the Dots? Count Me In
- I enjoyed Lou Grumet’s Publisher’s Column “Connecting
the Dots: The Estate Tax and Social Security” (October 2007).
What a wonderful idea! Alas, what are the chances in this era of
hostile politics for such a proposal to even begin to see the light
of day? I must admit that my own prejudices will leap to the fore
as I rail against politicians who demonize the estate tax, preferring
to use the “death tax” sobriquet that seems to find
a sympathetic audience, primarily among those who will never be
either the direct or indirect subject of that levy.
any event, if you feel that grassroots supporters might be helpful
in getting some air under your proposal, count me in and let me
know what I can do.
San Rafael, Calif.
Security: A Well-Trod Path
for a thoughtful Publisher’s Column [“Connecting the
Dots: The Estate Tax and Social Security” (October 2007)].
Please consider your technical solution as merely addressing the
“symptoms” of the Social Security shortfall.
we all trod this path all too often.
of the Social Security shortfall is rampant government fiscal
irresponsibility fueled by self-interest, bureaucracy, and general
disregard for the population and future (i.e., the period of time
beyond the next election) of the country. Until we have term limits
or some other limit on government whimsy, we must live with the
egos and chicanery of our elected officials—“our government.”
you to continue presenting CPAs’ technical solutions to
our nation’s fiscal problems. But please, in future columns,
emphasize the causes of fiscal problems in concert with the solutions.
Maybe if enough of us focus on the causes of our nation’s
fiscal problems, we may garner the will to institute systemic
solutions rather than technical fixes.
A Bill of Goods
to Editor-in-Chief Mary-Jo Kranacher’s November 2007 editorial,
“The SEC: Still the Investor’s Advocate,” we
have to rethink the efficacy of the Sarbanes-Oxley Act (SOX) before
we push it onto small public companies. Here is an excerpt from
Citigroup’s 2006 Form 10-K, dated February 23, 2007:
management assessed the effectiveness of the Company’s
internal control over financial reporting as of December 31,
2006 based on the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal
Control-Integrated Framework. Based on this assessment, management
believes that, as of December 31, 2006, the Company’s
internal control over financial reporting is effective.
assessment of the effectiveness of the Company’s internal
control over financial reporting as of December 31, 2006 has
been audited by KPMG LLP, the Company’s independent registered
public accounting firm … which expressed unqualified opinions
on management’s assessment and on the effectiveness of
the Company’s internal control over financial reporting
as of December 31, 2006.
investing public received these assurances about 11 months ago.
Nevertheless, lurking beneath the figures in the Form 10-K were
huge losses and billions of off–balance sheet exposure that
sooner or later were going to be disclosed. What good is SOX section
404 if the assurances about internal controls over financial reporting
are as ineffective as they appear to be in the case of Citigroup?
Add Merrill Lynch to the list, as just a week before the Citigroup
write-offs, then-CEO Stan O’Neal announced similar billion-dollar
It is a human
tendency to believe all we need is just another law or set of
rules to make things right. I’m sorry, but the investing
public has been sold the proverbial “bill of goods”
with SOX. All it has done is drive up the cost of doing business
without much benefit to the investing public.
V. Bencivenga, CPA