AICPA Tells Congress to Keep Oversight of Investment Advisers with SEC
As the AICPA gears up for our 125th Anniversary next week, here’s a wrap up of a few interesting accounting topics recently making the news. You can follow @AICPANews on Twitter to stay on top of all the latest official AICPA news as well as articles impacting the profession.
CFO.com wrote that the AICPA raised concerns over the Investment Adviser Oversight Act of 2012 and urged Congress to keep oversight of investment advisers with the SEC. Introduced in the House of Representatives on April 25, the bill would transfer oversight of investment advisers from the SEC to a self-regulatory organization."Many of our members work for a firm that is registered as, or affiliated with, a registered investment adviser," Barry Melancon, CPA, CGMA, AICPA president and CEO, said in a statement. The AICPA's stance is that the system proposed under the bill would cost advisers much more in fees than current SEC oversight would.
On January 19, 2011, the SEC issued a staff report that found the current SEC-registered investment-adviser examination program faces hefty capacity and funding challenges. Three options were proposed to offset these challenges. One would be to impose "user fees" on SEC-registered investment advisers to fund oversight. A second would authorize one or more SROs to examine investment advisers, with oversight from the SEC. A third choice would be to authorize the Financial Industry Regulatory Authority, a leading broker-dealer SRO, to examine dual registrants for compliance with the Investment Advisers Act of 1940. All three options require congressional action. "We believe that the SEC's core mission to protect investors requires adequate regulation of the investment advisory profession. The SEC remains the proper regulatory body to protect the public's best interest." Melancon said, "Providing the SEC with resources to properly enforce their rules is the best solution for investors and the public."
Deanna White covered the Accounting Doctoral Scholars program in a recent AccountingWEB article, which noted that the program was launched in 2008, with a goal of creating 120 new accounting PhDs by 2016. The initial Accounting Doctoral Scholars program is designed to have an eight-year life span - four years to select candidates and four years for their development as PhDs. "Universities have a limit on how many PhD candidates they can accept. Before, they may have only been able to take two candidates, but now they can take three because the ADS Program will fund the third," Steve Matzke, Senior Manager - Accounting Doctoral Scholars Program, said. The program will fund each candidate's education at a cost of a cost of $120,000 ($30,000 per year) over the course of four years. If a fifth year is required, the college or university will cover that cost. "The enrollments in accounting programs are up to historic levels, and it's these programs that will provide talent to the profession. The profession needs top talent and it needs top educators to prepare that talent," Matzke said.
Mike Cohn of Accounting Today wrote an article on the AICPA letter to the leaders of the House Ways and Means Committee and the Senate Finance Committee. The letter asked them to amend the Tax Code to allow estates and nongrantor trusts to fully deduct the cost of complying with the fiduciary duties of administering estates and trusts. The AICPA wants to simplify the law by amending Section 67(e). “Congress enacted section 67(a) in 1986 to limit deductions for miscellaneous itemized deductions to those in excess of 2 percent of adjusted gross income (AGI),” wrote AICPA Tax Executive Committee chair Patricia A. Thompson, in the letter. “Congress’s purpose was to reduce recordkeeping for numerous small expenditures and eliminate deductions for many, essentially personal expenditures claimed in error. Because estates and nongrantor trusts are taxed in the same manner as individuals, Congress provided an exception to the 2-percent floor in section 67(e) for fiduciary administrative costs that would not have been incurred “if the property were not held in such trust or estate.” The Institute said it believes the proposed amendment would simplify the statute and modernize it for the prudent investor rule. The amended law would also make it easier to administer, and provide a consistent definition of AGI for estates and nongrantor trusts throughout the Tax Code.