In March, the Public Company Accounting Oversight Board held hearings about whether to require public companies to change — or “rotate” — their external auditor periodically. Meanwhile, the European Union is proposing to require mandatory rotation every six or 12 years, and the lower house of the Dutch Parliament recently voted to require auditor rotation every eight years.
Author Archives: Bob Pozen
Advisor One: The 2012 IA 25 Extended Profile
Reducing the Tax Shield of Debt
As I wrote last week, there is broad bipartisan agreement that Congress must reduce the statutory tax rate on C corporations. However, politicians won’t find easy answers when it comes to paying for meaningful rate reduction. Ending subsidies to oil and gas companies or repealing the accelerated depreciation for corporate jets won’t make a real dent in the budget. Meanwhile, the largest tax expenditures in the corporate tax code effectively encourage capital investment, or Research & Development, just to name a few. Many of these breaks serve a reasonable economic purpose, and sizeable constituencies will fight their repeal.
Paying for Corporate Tax Reform
According to yesterday’s FT, corporate tax reform in the United States has been put on the back burner. But that hasn’t stopped experts from proposing new options for reforming the broken code. Recently, my colleagues at Brookings released “A Dozen Economic Facts about Tax Reform,” (pdf) which included several illustrative options for corporate tax reform. And yesterday, Laura Tyson, the head of the Council of Economic Advisers for former President Clinton, outlined her proposal for a revenue-neutral reduction in the corporate tax rate.
Lessons from the Social Security and Medicare Trustees’ Reports
The Social Security Trustees released their latest report yesterday, which showed that the finances of the system are deteriorating. In particular, The Trustees moved up the date when Social Security will become insolvent by three years, from 2036 to 2033. In 2033, absent any reform, the Social Security benefits of all recipients will be reduced across the board by 25%.
Medicare Spending Will Be Exhausted in 2024?
US hedge funds rules relaxed by accident [FT.com]
Co-authored with Theresa Hamacher
Earlier this month, President Obama signed into law the Jobs Act, short for Jumpstart Our Business Startups. This Act won bipartisan support because it purports to create jobs by making it easier for small businesses to raise capital. However, the Jobs Act will also significantly loosen the regulatory requirements on hedge funds – whether or not this was the intent of Congress.
An Intermediate Approach to the Auditor Rotation Issue [Huffington Post]
In March the Public Company Accounting Oversight Board (PCAOB) held hearings about whether to require public companies to change (or “rotate”) their external auditor periodically. Similarly, the European Union has proposed mandatory auditor rotation every six or 12 years.