You Want Jobs with That Recovery?

Employers expect to strengthen hiring, says a survey. Also: Officials call for Grasso's resignation from NYSE; ''Be cautious'' about tax-shelter planning, says PCAOB member; Ernst and Young, Catalina don't even agree to disagree; and more.

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According to latest quarterly employment outlook from staffing company Manpower Inc., U.S. employers said they expect to strengthen their hiring activity in the fourth quarter of 2003.

Of the 16,000 U.S. employers surveyed, 22 percent said they plan to increase hiring activity for the fourth quarter, while 11 percent expect a decrease in employment opportunities. The rest foresee no change or are uncertain.

Allowing for seasonal variations, the survey results for the fourth quarter mark the first increase in job prospects since the first quarter of 2003, according to Manpower. The company, based in Glendale, Wisconsin, started the survey more than 40 years ago.

“Although the survey results are somewhat weaker than the fourth quarter of 2002, employers report a consistent level of job growth across the majority of industry sectors and all four regions of the U.S.,” said chairman and CEO Jeffrey A. Joerres.

The survey results echo the sentiments of a report released Monday by the National Association for Business Economics. That report predicted that the U.S. economy will start to rebound as businesses begin rehiring workers in the fourth quarter, according to the Associated Press.

In the Manpower survey, employers in the South reported the most-optimistic job prospects for the fourth quarter, reported the AP. Manufacturers continue to struggle with hiring, while the finance, insurance, and real estate sector is the most optimistic, the survey found.

Officials Call for Grasso’s Resignation from NYSE

New York Comptroller Alan Hevesi issued a statement Tuesday that highly criticized the controversial pay package of New York Stock Exchange chairmen Richard Grasso, according to Reuters, and called for Grasso’s resignation. Earlier in the day, California Treasurer Phil Angelides, the head of the California Public Employees’ Retirement System (Calpers), and the head of the California State Teachers’ Retirement System sent an open letter to Grasso asking that he step down.

Grasso, who has worked for the NYSE for his whole career — 35 years — became the chairman of the exchange in 1995.

On August 27 the exchange disclosed that Grasso was compensated with a $140 million pay package. “The enormous amount of his remuneration is inappropriate for a regulator,” Hevesi said in a statement, reported Reuters. “It is also very troubling that the exchange did not publicly disclose his extremely complicated contract until it was forced to.”

”Be Cautious” about Tax-Shelter Planning, Says PCAOB Member

Tax-shelter planning is apparently in the crosshairs of the Public Company Accounting Oversight Board.

“This is an area in which auditors and audit committees should be cautious,” PCAOB member Daniel Goelzer said in a speech to mutual fund accountants earlier this week, according to Reuters.

“I have no problem with auditors assisting their clients with traditional tax compliance and routine planning,” he reportedly said. Goelzer added, however, “Tax services that go beyond that — especially the marketing to audit clients of novel, tax-driven, financial products — raise serious issues.”

Goelzer conceded that the biggest obstacle to writing a rule prohibiting this kind of activity seemed to be distinguishing tax shelters from more-conventional tax-planning advice. “However, given the well-publicized congressional and public concern in this area, the board may have to try its hand at solving the problem,” he said.

Keep in mind that when Congress created the PCAOB, it did not bar audit firms from selling some tax-consulting services, though it did restrict them from selling some non-audit services, such as appraisals and legal advice, to their audit clients. Earlier this year, Reuters points out, the SEC said it was up to companies’ audit committees to monitor other services, such as tax-shelter planning.

In another matter, Goelzer said that 440 audit firms had filed registration applications with the PCAOB as of September 9. That was half the number of firms that audited public companies last year.

The board has ordered all U.S. firms that audit U.S.-listed companies to register with it by October 22.

Ernst and Young, Catalina Don’t Even Agree to Disagree

Catalina Marketing Corp. filed an amended statement noting that it is in a dispute with Ernst & Young over whether they are in disagreement over an accounting issue related to the exclusivity provision of some of Catalina’s contracts with customers.

E&Y resigned from the account last month.

According to the Catalina statement, Ernst & Young states that it believes a “disagreement” existed. In Catalina’s view, however, no “disagreement” existed between the company and E&Y regarding accounting for customer contracts with exclusivity provisions, or regarding any other matter.

In fact, a plan for resolving pending issues was scheduled to be discussed the day that E&Y tendered its resignation, the company added.

“We take the issues surrounding our audit very seriously and are working to fully resolve those issues as soon as possible,” said Daniel D. Granger, Catalina chairman and chief executive officer, in a regulatory filing. “To that end we remain focused on retaining a new audit firm, and will announce retention of an auditor as soon as possible.”

“The issues raised by E&Y relate to discussions regarding accounting, and not the health of the business itself,” Granger added. “We reemphasize that none of the accounting issues affect our aggregate cash flow. Our fundamental business and financial position remain strong.”

Meanwhile, Catalina said Philip B. Livingston, chief financial officer of World Wrestling Entertainment Inc., has been elected to the company’s board of directors, where he will serve on the audit committee.

Prior to joining WWE in March of this year, Livingston was president and chief executive officer of Financial Executives International. At FEI, according to a Catalina press release, Livingston he had significant participation in the formulation and passage of the Sarbanes-Oxley Act and directly authored sections 406 and 407 of that law regarding ethical codes of conduct for corporate financial officers and audit committee financial experts.

Before joining FEI in 1998, Livingston was employed by Catalina Marketing, serving as the company’s senior vice president and chief financial officer until November 1998.

Short Takes

  • Theodore Sihpol, a broker for wealthy clients who Bank of America let go last week, was charged on Tuesday with felony counts of larceny and securities fraud by New York Attorney General Eliot Spitzer, reported Reuters.

Sihpol, who also faces charges filed by the Securities and Exchange Commission, according to the wire service, is the first person to face criminal prosecution in the sweeping investigation into mutual fund trading. The joint action reflects a recent pledge by SEC Chairman William Donaldson that the SEC would work jointly with state regulators to enforce securities laws.

  • Incidental, unscheduled, illness-related employee absences of one to five days account for 30 percent to 50 percent of all lost work days, according to a recent survey by the Disability Management Employer Coalition (DMEC). Only 51 percent of the employers that were surveyed said they track incidental absence, 54 percent are unaware of the cost that incidental absence inflicts on their company’s bottom line, and 64 percent say they lack the tools to address incidental absence at all.
  • In a survey of more than 600 business professionals conducted by Insight Express and released by Microsoft Corp.’s subsidiary PlaceWare Inc., 72 percent said they felt that business travel is at least as stressful as a visit to the dentist. Another 66 percent indicated that business travel is at least as stressful as giving a presentation, while 64 percent compared it unfavorably to sitting in rush-hour traffic.

Not surprisingly — PlaceWare does offer an online service called Office Live Meeting — the survey found that business travel adversely affects personal lives. Nearly 40 percent felt that “the stress of business travel has a negative impact” on their family, while 57 percent said that business travel hampers their ability to maintain their diet or manage their weight, or that it interferes with exercise and personal hobbies.

Alas, 79 percent of the respondents conceded that there’s no substitute for face-to-face meetings.

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