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Accounting News Roundup: Tapping the Poor’s Backdoor; IRS Targets Questionable Preparers; Raj’s Record Fine | 11.09.11

Accounting rules hurt public pension reform [SF Examiner]
The answer lies with the professionals who oversee public pension accounting, an unelected class of rule makers and contractors holding tremendous power. Pension number-crunching by the state funds has long been thought by financial economists to be illegitimate.
This begins with the fact that they are allowed to value their liabilities using projected investment returns rather than an interest rate derived from the real-world risk characteristics of the debt.
This policy, set by the Government Accounting Standards Board, makes pension deficits appear dramatically smaller than they really are.

Shulman Says IRS Will Focus on ‘High Risk’ Return Preparers [Business Week]
Internal Revenue Service Commissioner Douglas Shulman said the agency will place greater focus on return preparers it identifies as “high risk” in the upcoming tax filing system. “Beginning soon, the IRS will send letters to tax-return preparers who have been identified as high risk,” Shulman said today at a conference in Washington sponsored by the American Institute of Certified Public Accountants. “The letters are intended to bring to these return preparers’ attention that we’ve noticed some questionable traits” on some of their returns.

A backdoor tax on the poor [The Hill]
The IRS wants poor people to pay higher taxes. And it has figured out a way to do so without a rate increase. It is called a return-free system. Instead of completing your 1040 form yourself, the IRS would fill it out for you. All you have to do is cut a check. Congress is currently considering a bill to create such a system: H.R. 1069, sponsored by Rep. Jim Cooper (D-Tenn.).

CEOs say they are confident: PwC poll [China Daily]
More than half the CEOs in the Asia-Pacific region are “very confident” of increased revenue for their companies over the next three to five years, despite the ongoing economic turbulence in Europe and the United States, according to a survey from the international accountants, PricewaterhouseCoopers (PwC).

FASB Seeks Comments on Proposal to Defer Changes to Presentation of Reclassification of Other Comprehensive Income on Financial Statements [MarketWatch]
So, you know, get those comments ready if you’re all about the OCI

Rajaratnam Ordered in SEC Case to Pay Record $92.8 Million Fine [Business Week]
Rumor is Raj is looking for a new insider trading scheme to fund the fine, any takers?

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