TheCorporateCounsel.net

Not many companies have disclosed the lost corporate tax deductions caused by an executive’s personal use of aircraft, which often can result in some pretty sizable numbers. In this 30-minute podcast, Terry Kelley, Chairman & CEO of Gold Jets, provides some insight into issues related to personal use of corporate aircraft (see this 91Plus brochure and this letter that notes there may be disclosure issues relating to lost tax deductions), including:

– Can you provide a brief overview of the tax issues facing companies when they allow executives to use the corporate aircraft for personal use?
– The new disclosure rules say that you have to present the “incremental cost” of providing a benefit to the executive. I know that you have reviewed numerous proxies – what have you seen?
– What is 91Plus and how does it help companies and their executives?

Climate Change: The Time to Learn How It Impacts Your Practice is Now!

I really encourage you to catch at least one panel from next Tuesday’s complimentary webconference on TacklingGlobalWarming.com entitled: “Tackling Global Warming: Challenges for Boards and their Advisors.” There are quite a few disclosure, due diligence and other fiduciary duty issues raised by climate change – and not many corporate & securities practitioners are very familiar with them. If you can’t catch this program next Tuesday, each panel will be archived indefinitely (and still available for free).

To get a sense of the issues raised by climate change, check out a snapshot of how D&O insurance comes into play, as written up in the The D&O Diary Blog (and here is a follow-on blog). Note that next Tuesday’s Conference includes a panel on “Why You Need to Re-Examine Your D&O Insurance Policy.”

Another View: Why Have Audit Fees Risen So Much?

One of the primary reasons there is a battle over how much to reform the SEC’s and PCAOB’s internal controls rules is the rapid rise in audit fees. I was taken with last Friday’s opinion column by the President and CEO of SVB Financial Group, Kenneth Wilcox, in last Friday’s WSJ.

In his op-ed, Mr. Wilcox wondered: “My company is paying accountants five times more than it did three years ago. Why?” His response: “It turns out that only a diminishing portion of this increase is due to Sarbox.” Other factors driving the cost increase, he said, included “the significantly increased amount of time that audits are taking, and the much larger number of people that they involve.” FEI’s “Financial Reporting” Blog has commented on this op-ed recently.

On Tuesday, SEC Chair Cox testified that AS #5 will reduce internal controls compliance costs for smaller companies; PCAOB Chair Olson testified similarly. I haven’t yet been convinced that costs will drop significantly, as it seems to me that one cause of the high cost results from the dictates of Auditing Standard No. 3 regarding documentation and work papers, which has not been revised. I’m not sure why this standard wasn’t tweaked when AS #2 was replaced with AS #5 as they seem to go hand-in-hand. Then again, I’m not an accountant, so what do I know…

Learn more about what questions that you – and your audit committee – should be asking about the SEC’s and PCAOB’s new internal controls guidance in this upcoming webcast: “Internal Controls Update: AS #5, Management Reports and All that Jazz,” featuring John Huber, Linda Griggs and an expert from a Big Four firm.

– Broc Romanek