.

The government needs to clean up its sloppy record keeping, they say, or the United States risks running out of wireless capacity as people and businesses make increasing use of the mobile Internet.

"Radio spectrum is a natural resource, something that here in the U.S. is owned by all of us American citizens," Richard Whitt, Google's counsel for telecom and media, wrote in a blog post earlier this week in support of the Radio Spectrum Inventory Act, which was recently introduced in Congress by Sens. John Kerry, D-Mass., and Olivia Snowe, R-Maine. "Most of us don't give it much thought — and yet use of these airwaves is precisely what makes many of our modern communication systems possible."

Thanks in part to new devices like the iPhone that take the pain out of mobile browsing, the amount of data transmitted over wireless networks could double in three years, according to Nokia Siemens Networks.

"I don't expect current spectrum to be exhausted in the next couple of years, but I do suspect it will be highly stressed," said Peter Rysavy, an analyst who recently wrote a report on the demand for mobile
broadband spectrum for the CTIA, an international association for the wireless telecommunications industry.

Rysavy said new technologies will help, along with the construction of more cell phone towers, but that more spectrum will still be needed. Among the new technologies is WiMax, which provides a wireless data service similar in quality a high-speed cable connection, and femtocells, which are tiny wireless base stations that improve coverage in small areas.

Harold Feld, legal director for Public Knowledge, a public interest group based in Washington, D.C., said some spectrum could be freed up if the federal government was forced to use its airwaves more efficiently. "There is a lot of wasted spectrum that is under federal control," Feld said.

The new law, if passed, would require the Federal Communications Commission and the National Telecommunications & Information Administration to report on the use of all spectrum bands between 300 megahertz and 3.5 gigahertz, including information on the licenses or government user operating in each band and whether the spectrum is actually in use.

"There needs to be a very specific accounting not only of what spectrum is being used, but who is using it," said John Walls, a spokesman for CTIA.

The unusual alliance between Google and public interest groups and big telecommunications companies may be temporary. The telecom companies want to have the opportunity to buy a license to use any extra spectrum at an auction, as has traditionally been done.

Google, on the other hand, advocates the use of new technologies that would allow the spectrum to be shared by whoever needs it.

source :MercuryNews.com

Mental Accounting

2009-04-16T23:39:00.000-07:00

Mental Accounting

By : Harish Rao
Ever wondered why is it that when we go on a holiday, we tend to splurge on things we by and large would not have indulged in at home. For instance, spending an equivalent of Rs. 600 on a taxi ride in Singapore or Rs. 2000/- for entry into an amusement park overseas, when normally we would have thought twice about such expenses at home.

Or for that matter, willingly spend Rs. 15,000/- over and above budget while buying a house, but hesitate to spend the same amount in buying new clothes or new books.

Why is an amount of Rs. 1500/- that is received as dividend treated differently from the same amount received as a gift or as shopping vouchers received while redeeming reward points. And why is all of this different from Rs. 1500/- that is part of Salary. Its all about Mental Accounting.

Popularised by Richard Thaler, Mental Accounting is a concept that governs most of our choices and decisions in our life. As Thaler in his book Nudge highlights, "Every day, we make decisions on topics ranging from personal investments to schools for our children to the meals we eat to the causes we champion. Unfortunately, we often choose poorly".

Thaler has collaborated with other celebrated behavioural finance theorists like Daniel Kahneman and Robert Shiller.

How does it affect us in our daily life?

Mental Accounting influences the way we behave in several ways, especially when viewed against the flowing contexts.

a. Dividend Income vs Capital Gains : Why is it that certain investors prefer the dividend option, while others opt for growth (capital appreciation) option. The latter helps an investor benefit from compounding.

b. Paying by Cash vis-à-vis Credit Card : Rs. 2000 for a meal paid by cash tickles the mind much longer than a mere swipe.

c. Earned Income vs Gift Income : Mother always told us to save our ‘hard-earned money'. So what do we do with the Rs. 1000/- uncle just gifted us.

d. Context of the expense : Rs. 30 on a Kulfi after a thali costing Rs. 60 seems extravagant. However, an ice-cream for the kids costing Rs. 200 after an expansive lunch is par for the course.

e. Pain of Loss vs Joy of Gain : Most humans are more loss-averse than profit-motivated. Thus the pain of a loss is twice more hurtful than the joy of gain. Looked at from a different angle, the only time some investors assume risk, is actually to avoid a loss.

source :Wall street journal

FFI Announces Executive Promotions

2009-04-14T06:22:00.000-07:00

Fortune Industries, Inc. (NYSE Amex: FFI) is pleased to announce the promotions of Tena Mayberry to President and Randy Butler to Chief Financial Officer of the Company.

Mayberry will oversee the implementation of the Company's goals and strategies nationwide. Prior to her promotion to President of Fortune Industries, Mayberry served as president of Brentwood-based Century II Inc., the largest outsourced human resources firm based in Tennessee and one of the oldest professional employer organizations (PEOs) in the nation. Century II is a subsidiary of Fortune Industries, Inc.

Butler will be responsible for all financial reporting, budget management and forecasting for Fortune Industries and its subsidiaries. Butler joined Century II in 2006 as the Controller, and assumed responsibility for all the financial functions of PSM, Inc., a subsidiary of Fortune Industries in 2008.

"As a result of Fortune's emergence as a pure-play PEO in December, we are focusing our human capital and financial resources on the profitability of the PEO segment that has historically generated operating income and strong cash flows from operations," said John Fisbeck, CEO of Fortune Industries, Inc. "Tena is a proven top executive and one of the most knowledgeable senior managers in the PEO industry, and Randy has the financial background necessary to grow this business under our new operating structure. Under their direction, Century II has experienced substantial annual growth. Tena's experience in the PEO industry, combined with Randy's in-depth knowledge of banking and finance make them a powerful team to help guide Fortune into its next phase as a PEO industry leader. They are a valued addition to our executive team, and we look forward to leveraging their expertise and leadership as we continue to expand our business in the U.S."

Mayberry brings more than 20 years of management experience to her new position. She was named president of Century II in 2007 after serving four years as COO, two years as senior vice president and four years as vice president. Prior to joining Century II, Mayberry served in management positions with Contract Sales Managers, Kroger Co. and Norrell Temporary Services.

Mayberry holds a B.S. in marketing and business management from Tennessee Technological University.

Prior to Century II, Butler was the Controller for PFIC Corporation, a broker-dealer providing investment products for Union Planters Bank. At PFIC, Butler was responsible for all the accounting and financial operations for the Financial Services Division of Union Planters Bank. Prior to PFIC, Butler was the Secretary/Treasurer for NEC, Inc., the leading digital imaging company for publications in the country.

Butler graduated with honors from the University of Tennessee in December, 1982 with a Bachelor of Science degree in Accounting, and earned his Certified Public Accountant certification in 1986.

About Fortune Industries, Inc.

Fortune Industries, Inc. is focused as a professional employer organization (PEO) to small and medium-sized businesses in 47 states, including human resource consulting & management, employee assessment, training, and benefits administration.

Fortune Industries, Inc. is based in Indianapolis, Indiana and is publicly traded on the NYSE Amex exchange under the symbol FFI. Additional information about Fortune Industries, Inc. can be found at www.ffi.net.

This press release and other statements by Fortune Industries, Inc. may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by words or phrases such as "believe," "expect," "estimate," "potential," or future/conditional verbs such as "will," "should," and "could" or the negative of those terms or other variations of them or by comparable terminology. The absence of such terms, however, does not mean that the statement is not forward-looking. Any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially. Factors that might cause or contribute to such differences, include, but are not limited to, the risks and uncertainties that are discussed under the heading "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" within the Company's Form 10-K for the year ended August 31, 2008. The Company undertakes no obligation to publicly update or revise any forward- looking statements, whether as a result of new information, future events or otherwise. Readers should carefully review the risk factors disclosed within the Company's Form 10-K and other documents filed by the Company with the Securities and Exchange Commission.

SOURCE Fortune Industries, Inc.

Business valuation considerations in tough economic times

2009-04-10T23:59:00.000-07:00

By Grover Rutter CPA/ABV, CVA, BVAL

Current economic conditions have a significant impact on the fair market value of business enterprises and also on the valuation process. This article is not intended to be a complete treatise on business valuation. However it does provide a few tips and reminders for accounting practitioners to keep in mind when they consider taking on business valuation assignments. In the context of this article, the term "value" refers to "fair market value" (defined below) which can be different from fair value, intrinsic value, investment value, synergistic value, etc.
Accounting practitioners traditionally have been immersed in "formula" and "calculation" routines in their accounting, auditing, and tax practices. This is especially true in tax practices. Formulas and calculation protocols have been handed down from legislators to regulators and from the regulators to the accounting community. Accounting and tax practitioners follow those protocols in tax planning and tax preparation assignments.

Unfortunately, many accounting and tax practitioners approach business valuation in a manner similar to the approaches taken for tax and accounting assignments: they crunch some numbers and apply some formulas to arrive at an answer (what they call the value). Often very crucial "value considerations" are ignored when making valuation "calculations." And, ignoring crucial valuation considerations can prove misleading - in both, good and bad economic environments.

Tip # 1

My first tip is for the practitioner to consider what, exactly, is Fair Market Value? Fair Market Value is defined in Regulation 25.2512-1 as:

"The value of the property is the price at which such property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell, and both having reasonable knowledge of relevant facts." (Court decisions frequently state in addition that the hypothetical buyer and seller are assumed to be able, as well as willing, to trade and to be well informed about the property and concerning the market for such property.)

Regulation 25.2512-1 provides an immediate follow up to the foregoing definition:

"The value of a particular item of property is not the price that a forced sale of the property would produce. Nor is the fair market value of an item of property the sale price in a market other than that in which such item is most commonly sold to the public, taking into account the location of the item wherever appropriate."

Persons performing "fair market valuations" must take into account the considerations that would be made by both the knowledgeable buyer and the knowledgeable seller within a particular demographic and under current industry and economic conditions.

Tip #2

My second tip is for the practitioner to learn and understand how to make appropriate value considerations concerning a fair market value engagement. For this tip, I am going to turn back the clock by half a century: fifty years! Revenue Ruling 59-60 is an "oldie but a goodie" that has continuing significance even in these troubled economic times. The ruling states, in part:

"A determination of fair market value, being a question of fact, will depend upon the circumstances in each case. No formula can be devised that will be generally applicable to the multitude of different valuation issues arising... Often, an appraiser will find wide differences of opinion as to the fair market value of a particular stock. In resolving such differences, he should maintain a reasonable attitude in recognition of the fact that valuation is not an exact science. A sound valuation will be based upon all the relevant facts, but the elements of common sense, informed judgment and reasonableness must enter into the process of weighing those facts and determining their aggregate significance."

The ruling specifically discusses valuation considerations for changing economic times:

"The fair market value of specific shares of stock will vary as general economic conditions change from 'normal' to 'boom' or 'depression,' that is, according to the degree of optimism or pessimism with which the investing public regards the future at the required date of appraisal. Uncertainty as to the stability or continuity of the future income from a property decreases its value by increasing the risk of loss of earnings and value in the future. The value of shares of stock of a company with very uncertain future prospects is highly speculative. The appraiser must exercise his judgment as to the degree of risk attaching to the business of the corporation which issued the stock, but that judgment must be to all of the other factors affecting value."

Revenue ruling 59-60 provides some specific (although not all inclusive) considerations that must be made in performing a business valuation:

a) The nature of the business and the history of the enterprise from its inception.
b) The economic outlook in general and the condition and outlook of the specific industry in particular.
c) The book value of the stock and the financial condition of the business.
d) The earning capacity of the company.
e) The dividend paying capacity.
f) Whether or not the enterprise has goodwill or other intangible value.
g) Sales of the stock and the size of the block of stock to be valued.
h) The market price of stocks of corporations engaged in the same or similar line of business having their stocks actively traded in a free and open market, either on an exchange or over-the-counter.

Anyone contemplating the value of a business interest would do well to consider each of the eight factors set forth in 59-60.

Tip # 3

If you are going to become involved with business valuations, obtain the proper and necessary training. Just as prudent accountants do not engage in certified audits or tax preparation without the proper training, accountants should not attempt business valuation work without training and the recognized professional credentials. Taxing authorities and courts are increasingly citing the importance of having valuations performed by "qualified" valuators who possess the required training and experience and who hold themselves out as valuation professionals. In today's bad economy and litigious environment, accountants shouldn't risk exposure to malpractice suits.

How does an accountant obtain business valuation training? There are various professional valuation organizations that provide training and certification programs. In my opinion, the best program to begin with is offered by the National Association of Certified Valuation Analysts (NACVA). Compared to other valuation organizations, NACVA has the largest number of certified valuation professionals and offers the greatest number of courses and continuing education courses. Certified Public Accountants can study and test for the certification of CVA (Certified Valuation Analyst). Non CPAs can study and test for the certification of AVA (Accredited Valuation Analyst). Most of NACVA's membership has come from the ranks of accounting and tax practitioners. If you are interested in learning more, you can simply type "NACVA" in your web browser and you'll find ample information on the organization.learn moreManagerial Accounting

source :AccountingWeb.com

Software useful to UW-P students

2009-04-10T23:56:00.000-07:00

By :By Megan Veech

Though many students are unaware of UW-Platteville’s process in students, services and technology, the campus’ latest addition in technology is the Enterprise Resource Planning software being used in many classrooms. Through the participation in an international software company’s university alliance program, students can experience this growing knowledge of software.

The Systems, Applications and Products in Data Processing, Inc. is a software company based in Germany that produces ERP software, or a system in which data and processes are organized into one single system. Formed in 1972, SAP is the world’s largest ERP company in the world. With over 75,000 customers in over 120 countries, their hard work does justice with more than 12 million users each day.

The software handles everything imaginable about a business. UW-P uses an ERP system for programs like PeopleSoft, Steve Kleisath, business and accounting department chair, said.

But not to be confused, SAP is several steps up from PeopleSoft. With over thousands of companies using this resource just in the United States today, all fortune 100 companies and 80 percent of fortune 500 companies use it.

“I’m extremely excited for what is to come,” Kleisath said. “This is the future of business. SAP integrates everything into one huge package and will be a key advantage for students.”

Wendy Brooke, assistant professor of business and accounting, was already familiar with the program when she joined UW-P two years ago. With her help and a few other teaching staff, they made an initiation to look into and research the company. The personnel noticed that SAP did have an alliance program with colleges and after realizing that more of the faculty was interested in the alliance with the company, they sent in an application to become an alliance partner. With the formation of this alliance, the software can be used in the classrooms for educational purposes.

“We’re not using this as training — we’re putting this theory into practice,” Brooke said.

With this program, users are able to work with human resources, accounting, financing, inventory, customs, purchasing, quality control and more.

“This is what I’ve been waiting for — something concrete in upper division courses that will really prepare willing individuals in specific ways,” Donna Perkins, business and accounting professor, said.

Although the system was added to the campus in January, the faculty has needed plenty of time to learn and adapt before they can exercise it in their classes. Currently, only four or five classes have introduced the program, but by fall 2009, more than 20 professors will have gone through training at workshops during this summer and will be using the program in the fall. Though SAP is targeted towards the business department, the Industrial Studies, Industrial Engineering, and Agricultural Business department will get hands-on as well.

Many companies throughout the country are using SAP, including: John Deere, Milprint, Pepsi, Rayovac, Kellogg’s and Harley Davidson. UW-P is one of the few neighboring colleges that have chosen to pursue this growing skill. Madison and Milwaukee School of Engineering both use the program but only have one to two classes which includes an introductory course that teaches ERP specifically. UW-P chose to take a different approach.

“By understanding little pieces at a time, we’ll be able to hit better grounds with the students,” Perkins said.

Two months ago, Wisconsin had 442 companies that requested SAP experience on applications. SAP would increase their chances up to number one with that knowledge, or increased their pay when starting. In Illinois, 1,662 companies were looking for SAP on applications. That number continues to grow every day. With SAP’s customers needing more employees with the preferred background, the German company truly encourages colleges to give students a head start.

Though soon-to-be graduates may not have experience with SAP, the campus has increased their knowledge slightly.
“We are continually planning for next year,” Brooke said. “By the time our current freshmen make it to their fourth year, we hope to have at least seven courses with SAP exposure. It is truly a tool for today and I’m excited for what the future brings.”

source : Exponent.online

The Knowledge Congress Has Scheduled a Live Webcast on Auditor Independence: What You Need to Know

2009-03-12T03:38:00.000-07:00

The Knowledge Congress, a service of Knowledge Group LLC and the leading producer of regulatory focused webcast, announced today that it has scheduled a live webcast on Auditor Independence: What You Need to Know. This two-hour event is scheduled on Tuesday, May 7, 2009, at 3:00 NN to 5:00 PM (ET – New York).

Recently, certain high-profile fraudulent cases have heightened the public's awareness of how important auditor independence is in the performance of various engagements. Indeed, independence standards materially affect the ways in which a CPA performs audit and other attestation-related reviews and services for the client. In audits conducted according to generally accepted auditing standards (GAAS), or the standards of the Public Company Accounting Oversight Board (PCAOB), audit teams are charged with the duty of giving reasonable assurance that their client's financial statements are free of material misstatement (whether caused by error or fraud). Auditor independence is a key element in providing such an assurance.

This Live Webcast will focus on the scope and conceptual framework for independence standards and will explain the different regulatory requirements, as well as interpretations published to help auditors understand the standards set forth concerning auditor independence. It will also address several other key issues, including: what the independence principles and safeguards mean to audit practice, what non-audit services are permitted or prohibited, how to apply the standards in specific nonaudit circumstances and the differences between the GAO and AICPA independence standards.

Speakers/Faculty Panel

Bella Rivshin, CPA, Associate Chief Auditor, Public Company Accounting Oversight Board (PCAOB)

For updated list of the faculty panel, please visit: http://knowledgecongress.org/event_2009_Auditor.html

About The Knowledge Congress

The Knowledge Congress, a service of The Knowledge Group LLC, is an organization that produces webcast that examine regulatory changes across a variety of industries. “We bring together the world's leading authorities and industry participants through informative two-hour webcast that study the impact of changing regulations and help businesses succeed through proper regulatory compliance.”

source :PR.com

Is there a viable alternative to fair-value accounting?

2009-03-12T03:37:00.000-07:00

By TAY KAY LUAN

MANY culprits have been singled out to take the blame for the financial and economic crisis. Fair-value reporting too has been blamed for the depth of the crisis, where troubled companies claim that mark-to-market valuations are forcing them to declare declines in asset values that aren’t real, thereby worsening sentiment in jittery world markets.

Indeed, opponents of fair-value reporting argue that the information provided by fair-value financial statements can be unreliable and hence, financial decisions can be put at risk. But is there a viable alternative to fair value in this highly complex business world?

Although fair-value accounting may have gotten bad press as a result of the crisis, key producers and users of financial reports - such as chief financial officers and accountants - recognise the benefits of fair value.

In a recent survey done by CFO Research Services and ACCA, 128 CFOs stated that adopting global financial standards reporting - including mark-to-market valuations - will be good for their companies.

There are several reasons for their mindset. In this dynamic global environment where valuations can change in the blink of an eye, historical-cost financial statements may no longer be relevant because they are not able to give accurate information on current values.

Traditional accounting rules have not kept pace with sweeping reforms in regulations, customer sophistication, knowledge-based products and the evolving valuation methods of enterprises.

Value creation has also changed, and this has made reforms very necessary to the way we report, interpret and compare with a common set of acceptable standards to meet customers’ demands and protect public interest.

This is where fair value accounting - with its emphasis on mark-to-market valuations - is highly relevant. Historical-cost accounting methods may not work quite so well in measuring current values and in projecting future values.

It needs to be kept in mind that common double-entry accounting worked in systems based on transactions and are most relevant to economies based on buying and selling transactions.

Most sophisticated economies today have evolved beyond that to embrace dynamic value creation and there needs to be a means to reflect and measure this value.

For instance, intangibles including brand, patents, trademarks, intellectual property, and thought leadership towards corporate performance, has become a tremendous asset for the majority of companies, and a key element in valuations.

Most of the information metrics and reporting systems now appearing on the investment radar screen are designed to measure and report financial health, which are a challenge to their immediate users. Again, this is where the fair-value accounting framework comes in handy.

Many companies today also operate globally across many regimes and jurisdictions, thereby increasing the need for better quality disclosures and consistency in understanding and interpretation of complex financial and risk matters in order to better serve their investors and shareholders.

Delivering such quality and consistency is a key tenet of the international financial reporting standards, or IFRS, in which fair-value accounting is fundamental.

One of the biggest benefits of fair value accounting may also be that investors will have the opportunity to better manage the risk of investing in highly leveraged companies.

In other words, it enables investors to use their judgement to describe how to recognise real value.

Therefore, it can be argued that fair-value accounting best fits the bill in the demand for a robust new measurement and reporting framework that can serve the needs of business.

However, since fair-value accounting is a fairly new creature, there will be issues of interpretation and usage as it evolves.

Although the new financial reporting framework is here to stay, it will probably be tweaked to make it more relevant, user-friendly and palatable to all stakeholders in the financial value chain, as well as to critics like French President Nicholas Sarkozy who called for an overhaul of fair-value reporting as part of the solution to the current financial mess.

The International Accounting Standard Board - architect of the shift to fair-value accounting via the international financial reporting standards - has acknowledged that the global financial crisis underlined the importance and urgency of making financial reporting more transparent, comparable and clearer.

At the recent G20 summit, delegates agreed that immediate actions towards a more robust reporting and value measurement will be necessary as part of the global solutions towards addressing current financial woes.

Regardless, reforms must come with greater clarity, comparability and responsibility if the bitter lessons learnt from the current financial and economic crisis are to shape the world into a better place for everybody.

source :The Star online

TEXT-U.S. SEC chairman's testimony at House hearing

2009-03-12T03:33:00.000-07:00

Following are excerpts from the
written testimony submitted by Securities and Exchange
Commission Chairman Mary Schapiro to the House Appropriations
subcommittee on Wednesday:
Important questions have been raised concerning the
agency's handling of tips or whistleblower information related
to the activities of Bernard Madoff. Former Chairman Cox asked
the SEC Inspector General to look into what happened, what
failed to happen, and to report back to the Commission.
It is clear that, regardless of the ultimate findings of
the Inspector General, the agency needs to improve its ability
to process and pursue appropriately the more than 700,000 tips
and referrals it receives annually.
We have retained the Center for Enterprise Modernization to
begin work immediately on a comprehensive review of internal
procedures to evaluate tips, complaints, and referrals, with a
goal of establishing a process that will more effectively
identify valuable leads for potential enforcement action. In
addition to these changes, it is essential that we work to
improve our risk-based oversight of broker-dealers and
investment advisers.
Our Office of Compliance Inspections and Examinations
(OCIE), together with other agency staff, are presently working
on an initiative to identify the key data points that would
facilitate a risk-based oversight methodology and better allow
the staff to identify and focus on those firms presenting the
most risk.
These steps will build the knowledge base of our
inspections program, better enabling them to conduct oversight
of complex trading strategies and products that exist in our
markets today. In addition, the examination staffs of the SEC
and FINRA are working together to identify better ways that
incipient frauds might be detected at an early stage.
CREDIT RATERS, ACCOUNTING
I also plan to focus on the critical role played by rating
agencies, and to improve the current ratings process. The SEC
recently approved additional rules, pursuant to our authority
under the Credit Rating Agency Reform Act, to address certain
weaknesses in the ratings process. These rules were a step in
our continuing efforts to bring transparency and accountability
to the ratings process, which plays a critical role in the
market's pricing and allocation of capital.
In the area of accounting standards, the SEC staff
completed a congressionally-mandated study of fair value
accounting. The staff issued guidance to financial institutions
so that they can give fuller disclosure to investors,
particularly with respect to hard-to-value assets.
We have also continued to work closely with the Financial
Accounting Standards Board to deal with such issues as
consolidation of off-balance sheet liabilities, the application
of fair value standards to inactive markets, and the accounting
treatment of bank support for money market funds.
In the area of combating false rumors and manipulative
activity in the marketplace, the agency initiated examinations
of the effectiveness of broker-dealers' and investment
advisers' controls to prevent the spreading of false
information. The SEC adopted a package of measures designed to
strengthen investor protections against naked short selling,
including rules requiring that "fails" from short-sales be
closed out in a significantly shorter time; eliminating the
options market maker-exception of Regulation SHO; and expressly
targeting fraud in short-selling transactions.
As we move forward, the Commission will consider other
steps necessary to eliminate manipulative and illegal activity
in our markets, as well as limit market volatility.
In an effort towards bringing the unregulated world of
credit default swaps into the sunlight, the agency has worked
with private parties and its regulatory counterparts at the
Commodity Futures Trading Commission and the Federal Reserve to
facilitate the development and regulatory approval of central
counterparties, clearance and settlement systems, and trading
platforms for these products.
Over the coming year, we will also have an agenda that
focuses on issues of corporate governance, including proxy
access, risk disclosure, disclosure related to executive
compensation; money market fund regulation; retail investor
protection; and international cooperation.
SEC BUDGET, STAFFING
Between 2005 and 2007, the agency lost 10 percent of its
employees, a decline that inevitably affected all of the SEC's
major programs. The SEC oversees more than 30,000 registrants
including 12,000 public companies, 4,600 mutual funds, 11,300
investment advisers, 600 transfer agencies, and 5,500 broker
dealers. We do this with a total staff of 3,600 people.
With support from this subcommittee, during the last two
fiscal years the SEC was able to lift its hiring freeze and
begin rebuilding its workforce.
As you know, the previous Administration's request for FY
2009 gave the SEC an increase of less than 1 percent over last
year. But, the SEC will require a 5 percent increase just to
sustain current staffing levels and provide cost-of-living and
merit adjustments for staff. As a result, the previous
Administration's request would have resulted in a cut of nearly
100 staff. The subcommittee's support for a 2009 appropriation
of $943 million for the SEC will be enormously helpful as we
work to reinvigorate and strengthen the agency in the wake of
the last few difficult months.
However, I have learned since coming to the agency several
weeks ago that this funding level would still require the
agency to make significant cuts in its current operations. I do
not believe it would be wise for the SEC to retrench during
such perilous times in our markets.
For this reason, I have submitted a reprogramming request
to the subcommittee to use $17 million in the SEC's unspent
prior year funds in fiscal year 2009. These are monies
appropriated to the agency and obligated in past years, so this
is not a request for the subcommittee to find new funds for the
agency.
FY2010 BUDGET
The President is requesting a total of $1.026 billion for
the agency in FY 2010, a 9 percent increase over the FY 2009
appropriation. This proposal demonstrates the Administration's
firm resolve to strengthen oversight over our financial
markets. It will fund an additional 50 staff for the SEC,
enhance our ability to uncover and prosecute fraud, and begin
to build desperately needed technology.
Specifically, we plan to add staff to the SEC's Enforcement
program to focus on pursuing tips, complaints, and other leads,
thus increasing the resources the SEC can dedicate to frauds
that citizens bring to our attention. The Examination program
would also receive new positions to expand its inspections of
credit rating agencies, and to strengthen risk-based
surveillance and examination oversight of investment advisers.
Finally, I plan to increase the number of staff in our
Office of Risk Assessment specifically dedicated to deepening
our understanding of risk, and incorporating risk assessment
into all aspects of operations.
With the additional IT funds provided under the President's
Budget for FY 2010, I plan to focus on several key projects:
First and foremost, we will use additional funds to enhance
our systems for handling tips, complaints, and referrals. The
SEC has a number of different processes to track this kind of
information, but there is no central repository or system
through which this information comes together to ensure it is
handled consistently or appropriately.
The SEC also plans to use additional technology funding to
improve our ability to identify emerging risks to investors.
We have many internal data repositories that have resulted from
filings, examinations, investigations, economic research, and
other ongoing activities. But we need better tools to mine this
data, link it together, and combine it with data sources from
outside the Commission to determine which firms or practices
deserve a closer look.
Finally, we aim to complete the multi-year efforts to
improve the case and exam management tools available to our
enforcement and examination programs. These systems will give
our senior managers better information on the mix of cases,
investigations, and examinations, so they can apply resources
swiftly to the continually evolving set of issues and problems
in the markets.

source :Reuters

Accounting standards could change by the time current students graduate

2009-03-12T03:30:00.000-07:00

by :Chelsey Levingston

International Financial Reporting Standards (IFRS) should be a concern of current accounting students.

“When accounting students graduate, they’ll have to be familiar with the direction business is going,” said James Greenspan, Ph.D., professor and chair of accountancy.
And it looks like the direction is IFRS.

Under consideration by the Securities and Exchange Commission (SEC), if the SEC votes to move U.S.-listed companies from U.S. Generally Accepted Accounting Principles (GAAP) to IFRS, the results will be a more level playing field for businesses worldwide.

Already, more than 100 countries require or permit use of the international standards, according to “Buckle Up”, a report by Deloitte, the parent company of 165,000 audit, consulting, financial advisory, risk management and tax service firms.

When the SEC decides whether or not to go forward, the target date for the International Accounting Standards Board (IASB), the standard setting body for IFRS, and the Financial Accounting Standards Board (FASB), the standard setting body for U.S. GAAP, to converge is 2011, according to the SEC timetable issued Nov. 14, 2008.

Mandatory use of IFRS is likely to start in 2014, according to the Deloitte report.

IFRS questions are expected to start appearing on the CPA exam in 2013, according to the American Institute of Public Accountants.

“This is why students should be concerned,” said Kate Lash, a junior majoring in accountancy and president of Accounting Club. “Questions could appear on the CPA soon after current students graduate.”

She also said as far as jobs, it’s likely students will be trained appropriately.
“WSU is taking the necessary measures,” Lash added.

“I am concerned. In my undergraduate, we haven’t hardly heard of IFRS,” Lash said.

So it’s hard to know if one graduating class will be more affected than another, said Greenspan. However, with the change in the presidential administration and the new SEC chair, Mary Schapiro, there could be a new transition pace, he said.

“We know it’s going to be coming sooner or later, but we don’t know the pace,” Greenspan said.

Instead of waiting on the SEC to set the pace, the role of universities is to be at the cutting edge, said the accounting chair. That’s why education is so expensive.

“I think our role as professors is to always make sure we teach what’s current now and what will be current when students graduate,” Greenspan said.

Knowing the switch to IFRS will happen, the accounting department met fall 2008 and targeted fall 2009 to start incorporating the new standards in the classroom.

A reason for the education lag is it takes three years to get new textbooks written and published, according to Strategic Finance.

But IFRS has been addressed in the masters of accountancy program the last two or three years, Greenspan added.

One professor hasn’t waited on textbooks.

Currently teaching international accounting, Neal Pemberton, an accountancy adjunct faculty member, said students won’t have to relearn accounting, but understand the differences between GAAP and IFRS because they’re built on common concepts.

International accounting, open to all business majors, has kept up with IFRS developments the last two years and covers current events, but doesn’t cover IFRS accounting practices.
Knowledge of IFRS could increase a student’s marketability and become an opportunity for accounting professionals and students, he added.

“It’s going to impact their career development, so they’re going to have to stay current,” Pemberton said.

At University of Dayton, IFRS is being covered and tested in intermediate accounting courses and international accounting courses, said Donna Street, president of the International Association for Accounting Education and Research and Mahrt Chair of Accounting at the University of Dayton, Ph.D.

In general, many U.S. professors lack IFRS expertise and textbooks, but large accounting firms are making materials and cases available, said Street.

For example, Street uses electronic materials in her classroom from the International Association of Accounting Education and Research.

The University of Dayton School of Business Administration also started a pilot IFRS certificate program Monday, Jan. 26 at U.D. in cooperation with the Institute of Chartered Accountants in England and Wales.

Upon program completion, students sit for an online exam to earn the certificate.
Street will be teaching another international course this summer, which also includes a two-week trip to the partner school and site visits in England.

“The big firms are already training their staff. The universities are the problem,” Street said.

Professors and students graduating this year can get continuing education and CPA courses online.

The Accounting Club, about 25 to 30 students, meets at least once a quarter and gives the opportunity to learn and network with speakers, Lash said.

Greenspan said, “I think IFRS is sort of a signal that if you don’t make yourself more familiar with the way other countries do things or if you don’t get a more global prospective, you’re going to be in trouble.”

source: The Guardian

Knowledge is a worthy investment, OCC freshman writes

2009-03-12T03:15:00.000-07:00

by Jessica Gorman

With the outlook of our current economy, high school students might decide that college is not worth their time or their money. For a few, this may be true. In some cases, a trade school would be a wise decision. Becoming a master of a trade is increasingly popular.

In any other case, college is probably the smartest route. Students can gain a life experience.
You may not know what you want to do for the rest of your life, but you can get a good idea of what you like to do. Also, even if you have a degree in accounting, you would have a better chance of being hired for an upper-level position in a retail store or restaurant over a competitor lacking a degree.

As Sir Francis Bacon said, "Knowledge and human power are synonymous."

I never graduated from high school, and I quickly realized that I could do anything I wanted but I would have to work for it.

I got myself into Onondaga Community College. This was probably the best decision of my life. Not many people truly love trudging through the mundane educational system, but the rewards exceed the endeavor. How can somebody put a price on self-actualization?

When it comes to college and you do not know how you will pay for it, just get creative. Make sure you are getting all the financial aid, grants, and loans available for you. Ask relatives to help pay for tuition and books. Work a part-time job.

To have a constant cash flow, I turned my knitting hobby into an entrepreneurship opportunity.

Anyone can do anything, and anyone can go to college, but the moral of the story is that you have to work for it to reap the benefits.
source:syracuse.com

Obama's Radical New Discourse

2009-02-24T20:49:00.000-08:00

By Dan Froomkin

President Obama yesterday modeled a dramatic new form of discourse for the White House -- a possible antidote to the sound-bite culture of modern politics -- in which people with different views come together to engage in a respectful dialogue.

Some 130 Democratic, Republican and community leaders met in intense but collegial "breakout" groups on key issues related to the country's fiscal health for over two hours at the White House yesterday afternoon. They then gathered in an auditorium where Obama calmly and commandingly called on more than a dozen of them -- starting with his vanquished foe, Republican Senator John McCain -- to share their thoughts.

My favorite immediate response came from MSNBC anchor Tamron Hall, who marveled moments after the summit wrapped up: "The tone was very different than what we hear when people are guests on the show." It sure was.

Here's the transcript. "My sense is that, despite partisan differences, despite regional differences and different priorities, everybody is concerned about the legacy we're leaving to our children," Obama said. "And the hope was, is that if we had a forum like this to start talking about these issues that it would turn out that there are real opportunities for progress -- there are going to be some areas where we can't make progress -- but that we have more in common that we expect. And I appreciate that while we may have different opinions, there's a renewed willingness to put some concrete ideas on the table, even on those issues that are politically tough, and that's real progress."

Mark Miller, of the liberal Center for American Progress, told MSNBC's Hall: "What you saw here was a really genuine attempt by a president who's very comfortable dealing with the substance, to engage political leaders across the spectrum....It's like a national teach-in almost, and I think this will be the first of what will be a number of things we see Obama do in this vein to both teach people about the problems and create a climate to get past just the finger-pointing and come together to solve problems."

Steve Holland of Reuters likened the session to "a polite version of British 'question time' in which the prime minister engages in back-and-forth with members of parliament."

Liz Sidoti of the Associated Press called Obama the "facilitator in chief" and wrote that he "showed his hand as both a policy wonk and a gracious host — to allies and adversaries alike.

"Easygoing though always in charge, Obama melded serious talk about ways to control the exploding federal deficit with frequent doses of humor and familiarity. That mix provided moments of levity that defused what could have been a tense session of finger-pointing between Republicans and Democrats on a painfully dry subject — fiscal policy."

The Washington Post's Dana Milbank mocked certain elements of the event, but concluded: "For all the no-shows and the lack of planning, the summit had, in the end, provided something of value: a rare, public back-and-forth between the president, lawmakers and interest groups."

Obama said the approach was particularly necessary for such central issues as health care, where there are a lot of tradeoffs and "no perfect solutions.

"But in the sound bite, political culture that we got, it's very hard to communicate that. And we think that it's very important to have some forums -- and I talked about this during -- way back in the primary campaign, that there is a process that the public can listen to about what these tradeoffs are, because I think that some of us get on our high horse and say we've got the answer to health care. Well, it turns out that, you know, there are costs involved on the front end even if the benefits accrue in the out years. There are situations in terms of people, if they've got health insurance, sort of liking what they've got now, they just want it for cheaper. There are issues in terms of providers and them feeling like they're getting squeezed.

"And so making sure that all that stuff is surfaced in public and we're educating the public on some of these issues can be very important if we're going to make progress because -- you know, some of these things will ultimately involve some tough decisions and some tough votes."

Obama's exchange with McCain was substantive -- and humorous.

McCain, who had participated in the breakout session on procurement, said that the issue that "consumed a lot of our conversation on procurement was the issue of cost overruns in the Defense Department." And as an example, he raised a matter close to home. "We all know that the cost overruns -- your helicopter is now going to cost as much as Air Force One. I don't think that there's any more graphic demonstration of how good ideas have cost taxpayers an enormous amount of money."

Obama replied: "Well, John, let me -- this is going to be one of our highest priorities. By the way, I've already talked to [Secretary of Defense Robert] Gates about a thorough review of the helicopter situation. The helicopter I have now seems perfectly adequate to me. (Laughter.) Of course, I've never had a helicopter before -- (laughter) -- maybe I've been deprived and I didn't know it. (Laughter.)

"But I think it is a -- it is a -- an example of the procurement process gone amuck. And we're going to have to fix it. Our hope is, is that you, Senator [Carl] Levin, and others, can really take some leadership on this."

(As a result, R. Jeffrey Smith writes in The Washington Post today that "prospects for building a new fleet of high-tech presidential helicopters darkened" after what "amounted to a shot across the bow of large defense contractors such as Lockheed Martin, the helicopter's manufacturer.")

Obama called on several other Republicans, including House Whip Eric Cantor. When Democratic Sen. Tom Carper urged Obama to continue his outreach, he replied: "Well, I will certainly do that, Tom, because I'm just a glutton for punishment. (Laughter.) I'm going to keep on talking to Eric Cantor. Some day, sooner or later, he is going to say, boy, Obama had a good idea. (Laughter.) It's going to happen. You watch, you watch. (Laughter.)"

In perhaps the most striking contrast to events in the Bush White House, where the opposition was rarely seen and never heard, Rep. Joe Barton (R-Texas) challenged Obama to pressure the House's Democratic leaders to include Republicans in the bill-writing process. "I think the House Republicans have shown that when we're not included in the decision-making, we're disinclined to sign off on the solution," Barton noted dryly.

Obama called that "an important point," but responded : "[O]n the one hand, the majority has to be inclusive. On the other hand, the minority has to be constructive.

"And so to the extent that on many of these issues we are able to break out of sort of the rigid day-to-day politics and think long term, then what you should see, I think, is the majority saying, what are your ideas; the minority has got to then come up with those ideas and not just want to blow the thing up. And I think that on some of these issues, we're going to have some very real differences and, you know, presumably the majority will prevail unless the minority can block it. But you're just going to have different philosophical approaches to some of these problems."

Indeed, while preaching -- and modeling -- civility, Obama didn't gloss over his differences with the previous administration. In his opening remarks at the summit, Obama blamed former president George W. Bush for the fix he's in -- and for engaging in budget subterfuge.

"We cannot, and will not, sustain deficits like these without end. Contrary to the prevailing wisdom in Washington these past few years, we cannot simply spend as we please and defer the consequences to the next budget, the next administration, or the next generation," Obama said.

"And that's why today I'm pledging to cut the deficit we inherited in half by the end of my first term in office. This will not be easy. It will require us to make difficult decisions and face challenges we've long neglected. But I refuse to leave our children with a debt that they cannot repay -- and that means taking responsibility right now, in this administration, for getting our spending under control.

"We'll start by being honest with ourselves about the magnitude of our deficits. For too long, our budget process in Washington has been an exercise in deception -- a series of accounting tricks to hide the extent of our spending and the shortfalls in our revenue and hope that the American people won't notice: budgeting certain expenditures for just one year, when we know we'll incur them every year for five or 10; budgeting zero dollars for the Iraq war -- zero -- for future years, even when we knew the war would continue; budgeting no money for natural disasters, as if we would ever go 12 months without a single flood, fire, hurricane or earthquake.

"We do ourselves no favors by hiding the truth about what we spend. In order to address our fiscal crisis, we're going to have to be candid about its scope. And that's why the budget I will introduce later this week will look ahead 10 years, and will include a full and honest accounting of the money we plan to spend and the deficits we will likely incur."

(Christi Parsons and Maura Reynolds of the Los Angeles Times have more on the exclusions, unrealistic assumptions, and accounting tricks that were part of the Bush budget process.)

Obama continued: "[I]f we want to rebuild our economy and restore discipline and honesty to our budget, we will need to change the way we do business here in Washington. We're not going to be able to fall back into the same old habits, and make the same inexcusable mistakes: the repeated failure to act as our economy spiraled deeper into crisis; the casual dishonesty of hiding irresponsible spending with clever accounting tricks; the costly overruns, the fraud and abuse, the endless excuses. This is exactly what the American people rejected when they went to the polls.

"They sent us here to usher in a new era of responsibility in Washington -- to start living within our means again, and being straight with them about where their tax dollars are going, and empowering them with the information they need to hold all of us, their representatives, accountable."

Despite all the speculation -- both alarmed and enthusiastic -- that "entitlement reform" would be the theme of yesterday's summit, the central topic, as I predicted in a post on Friday, Obama's Sense of Entitlements, was clearly health care.

Lori Montgomery and Amy Goldstein write in The Washington Post: "President Obama will make reforming the U.S. health-care system his top fiscal priority this year, administration officials said yesterday, contending that reining in skyrocketing medical costs is critical to saving the nation from bankruptcy....

"The White House budget director, Peter Orszag, delivered a forceful argument for keeping Washington's focus, for now, on slowing 'the growth rate in health-care costs,' calling it 'the single most important thing we can do to improve the long-term fiscal health of our nation.'

"'Let me be very clear: Health-care reform is entitlement reform. The path of fiscal responsibility must run directly through health care,' Orszag said...

"Although the $787 billion stimulus package approved by Congress this month, along with bailouts for the nation's financial system, has bloated this year's budget deficit, administration officials and many outside experts contend that the rising costs of Medicare and Medicaid, the federal health programs for the elderly and the poor, present a far greater threat to the nation's long-term financial stability."

Michael Kranish and Lisa Wangsness write in the Boston Globe: "The effort to overhaul healthcare and extend insurance to most Americans has vexed politicians in Washington for decades. There had been discussion among analysts in the last month about whether the Obama administration might try to wrap healthcare into a 'grand bargain' that would also include overhauls of Social Security and Medicare.

"But Obama aides said that the president wants to work on healthcare separately and 'made it clear they want to focus on healthcare first,' according to Senator Judd Gregg, a New Hampshire Republican who took part in the summit."

Here are the pool reports from the breakout sessions on Social Security, tax reform, health care, the budget process and procurement.

In one rare example of consensus, incidentally, GOP Rep. Darrell Issa told Obama: "Mr. President, it was kind of a surprise in the procurement group that was together, we had almost universal recognition that over the last decade or so, we've overdone, in some cases, outsourcing of critical federal requirements, and that means that in many cases we spend more to hire a contractor or a non-federal worker than we would pay to invest in federal workers.

"And so there was universal -- Republican, Democrat, House and Senate, even -- (laughter) -- that during this administration we need to assess where we can re-federalize some parts of the workforce, particularly when it came to people who do get procurement and oversee the procurement."

source: The Washington Post

Why Mark-To-Market Accounting Rules Must Die

2009-02-24T20:47:00.000-08:00

by:Brian S. Wesbury and Robert Stein

We have been accused of beating a dead horse when it comes to our support for either suspension of, or targeted relief from, market-to-market accounting.

And we suppose after writing thousands of words, producing videos and giving speeches about the issue, some might be tempted to let it go. But we can't do that, especially when the government continues to spend trillions of dollars and is coming very close to bank nationalization.
This is a real shame. Suspending mark-to-market accounting could fix major problems at no cost. Unfortunately, many people dismiss this issue without really understanding its impact on the economy.

We are economists, not accountants or bank analysts. We really don't think a debate about how big the housing bubble was, or whether a certain bank is viable or not, is worthwhile when it comes to accounting rules. That misses the point. Mark-to-market accounting rules affect the economy and amplify financial market problems.

The history seems clear. Mark-to-market accounting existed in the Great Depression, and according to Milton Friedman, who wrote about it just 30 years after the fact, it was responsible for the failure of many banks.

Franklin Roosevelt suspended it in 1938, and between then and 2007 there were no panics or depressions. But when FASB 157, a statement from the Federal Accounting Standards Board, went into effect in 2007, reintroducing mark-to-market accounting, look what happened.

Two things are absolutely essential when fixing financial market problems: time and growth. Time to work things out and growth to make working those things out easier. Mark-to-market accounting takes both of these away.
source : Forbes.com

An Accounting Solution to Help Your Business Succeed

2009-02-24T20:46:00.000-08:00

By Sandra Miller

What does it take to run a successful business? J.R. Hudson of Account Services, Inc. explains it. “It really takes a business platform supported by three tiers; Marketing and Sales, Operations and Management, and Finance and Accounting, for a business to be successful.” For businesses looking to streamline their accounting platform, Account Services, Inc. provides quality solutions.

Account Services, Inc. provides the tools used in the day-to-day operations of small to mid-size businesses. It differs from other accounting firms as their staff specializes in setting up all accounting functions for running a business. Tools such as Quickbooks, Quickbooks Online, and Peachtree are the more popular among clients. Account Services. Inc. also specializes in the ‘clean up’ of accounting systems; if the ‘books’ are out of balance or there is a backlog of work to be entered into a system, Account Services, Inc. will get the job done.

When systems are running efficiently, all tax information is clean and readily available. Account Services, Inc. knows success. “During tax season, businesses say how easy it is to get the taxes completed, and tax preparers really appreciate us,” says Hudson. Account Services, Inc. is not a CPA firm, and does not perform federal income tax preparation. The staff provides ongoing internal accounting support.

Some businesses already have a workable system in place and just need to fine-tune the accounting system to make it run more efficiently. Other businesses may have expanded or upgraded to new accounting systems, and need some major revisions to combine business practices. The staff at Account Services, Inc. works to merge and coordinate accounting systems.

Startups that use Account Services, Inc. have the added advantage of getting a quality system in place at the beginning; from there, upgrades and additions can be incorporated almost seamlessly.

In this economy, customers are looking for ways of doing business more efficiently. The trend is to have information readily available when making business decisions. The staff at Account Services, Inc. works closely with its clientele to build excellent customer relationships; communication is the key that makes the difference in providing accounting solutions. “This is where our team of experts can really make a difference in providing accounting solutions,” says Hudson.

Account Services, Inc. is located at Carillon Point in Kirkland has been operating on the Eastside and Greater Seattle metropolitan area since 1994. Owner J.R. Hudson started the business after working for a CPA firm, a Fortune 500 company, and setting up accounting systems for several businesses. Currently, their staff of five brings a wealth of expertise honed from their experiences as accountants and bookkeepers for many large area businesses and law firms, which include the Seafirst Division of Bank of America, the Pike Place Market, and the Paramount Theater.
source: Eastside Business

10-Q: WATERPURE INTERNATIONAL part3

2009-02-24T20:44:00.000-08:00

NOTES TO FINANCIAL STATEMENTS

NOTE 9 - STOCK OPTIONS (continued)
During the year ended June 30, 2008, the Company issued 100,000 options to one of its executive officers. The exercise price is $0.07, which was the price of the Company's common stock on the grant date. The options are immediately exercisable and expire five years from the grant date. The fair value of the options was estimated at the date of grant using the Black-Scholes option price model. The Company determined that the stock option compensation was $6,845 and was recognized during the year ended June 30, 2008.
During the year ended June 30, 2008, the Company also issued 3,000,000 options to one of its executive officers. The exercise price was $0.10, which is a discount to the price of the Company's common stock price of $.20 on the grant date. The options are immediately exercisable and expire five years from the grant date. The fair value of the options was estimated at the date of grant using the Black-Scholes option price model. The Company determined that the stock option compensation was $576,092 and was recognized during the year ended June 30, 2008.
To determine the fair value of the options granted during the year ended June 30, 2008, the Company used the following assumptions in its Black-Scholes option -price calculation:
Issue date June 30, 2007 January 1, 2008 June 30, 2008
Options issued 500,000 3,000,000 100,000
Risk-free interest rate 5% 3% 3%
Expected option life 5 years 5 years 5 years
Dividend yield 0% 0% 0%
Volatility 120% 157% 194%
Exercise price $0.55 $0.10 $0.07

These assumptions were determined as follows:
· The risk free interest rate for the period within the contractual life of the option is based on the 5-year U.S. Treasury yield at the time of the grant.
· The expected term of the options granted represents the period of time that the options granted are expected to be outstanding.
· Historically, the Company has not paid a dividend on its common shares and does not expect to do so in the future.
· The volatility assumption represents an expectation of the volatility of the price of the underlying shares for the expected term of the option, considering factors such as historical stock price and stock volatility of other companies within the industry.
WATERPURE INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 9 - STOCK OPTIONS (continued)
The following is a summary of the status of stock option activity for the period
from inception (July 22, 2005) through December 31, 2008:
Weighted
Average
Exercise
Options Price
Outstanding as of July 22, 2005 (inception) - $ -
Granted 125,000 0.0025
Exercised - -
Forfeited - -
Expired - -
Outstanding as of June 30, 2006 125,000 $ 0.0025
Granted 500,000 0.5500
Exercised - -
Forfeited - -
Expired - -
Outstanding as of June 30, 2007 625,000 $ 0.4400
Granted 3,100,000 0.0990
Exercised 125,000 0.0025
Forfeited - -
Expired - -
Outstanding as of June 30, 2008 3,600,000 $ 0.1610
Granted - -
Exercised - -
Forfeited - -
Expired - -
Outstanding as of December 31, 2008 3,600,000 $ 0.1610

No options were exercised and no funds were received from the exercise of options during the six-month period ended December 31, 2008.
NOTE 10 - RELATED PARTY TRANSACTIONS
LEASE
The Company subleases its office space from Stein, Feldman and Sampson, LLC, of which, Mr. Orr, the Company's Chief Financial Officer is affiliated, for $500 per month on a month-to-month basis.
DUE TO OFFICERS AND STOCKHOLDERS
During the six-months ended December 31, 2008, the Company received advances, made repayments, and had amounts due to officers and stockholders as disclosed in Note 6.
WATERPURE INTERNATIONAL, INC. (A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS

NOTE 11 - INCOME TAXES
The Company adopted the provisions of FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109" ("FIN No. 48"), on July 1, 2007. FIN No. 48 requires that the impact of tax positions be recognized in the financial statements if they are more likely than not of being sustained upon examination, based on the technical merits of the position. As discussed in the June 30, 2008 financial statements in the Form 10-K, the Company has a valuation allowance against the full amount of its net deferred tax assets. The Company currently provides a valuation allowance against deferred tax assets when it is more likely than not that some portion, or all of its deferred tax assets, will not be realized. There was no impact to the Company as a result of adopting FIN No. 48 as the Company's management has determined that the Company has no uncertain tax positions requiring recognition under FIN No. 48 both on July 1, 2007 (adoption) and on December 31, 2008.
The Company is subject to U.S. federal income tax as well as income tax of certain state jurisdictions. The Company has not been audited by the I.R.S. or any states in connection with income taxes. The periods from inception - 2007 remain open to examination by the I.R.S. and state authorities.
The Company recognizes interest accrued related to unrecognized tax benefits in interest expense. Penalties, if incurred, are recognized as a component of tax expense.
NOTE 12 - SUBSEQUENT EVENTS
Subsequent to December 31, 2008, the Company at various times sold 2,999,999 shares of its common stock for $22,500. The fair value of the shares was determined based on the closing price of the shares at the date of the agreements.
Subsequent to December 31, 2008, the Company at various times issued 6,550,000 shares of its common stock for consulting services totaling $65,500.
source : MarketWatch

10Q: WATERPURE INTERNATIONAL part2

2009-02-24T20:43:00.000-08:00

NOTES TO FINANCIAL STATEMENTS

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (continued)
CONCENTRATIONS OF CREDIT RISK
The Company's financial instruments that are exposed to a concentration of credit risk are cash and accounts receivable. The Company places its cash with a high credit quality institution. At December 31, 2008, the Company's cash balance on deposit did not exceed federal depository insurance limits. The Company routinely assesses the financial strengths of its customers and, as a result, believes that its accounts receivable, net of reserves, credit risk exposure is limited.
FAIR VALUE OF FINANCIAL INSTRUMENTS
FAS No. 107, Fair Value of Financial Instruments, requires disclosure of the fair value of financial instruments for which determination of fair value is practicable. SFAS No. 107 defines the fair value of a financial instrument as the amount at which the instruments could be exchanged in a current transaction between willing parties. The carrying amount of cash, accounts receivable, accounts payable and accrued expenses, due to officers and due to stockholders approximates fair value because of the immediate or short-term maturity of these financial instruments. The fair value of the notes payable was estimated by discounting the future cash flows using current rates offered by lenders for similar borrowings with similar credit ratings. The fair value of the notes payable approximate their carrying value. The fair value of the convertible notes is not determinable because of the lack of any quoted market price or trading activity in the instruments (see Notes 5 and 7 for a description of these instruments). The carrying value of the accrued royalties payable approximate fair value and was estimated by discounting future cash flows using a 12% discount rate. The Company's financial instruments are held for other than trading purposes.
NET LOSS PER COMMON SHARE
The Company presents basic earnings (loss) per share and, if applicable, diluted earnings per share pursuant to the provisions of SFAS No. 128, Earnings per Share. Basic earnings (loss) per share are calculated by dividing net income or loss by the weighted average number of common shares outstanding during each period.
STOCK BASED COMPENSATION AND PAYMENTS
The Company accounts for equity instruments exchanged for services in accordance with FAS No. 123(R), "Share-Based Payments." And EITF 96-18, "Accounting for Equity Investments that are Issued to Other than Employees for Acquiring, or in Conjunction with selling, Goals or Services." Under the provisions of FAS No.
RECENT ACCOUNTING PRONOUNCEMENTS
There are no accounting pronouncements not yet adopted that are expected to have a significant impact on the Company.
WATERPURE INTERNATIONAL, INC. (A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS

NOTE 4 - INTANGIBLE ASSETS - LICENSE
On December 7, 2007, the Company entered into licensing agreements with Everest Water LTD for the manufacturing and marketing rights to atmospheric water generators and mineral additive units. The Company agreed to pay $300,000, plus 1,500,000 shares of the Company's common stock valued at $330,000 as consideration under this agreement. The Company paid $50,000 with the execution of the agreement and an additional $20,000 through July 31, 2008. On August 1, 2008, the Company and Everest Water LTD modified the payment terms of their licensing agreement. Under the amended payment terms, the Company cancelled the shares to be issued to Everest and agreed to pay Everest $430,000 over 33 months starting September 1, 2008, plus 8% royalty payments with guarantee minimum payments as follows: $50,000 in year one, $60,000 in year two, $70,000 in year three, $90,000 in year four and $100,000 each year after until the termination of the licensing agreement which coincides with the expiration of the last patent in August 2027.
The following table summarizes the various components of the Everest license as of December 31, 2008:
December 31, 2008 June 30, 2008
Amended value of license described above $ 1,094,864 $ 1,094,864
Less: accumulated amortization 67,662 38,079
License, net $ 1,027,202 $ 1,056,785

Total amortization for the six months ended December 31, 2008 and 2007 was $29,583 and 5,397, respectively.
Contingencies - Royalties
Pursuant to the licensing agreement as described above, the Company will pay Everest Water LTD an 8% royalty payment with a guaranteed minimum payment. The Company has recognized a liability of $750,442, which represents the present value of the minimum royalty payments the effective discount rate.
NOTE 5 - NOTES PAYABLE
The Company entered into a Securities Purchase Agreement with accredited investors on May 21, 2007 for the issuance of two $25,000 notes for a total of $50,000. The notes payable accrue interest at 12% per annum and were due six-months from the date of issuance. On November 15, 2007, the terms of these notes were extended for an additional six months.
During the year ended June 30, 2008, the Company repaid one of the $25,000 notes. The other note is currently in default and is included in current liabilities on the balance sheets.
NOTE 6 - ADVANCES FROM OFFICERS AND SHAREHOLDERS
Officers and stockholders of the Company have provided various short-term working capital advances. During the six months ended December 31, 2008, short-term working capital advances from officers and stockholders under this borrowing arrangement totaled $26,350 and $26,500 respectively. During the six months ended December 31, 2007, short-term working capital advances from officers and stockholders under this borrowing arrangement totaled $65,898 and $109,033 respectively. The Company issued 666,111 shares of common stock as repayment for $41,550 of the amount due to stockholders and issued 1,000,000 shares of common stock as repayment for $50,000 of the amount due to officers during the six months ended December 31, 2008. The Company does not intend to pay interest on the principal borrowed from officers and stockholders as the advances are intended to be short-term.
WATERPURE INTERNATIONAL, INC. (A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS

NOTE 7 - CONVERTIBLE DEBT
The Company entered into a Securities Purchase Agreement with accredited investors on May 21, 2007 for the issuance of an aggregate of $50,000 of convertible notes. The convertible notes accrue interest at 12% per annum and are due two years from the date of the note. The note holder has the option to convert any unpaid note principal to the Company's common stock at a rate of $0.25 per share. In accordance with EITF 98-5, during the year ended June 30, 2007, the Company recorded a debt discount of $18,750 on the debt, representing the intrinsic value of the beneficial conversion features based upon the difference between the fair value of the underlying common stock at the commitment date and the effective conversion price embedded in the debt. The Company determined the commitment date of the loans to be the date of the agreement.
The Company entered into a Securities Purchase Agreement with accredited investors on July 30, 2008 for the issuance of an aggregate of $50,000 of convertible notes. The convertible notes accrue interest at 8% per annum and are due one year from the date of the note. The note holders have the option to convert any unpaid note principal to the Company's common stock at a 30% discount to the average five day stock price prior to conversion. In accordance with EITF 98-5, during the six months ended December 31, 2008, the Company recorded a debt discount of $15,000 on the debt, representing the intrinsic value of the beneficial conversion features based upon the difference between the fair value of the underlying common stock at the commitment date and the effective conversion price embedded in the debt. The Company determined the commitment date of the loans to be the date of the agreement.
The Company entered into a Securities Purchase Agreement with accredited investors on November 18, 2008 for the issuance of an aggregate of $10,000 of convertible notes. The convertible notes accrue interest at 12% per annum and are due one year from the date of the note. The note holder has the option to convert any unpaid note principal to the Company's common stock at a rate of $0.005 per share. In accordance with EITF 98-5, during the six months ended December 31, 2008, the Company recorded a debt discount of $7,500 on the debt, representing the intrinsic value of the beneficial conversion features based upon the difference between the fair value of the underlying common stock at the commitment date and the effective conversion price embedded in the debt. The Company determined the commitment date of the loans to be the date of the agreement.
NOTE 8 - STOCKHOLDERS' EQUITY
During the six-months ended December 31, 2008, the Company sold 1,000,000 shares of its common stock for $.01 per share or $10,000. The fair value of the shares was determined based on the closing market price of the shares at the date of the agreements. These shares have not been issued as of December 31, 2008.
During the six-months ended December 31, 2008, the Company issued 20,152,600 shares of its common stock for consulting services totaling $504,217.
During the six-months ended December 31, 2008, the Company issued 666,111 shares of common stock as repayment of $41,550 of the amount due to stockholders and issued 1,000,000 shares of common stock as repayment of $50,000 of the amount due to officers.
During the six months ended December 31, 2008, the Company cancelled 1,500,000 shares of common stock to be issued in accordance with an amendment to the repayment terms of its licensing agreement in the amount of $330,000 (Note 4).
During the six month ended December 31, 2008, the Company issued 25,000 shares of common stock previously classified as to be issued.
NOTE 9 - STOCK OPTIONS
At the time of inception (July 22, 2005), the Company issued 125,000 options to one of its consultants for services rendered. The exercise price was $.0025, the options were immediately exercisable, and expired five years from the grant date. These options were exercised on August 29, 2007.
During the year ended June 30, 2007, the Company issued 500,000 options to one of its executive officers. The exercise price is $0.55, which was the price of the Company's common stock on the grant date. The options are immediately exercisable and expire five years from the grant date. The fair value of the options was estimated at the date of grant using the Black-Scholes option price model.
WATERPURE INTERNATIONAL, INC. (A DEVELOPMENT STAGE COMPANY)
source : MarketWatch

10-Q: WATERPURE INTERNATIONAL part1

2009-02-24T20:39:00.000-08:00

(EDGAR Online via COMTEX) -- NOTE 2 - GOING CONCERN/MANAGEMENT'S PLAN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company has incurred a net loss since its inception totaling $4,244,263 has earned minimal revenues and has a working capital deficit as of December 31, 2008. These matters raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include adjustments that might result from the outcome of this uncertainty. In order to generate revenues and the working capital needed to continue and expand operations, the Company's management has committed to a plan for increasing retail distribution channels for its products and raising additional capital. There can be no assurances, however, that the Company will be able to obtain the necessary funding to finance their operations or grow revenue in sufficient amounts to fund their operations.
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
WaterPure International, Inc. (a development stage company) (the "Company") was incorporated in the state of Florida on July 22, 2005, for the purpose of marketing selected private label products and services to the small office and/or home office as well as the consumer markets. The Company intends to market and eventually to manufacture licensed Atmospheric Water Generators from Everest Water Ltd., devices which harvest pure drinking water from ambient air. These machines are engineered to produce drinking water virtually free of any material, bacterial, organic or other contaminants. The Company also intends to market Mineral Additives that will permit addition of organic minerals, flavors and other desired additives to water produced by the machine. The products will bear the Company's own exclusive WaterPure branding.
DEVELOPMENT STAGE COMPANY
The Company is considered a development stage company as defined by Statement of Financial Accounting Standards (SFAS) No. 7, "Accounting and Reporting by Development Stage Enterprises," as it has no principal operations and minimal revenue. Operations from the Company's inception through December 31, 2008 were devoted primarily to strategic planning, raising capital and developing revenue-generating opportunities.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
WATERPURE INTERNATIONAL, INC. (A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (continued)
CASH AND CASH EQUIVALENTS
The Company considers financial instruments with a maturity date of three months or less from the date of purchase to be cash equivalents. The Company had no cash equivalents at December 31, 2008 and June 30, 2008.
ACCOUNTS RECIEVABLE
The Company makes judgments about the collectibility of accounts receivable to be able to present them at their net realizable value on the balance sheet. Such judgments require careful analysis of the aging of customer accounts, consideration of why accounts have not been paid, and review of historical bad debt issues. From this analysis, the Company determines an estimated allowance for receivables that will ultimately become uncollectible. As of December 31, 2008, the Company had an allowance for bad debts of $16,297.
INVENTORIES
The Company states inventories at the lower of cost or market. As of December 31, 2008, inventories consisted of purchased finished goods, plus directly attributable acquisition costs. Cost of inventory is determined using the weighted-average cost method. The Company assesses the need to establish inventory reserves for excess, obsolete or slow-moving inventory based on changes in customer demand, technology developments and other factors.
LONG-LIVED ASSETS AND OTHER INTANGIBLE ASSETS
The Company accounts for its long-lived assets in accordance with Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets", which requires that intangible assets with finite lives be amortized over their respective estimated lives and No. 144, "Accounting for the Impairment of Long-lived Assets and for Long-lived Assets to be Disposed of," which requires that long-lived assets and certain intangible assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If undiscounted expected future cash flows are less than the carrying value of the long-lived assets, an impairment loss is to be recognized based on the fair value of the assets.
CONVERTIBLE DEBT
The Company accounts for its convertible debt in accordance with the provisions of Emerging Issues Task Force Issue ("EITF") 98-5 "Accounting for Convertible Securities with Beneficial Conversion Features" ("EITF 98-5") and EITF 00-27 "Application of EITF 98-5 to Certain Convertible Instruments" ("EITF 00-27") which require the embedded beneficial conversion features present in convertible securities be valued separately at issuance and recognized and measured by allocating a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital.
REVENUE RECOGNITION
The Company recognizes revenue in accordance with Securities and Exchange Commission ("SEC") Staff Accounting Bulletin ("SAB") No. 104, "Revenue Recognition," which outlines the four basic criteria that must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed or determinable; and (4) collectibility is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the fee charged for services rendered and products delivered and the collectibility of those fees.
INCOME TAXES
The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax liabilities and assets are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Differences between the financial statement and
WATERPURE INTERNATIONAL, INC. (A DEVELOPMENT STAGE COMPANY)
source :MarketWatch

Accounting standard setter plans fair value revamp

2009-02-24T20:31:00.000-08:00

By Huw Jones

PARIS, Feb 23 (Reuters) - A global accounting standard setter will publish a draft rule later this year aimed at replacing and simplifying rules which critics say have forced writedowns, exacerbating the credit crunch. The International Accounting Standards Board (IASB) sets accounting rules used in over 100 countries and is mandatory for the 8,000 listed companies in the European Union.

Its IAS 39 standard on fair value obliges banks to mark to market or value assets on a regular basis, a process that has forced writedowns which have unnerved investors as asset prices sink.

This "procyclical" effect must be eased, critics say as the credit crunch has frozen trading in some assets, forcing banks to use their own models to price them.

"We plan to replace it, the whole thing. We want to stop patching up the standard and we want to write a new one," IASB board member, Philippe Danjou, told Reuters on the sidelines of a regulation conference. "We are aware that the current model is too complex. We need to simplify... We will move to exposure draft hopefully within the next six months," Danjou said.

The IASB was forced by the EU to tweak the existing standard last October to move in line with changes to accounting rules used by the United States.

The IASB eased the burden of marking assets to market prices on some types of assets, if banks wanted to. The change allowed Deutsche Bank (DBKGn.DE) to show a much better than expected third quarter pre-tax profit and net income but many banks have chosen not to avail themselves of it.

Gerard Gil, group chief accountant for French bank BNP Paribas (BNPP.PA) said the only real future for fair value was in liquid markets. Fair value represented the "primacy of the balance sheet" when analysts preferred to look at a company's net cash flow, Gil said.

"We need accounting standards that help strengthen the financial system and not the opposite," Gil said.
Bank of Spain's director general of regulation, Jose-Maria Roldan, said IAS 39 could be improved to elminate excess "procyclicality" by widening the "parameters" of valuation models and putting any profits into a reserve fund.

Fair value and dynamic provisioning -- another demand of many policymakers -- have become simplistic "buzz words" and must not be allowed to undermine credibility built up in Europe by the switch to IASB, said Stig Enevoldsen, chairman of the European Financial Reporting Advisory Group.

Spanish banks have used dynamic provisioning by building up reserves in good times to cover any losses when markets turn rocky, a model many policymakers say has worked.

Roldan said there was also a need to minimise differences between accounting rules.

"Having a single set of accounting standards globally and for all users would be extremely powerful," Roldan said.

The United States uses its own GAAP accounting rules and was pursuing a roadmap towards converging with IASB, perhaps by 2014, but momentum appears to have slowed.

A source familiar with SEC thinking said the deadline for consulting on the watchdog's roadmap had been extended and that no deadline was "cast in stone".

"It's intentionally open ended. There are some milestones in there but they are suggestions and ideas. It's an open roadmap," the source said.

(Reporting by Huw Jones, editing by Ron Askew)
source :Reuters UK

Accounting board announces mark-to-market studies

2009-02-18T16:43:00.000-08:00

By MARTIN CRUTSINGER
The board that sets U.S. accounting rules will conduct two new studies on the issue of mark-to-market accounting, the standard that critics contend has deepened the banking crisis.

Robert H. Herz, chairman of the Financial Accounting Standards Board, said Wednesday the new studies followed recommendations from the Securities and Exchange Commission in its recent report on the rules.

One of the FASB studies will review the guidelines used for applying mark-to-market accounting, including addressing such issues as when the market for a particular asset is not active. The other study will make recommendations aimed at improving disclosures.

"The SEC expressed continued support of fair-value accounting in its study, but recommended consideration of potential improvements surrounding the application of fair-value principles," Herz said in a statement.

Mark-to-market, or fair-value, accounting requires banks to carry assets, such as mortgage-backed securities, on their books at their current values. Critics contend this has made the current financial crisis worse by forcing banks to slash the value of assets that have been severely depressed by market conditions.

Herz said the accounting board hopes to complete the study on improving guidance for applying the rules by the end of June. He said the aim is to complete the project in time for the recommendations to be used for year-end financial reporting.

The American Bankers Association welcomed the decision of the accounting board to launch the two studies but the group complained that the efforts did not go far enough to bring U.S. rules on mark-to-market more in line with the accounting standards that foreign competitors operate under.

"U.S. companies are needlessly required to report higher on-paper losses than their international competitors," said ABA president Edward Yingling.

The Obama administration's overhaul of the $700 billion financial bailout program announced last week did not include any proposal to modify the mark-to-market rules during. Some analysts said that omission contributed to the market's big plunge immediately after the plan was unveiled by Treasury Secretary Timothy Geithner.

Mary Schapiro, tapped by President Barack Obama to head the SEC, noted earlier this month that the agency had recently recommended retaining the accounting rules.

When asked during her first public appearance as SEC chairman on Feb. 6 to comment on speculation the rules might be suspended as a form of relief during the financial crisis, Schapiro said the commission had recommended retaining them with only possible revisions around the margins.
source :The assosiated press

Soup-Kitchen Accounting

2009-02-18T16:42:00.001-08:00

By JAMES DEITRICK and MICHAEL GRANOF

TIMOTHY GEITHNER, the Treasury secretary, has pledged that the second bank bailout will be characterized by far greater transparency than the first on the part of the financial institutions. If he is sincere in his goal, then there is a simple accounting procedure that should be a part of the plan: the beneficiaries of taxpayer financing should have to keep track of their money in the same way nonprofits must.

Nonprofit accounting is designed to ensure that the recipients of grants from the federal government and other benefactors are held accountable for the funds they receive. Regrettably, the big banks that have been granted billions from the Troubled Asset Relief Program are less transparent in their financial reporting than the local soup kitchen that gets federal support.

Nonprofits use what is known as “fund accounting.” Fund accounting requires that a separate set of books be maintained for all grants that are designated for a specific activity. The aim is to ensure that the resources are spent for their intended purpose.

Executives of banks that have received TARP cash have said that it is too hard to account separately for how they spend their federal dollars. Money is fungible, they argue, and therefore they cannot readily distinguish between outlays of their own resources and those provided by the government. But that’s the type of doublespeak that would get the head of a town’s homeless shelter thrown in jail. If bankers are unable to segregate cash by source and specifically account for expenditures, why are they in charge of banks in the first place?

Were a bank or other bailout beneficiary required to maintain separate accounts for its federal receipts, then independent auditors could track all direct outlays of those funds. All they would have to do is follow the checks drawn on the accounts used for government money.

It’s true that there would still be opportunities for mischief. For example, a bank executive who has received TARP money could use the bank’s regular resources to purchase a $50 million jet or pay himself a bonus while reserving the TARP funds for routine loans.

However, this is where additional practices common to federal financial assistance come into play. Before a charity can receive a federal grant, it must prepare a proposal outlining precisely what it will do with the funds. Bailout recipients should do the same, or at least sign contracts agreeing to spend the money in accordance with terms set forth by the Treasury and to refrain from certain types of expenditures during these troubled times.

Similarly, charities are asked to provide detailed financial reports at least once a year to the federal agencies overseeing their grants. In the case of banks, the Treasury (or some other regulatory agency), could require quarterly “accountability reports” that include schedules detailing new loans, renegotiated loans, entity operating expenses, dividend payments, purchases of Treasury shares, debt retirement, maintenance of reserve or capital requirements and purchases of derivatives.

In addition, TARP recipients should be compelled to produce schedules that quantify the riskiness of their portfolios. These could be based on models that they now use for internal risk assessment, or that bank examiners have developed. This type of information, when compared with similar data from prior years, would go a long way toward determining whether the TARP funds were used for what Congress and the Treasury intended.

Thanks to the Single Audit Act of 1984 and supporting regulations from the Office of Management and Budget, governmental entities and not-for-profit organizations receiving federal assistance must submit to independent audits. TARP recipients should do the same. The auditors would not only attest to the integrity of the recipients’ financial data but also report on the extent to which they complied with the terms of the grant. If violations were found, the auditors would be charged with reporting them to the appropriate oversight agency.
source :The New york times

Soup-Kitchen Accounting

2009-02-18T16:42:00.000-08:00

JPB Accounting Services to Provide Bill-Paying Services to NFL Athletes in Partnership With Williams Asset Management

2009-02-18T16:40:00.000-08:00

JPB Accounting Services, LLC, a premier provider of outsourced accounting and financial management services in the Baltimore-Washington corridor, has been chosen by Williams Asset Management, a Registered NFLPA Player Financial Advisor, as a partner to provide services to NFL athletes.

The NFLPA Registered Financial Advisors Program, the first of its kind in professional sports, provides NFL players access to a diverse group of qualified financial advisors. The idea for the Program came from the players themselves. JPB Accounting Services, LLC, through its relationship with Williams Asset Management, will offer the much-requested bill-paying and related accounting services to members of the National Football League.

Williams Asset Management provides wealth management and investment advisory services to high-net-worth individuals and professional athletes.

source :msnbc

PKF Texas Named One of the 'Best Accounting Firms to Work For' in the US

2009-02-18T16:39:00.000-08:00

Pannell Kerr Forster of Texas, P.C. (PKF Texas) was named one of the Best Accounting Firms to Work For in the inaugural program, sponsored by the Accountants Media Group. PKF Texas is proud to be in the company of the best accounting firms in the nation.

"PKF Texas is honored to be included in the first Best Accounting Firms to Work For program," said Kenneth Guidry, CPA, President. "PKF Texas takes this type of recognition very seriously because our team members provide the survey responses. The results provide us valuable feedback about our people and areas in which we are doing well and the areas where we can improve."

Nearly 200 accounting firms across the nation applied and completed the survey process. Only 60 firms were chosen for the final list.

The survey and award program were designed to identify, recognize and honor the best places of employment in the accounting industry, benefiting the nation's economy, its workforce and businesses. The survey was administered by the Best Companies Group.

About the Best Accounting Firms to Work For Program

This first annual program was created by The Accountants Media Group, publishers of Accounting Today, Accounting Technology, CPA Wealth Provider, Practical Accountant and host of WebCPA.com and Best Companies Group. The Best Accounting Firms to Work for list is made up of 60 companies split into three groups: 5 small-sized companies (15-24 employees), 40 medium-sized companies (25-249 employees) 15 large-sized companies (more than 250 employees).

About PKF Texas

Located in Houston's Galleria area at 5847 San Felipe, PKF Texas is a CPA firm that focuses on solutions for every stage of your business. With leaders who are forward-thinking entrepreneurs and business advisors with Big 4 backgrounds, PKF Texas serves emerging and middle market companies across many industries. Service areas include profit enhancement, internal audit, international/domestic tax, accounting, auditing, litigation services, business systems consulting and IT. PKF Texas is a member of PKF International and The Leading Edge Alliance.
source : PTnewswire

PricewaterhouseCoopers Announces $700,000 Grant to Accelerate IFRS Curriculum

2009-02-18T16:38:00.000-08:00

PricewaterhouseCoopers LLP (PwC) today announced the awarding of $700,000 in grants to colleges to accelerate preparedness of U.S. accounting students for the anticipated adoption of International Financial Reporting Standards (IFRS). The first-of-its-kind program initially assists 26 universities and colleges across the United States in creating an IFRS curriculum in their accounting programs. The grants are part of a $1 million financial commitment announced by PwC to support IFRS education.

The globalization of business and finance has led to the successful adoption of IFRS by upwards of 12,000 companies in more than 100 countries. The U.S. Securities and Exchange Commission recently adopted a proposed roadmap for the potential transition by U.S. companies from Generally Accepted Accounting Principles (GAAP) to IFRS. This decision formalizes a path to adoption and hastens the need to transform the education of the domestic accounting industry.

PricewaterhouseCoopers believes that the adoption of IFRS will make the U.S. capital markets more competitive because U.S. issuers will be better able to compete for capital in sectors where non-U.S. companies now report under IFRS. Embracing a single set of global accounting standards will contribute to a higher degree of investor understanding and confidence.
source : msnbc

Effective Control Transport Announces the Appointment of Dominic Landry to the Position of CFO

2009-02-18T16:37:00.000-08:00

Mr. Raphael Huppe, President and CEO of Effective Control Transport, Inc. (PINKSHEETS: EFFC) (www.econtroltransport.com), a software company which specializes in a technology that monitors an operator's vigilance and awareness (the "CRAM"), is pleased to announce the appointment of Mr. Dominic Landry, CA, to the position of Chief Financial Officer of the Company.

As CFO, Mr. Landry will oversee all finance, accounting, treasury, capital markets and planning functions for the company. In addition, he will develop the financial and systems infrastructure to support the future growth of the Company, and facilitate financial reporting policies and procedures.

Prior to his role with ECT, Mr. Landry was Director, Finance at Bell Canada where he has played an important role in financial reporting, forecasting and strategic planning. Mr. Landry has been a member of the Order of Chartered Accountants of Quebec since 2001. He began his career at PricewaterhouseCoopers LLP, before joining Entourage Technology Solutions (now Bell Technical Solutions), where he worked as Corporate Controller and was responsible for external reporting, accounting, tax and treasury functions.

Mr. Landry holds a graduate degree in accounting and a BA in Administration from the University of Québec in Trois-Rivières.

To learn more about Effective Control Transport, Inc. and the CRAM technology, please visit www.econtroltransport.com

All statements in this news release that are other than statements of historical facts are forward-looking statements, which contain our current expectations about our future results. Forward-looking statements involve numerous risks and uncertainties. We have attempted to identify any forward-looking statements by using words such as "anticipates," "believes," "could," "expects," "intends," "may," "should" and other similar expressions. Although we believe that the expectations reflected in all of our forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct.

A number of factors may affect our future results and may cause those results to differ materially from those indicated in any forward-looking statements made by us or on our behalf. Such factors include our limited operating history; our need for significant capital to finance internal growth as well as strategic acquisitions; our ability to attract and retain key employees and strategic partners; our ability to achieve and maintain profitability; fluctuations in the trading price and volume of our stock; competition from other providers of similar products and services; and other unanticipated future events and conditions.

source : CNNmoney.com

Taiwan now sees economy contracting this year

2009-02-18T16:35:00.000-08:00

Taiwan's government lowered its 2009 economic growth forecast Wednesday and now predicts the island's economy will shrink 3 percent.

The Directorate-General of Budget, Accounting and Statistics also said gross domestic product shrank 8.36 percent in the fourth quarter - its worst quarterly drop ever.In a bid to spur growth, Taiwan's Central Bank lowered the island's key lending rate by a quarter point to 1.625 percent, its seventh rate cut in 4 1/2 months.

With a revision in third quarter GDP to minus 1.05 percent, Taiwan's economy is officially in a recession, traditionally defined as two straight quarters of contraction.

The annual GDP revision came after two consecutive months in which exports tumbled more than 40 percent. Previously, the Directorate-General of Budget, Accounting and Statistics had forecast that gross domestic product would grow 2 percent.

The last time the Taiwanese economy contracted for a full year was in 2001 when the dot.com bubble burst, battering the island's technology industry.

For all of 2008, Taiwan's GDP grew a scant 0.12 percent, the directorate-general said.
source: Forbes

Chanos, SAC Got Nonpublic Fairfax Research, Court Papers Show

2009-02-13T01:13:00.000-08:00

By Thom Weidlich

Jim Chanos’s Kynikos Associates Ltd., a short seller of Fairfax Financial Holdings Ltd., learned of negative analyst research on that company before it was published, according to unsealed court documents.

Chanos, Steven Cohen’s SAC Capital Advisors LLC and other hedge-fund managers were accused in 2006 by Fairfax of cooperating to drive down the firm’s shares through short sales, according to a complaint by Fairfax seeking $6 billion in damages. Toronto-based Fairfax owns U.S. and Canadian insurers.

Chanos forwarded an e-mail about research by John Gwynn, an analyst with brokerage Morgan Keegan & Co., to rival SAC Capital, the documents show. Morgan Keegan fired Gwynn for telling clients before publication that he planned a negative report. Morgan Keegan and Gwynn were also sued. All defendants denied Fairfax’s claims. Fairfax filed that e-mail and others provided by the defendants with a New Jersey state court to support its claims.

“Last night John Gwinn at Morgan Keegan faxed over to me an outline detailing the issues at FFH, basically those he will be publishing,” Mark Heiman, then an analyst at Kynikos, wrote in a Dec. 21, 2002, e-mail to Chanos that was filed in the case.

FFH is Fairfax’s stock ticker. Gwynn’s name is misspelled in some of the e-mails, unsealed at the request of Bloomberg News.

Gwynn’s first report on Fairfax was dated Jan. 16, 2003, and released the next day.

Rejects Claim

“Kynikos rejects any claim that it participated in a conspiracy or that it did anything improper when it decided to sell short Fairfax stock,” Peter Haveles, an Arnold & Porter LLP lawyer for Kynikos, said in an interview.

Jonathan Gasthalter, a spokesman for SAC Capital, declined to comment. Gwynn didn’t immediately return a call seeking comment.

Morgan Keegan spokesman Eric Bran said the company didn’t have an immediate comment. Memphis, Tennessee-based Morgan Keegan is a unit of Regions Financial Corp., Alabama’s biggest bank.

Fairfax filed its complaint in New Jersey Superior Court in Morristown. Fairfax accuses the defendants of racketeering, commercial disparagement, tortious interference with contractual relationships and conspiracy.

The company accused Gwynn of collaborating with the hedge funds to write negative reports on the insurer. The funds knew when the reports would be released and what they would say, Fairfax claims.

Increased Bet

When he learned of Gwynn’s research, Chanos began increasing his bet that Fairfax’s shares would fall, a Fairfax lawyer said at a Sept. 25 hearing in the case. A Kynikos lawyer disputed him.

“The presence of the e-mails adds credibility to the plaintiffs’ case,” said Blair C. Fensterstock, a securities lawyer with Fensterstock & Partners LLP in New York, who’s not involved in the Fairfax matter. “It may be proof of an act that may support a racketeering claim.”

Gwynn sued Fairfax in April. He said Fairfax defamed him by asserting that he had issued fraudulent research. Judge Deanne Wilson, overseeing the Fairfax case, in August ruled against the company’s request to dismiss Gwynn’s suit.

“The evidence demonstrating that Gwynn leaked his research to hedge funds before publication, and his subsequent termination for that misconduct, speaks for itself,” said Marc Kasowitz, a lawyer for Fairfax. “It further proves his prior denials about such misconduct and counterclaim were utterly without merit.”

On Dec. 11, 2002, Heiman wrote his boss Chanos that an insurance analyst at another investment firm told him that Gwynn was going to initiate Fairfax coverage “at ‘underperform,’ with the thesis being that they are extremely under-reserved in the $3-$5 BN area,” according to an unsealed e-mail.

‘More Critical’

“Just spoke to John Gwinn at Morgan Keegan, and he was more critical of FFRX than I’ve ever heard a sell side analyst,” Heiman told Chanos in a Dec. 16, 2002, e-mail, using Fairfax’s former ticker symbol. “Everything from underwriting to accounting to dishonesty.”

Chanos, on Dec. 18, 2002, forwarded that e-mail to Jeff Perry, then of New York-based SAC Capital, who’s also a defendant. Perry didn’t return a call seeking comment.

When a SAC Capital employee asked Gwynn for a spreadsheet on Fairfax, he replied in a Jan. 6, 2003, e-mail that he would send it to him.

Heiman wrote Chanos on Jan. 16: “Just got off the phone with Gwynn at Morgan Keegan -- his piece that rips FFH apart is supposed to be published tomorrow. Should be interesting to see how the street reacts.”

Heiman, now an analyst at Trafelet & Co. in New York, declined to comment on the e-mails.

Gwynn’s Report

Gwynn’s published report said Fairfax was short $5 billion of reserves needed to cover future insurance claims, Fairfax said in its complaint. The company’s shares, listed in Toronto, tumbled 28 percent in three trading sessions, to C$85 ($67.93), a seven-year low. Its U.S. shares also plunged.

Hedge funds run by the defendants profited because they short sold Fairfax’s stock, according to the complaint. In a short sale, an investor sells borrowed shares, hoping to replace them later with cheaper shares, and profiting from the difference.

Two weeks later, in a Jan. 30 report, Gwynn trimmed his shortfall estimate by 40 percent, to $3 billion. Fairfax shares in Toronto jumped 9.7 percent. Gwynn continued to issue negative reports on Fairfax, according to the complaint.

Short-selling came under attack last year because of the financial crisis. From Sept. 19 to Oct. 8, the U.S. Securities and Exchange Commission banned the shorting of financial companies, including Fairfax, after Morgan Stanley Chief Executive Officer John Mack and New York Senator Charles Schumer blamed the practice for driving companies toward collapse.

Enron’s Demise

Chanos, who only shorts stocks, was one of the early predictor’s of Enron Corp.’s demise. He began betting in late 2000 that Enron’s shares would fall after reading an article about accounting irregularities at the power and natural-gas trader. In December 2001, the Houston company filed what was then the U.S.’s largest bankruptcy. Investors sued seeking to recover more than $40 billion.

“Fairfax is one of our largest shorts,” Chanos told a TheStreet.com Inc. columnist in August 2002, according to an e- mail unsealed in the case.

Michael Bowe, a lawyer for Fairfax, said at a Sept. 25 hearing in the case that until receiving the advanced notice of Gwynn’s report, Chanos had been covering his short -- buying Fairfax shares to close out his short sale.

Covering Positions

“Chanos had been covering his positions up and until the point when he receives the tip that Gwynn is going to issue his report,” Bowe said, according to the transcript. “And between that time and the time of the report coming out, he shorts over five million dollars’ worth of Fairfax shares, half of which he shorts the day before the report comes out.”

Haveles, the Kynikos lawyer, denied that.

“Kynikos continued to reduce its short position in Fairfax after receiving information in mid-December 2002 about the views of Morgan Keegan’s analyst,” he said. “Kynikos increased its long-standing short position in Fairfax by a modest amount on January 16, 2003, but it did not receive information about the imminent release of the Morgan Keegan report until after the close of trading that day and after Kynikos’s trading on that day had occurred.”

Kynikos’s Fairfax trades are still under seal.

Buying, Not Shorting

In an Aug. 8 hearing in the case, SAC Capital lawyer Martin Klotz said that in the period before Gwynn’s report was published his client was buying Fairfax shares and didn’t short them.

“SAC was not a participant in any conspiracy because we were doing the exact opposite of what they say that we were supposed to be doing,” said Klotz, of Willkie Farr & Gallagher in New York.

Another defendant in the case is New York hedge fund Exis Capital Management Inc.

“The way to get this thing down is to get them where they eat, like the credit analysts and holders,” Exis’s Andrew Heller, also a defendant, told a colleague at another firm five months before Fairfax sued, according to an unsealed e-mail. “We’re taking this baby down for the count.”

“Its a volatile sucker, but patience will be rewarded,” Heller wrote.

‘One Little Piece’

The comments don’t buttress Fairfax’s case, said Eugene Kaplan, a lawyer for Exis and Heller. “In the context of the overall conversation, this is one little piece,” Kaplan said. “That’s why they were shorting it. They were hoping it’s going down.”

His clients continue to deny Fairfax’s allegations, said Kaplan, of Kaplan Landau LLP in New York. The proof that Exis believed Fairfax “was not what it purported to be” was the hedge fund’s “aggressive short position” that ended up losing “several million dollars” when Fairfax’s stock kept rising, he said.

The case is Fairfax Financial Holdings Ltd. v. SAC Capital Management LLC, L-2032-06, Superior Court of New Jersey, Morris County (Morristown).

source : Bloomberg.com

CFOs on the Move: Week Ending February 13

2009-02-13T01:11:00.000-08:00

by :Kate Plourd and John Zhu

Textron CFO Ted French has left after nearly nine years at the defense company. Textron Financial Corporation now reports to the company's COO and president Scott C. Donnelly. French was chairman and CEO of TFC as well as the parent company's finance chief. Senior vice president and controller Richard Yates has been named acting CFO.
Michael Potter has been appointed CFO and corporate vice president of Lattice Semiconductor, effective February 17. Potter's most recent job was CFO at Neophotonics Inc. He also headed finance at STATS ChipPAC LTD, a Singaporean semiconductor test and packaging service provider.
Cardinal Gas Storage Partners has hired Daniel Hannon as its first CFO. Hannon previously ran finance for Green Earth Fuels and Range Fuels, and he served as senior vice president of finance and corporate development at Reliant Energy.
Eric Swank has been appointed CFO of Global Telecom & Technology, where he'll oversee global financial functions and financial operations, reporting and controls, audit and tax, and financial planning and analysis. Swank has worked in financial management positions in the telecom industry for almost 20 years. Most recently he was senior vice president of finance at Mobile Satellite Ventures.
The oil and gas developer Denbury Resources has promoted its CFO Phil Rykhoek to succeed chief executive officer Gareth Roberts, who is stepping down. The company's chief accounting officer, Mark Allen, will take over as CFO.
The international engineering company Weidlinger Associates has created a CFO position and appointed Rimma Zaleznik to fill it. Zaleznik was previously responsible for oversight of accounting at Telcordia Technologies.
Tom Herzog is resigning as CFO of the real estate investment trust Apartment Investment and Management Co. David Robertson will assume the CFO role in addition to his existing ones of president and chief investment officer.
Dynamic Gold Corp has appointed Gordon Steblin as its CFO. Steblin, who most recently served as CFO of Alberta Star Development Corp. and Freegold Ventures Limited, replaces Chantal Schutz. Schutz is resigning to pursue other business interests. Past CFO stints for Steblin included Pacific North West Capital Corp, El Nino Ventures, and CanAlaska Uranium.
Germaine Gibbs has been appointed CFO of Animus Solutions Inc. Gibbs comes to the IT investment consulting company from the University of South Florida, where she taught corporate finance. Gibbs has also served in financial positions at Eckerd Corporation.
Dennis Klaeser, CFO of Private Bancorp, is leaving the company in March. He'll be replaced by Kevin Killips, who most recently served as chief accounting officer and corporate controller with Discover Financial Services. Before coming to Discover in March 2008, Killips was at LaSalle Bank for 10 years, serving as North American chief accounting officer and corporate controller.
The correctional, detention, and residential treatment services company GEO Group announced that its CFO John O'Rourke will retire after 18 years. Brian Evans, current vice president of finance and treasurer, will succeed him. Evans joined GEO in 2000.
Premier Business Centers has hired former Merrill Lynch vice president William Gutierrez as its CFO. For the past nine years at the investment bank, taken over by Bank of America last fall, Gutierrez was in charge of the disposition of excess office space throughout the country and handled the company's real estate portfolio of more than 200 offices.
London-based law firm Linklaters has recruited Peter Hickman as its chief financial officer. He was previously with HBOS for four years, serving in roles including director of group finance and group risk director, and spent eight years at Ernst & Young before that. He replaces former CFO Nick Heywood-Waddington, who retired late last year.
Italian cooperative bank Banco Popolare named Maurizio Faroni chief financial officer. Faroni will report to chief executive Pier Francesco Saviotti. He was previously managing director of the bank's investment bank subsidiary, Banca Aletti.
Marston's, a U.K. pub company, named Andrew Andrea as group finance director effective March 31. He joined Marston's in 2002, and is currently commercial director for both Marston's Pub Company and Marston's Beer Company. Current CFO Paul Inglett is leaving to pursue other opportunities.
Swedish clothing retailer RNB has appointed Gunnar Bergquist as its new CFO. He was previously finance director at food retailer Coop Sweden and replaces Göran Blomberg, who is the new CFO of Hakon Invest.
Mike Hannant, finance director for British semiconductor maker e2v Technologies, is planning to step down after 17 years.

source : CFO

‘Another Day, Another Scandal’ as Irish Bank Executives Exit

2009-02-13T01:10:00.000-08:00

By Dara Doyle

Anglo Irish Bank Corp.’s decline last year cost the jobs of its chairman, chief executive officer and Ireland’s financial regulator. Today, it spelled the end for two top executives at rival Irish Life & Permanent Plc.

Finance Director Peter Fitzpatrick and treasury head David Gantly resigned from Irish Life, in a controversy over transfers of funds between the two lenders, the Dublin-based company said in a statement today. The board rejected the resignation of Chief Executive Officer Denis Casey.

“Another day, another scandal,” said Brian Lucey, associate professor in finance at Trinity College Dublin. “I guess international investors are getting used to hearing the unbelievable out of Ireland.”

The integrity of the country’s financial industry may be at stake. The scandal is hampering efforts by Ireland to shore up confidence in its ailing banking system. The government agreed this week to inject 7 billion euros ($9 billion) into its two biggest banks, though analysts say they may need more.

These issues “affect investors willingness to put their money into a jurisdiction where telling the truth seems to be not a high priority among some companies,” said Niamh Brennan, a professor of management at University College Dublin. “It begs the question, is this widespread?”

On Sept. 30, the last day of Anglo Irish’s fiscal year, Irish Life deposited 4 billion euros overnight with Anglo, the company said.

That transfer was made after Anglo deposited the same amount “as collateral” with Irish Life, the company said. Similar transactions amounting to 3.45 billion euros took place earlier in the month.

‘Enron-style Accounting’

“It may well have created a false impression about the deposit base,” Finance Minister Brian Lenihan told national radio yesterday. “Clearly the transaction wasn’t desirable because it involved the use of the bank’s own money going out of the bank and back into the bank in a different guise.”

“Unacceptable” practices at Anglo emerged before it was nationalized last month, Lenihan said. Joan Burton, finance spokeswoman for the opposition Labour Party, called the transfers “Enron-style accounting.”

The transactions were “properly accounted for and fully disclosed to the financial regulator,” Irish Life said.

The company also said that while the financial regulator had indicated that lenders should “support each other,” the board expressed “strong disapproval” of the measures used to help Anglo.

‘Mistakes Were Made’

“I have absolutely no doubt about the integrity of the individuals concerned,” Chairman Gillian Bowler said in the statement. “However in providing support to the broader financial infrastructure, mistakes were made - for which I and the board apologize unreservedly.”

Anglo Irish declined to comment.

The financial regulator is now reviewing the “circumstances” of the transactions, said Lenihan, who held a meeting with Irish Life yesterday.

Anglo Irish started unraveling in December, when former Chairman Sean Fitzpatrick resigned, saying he hadn’t fully disclosed loans of more than 80 million euros from the bank. Chief Executive Officer David Drumm left a day later, and Financial Regulator Pat Neary stepped down a month later after it emerged his agency had known about the loans.

The government moved to seize control of Anglo Irish after Fitzpatrick, 60, said in a Dec. 18 statement he had temporarily transferred borrowings to another bank before each year-end, moving them off Anglo’s books.

‘Unethical Practices’

“This is the real damage that’s been done, the reputational damage to the country’s financial system by the unethical practices that have come to light,” Lenihan said.

Ireland’s five-member ISEF financial index plunged 94 percent over the past year, compared with a 65 percent drop in the Bloomberg Europe Banks and Financial Services Index.

Eugene Sheehy, CEO at Allied Irish Banks Plc, the largest bank, said the case of Anglo Irish was “disappointing and caused problems” for Ireland’s reputation.

“But you can’t tar everybody with the same brush,” Sheehy said in an interview yesterday by telephone. “There are institutions in Ireland operating to the highest standards.”

The government on Feb. 11 announced plans to inject 3.5 billion euros each into Allied Irish and Bank of Ireland Plc, seeking to cushion the impact of surging bad debts.

Earlier, the government had planned to inject 2 billion euros and underwrite a further 1 billion euros of shares for each bank. It scrapped that plan as banks couldn’t find willing investors as the economy lurched deeper into crisis.

Now the latest revelations have overshadowed efforts to restore the banking system, said Joan Burton, the Labour lawmaker, in a Feb. 10 statement. “Ireland’s international reputation continues to be severely undermined.”
source : Bloomberg

G-7 Takes ‘Back Seat’ as Financial Crisis Pushes G-20 to Fore

2009-02-13T01:08:00.000-08:00

By Simon Kennedy

The Group of Seven, whose finance chiefs convene this weekend in Rome, is ceding its traditional power to rebuild the world economy to a broader body of governments that now wield greater sway over global growth.

As U.S. Treasury Secretary Timothy Geithner and European Central Bank President Jean-Claude Trichet join their G-7 counterparts, it’s the Group of 20 that occupies the vanguard responding to the financial crisis.

The shift in influence to the group, whose membership ranges from the U.S. to China to Saudi Arabia, reflects the fact that industrial nations lack the resources to fix the world’s economic woes alone. That curbs the G-7’s scope to deliver new initiatives this week, say economists and former officials.

“The world has changed,” said Paul Martin, Canada’s former prime and finance minister who attended G-7 meetings and helped establish the G-20 a decade ago. “The G-20 reflects the realities of the global economy. Its finance ministers are becoming the dominant policy-making body.”

The G-7’s finance ministers and central bankers meet tonight and tomorrow before releasing a statement and talking to reporters at about 2:30 p.m. local time. On the agenda: How to thwart protectionism, overhaul financial oversight and end what the International Monetary Fund calls a depression in advanced economies.

Rebuilding World Economy

Limiting the G-7’s scope to act is the fact that policy makers have given the task of rebuilding the world economy to the G-20, which was created after a spate of currency devaluations in emerging markets in the 1990s.

The G-20’s increasing influence reflects how the current slump is being led by the major economies, forcing them to look beyond their ranks for help in ending it. That’s a reversal from previous crises when the G-7 was in the driver’s seat of the recovery effort.

The IMF predicts advanced economies will shrink 2 percent in 2009. Still, the expansion of developing nations will keep the global economy growing at a 0.5 percent pace, it estimated last month.

“The crisis has escalated the awareness of how irrelevant the G-7 is,” said Jim O’Neill, chief economist at Goldman Sachs Group Inc. in London. “It’s in the back seat, and the focus on the G-20 is growing.”

China Rising

China overtook Germany in 2007 to become the world’s third-largest economy, new data showed last month, and in September passed Japan as the biggest foreign investor in U.S. government debt. China, Russia, Brazil and India together hold about 41 percent of global foreign exchange reserves. Together, the G-7 countries produce only slightly more oil a day than Saudi Arabia.

The emergent power of the G-20 “is a recognition of new realities,” said Nobel laureate Joseph Stiglitz, a former economic adviser to President Bill Clinton. “It’s effectively recognition by the G-7 that they don’t have the money. The money is in Asia, the Middle East.”

Leaders from the bigger group met for the first time in November in Washington and released a string of directives on strengthening accounting standards and oversight of derivatives, hedge funds and debt-rating companies.

It’s that manifesto rather than anything the G-7 has produced that is now garnering international attention. G-20 heads will meet in London April 2 to seek ways to implement it.

Bigger Than G-7

“The world economy is bigger than the G-7,” U.K. Prime Minister Gordon Brown said Feb. 9. “You cannot talk about the world economy and what you want to do without involving a whole range of countries.”

John Taylor, a former U.S. Treasury official and now at Stanford University in California, says even as the G-20 gains in importance, the G-7 can “still get things done better” because it’s smaller, involves only major economies and is monitored closely by investors.

Having this week pledged up to $2 trillion to spur new lending and address banks’ illiquid assets, Geithner will press his colleagues to take “bold actions” to combat the turmoil, according to a Treasury official. In turn, “there is a desire to have more particulars” of the U.S. plan outlined, said Canadian Finance Minister Jim Flaherty.

Emergency Meeting

The G-20’s role has grown as the current crisis festered. In November 2007, central bankers used its talks near Cape Town to hatch a plan to inject more dollars into markets. Last October, its finance ministers held an emergency meeting in Washington that President George W. Bush attended.

Modern challenges also mean the G-7 is not the proper forum to set international policy, said Goldman’s O’Neill. Fighting protectionism, global imbalances, climate change, money laundering and terrorist financing as well as reforming agencies such as the IMF and World Bank all require the input of nations outside the group, he said.

Even the G-20 may not be big enough. German Chancellor Angela Merkel wants a body akin to the United Nations Security Council to oversee the world economy. Philippine President Gloria Arroyo says the G-20 “must even go beyond” its membership to include African nations.

“Developing countries’ economies are doing better than the developed countries and yet don’t have a say in how to restructure the world,” said Arroyo.

Alastair Newton, political analyst at Nomura International, and a former U.K. trade official, says the G-7 and G-20 will both remain for now and that the bigger group must prove it can carry out its pledges.

“I wouldn’t suggest the G-7 has reached its sell-by date quite yet,” says Newton, a former U.K. official. “The G-20’s being pushed to the fore, which implies it’s becoming more important, but it has to deliver.”

For Related News and Information: Stories on Currencies: {NI FRX } Stories on Central Banks: {NI CEN } Stories on Finance: {NI FIN } Stories on the credit crisis: {NI CRUNCH BN } Stories on Government relief programs: {GGRP } Stories on rescue programs: {RESQ } Credit crunch page: {WWCC } For G-7 news {NI G8 BN }.

source : Bloomberg

Wells Fargo says accounting change increases loss

2009-02-13T01:06:00.000-08:00

By Tom Petruno
A charge of $328 million resulting from 'credit events' pushes the bank's fourth-quarter loss to $2.73 billion.
Wells Fargo & Co. on Thursday said its fourth-quarter loss was bigger than previously reported because of a change in how it accounts for the value of certain securities it holds.

The San Francisco bank said it recorded a noncash, pretax charge of $328 million in the quarter, boosting its reported net loss to $2.73 billion, or 84 cents a share, from $2.55 billion, or 79 cents.Wells said it took an "other-than-temporary impairment" charge against certain so-called perpetual preferred securities in its portfolio. The charge was triggered by "credit events" that occurred after Wells announced its results Jan. 28, the bank said.

That could mean that the issuer of the preferred securities had its credit rating downgraded. Wells didn't provide additional details.

The charge merely reflects a change in how Wells accounts for the securities on its books; the drop in the value of the securities had been previously recorded as "unrealized."

Still, the stock took a hit in after-hours trading, dropping to $16.25 following the announcement. Wells' shares had fallen as low as $15.27 during regular trading, then rebounded with the rest of the market to close at $16.80, off 70 cents.

The stock has tumbled 43% year to date, reflecting some investors' concerns that Wells will need to raise more capital to bolster its finances against rising loan losses.

The company has insisted that its balance sheet remains strong.

source : Los Angeles Times

SEC report keeps alive accounting integrity

2009-02-13T01:02:00.000-08:00

by: Rule of Thumb, Govind Sankaranarayanan

Amid the clamour and turmoil of 2008, where established market rules have been turned on their head, stands the question mark over the use of mark-to-market (MTM) accounting. For years there existed a debate within the accounting fraternity about the need for assets and liabilities in financial statements to reflect a picture as close to their fair value, usually determined by what assets are worth in the market. Finally reflecting the need to measure fair value, the International Accounting Standards 39 and US Financial Accounting Standard (FAS) 157 were adopted in 2004 and 2006, respectively, after several years of deliberation.
In the wake of the crisis of 2008, financial institutions have levelled strong criticism against the adoption of these standards. They say the standards have led to the credit crunch by forcing companies to revalue seemingly illiquid assets and forcing further fire sales to offset the mark-to-market losses. Banks in particular make the point that the principle of marketing of market is an oxymoron when no market exists for an instrument and that in times such as these when consumer diffidence overrules reason, MTM does not reflect the reality. Such banks are not without political clout, having been the purveyors of the politically popular, cheap funds regime prevalent over the last few years. They had succeeded in lobbying Congress, through the US Emergency Economic Stabilization Act of 2008, to recommend the suspension of FAS 157. Congress had, in turn, asked the Securities and Exchange Commission (SEC) and Financial Accounting Standards Board (FASB) to revert by January 2009 with a view on the feasibility of suspension of the standard. SEC has examined this and its report was released a few weeks ago.
Also Read Govind Sankaranarayanan’s earlier columns
In a courageous move on a subject with politically emotive implications, SEC has not accepted the value of removing FAS 157 and has indicated that fair valuation was, in any case, not the cause of the current crisis. SEC has indicated that at least 90% of investments they saw on balance sheets did have an active market in which prices could be determined. It has conceded that guidance is required, in the standards, for situations when markets become inactive. It has also sought to provide guidance when the creditworthiness of borrowers change.SEC is particularly conscious of the fact that accounts are meant to provide confidence to investors (not to the companies themselves who anyway have a good feel for how they are doing), and therefore need to be transparent and consistently applied. The financial institutions clamouring for these MTM changes were, in their view, required to make clear choices with regard to the holding period as well as the liquidity of an asset at the time they acquire an asset and if those choices went sour it is really too bad. One cannot disagree that if companies were able to book the profits from changes in valuation, then a special dispensation to enable the avoidance of loss booking does not provide investors with fair view of the balance sheet.
Providing a true picture to investors is actually the solution to a part of the crisis of frozen markets. Indeed the major cause of illiquid asset markets, which is claimed to be one of the excuses to eschew MTM accounting, is the opacity of financial statements that makes it difficult for investors to distinguish between a bank with strong assets and another with poor assets. This can result in a situation where all assets get tainted, even when such a taint is not called for. Finance theory suggests that in such a situation the stronger company needs to be permitted to find a way to communicate its advantages through a signalling mechanism which weaker firms cannot afford to use. Companies should be explicitly encouraged by SEC to disclose much more about their portfolios, counterparties and why they believe that long-term diminutions in their portfolios do not exist. This information would likely have to be prepared internally anyway as required by FAS 157. All we suggest is that these calculations and the risk assessments of organizations be shared with the wider public. Only those with stronger assets will choose to make these disclosures, effectively signalling the relative strengths of their balance sheets. The analyst community can play referee about the underlying strength of companies based on these disclosures. Such transparency could be a solution to avoiding the unintended consequences of mark-to-market accounting.
On a more philosophical note, avoiding the MTM world has deeper long-term economic implications. PriceWaterhouseCoopers’ chairman Dennis Nally has suggested that a move in that direction could plant the seeds for the next crisis. He pointed out, rightly, that the decade-long economic malaise in Japan was largely due to the failure of Japanese banks to reflect the real value of their assets, precisely what would be achieved by not biting the MTM bullet now.
Practising CFOs would perhaps have preferred the certainty of a world far removed from MTM. It would simplify the accounting process and leave much less to judgement. However, given the primacy of market efficiency in our consciousness, it is difficult to suddenly draw the line when the consequences of the same result in adverse financial reportingFinally, we need to recall that poor underwriting practices, credit defaults and steep declines in asset values were the real causes that forced banks to mark down their assets. The accounting rules only captured the reality of the market after the event. In fact, fair value with all its limitations is the best method to reflect market conditions. When markets are volatile, one would argue that marking assets to market is more, rather than less, relevant. When we make retrospective changes in well-thought-out accounting standards, we send out the message that even the most sacred element of the governance framework is up for grabs and that the rules of the game can be changed after the event. One cannot think of a surer way to keep investors away from markets than to create confusion about the quality and consistency of the accounts that they rely on. Finally, it is worth remembering perspicacious comment of Walter Wriston, who ran Citibank, during happier times, that consistency of accounting treatments is more useful to investors than the latest fad in accounting standards. Changing fundamental cornerstones of the accounting edifice is hardly the way to be consistent.

source : livemint.com

Art And Literature, Meet Accounting

2009-02-13T00:59:00.000-08:00

by :Elisabeth Eaves

Even in the best of times, the market for cultural goods is a mysterious one. Pure hype can drive up the value of a work of art (see: Damien Hirst) in a way that never happens with cars or dishwashers. So much subjectivity is involved that predicting demand is nearly impossible. Even Hollywood, which tries harder than other creative industries to gauge the market, winds up with Ishtars and Waterworlds on its hands. At the other end of the budget spectrum, painters and novelists and dancers make sacrifices that would never make sense from a profit-and-loss point of view.

As we embark on a long, hard recession, the creative industries are feeling the pinch too. The high-flying contemporary art market is proving to have been a bubble. Over in book publishing, this week brought the announcement of more layoffs: HarperCollins (owned by News Corp. (nyse: NWS - news - people )) let go of two top executives, the heads of the Collins and William Morrow imprints, and said that several of the company's imprints will be shuttered. This news follows layoffs in recent months at Random House, Simon & Schuster, Houghton Mifflin Harcourt and Macmillan.In these industries, though, reaction to the recession has produced some bizarre ideas, ones that would never occur to anyone analyzing, say, banking.

The first is that the recession might be good for artists and writers. All the yahoos who were in it for the money will get lost, or so the theory goes, leaving the field open to the truly dedicated, who will make work that is "authentic." The celebrated German painter Gerard Richter recently advanced an argument along these lines. In November, he described price tags on even his own paintings as too high and told TheScotsman that "we are losing our culture, when you see the auction catalogues full of bullshit and hype."

The second idiosyncratic argument being circulated in the world of arts and letters is that better bottom-line management is more likely to hurt than to help.

Both ideas are misguided.

I understand why some artists and writers resist identifying too closely with money. Creative careers tend to be vocations. If you start valuing what you do in, say, dollar-an-hour terms, the result can be terrifying. And the more you let your ego inflate based on a huge sale, the more emotional fallout there will be in that year you don't sell anything.

source : Forbes.com

HCC changes accounting treatment of forex losses

2009-02-13T00:58:00.000-08:00

Hindustan Construction Company, the infrastructure company building

various large projects in Maharashtra and elsewhere, has changed
its accounting
treatment of foreign exchange losses which has reflected in a higher third quarter net profit figure, than what would have been, had set standards been followed.

The Accounting Standard 11 which calls for quarter-on-quarter mark-to-market adjustment in the event of any forex losses, would have resulted in a lower third quarter net profit by about Rs 24.57 crore and lower nine-month net profit by Rs 63.52 crore for HCC.

While announcing its quarterly results last month, HCC had reported that its net profit for the third quarter ended December 2008, was Rs 23 crore, which was 7.4% lower than the profit posted last year.

"We sought legal opinion for the change and this is in line with the provisions of Schedule VI of the Companies Act," HCC group CFO Praveen Sood told ET. "This change in the forex treatment is mentioned by the (company's) auditors in their limited review report," he said, adding that the delay in putting out the Limited Review Report has caused confusion.

Schedule VI is the format under which the balance sheet and the profit and loss account is prepared. K S Aiyer & Co is the statutory auditors for HCC.

According to auditors contacted by ET, many companies adopt the practice when faced with the prospect of losses due to extreme fluctuations in foregn exchange, and if it is not core to the company's operations. It is also the reason why the deviation from set accounting procedures, as done under legal opinion, prompted the auditors to qualify it as a remark in their auditor's report.

Typically, under AS-11 standards, the losses should have been entered in HCC's profit and loss account, instead of being capitalised, that is taking it to the balance sheet. The company said that the fluctuations related to foreign exchange rates in foreign currency and foreign currency convertible bonds were adjusted in the carrying costs of fixed assets.

Set accounting standards say that fluctuations in foreign exchange rates should not be capitalised. HCC said it ahd adjusted it in the carrying costs of fixed assets which would inflate the final cost of the asset. Construction companies like HCC use costly equipment that are either bought or taken on lease for use in large projects and any increase in the cost of such an asset would increase the project cost.

Many companies typically charge such forex losses to reserves (capitalise) as it is temporary and then show it as and when the actual liability arises. But the AS-11 is more conservative in its approach as it follows the market-to-market method.

source : The Economic Times

Wellmont audit shows "erroneous" accounting entries from 2006 to 2008

2009-01-27T20:44:00.000-08:00

By Rick Wagner
An ongoing financial review of Wellmont Health System has found “erroneous” accounting entries from 2006 to 2008 but none that involved theft, personal gain or government contracts.

As part of an update on the review of the audits Wellmont first announced in December, the system in a Tuesday night news release reiterated that in June 2008, at the conclusion of its 2008 fiscal year, it “transitioned to a new financial auditing firm, KPMG.”

“As the entities prepared for Wellmont’s year-end audit, KPMG and Wellmont’s Audit Committee decided to initiate a review of certain historical accounting entries,” states the news release.

The release said that independent review — led by an outside legal counsel, Alston & Bird — is completed, with key findings to bondholders and other interested parties as follows:

•“Wellmont concluded that a number of erroneous accounting entries were made, beginning in 2006 and concluding in 2008.

“As a result of our findings, Wellmont plans to restate its financials for Fiscal Year 2006 and Fiscal Year 2007. The restated financials will be announced upon completion of the review process in mid-2009.”

•“During the extensive review which included interviews with dozens of past and present Wellmont employees and review of several hundred accounting entries, neither Wellmont nor its independent legal counsel found any evidence of theft or personal gain associated with the erroneous entries.

“Furthermore, the erroneous entries did not involve any payments received or owing to government contracts or payors, and they do not present any regulatory issues for Wellmont.”

•“Despite a challenging economic and health care environment across the country and regionally, Wellmont remains financially strong and expects to report a positive operating profit for Fiscal Year 2008.”

The release said Wellmont’s Audit Committee and leadership “have already taken steps to ensure similar accounting issues do not occur in the future. These include strengthening Wellmont’s internal auditing function among other measures.”

Fitch Ratings has placed a BBB+ rating on outstanding bonds issued on behalf of Wellmont for a negative rating watch.

“The Rating Watch Negative reflects Wellmont’s failure to complete and disseminate its fiscal 2008 audit within the time period specified in its bond documents, as well as a significant decline in Wellmont’s liquidity and a negative operating margin through the first five months of fiscal 2009,” states a Jan. 12 news release from Fitch. “Wellmont is currently not compliant with its continuing disclosure agreement that requires financial statements for the year ended June 30, 2008, to be filed with the bond trustee within 150 days.”

The Fitch release said Wellmont management “has indicated to Fitch that the delay in the audit’s completion is due to the identification of certain items that were classified to the incorrect fiscal years. Wellmont expects to have the fiscal 2008 audit completed by June 2009. “

Dr. Richard Salluzzo, chief executive officer, and Chris Knight, chief financial officer, both have left Wellmont.

Fitch in its ratings change also cited a “significant decline in liquidity, with days cash on hand dropping approximately 48 percent since June 2007; operating losses through the first five months of fiscal 2009; and the departures of the CEO and CFO.”

Wellmont and its chief competitor, Johnson City-based Mountain States Health Alliance, Jan. 16 announced a series of cost-cutting measures because of the downturn in the economy.

MSHA announced the elimination of 109 positions, representing 1.4 percent of its work force of 7,863 people.

For Wellmont, changes included elimination of 86 jobs and a reduction in corporate and administrative expenses at Wellmont. Another 60 positions that are now vacant will not be filled.

The 86 jobs are just more than 1 percent of Wellmont’s work force of 6,900 people in the region. And a new patient tower at Holston Valley Medical Center, part of the $100 million Project Platinum renovation, has been delayed.

source : timesnews.net

Fraud suspects held as FBI swoops on finance world

2009-01-27T20:40:00.000-08:00

Missing fund manager who faked suicide is arrested
By Stephen Foley
Authorities in the US had custody yesterday of two high-profile alleged fraudsters, dubbed "mini-Madoffs", in an intensifying sweep against financial wrongdoing.

Arthur Nadel, a 76-year-old Florida fund manager who tried to fake a suicide earlier this month, turned himself in after two weeks on the run, and investigators in New York charged a separate fund manager of defrauding 1,500 investors out of $370m (£261m) in a Ponzi scheme similar to the one run by Bernard Madoff.

The breakthroughs came as regulators from the Securities and Exchange Commission pleaded for more money from Congress, saying that a lack of resources explained how the organisation had repeatedly failed to spot that Mr Madoff, a former Nasdaq chairman, was operating the biggest fraud in Wall Street history.

Mr Nadel, who ran a firm in Sarasota called Scoop Management, was rep-orted missing by his family on 14 January. He left behind a suicide note that expressed guilt for losing clients' money and said someone might try to kill him, but police never believed he went through with the plan to kill himself.

Instead, they noted that he transferred at least $1.25m to a secret bank account. They traced his cellphone use as he fled to Louisiana. At the same time, employees found the shredded remains of a note for his wife, Peg, which set out instructions on how to withdraw money before all his trust accounts were blocked. "If you want to survive this mess, what follows is for your eyes only," the letter began, according to a criminal complaint filed yesterday.

The authorities believe Mr Nadel had more than 100 investors in his six hedge funds, which he told them were valued at more than $300m. In fact, there was less than $1m left.

A New York FBI spokeswoman said Mr Nadel would make an initial appearance in a federal court in Florida. "Arthur Nadel surrendered in the company of two lawyers to FBI agents in Tampa," she said yesterday.

Meanwhile, on Monday night FBI officers in New York arrested Nicholas Cosmo, at the end of a day of drama when the offices of his Agape World hedge fund business in Long Island had been besieged by furious investors. Screaming through locked, glass doors, they had demanded that Mr Cosmo "stand up for your money". On Friday last week, when Mr Cosmo had first told some investors that he was suspending redemptions, he had to be escorted from the building with a police guard.

The FBI now believes that his $370m investment business was a Ponzi scheme, where existing investors were paid using money from new clients. He had claimed that he would use the money raised to make loans, but investigators say only $10m was used for that purpose, and that $100m went into a trading account that he controlled.

Both Mr Nadel and Mr Cosmo have murky pasts. Mr Nadel was disbarred from being a lawyer in 1982 after taking money out of a client's escrow account. Mr Cosmo was sentenced to 21 months in prison for fraud in 1999. Theirs are the biggest in a string of Ponzi schemes and other frauds uncovered since the arrest of Mr Madoff on 11 December. Madoff Investment Securities, his firm, was the biggest Ponzi scheme in history, totalling $50bn, he told the FBI at the time.

The SEC has launched an internal investigation into why numerous warnings over the past decade went unheeded and why, when investigations were carried out, they failed to uncover the fraud.

Linda Thomsen, the SEC's enforcement director, told the Senate banking committee yesterday that the agency needs more authority to regulate parts of the financial system that escape oversight and more funding to carry out more investigations. "While we always do our utmost to do more with less, if we had more resources, we could clearly do more," she said. Lori Richards, who heads the SEC's inspections office, said agency officials are thinking "expansively and creatively" about changes that could improve the detection of fraud.

Governor proposes 2.2 percent budget cut

2009-01-27T20:32:00.000-08:00

By Staff
Gov. Tim Pawlenty unveiled his plan to fix the state’s projected $4.8 billion biennial budget deficit using budget cuts, accounting shifts, federal stimulus dollars and nearly $1 billion in “tobacco appropriation bonds.”

In sum, the governor’s budget proposals would shrink the state government by 2.2 percent, or $750 million, over current spending levels. Among the areas hardest-hit by his proposed spending reductions would be health and human services, local government aid and higher education.
“This budget involves some tough decisions — we realize that,” Pawlenty said. (Watch the announcement.)

Although no children would lose health coverage under the proposals, Human Services Commissioner Cal Ludeman said nearly 84,000 adults would likely lose their eligibility for state health care programs over the next two years.

K-12 education would actually see a funding increase under the governor’s proposals, with a focus on Q-Comp and other pay-for-performance initiatives; however, accounting shifts in the area of aid payments to schools are called for to temporarily save the state nearly $1.3 billion.

The governor’s plan assumes a $920 million “placeholder” for funds from a forthcoming federal stimulus package expected to be passed by Congress and signed by President Barack Obama in the coming months. Pawlenty said that while the final dollar amount might be significantly higher, not all of it will likely be “flexible cash” that can be used to shore up the General Fund.

The final piece of the governor’s proposal would be $983 million in one-time funds gained through the sale of “tobacco appropriation bonds” that would essentially bond for half of 20 years’ worth of future revenues from the state’s decade-old tobacco settlement.

Legislative leaders reacted cautiously to the governor’s proposals, noting that the February budget forecast and the passage of the federal stimulus bill would likely change the state’s economic outlook. (Watch the press conferences.)

House Speaker Margaret Anderson Kelliher (DFL-Mpls) said members of her caucus plan to travel around the state getting input on the governor’s proposals from ordinary Minnesotans. She expressed skepticism that a corporate tax cut included in the governor’s plan would help Minnesota’s ailing economy, noting that 46 percent of companies that pay the tax aren’t headquartered in the state.

House Majority Leader Tony Sertich (DFL-Chisholm) said the governor’s current budget proposals would be “the blueprint” on which future budget negotiations would be based.

House Minority Leader Marty Seifert (R-Marshall) praised the governor’s proposals and challenged the DFL to come up with their own solutions if they disagree with the governor. He said he expected DFL leaders would ultimately introduce legislation to raise taxes.

source :Daily Planet

2009 Accounting Student Scholarship will honor three students

2009-01-27T20:30:00.000-08:00

AccountingWEB, the Web site dedicated to providing news and resources for members of the accounting profession, is pleased to announce the creation of a new scholarship that is offered to undergraduate accounting majors throughout the country. Three scholarships will be awarded to students who are declared accounting majors based on the submission of an essay and the subsequent judging thereof. Funding is provided by AccountingWEB with the goal of encouraging accounting as a major and a career choice.
Participation in the AccountingWEB Accounting Student Scholarship program is open to United States citizens attending colleges, universities, and professional schools of accounting in the United States. Students applying for the AccountingWEB Accounting Student Scholarship must have already completed at least one semester or two trimesters of full-time college and must be declared accounting majors, effective for the fall of 2009.

The scholarship is a $500 award, payable to students who attend college as full-time students, have a cumulative grade point average of 2.5 on a 4.0 scale, or the equivalent, and who are declared accounting majors. Transcripts will be required as evidence of this status.

Scholarship winners will be chosen based on submission and subsequent judging of a short essay not to exceed 500 words. The topic for the 2009 AccountingWEB Accounting Student Scholarship is Green Accounting Firms. Essays will be judged on both style and content. More details are available in the Scholarship Rules.

Applications are now being accepted and will be accepted through the deadline of midnight EST March 31, 2009. Winners will be selected by May 1, 2009 and notified shortly thereafter. AccountingWEB will announce the winners to the public on June 15, 2009.

source : Accounting web.com

Ann Arbor Spark makes internal accounting changes following LDFA audit

2009-01-27T20:28:00.000-08:00

by Tina Reed
Ann Arbor economic development group Spark has made a number of accounting and procedure changes since an audit contracted by the Local Development Finance Authority found billing inconsistencies last year.

Now the LDFA plans to have the auditor take another look at Spark and the changes it made midway through its fiscal year, members decided at a Tuesday meeting.
The LDFA is a Ann Arbor City Council-appointed committee that oversees the capture of part of the property taxes from Ann Arbor's downtown development district. It gives some of that revenue to Spark and is responsible for overseeing how Spark spends it.

Last year, the LDFA contracted with an outside auditor to look at Spark's accounting practices. The audit found accounting problems that led to overbilling and underbilling due to geographic ineligibility. It also found conflicts of interest during its 2008 fiscal year.

The LDFA's contract with Spark was for $872,836 during the audited 2007-08 year.

The changes Spark has made include:

• Stricter reporting deadlines for all of its billing, such as requiring all consultant invoices to be turned in to Spark by the fifth of every month.

• Stricter review of companies receiving Spark's more advanced services to determine geographic eligibility.

• An updated conflict of interest policy to restrict the use of related parties, such as family members, for consulting services.

Skip Simms, executive director of Spark's Business Accelerator, expressed frustration with the contract between the LFDA and Spark in recent months. Some of the guidelines in the contract make it difficult to practically perform all the services Spark would like to provide for clients, Simms said.

"Quite honestly," he said, "what we've had to do is cut back on what we've been able to offer entrepreneurs" since the contract regarding how Spark can use LDFA funds was rewritten two years ago.

At the meeting, Simms asked the board to clarify whether Spark could use funds on services that aren't easily billed at an hourly rate, which is traditionally how the LDFA keeps track of Spark's services.
LDFA members said they would review the contract.

source : Mlive.com

Obama's Accounting Expert?

2008-12-03T00:35:00.000-08:00

Google Paul Volcker, and most of the results will focus on the former Fed chairman's role as a hardnosed inflation fighter. In the late 1970s, Volcker jacked up interest rates, successfully taming runaway inflation, but also sparking the severe 1981-82 recession.

In a news conference today, President-elect Barack Obama named Volcker, now 81, as head of a special Economic Recovery Advisory board that will regularly brief the President.

At first blush, given the macroeconomic crisis facing the United States, it seems unlikely that the board would be dealing with seemingly esoteric issues such as accounting standards and auditing procedures. But biographical sketches of Volcker frequently overlook his deep background in accounting issues in favor of his roles at Treasury, at the Federal Reserve, and, more recently, as the lead investigator into corruption in the Iraqi Oil for Food program.

Impressive as those accomplishments are, such biographies ignore much of what has made Volcker, in the words of the press release from the Obama transition team, "one of the world's foremost economic policy practitioners."

For example, in 2000, Volcker chaired the oversight board that created the International Accounting Standards Board, and then served as head of the IASB's trustees for two years.

In 2002, he was also brought in to try to reform Arthur Andersen in the immediate aftermath of the Enron scandal. And although Andersen fell apart too quickly for Volcker to accomplish much, the episode only enhanced his sterling reputation. Indeed, shortly thereafter, SEC-chairman Harvey Pitt to ask Volcker to head up the newly created Public Company Accounting Oversight Board — which Volcker declined, citing the time demands of the job.

Those experiences are all highly relevant in the midst of a financial collapse that has been widely blamed on accounting rules that, depending on your point of view, were either faulty or misapplied.

Just this week, for example, the American Bankers Association sent a letter to Treasury Secretary Henry Paulson, complaining that all of the recent efforts to bolster bank capital could be undone if year-end financial reports have to follow current fair-value accounting rules. Those rules require banks to mark their assets to market. Critics have said the rules exacerbated the crisis by forcing banks to drastically mark down securities for which no market existed. Defenders argue that the rules actually exposed the extent of toxic assets on banks' books. A third school of thought says that banks actually failed to use the flexibility built into fair-value measurement rules and harmed themselves by applying prices from markets that were all but frozen.

That's just one of many accounting issues at the forefront of the current economic crisis. Another: Should the United States adopt International Financial Reporting Standards, bringing its listed companies closer in line those of Europe and others around the globe? Or are recent efforts in that direction too quick to abandon U.S. GAAP, putting at risk the reputation of the U.S. capital markets as well policed?

Likewise, what should be done about the auditing profession itself? Currently, corporate auditing is so concentrated among the Big Four accounting firms that many companies have trouble meeting independence requirements put in place by Sarbanes-Oxley. And audit firms themselves have repeatedly pushed for some level of indemnification against litigation. Indeed, many observers say fear of litigation led audit firms to be overly cautious about fair-value estimates, pushing banks to also err on the side of caution.

That last example doesn't bode well for the adoption of international standards, which are far less reliant on prescriptive rules. But where will Volcker stand? In 2001, he stood by IASB chairman David Tweedie's side as Tweedie noted that "If you want a standard to deal with 80 percent of the problems, you could do that in about 60 pages. If you want to deal with 95 percent, it would take another 200 pages."

Likewise, when Volcker was brought in to try to reform Andersen, he surprised them by offering to throw out the existing managers out and run the accounting firm himself. His plan was to establish a seven-member panel that would ultimately select a new management team. Under his proposed plan, the revamped Andersen would have focused almost exclusively on auditing — and would substantially scale back its consulting business.

In a 2003 interview with CFO magazine, Volcker had the following thoughts on some of these issues:

On international standards: "All the [corporate] scandal has been a big help in one sense: it has challenged the traditional American view that if you want international standards, use our standards, because we've got the best and the brightest."

On board structure: "I think the single most important structural change is to encourage nonexecutive chairmen. I think the best way to get some independent leadership on the board is to have a nonexecutive chairman who can also determine the agenda. That way, the board isn't entirely at the mercy of the priorities and information of the chief executive. In extraordinary times, it becomes really important — for instance, when a company isn't doing well, or when there's some question as to whether you want a new chief executive, or when you have to pick a new chief executive."

Accounting wins kudo at USF Business school

2008-12-03T00:33:00.000-08:00

“By the numbers” carries new meaning with the accounting program at the University of South Florida earning its first ranking and some national prominence in Public Accounting Report’s annual assessment of the country’s top accounting education programs. Making its debut at number 25, USF’s doctoral program was one of five doctoral programs to make the leap from unranked to ranked in the roster published by the independent newsletter of the accounting profession.

The newsletter compiled its rankings by surveying more than 1,500 accounting professors and department heads and chairs who were asked to name PhD programs they had the most regard for in turning out quality accounting professors. Also ranked at the doctoral level was Florida State University, previously unranked, taking No. 23. Among the top 25 graduate programs in accounting: Florida State was No. 19 and University of Florida was No. 21. At the undergraduate level: University of Florida (No. 21) and Florida State (No. 24).

Here's are some comments from Stephanie Bryant (see photo above), director of the School of Accountancy at USF’s College of Business. “What makes the findings particularly gratifying is that the respondents were 1,557 accounting professors — our peers,” she said. “They recognize that many of tomorrow’s finest professors are coming from the University of South Florida.”

Dean of the College of Business Robert Forsythe (see photo) said the ranking is yet another testament to the high quality of education that the college produces. For the past two years, the Center for Entrepreneurship’s graduate program was also nationally ranked in the top 10.

“The ranking of the accountancy doctoral program by this significant publication adds to our list of national achievements,” Forsythe said. “Thanks to our hard-working faculty and staff, we are able to continue to offer students top-notch programs."

(Photo of Bryant courtesy of USF. Photo of Forsythe by Melissa Lyttle of the St. Petersburg Times.)

Sluggish IPO market, poor business chill accounting firms

2008-12-03T00:31:00.000-08:00

The sharp fall in initial public offerings and other businesses has forced many accounting firms in China, including the big four international giants, to start cutting jobs for the first time in many years.

Ernst & Young has laid off 50 to 100 auditors at its Beijing office, a source at the firm said.

There has been a spate of departures from the firm last week. Many of those who have left are manager assistants who are yet to obtain professional qualifications.

A few senior managers transferred from the firm's offices in Hong Kong and Malaysia have also left and many of those who have stayed on are now worried about their future at the firm, the source said.

On Sunday, Nov 16, a group of auditors at KPMG were told to cancel their appointments and return to the office the next day. On what was known in the firm as "black Monday", this group of about 70 to 100 professionals were asked to resign "voluntarily" by Nov 21 at the latest.

Most of the auditors in this group had worked at the firm for less than three years, a source at KPMG said. There are 12 audit teams in the Beijing office with about 100 members each. The teams have been forced to downsize by axing four to five members.

KPMG has offered a "N+2" termination compensation program to those who were told to resign. "N" refers to the staff's serving years in the company and "N+2" multiplied by the monthly salary will be the total compensation package, said the source.

The accounting firm is also not expected to renew staff contracts that are due to expire in January, the source said. However, there will be no changes to the standard program of recruiting fresh graduates.

The other two international firms, PricewaterhouseCoopers (PwC) and Deloitte are not known to be laying off staff. But sources at these firms said there has been an increase in the number of auditors who are not being assigned auditing projects. Quite a few of these so-called "idle" people have been asked to avail their leave.

According to market researcher Zero2IPO Group, the number of IPOs in China fell by more than 70 percent to 28 in the third quarter, with the total capital raised falling more than 80 percent, from a year earlier.

Globally, it will continue to be negative next year in the human resource sector, especially for the auto, finance and construction industries, said China Miner Gorman, chief operating officer of Society for Human Resource Management, the world's largest human resource management firm.

"It is time to take action to boost staff morale and the employers should be cautious before embarking on large-scale layoffs," she said.

Currently, the "big four" have no plans to curtail campus recruitment. An email to PwC staff in October stated, "there will be no reduction in graduate hires. We are not going to make short-term, knee-jerk decisions to cut hiring, which we will regret in future years."

PwC also confirmed earlier in November that it plans to hire about 2,000 graduates in China next year.By Bi Xiaoning (China Daily)

Akron accounting firm has new managing director

2008-12-03T00:30:00.002-08:00

Akron accounting firm Brockman, Coats, Gedelian & Co. has a new top gun: Co-founder David A. Brockman has succeeded James J. Coats as managing director.

Coats had been managing director since the firm's founding in 1986, when the fledgling accounting company had three directors and a staff of four. The company now has 13 directors and more than 100 employees.

Brockman as of Monday began directing the firm's overall strategy and operational direction. Coats will continue to provide advisory services for clients.

The announcement completes the accounting, consulting and technology firm's executive leadership transition.

Rothstein Kass Rated Top Accounting Firm in 2008 Hedge Fund Service Providers Survey by Alpha Magazine

2008-12-03T00:30:00.001-08:00

NEW YORK, Dec 01, 2008 /PRNewswire via COMTEX/ -- CPA firm Rothstein Kass rated first among accounting firms in the 2008 Alpha Awards(TM), an annual ranking of hedge fund service providers sponsored by Institutional Investor's Alpha Magazine. Results were based on voting by more than 1,000 hedge fund firms with aggregate assets in excess of $1.5 trillion. Researchers asked participants to rate the quality of service received during the 12 month period ended March 31, 2008. Rothstein Kass finished first overall for client service and also topped the list of "small firms' favorites," and "big firms' favorites." The firm was also the top firm in the "audit," "regulatory & compliance" and "hedge fund expertise" categories.

"Our selection as the top accounting firm to the alternative investment industry by Alpha Magazine is extremely gratifying. That we have achieved this distinction amid an intensely competitive environment speaks to the appeal of our 'one-firm, one floor' culture, and our deep industry expertise," said Co-Managing Principal Howard Altman. "Across all office locations, we offer our clients access to unparalleled sophistication and understanding of the issues impacting alternative investments. Wherever they call home, our clients depend on the account continuity, consistency of service, and dedicated professionals that define the Rothstein Kass brand."

"Our firm has long recognized that talented and motivated professionals who are passionate about their career development provide the foundation for superior client service. Through our commitment to attract, retain and develop our professionals, we have established Rothstein Kass a best place to work even as we set the standard for service. Our standing as a favorite provider to both large and small firms speaks to our ability to assess each assignment on its individual merits to create customized client support teams," said Steve Kass, Co-Managing Principal of Rothstein Kass. "The strength of our Financial Services Group and our standing as the trusted advisor to the alternative investment community continues to facilitate our expansion in interrelated practice areas and new markets. As we approach our 50th anniversary as a firm, our adherence to these principles will drive our growth and success."

Corefino Appoints Lyne Noella to Serve as VP, Strategic Alliances

2008-12-03T00:29:00.001-08:00

SUNNYVALE, Calif., Dec 02, 2008 /PRNewswire via COMTEX/ -- Corefino, Inc., a provider of outsourced accounting and financial solutions, today announced the appointment of Lyne Noella to the new position of Vice President, Strategic Alliances. She is responsible for establishing strategic business relationships with interim CFOs and accounting industry service providers who can refer clients who will benefit from Corefino's innovative combination of robust Web-based financial software and off-site professional expertise.

Noella most recently served as a principal in the Startup & Emerging Companies Group of Stonefield Josephson, an audit, tax and advisory services firm. She was the firm's key alliance principal, building business opportunities in new and existing markets throughout California. She formerly served as president of Lyne Noella Marketing, developing strategic consulting and marketing plans for accounting, management consulting, insurance and other professional service clients. Her background also includes management roles in the biotech and service industries.

"Interim CFOs, accountants, auditors and tax advisors who deal with growing businesses have clients who need our services. Lyne will focus on forming partnerships with these professional service providers to build a referral network," said Corefino CEO Karen Northup. "The companies that hire Corefino will benefit from topnotch, cost-effective outsourced accounting services and advice, and our partners will benefit by providing value to their clients. In addition, Corefino benefits from a network of trusted partners to which we can refer customers for complementary services."

"The market is filled with emerging and middle market businesses in search of better strategies for handling their accounting and financial needs, as well as business advisors who understand the importance of finding the right solution," Noella said. "My role is to establish relationships that will help both parties achieve their goals through Corefino's outsourced accounting platform."

Corefino offers a unique outsourced business model that fills the accounting/financial needs of growing companies. The company's turnkey solutions combine the services of experienced accounting professionals, best practice-based accounting processes and tools, and a robust online accounting platform. Customers receive GAAP-based, audit ready accounting and financial reporting -- all at a 25-40% savings over building and staffing an internal finance operation.

Each Corefino client is industry-matched with a four-member Corefino team of staff accountants and a controller, who works directly with the customer. Additional oversight is provided by a council of Chief Accounting Officers each with over 20 years of experience. Corefino provides critical guidance, oversight and controls and prepares all monthly reports, calculates commissions, cuts checks and performs other accounting duties. This strategy ensures timely, accurate and expert accounting and financial services while freeing clients to focus exclusively on building their business.

About Corefino

Corefino, Inc. provides integrated accounting and financial solutions for growing businesses that combine best-of-breed technology tools and optimized processes with a seasoned team of financial experts. The affordability of Corefino's solution suite allows growing businesses to take advantage of expertise and tools currently only available to the Fortune 500 to plan for future growth. Founded in 2004, Corefino is headquartered in Sunnyvale, CA, with local teams and offices worldwide.

VSB Bancorp, Inc. and Victory State Bank Announce the Appointment of Ronald A. Giampaolo as Vice President, Controller and Principal Accounting Offic

2008-12-03T00:26:00.000-08:00

STATEN ISLAND, NY, Dec 02, 2008 (MARKET WIRE via COMTEX) -- VSB Bancorp, Inc. (VSBN:

VSBN and Victory State Bank announced today that Ronald A. Giampaolo, has been appointed as Vice President, Controller and Principal Accounting Officer.

Mr. Giampaolo, 55, has more than 20 years experience in banking in various financial capacities. Prior to joining the Registrant, he had been Assistant Vice President and Senior Financial Analyst for Banco Popular since August 2007. Prior to that, he was Assistant Vice President and Accounting Manager for Amalgamated Bank from October 2002 through August 2007. Mr. Giampaolo graduated from the City University of New York with a BA in accounting.

Mr. Branca, VSB Bancorp's and Victory State Bank's President & CEO stated "Ron Giampaolo is a welcome addition to our staff. Ron fills a key position in the Company and the Bank where he can utilize his expertise in accounting and other financial matters."

VSB Bancorp, Inc. is the one-bank holding company for Victory State Bank. Victory State Bank, a Staten Island based commercial bank, which commenced operations on November 17, 1997. The Bank's initial capitalization of $7.0 million was primarily raised in the Staten Island community. The Bancorp's total equity has increased to $22.1 million primarily through the retention of earnings. The Bank operates five full service locations in Staten Island: the main office in Great Kills, and branches on Forest Avenue (West Brighton), Hyatt Street (St. George), Hylan Boulevard (Dongan Hills) and on Bay Street (Rosebank).

Fi-Tek Launches Integrated Wealth Management Solution on .NET Platform

2008-12-03T00:25:00.001-08:00

Fi-Tek, LLC, a wealth management solutions provider for the financial services industry, and the Northern Trust Company today announced the release of TrustPortal, a fully integrated, straight-through solution for trust management. Incorporating investment management, trust administration and comprehensive taxlot trust accounting features into one platform based on .NET architecture, TrustPortal 1.0 provides clients with accurate and instantaneous flow of data between accounting and investment management, significantly reducing reconciliation and errors, and allowing clients to respond proactively and immediately to changing market conditions.

The TrustPortal provides a full suite of products, including investment management with electronic trade execution, compliance, administration, accounting, operations, automated account review, extensive web-based report engines, and with a host of third party interfaces including complete custody reconciliation.

Unlike most other offerings in its class, TrustPortal 1.0 seamlessly manages data between trading, investment management and accounting automatically, and accurately reflects true position and cash balances at any point in time. TrustPortal manages and automates these processes through the full life cycle of the transaction, significantly improving productivity and reducing errors. Built upon a highly scalable platform, TrustPortal can easily scale from a few hundred to tens of thousands of accounts.

Fi-Tek also announced the general availability of TrustPortal ASP, with software as a service model for clients, including complete hosting, business continuity, backup, monitoring, and disaster recovery services for the TrustPortal through secured SAS70 datacenters of the largest service providers in the country. These new services will alleviate the need for TrustPortal users to have to manage software and hardware, allowing them to focus attention on managing their business at an affordable price.

Subir Chatterjee, President and CEO of Fi-Tek LLC, states, "The TrustPortal is an extremely flexible and easy to use tool for the front, middle and back office, enabling users to perform the most complex wealth management functions in an automated way, thus delivering the highest quality of service at greatly reduced cost."

TrustPortal is the evolution of Trust/Rite, the leading Trust Accounting application developed by Fi-Tek, in partnership with The Northern Trust Company. Over 135 trust organizations across the United States, with more than $100 billion in combined trust assets, use TrustPortal as either a locally deployed or Fi-Tek ASP hosted solution.

For more information about TrustPortal's partnership with Northern Trust Correspondent Services, please contact David Batrich at 312-557-2890.

About Fi-Tek, LLC

Fi-Tek, LLC provides innovative wealth management software products and world-class business solutions to financial service providers and their customers worldwide. Offering alternative investment and trust solutions since 1998, Fi-Tek's state-of-the-art software solutions and professional services enable its clients to efficiently grow and manage complex businesses with minimum resources, deliver premier financial services, improve communications and make informed decisions on behalf of their customers. More than 160 financial institutions around the world use Fi-Tek solutions to manage and service nearly $0.5 trillion in assets. Fi-Tek is both SAS70 Type II and ISO 9000/200X compliant. For more information, visit www.fi-tek.com.

About Northern Trust

Northern Trust Corporation (NASDAQ: NTRS) is a leading provider of investment management, asset and fund administration, fiduciary and banking solutions for corporations, institutions and affluent individuals worldwide. Northern Trust, a financial holding company based in Chicago, has a growing network of 85 offices in 18 U.S. states and has international offices in 15 locations in North America, Europe, the Middle East and the Asia-Pacific region. As of September 30, 2008, Northern Trust had assets under custody of US$3.5 trillion, and assets under investment management of US$652.4 billion. Northern Trust, founded in 1889, has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology.

Greater Baltimore finance, accounting industry job outlook found bleak

2008-12-03T00:23:00.000-08:00

Baltimore Business Journal - by Ryan Sharrow Staff

The early 2009 job outlook in the finance and accounting industry looks bleak for Greater Baltimore, according to the Robert Half International Financial Hiring Index released Tuesday.

The survey found that 2 percent of chief financial officers in Greater Baltimore plan to bulk up staffs in the first quarter of 2009.

Meanwhile, 9 percent of the local executives surveyed anticipate a reduction in personnel.

The majority of the executives, 87 percent, do not expect a change in their staff levels.

Menlo Park, Calif.-based staffing firm Robert Half compiled the report by surveying 200 CFOs in the region with 20 or more employees.

Nationally, 9 percent of the 1,400 CFOs surveyed plan to add full-time accounting and financial professionals in the first quarter of next year. Eight percent said they plan to decrease their staff size and 82 percent expect no change.

Its accounting in the business cycle Mass Market

2008-11-27T09:10:00.000-08:00

Almost the same with the computerization of business in the trade, dakalanya people think that by applying computerized accounting system, then all problems will terselesaikan.Meskipun accounting assumption is not entirely wrong, but also can be said is not entirely truthful. Because the actual purpose of computerized accounting system is only for

* Zoom error recording,
* Control and cheating
* Acceleration calculations.

However, computerized systems can not be right that a system that has been applied correctly or incorrectly, because the computer only act in a dummy (Passive), meaning that any given command to be done for the countdown, the computer will calculate the direct, but he (computer) do not know whether that was in the countdown is a matter that should be counted or not a matter that needs to be calculated (by way of such).

Departure from there, if we want to start a turnaround in the accounting business, which is a new walk, which needs to be is that we must first know the accounting system (manual), which will be applied in our business. After we merancangnya, we can apply the new accounting system that terkomputerisasi. There will be compromise, compromise occurred in the calculation of the accounting method.

The need to first be prepared to start the cycle accounting is true, actually has bebererapa stages, depending on the destination to be achieved from the accounting calculation.

Starting sikulus Akuntnasi diusaha savings and loans will be divided into 2 groups basis, namely:

1.

Savings and loans that have been there before and computerization
2.

Saving and Loans where there are no new data.

1. If the Save Borrow your business running, of course, you have a little more to apply methods or how accounting calculation that can generate a report Balance Profit and Loss. From the way you gunkana at this time, you can applying it to the system that you will use.
the need to become your attention is when you apply perhituangan accounting Savings and Loans are self-taught (think own), then your accounting system should be replaced by adopting the system that you use, because there is a possibility if you still use your self-taught system, the method is not ready for the development of your business.

some points that need attention:

1.

Loan interest calculation method
2.

Method of calculation of interest savings
3.

treat income and the cost basis or cash basis accruel

2. Saving and Loans If you just stand, the most important point is that you must have at least one that can never run or (become) an interpreter at a book store business loans. Because with this, then the business will be reported (in the manage) is how, will be set at the start.
You try to imagine the business if you do not understand that one of the savings and loans (usually cooperative), the "obligation" to make a report and rugilaba balance that must be reported to the Member be difficult.
Different business trade (private) that do not have the obligation to make reports and balance sheets rugilaba.

jurubuku needs a new business due to system (computerization), which is not 100% dictate how melaporakan how the accounting should (be), but some will be set up in advance (by the user) to comply with state savings and loans (cooperative) that run. and this need in the pen "design" the report forms and methods of calculation.

Welcome Starting Accounting Cycle
Radian Multi Prima 2007
www.radiansystem.com

CPA teaches businesses techniques for survival

2008-11-21T20:25:00.001-08:00

Written by ArticleCafe.NET
It's a jungle out there for business owners, but we plan to teach people how to survive in it.

"I believe all your professionals should save you either tax dollars or make you more money or give you good advice or preclude bad things happening to you, easily exceeding the fees they get for their services", he said.

We make plans to spotlight the practical aspects of running a business. Schools teach business concepts, but our firm narrows the focus to particulars such as preparing financial statements, developing business plans and calculating a business's vital statistics.

We give other very specific advice. For instance, in the case of loans either going to or coming from a company, if a promissory note doesn't exist, IRS officials could call the exchange of money additional capital for the company or a dividend for an individual and tax the money. Standard loans, on the other hand, normally aren't taxed.

Most business owners are very willing to loan their companies money or vice versa. But most fail to document the full (meaning of the transaction), he said.

The course is designed for small business owners. Leaders of large businesses, he said, generally know how to survive in the business world; that's how their businesses became large.

Then Jesus came to them and said, "All authority in heaven and on earth has been given to me. Therefore go and make disciples of all nations, baptizing them in the name of the Father and of the Son and of the Holy Spirit, and teaching them to obey everything I have commanded you. And surely I am with you always, to the very end of the age."

How do you enter or prepare for the field?

2008-11-21T20:21:00.002-08:00

Written by ArticleCafe.NET

If your company has a compliance program, then your first step is to examine its makeup. Look for compliance program elements like a code of conduct and helpline. A common misconception is that helplines are only for reporting crimes; In most cases you can call the helpline with serious questions about the program. Talk to people working in the program. Take advantage of any training offered by the compliance office, and perhaps even volunteer to help in the compliance office (or with compliance efforts in your unit).

If there is not a compliance program in your company, or you are looking for more information, networking with compliance professionals outside of work is an invaluable resource. Call the compliance staff at other companies in your industry. Compliance people tend to be open and communicative, due in part to the U.S. Sentencing Guidelines requirement for programs to meet industry practice; In order to determine what industry practice is, we need to know what others are doing. Also speak to any compliance vendors your company hires.

There are a variety of membership organizations that serve compliance professionals by sponsoring forums, and by offering education/training and publications. Attending a Society of Corporate Compliance and Ethics (SCCE) or Ethics and Compliance Officer Association (ECOA) event is an excellent way to meet other compliance people and discuss the field. Many industries or regions boast compliance and ethics organizations, and there are also many other non-profits that provide great resources. The Society of Financial Service Professionals is just one example of an organization offering ethics resources (including a hotline).

In addition to networking, read about compliance topics. You can augment your perceived value by being a source of useful information and ideas, much of which you can get by paying attention to the relevant literature. There are several publications with how-to information and war stories (scandals) that will serve as a good starting point, such as Compliance and Ethics Magazine (www.corporatecompliance.org), Ethikos (www.singerpubs.com/ethikos), and the book The Smartest Guys in the Room.

Another obvious step is to receive training or education. If your company has no training, look to the membership organizations and service providers that do provide it. A highly regarded course, "Managing Ethics in Organizations," is offered at Bentley College. The Society of Corporate Compliance and Ethics now offers an academy, and has a certification program for those interested in becoming "Certified Ethics and Compliance Professionals" (CCEP). In getting training, you may be tempted to focus on one area of risk. This can make you more appealing to certain employers or in certain industries, but it may also pigeonhole you if you are not careful.

Other skills to possess or develop are important management skills such as public speaking, selling, and the ability to lead meetings and get results. Most of these skills can be developed through practice or even a class at a local community college.

Finally, your character and your social skills will be major parts of getting and succeeding in a compliance position. Integrity and good reputation are paramount in this field, but you must also recognize the value of benchmarking and obtaining buy-in for ideas and documents before you push them in your company.

Conclusion

If the idea of moving into another field or specialization has been weighing on your mind, or if you are looking for a way to turn your skills and experience into a more satisfying career, spend some time researching compliance and ethics. Make some calls and ask lots of questions. Do your homework. This is a challenging field that has been attracting many of your peers. With great opportunities and an open, supportive community, you may find that a career in compliance and ethics is just the job you look forward to every Monday morning.

Have You Considered a Compliance and Ethics Career?

2008-11-21T20:21:00.001-08:00

Written by ArticleCafe.NET

The compliance and ethics field encompasses how people act in large organizations, and how to keep those organizations out of trouble. At the root, we must recognize that organizations act in ways different from individuals, and that individuals in organizations do things that they would not do if acting alone. Those of us working in the field of ethics and compliance seek to prevent organizational misconduct and to protect those who can be harmed by it. Elements of the field have existed for decades in companies' handling of a variety of legal, ethical and reputational risks, in such areas as advertising, antitrust, off-the-book accounts, discrimination, financial statements, harassment, labor, privacy, purchasing, and more. But the field really began to take shape with the advent of the U.S. Sentencing Guidelines for organizations. The guidelines helped to shape the development of compliance programs and to prevent a stove-pipe approach, as well as encouraged judges to give breaks to companies and other organizations that set up "effective" compliance programs. The field of compliance and ethics has formed in response, and it demands motivated and experienced professionals. Why should you go into this field? There are both practical and personal reasons you will find the field appealing. On the practical side, good compliance opportunities exist everywhere. Every large organization needs compliance people, including blue-chip companies. Compliance is a wide-open field, drawing professionals from countless backgrounds. Of course, there are positions best suited to people with certain experience. Of particular interest to a trained accountant may be positions such as Compliance Accountant, Finance Compliance Education Coordinator, and Senior Financial Compliance Analyst -- not to mention countless Sarbanes-Oxley-based positions. As for advancement and mobility, compliance may not be the best path to the top (CEO), but the top compliance position is typically an executive-level position (Chief Compliance/Ethics Officer). Many in this field have moved outside and become entrepreneurs, starting their own compliance provider service. Others may have found themselves in high demand as chief financial officers and general counsels, particularly at companies with compliance problems and scandals. Compensation is another factor to consider. A recent study by the Ethics and Compliance Officer Association (ECOA), performed in conjunction with Salary.com, found the median annual salary for many positions, including: Top Global Ethics and Compliance Officer: $206,800 Top Domestic Ethics and Compliance Officer: $180,600 Corporate Manager, Ethics and Compliance: $120,000 Salary will vary according to industry and experience. Perhaps more importantly, personal reasons are often cited as the primary motivators behind a move into a compliance career. Compliance people are commonly heard to say, "In the compliance and ethics field, we have the knowledge that we have spent our day trying to do the right thing." Still working to help the company succeed, compliance people know that their efforts help prevent harm, protecting all stakeholders, such as executives, employees, and shareholders. Another appealing aspect of the field is the people working in it. Compliance and ethics is an open field, where the model relies on the sharing of best practices and consulting with one another about our experiences. It is a great source of strength -- compliance people always have someone to turn to when facing a problem.

Planning vs. Historical Accounting

2008-11-21T20:17:00.000-08:00

Planning vs. Historical Accounting

Written by ArticleCafe.NET

Wednesday, 07 July 2004

Spot Light

Financial statements are often misused and abused. They are often ornately presented with accountant's opinions ranging from audits to compilations. Often we even find a statement of cash flows and financial footnotes.

What do these statements tell us? Numbers and data when prettily presented often are an accountant's representation of the financial status of an entity.

I believe that financial statements without narratives, analysis of trends, and a review of expenditures are nothing more than formal proof that the bank account has been reconciled and that everything balances. Data without thorough critique is useless.

A classic example is Good Times, Inc. (a fictional retail operation) whose accountant formally presented the results of the past month's operation that indicated that the company just had its best sales month ever. Good Times, Inc. accordingly beefed up its sales force and administrative staff in order to handle the increased volume.

Unfortunately the financial statements alone failed to reflect several other critical areas of financial distress:

The line of credit was tapped and no prior efforts had been made with the company's bank to extend the line.
Spending levels were at an all time high and the profit margins were slipping.
Trade data suggested that the market's profitability was moving from retail to wholesale.

Approximately, sixty days after the best month ever, the company's increased spending, the additional personnel and the shift in the marketplace began eroding the company's profitability picture. As the accountant had solely processed prior data and presented it as current month and year-to-date data, the trends, and changes in the margins and the company's changing financial situation had been hopelessly lost in the numbers. Now the company was faced with downsizing and refocusing its marketing efforts away form wholesale and towards retail. Good Times, Inc. could have avoided and even planned for the downturn if they had analyzed their trends and compared their results to the available market data.

A company's focus should always be on the marketplace and what it's doing. It should not get caught up in admiring it's own historical data. Careful attention should be paid to product lines and profitability and whether trends indicate a rise or fall. Companies should change their focus from historical review to short-term and strategic planning and should concentrate on how to maintain constant step with the marketplace.

Only in this way will Good Times, Inc. not be left behind. The marketplace is always changing and we owe it to our future to be ready to keep pace.

Activity Based Risk Evaluation Model of Auditing

2008-11-21T20:16:00.002-08:00

Written by ArticleCafe.NET

ABREMA is a normative model of assurance auditing originally published as a monograph and subsequently developed on the WWW for use as an aid in teaching and researching financial statement auditing. Although the pages in the ABREMA site do not refer to the auditing standards of any particular country, the model is generally consistent, unless otherwise noted, with International Standards on Auditing issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants. These International Standards on Auditing are referred to in the ABREMA pages with the prefix ISA.

As indicated above, ABREMA is prescriptive in nature. There are, however, references throughout the site to a number of more recent descriptive studies reported in the professional and academic literature. Not unexpectedly, many of these studies support the approach taken by ABREMA / ISAs, while others do not.

The auditor of information (such as financial or environmental information) that is the responsibility of one party (such as management) but is for use by other parties (such as shareholders, customers, suppliers, governments) requires technical competencies in three main disciplines:

accounting (such as financial or environmental accounting),
information systems, and
cognitive decision making.

The pages on the ABREMA site primarily deal with the last of the abovementioned disciplines. There are no pages dealing with either information systems or the accounting aspects of auditing. The ABREMA site is concerned with cognitive decision making by auditors^[fn]. In particular, the pages deal with the manner in which auditors initially plan to gather the necessary evidence relating to the critical decisions made by them during the course of an audit, then how auditors gather and evaluate that evidence, and finally how auditors make the critical decisions based on the evaluation of that evidence.

ABREMA integrates the three descriptive concepts of the audit objective, information misstatements and audit stages, with the two theoretical concepts of cognitive decision making and audit risk.

Although some of these concepts are neither new nor particularly controversial, the manner in which these concepts are brought together into a single, integrated model (demonstrated in tabular form below) provides the basis for a structured, modular approach to the teaching of auditing as well as being a novel contribution to the conceptual framework discussion.

A Brief Introduction to Accounting PDF Print E-mail

2008-11-21T20:16:00.001-08:00

Written by ArticleCafe.NET

Most people who have been appointed to work in an office have come across at some accounting. They are the people who pay and send out the bills that support the company operation. They do a lot more than that, though. Sometimes referred to as "bean counters" they in addition keep their eye on gains, costs and losses. Unless you are running your own business and acting as your own accountant, you would have no way of knowing just how profitable - or not - your business is without some form of accounting.
Accounting covers many aspects, even if your task is to balance a checkbook, that is still accounting. It is part of even a kid's life. Saving a payment, consuming it all at once - these are accounting principles.

Most businesses, if not all, have a well defined accounting procedure and for some, account is a critical part of the business. For example, farmers need to carry out prudent accounting procedures. Many of them manage their farms year to year by taking loans to plant the crops. If it is a good year, a profitable one, then they can pay off their loan; if not, they might have to carry the loan over, and accrue more interest charges.

An important aspect of accounting for owners and executives of a business, is to manage the shifts in assets and liabilities. It is the responsibilities of the owners and managers to keep track of such changes. Making a profit in a business involves a number of factors, not just increasing the amount of cash that flows through a company, but management of other assets as well.

We have some sort of accounting system in our ordinary lives,, not just businesses, although we may not call it accounting per say. Without accounting, peoples' finances can get away from them where they do not know what they have spent, or whether they can anticipate a gain or a loss from their business. Staying on top of accounting, whether it is for a multi-billion dollar business or for a personal checking account is a certain activity on a regular basis if you are smart. Not doing so can mean anything from a bounced check or posting an end to a company's shareholder. Both schemes can be equally devastating.

In summary, accounting can be regarded as information, which is published periodically in business as a profit and loss statement, or an income statement

Article Source: http://www.articlecafe.net

Secured Credit Cards

2008-11-21T20:14:00.000-08:00

Written by ArticleCafe.NET

Credit card owners, the merchants or banks; everybody needs to be sure that every transaction is secure. For merchants, credit card transactions are becoming more secure than any other form of payment because the transaction is made a few minutes after the account verification. The reverse part of this payment modality is the penalty that the merchant can receive when there too many transactions are cancelled. A credit card is secured when there is a deposit in an account that belongs to the cardholder. The deposit must have 100% or even 200% of the total value of the desired credit. This means that if the card owner puts down $2000, he will receive a credit in the range of $1000 - $2000. Many credit card issuers are offering incentives on their secured cards portfolios; this fact leads to a required deposit significantly smaller that the credit limit. The percentage can be 10% of the credit limit. This kind of deposit is held in a savings account. The purpose of this savings account is to recover the cardholder's payments when there is not enough left on the card to pay for a transaction. In this situation, the credit card issuer can recover the purchase’s cost out of this savings deposit. Even if the purpose of the security account is to be able to recover the event of default by cardholder, the savings account will not be credited in the case of one or two payments. The savings deposit is usually used when the account is closed. It is used too if the client is requesting to close it or due to delinquency between 150 and 180 days. In this case, the account will accrue fees and interest and the resulting balance will be much higher than the actual credit. The total debit may exceed the deposit and the owner can have an additional debit. The cardholder knows these conditions from the agreement, which he signs when the account is opened. Those protections are taken when the person who requires a credit card has a poor credit history. The secured credit cards are also used when someone wants to rebuild their credit. Popular credit card logos can be visible on the secured credit card. The services charges and fees for ordinary credit cards are cheaper than the services and fees for secured credit cards. People in special situations, such as people having a history of delinquency on debits or having no credit history, can find the secured credit cards more advantageous than the common ones. The security deposit can even be an even less expensive solution than the cost of the unsecured credit cards. Many advertising spots are presenting the credit cards use as a way to enjoy the wonderful moments of its user's life. These are some famous credit card brands that provided worldwide acceptance and an attractive suite of offers. The credit cards design and logo are also really important. The credit cards inaugurate a new era in the electronic technology of payment. Article Source: http://www.articlecafe.net

Common Pitfalls of Credit Card Use

2008-11-21T20:13:00.000-08:00

Written by ArticleCafe.NET

Credit cards are one of the financial industry's success stories over the last half century, going from strength to strength since the first general purpose card was invented by Joseph P. Williams of the Bank of America in 1958. Since then, the number of cards issued has risen dramatically, and now most adults carry at least one card, with an increasing number of people carrying several. There's no doubt that plastic can be a great convenience, making it easier to shop online, by mail order, and by telephone. They remove the need to carry cash beyond small change, and despite some scare stories they are actually more secure than cash, and offer more guarantees should you receive faulty goods or bad service paid for with the card. However, it's also widely accepted that credit cards have a serious dark side, although you might perhaps not know that by looking at card issuer advertising and marketing materials. Unfortunately, it's all too easy to rack up debts on your card account with little to show for the money you've spent. The interest rates charged on these debts can be among the highest in the credit industry, and real problems up to and including bankruptcy can result from irresponsible use of credit cards. So, accepting that you want the convenience of a card, how can you ensure that you stay out of trouble? The first major culprit in building up debt is impulse spending. Paying with plastic just doesn't feel the same as spending with cold hard cash, at least until your credit card statement arrives. Resist the temptation to 'put it on the plastic', and ask yourself if the purchase you're about to make is one you'll regret when the time comes to actually pay for it. Also avoid using your card to pay bills and other day to day expenses, unless you plan to repay this borrowing when your statement comes. Credit cards are an expensive way of papering over the cracks of a badly thought out budget, and if you really need to borrow then explore other, cheaper ways such as bank overdrafts, credit unions or even personal loans. As well as allowing payment for goods and services, most card accounts now let you withdraw cash from ATMs and pay by check. Be very careful when making use of these services, as the interest rates charged on them are usually higher than the normal purchase rate. There is also normally no interest free period, so even if you repay the borrowing at the end of the month it'll still be a costly exercise. Even by following the above steps to minimize your debt, most people will end up carrying a balance from month to month. This is where possibly the most important advice comes into play: never pay just the minimum amount required. Years ago, the minimum payment was fairly high, at 5% of the outstanding balance. These days, the more common figure is 3% or even 2%. If you only repay this small amount each month, nearly all of your repayment will be swallowed up by interest charges, leaving your debt virtually untouched. This situation can increase the amount of time it takes to clear your debt by literally years, and is hugely expensive in the long run. For this reason you should always try to pay off as much as you can each month, even if it's only a little bit more than the minimum. Lastly, while we're talking about repayments, make sure that you set up an automatic monthly repayment for your card account. It's very easy to overlook making a payment, and the fees charged for late or missed payments are one of the main ways credit card companies make their profits. It's better to keep the money in your pocket than theirs! Article Source: http://www.articlecafe.net

Business Planning: a Strategic Decision

2008-11-21T20:09:00.000-08:00

Written by ArticleCafe.NET
A definition of

an auditor is a person who goes in after the war is lost and bayonets the wounded.

an auditor is a person who goes in after the war is lost and bayonets the wounded. The consultant on the other hand has nothing to lose if all is lost. The C.P.A. often tries to explain the conflict in dollars and cents while somehow ignoring the human elements and the potential. Alas, who does the business owner turn to?

While owners are proficient at their chosen task they often fail at planning, financial and administrative functions. These functions are not the lifeblood of a business; sales are. However, without these functions, even the best sales organizations will eventually fail. The owner who anticipates the needs of a business will be better suited to handle the emergencies that arise. Accordingly, the owner that handles these other tasks in addition to sales will succeed.

Owners are constantly faced with everyday decisions that affect the short and long term growth and profitability of their business. Everyday risks occur and have to be immediately addressed and handled. Long term strategic decisions such as opening a new location or getting into a new business need to be carefully reviewed in regards to financial, manpower, and market conditions. These risks should be taken with excess dollars that can be afforded to be lost while the nest egg always has to be protected at all costs.

As a firm grows, the human resource elements test the talents of the owner as well as his staff. Careful review should be accorded every personnel move so that key management positions are stretched, but not beyond their capacities. Owners should know the boundaries of their financial and people resources and forever push them but being careful so as not to break.

In order to survive, owners need to have all the resources personally or immediately available so that when key decisions need to be made, they can be done quickly and accurately. The owner's focus should be on anticipating the future and how to get there. This necessitates that financial and marketing data should be recorded in detail monthly and analyzed for trends and future viability. The pulse of the business has to be monitored in order to ensure future viability; ignore it and the patient will die.

Tips To Finding A Financial Advisor

2008-11-21T20:07:00.003-08:00

The current national debt in the United States is starting to reach a staggering $9 trillion. Households are borrowing more and more with mortgages and credit cards now accounting for a large proportion of a households debt's. One of the reasons for this increasing debt is that we have come to embrace the consumerism lifestyle where instant gratification has become the norm. Instead of saving up as previous generations once did, the availability of credit has enabled many who are in a position to least afford it, to go out and live a lifestyle far beyond their financial means. So how can we turn things around if we have been caught in this endless cycle of debt. The first thing you need to do is realize that there are professional help available. If you want to turn your financial circumstances around then finding yourself a good financial advisor should be high up in your consideration. With the abundance of financial advisors out there how can you know which one is right for you.

The first thing you should do when looking for a financial advisor is to ask family and friends for recommendations. The same way you would get a recommendation for a doctor or accountant. Try to ask friends and family who seem to have their financial lives on track. Otherwise if you don't have any quality recommendations to work from then call up the financial planning association and ask for a few recommendations.

Then schedule a meeting with the financial advisor. With many firms the first meeting is free and its an opportunity for you and the advisor to meet each other and get to know a little bit about each other. Don't be afraid to ask lots of questions on this first meeting. There are no silly questions and you can be sure that no matter what your question is that they have more likely than not heard it before and would be happy to answer it for you. You want to know how well you get along with this person and if you want to have them managing your finances.

Find out about their background, experience and credentials.

Find out about their background, experience and credentials. You want to know if the advisor has the necessary background to be able to advise you suitably. Know who their general clients are. If you find that the first specializes in doctors and you're a public servant then they may not be as suitable for you as managing high net worth individuals like doctors is very different to managing public servants. So you want to know who their typical clients are.

Ask about their fee structure and how commissions are charged. Find out if they are affiliated to any particular products and what commissions they are provided for selling these products. Some financial advisors are owned by banking institutions or the like and therefore may push their parent companies managed funds ahead of more suitable funds for your situation.

Once you've decided with your financial advisor the first step they will likely take is to find out your current financial situation and design a financial plan for you to follow and implement.

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