Corporate Governance Best Practices 10 Years After SOX

BY KEN TYSIAC

Journal of Accountancy

You could hardly go to a Washington hearing related to an accounting or auditing issue this spring without someone singing the praises of the Sarbanes-Oxley Act of 2002 (SOX). At a House subcommittee meeting on accounting and auditing oversight, House Financial Services Committee Chairman Spencer Bachus, R-Ala., said SOX has been successful in preventing some of the challenges it was created to address. At the PCAOB hearings on auditor independence, objectivity, and professional skepticism, experts including audit committee members, audit firm chairmen, and educators talked about the positive effects SOX has had in strengthening business oversight.

"There are a whole host of reforms that Sarbanes-Oxley has put into play that I think have definitely improved audit quality," Center for Audit Quality Executive Director Cindy Fornelli said in a telephone interview.

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Is a Reverse Mortgage Right for You?

BY NICHOLAS C. LYNCH, PH.D. AND CHARLES R. PRYOR, PH.D.
Journal of Accountancy

The recent recession left no age group untouched, but baby boomers were hit especially hard. High unemployment and an uncertain stock market have caused older Americans to realize that their retirement funds might not support their desired lifestyle. Many seniors are facing foreclosure, while others are unable to meet their basic needs, such as paying medical, energy, and other daily living expenses. A reverse mortgage can enable homeowners who are at least 62 years old and have sufficient equity in their homes to receive enough cash to live more comfortably throughout retirement.

A reverse mortgage is a loan against home equity that requires no repayment until the home is sold or the last surviving borrower dies or no longer occupies it as a principal residence. Read more

Penn State Hammered by NCAA - NYT

By PETE THAMEL

INDIANAPOLIS — The N.C.A.A. announced significant penalties against Penn State and its football program Monday, including a $60 million fine and a four-year postseason ban, in the wake of the child sexual abuse scandal involving the former assistant coach Jerry Sandusky.
The N.C.A.A. stopped short of shutting down Penn State’s program, but officials insisted that the breadth and significance of the penalties were nearly as debilitating. It is expected to be almost a decade before Penn State will be in a position to attempt to regain its place as one of the sport’s elite programs.

The punishment also included the loss of 10 scholarships per year for the next four years, with a limit of 65 total scholarship players on the roster, as opposed to the typical 85, by the 2014 season. The university must also vacate all of its victories from 1998 to 2011, meaning that Joe Paterno is no longer the major-college career leader in football wins. Read more

Spanish Bond Yields Soar - NYT

MADRID — Spain’s borrowing costs rose to record levels for a third consecutive trading day on Monday on concerns that a deepening recession and the financing problems of its regions would force the government to seek a full-fledged bailout.
Market regulators in Spain and Italy announced bans on stock short-selling, as Spanish turmoil and fresh concerns about Greece’s status in the euro zone sent European stocks down broadly and sharply.

The yield, or interest rate, on 10-year Spanish government bonds was at 7.4 percent in late afternoon trading on Monday, having breached 7 percent last Thursday — a level that many analysts fear could eventually shut Spain out of public markets and force it to seek a Greek-style bailout. Read More

Courts Extend Legal Protection to Small Firms Whose Accounts Were Hacked

By JOE PALAZZOLO

Small-business owners whose bank accounts have been plundered by cyberthieves until recently had no one to blame but themselves. 

But two recent court rulings are giving those business owners new hope that banks which don't cater to their specific security needs may be held liable for funds stolen by hackers who increasingly have focused on attacking small businesses.

Banks typically are responsible for losses when personal accounts are hacked. But state laws uniformly place the burden on commercial clients to show that banks didn't do enough to protect their money. Read more

The Latest News on Tax Fairness - WSJ

By ARI FLEISCHER

If fairness in paying taxes means the amount you pay is based on the amount you make, then the only group in America paying at least a "fair share" is the top 20%—people who make more than $74,000. For everyone else, the tax code is a bargain.

You wouldn't know this from President Obama's rhetoric, but our tax system, according to a recent report by the Congressional Budget Office (CBO), is incredibly progressive. Consider: The top 1% of income earners pay an average federal tax rate of 28.9%. (See the nearby table.) The average federal tax rate on the top 20% is 23.2%. The 20% of taxpayers earning between $50,100 and $73,999 pay an average 15.1%, and so on down the line. The CBO report includes payroll as well as income taxes paid. Read more

Hunting for higher bank yields? Read on...

By RUTH SIMON

Where's the yield?

That is the question frustrated savers are asking these days, as interest rates hit record lows with depressing regularity.

People who need a pool of cash for emergencies or looming expenses usually look to keep it in banks or credit unions, where deposits are protected by the Federal Deposit Insurance Corp. or the National Credit Union Administration. Yet the yields on certificates of deposit, savings accounts and money-market accounts, on average, are the lowest they have been in at least 50 years, according to research firm Market Rates Insight. Read More