Bill Gates Has Less Than Flattering Things to Say About Government Accounting

Posted on by Caleb Newquist

“[R]eally, when you get down to it, the guys at Enron never would have done this. This is so blatant, so extreme,” Gates said of state governments’ accounting practices generally. “Is anyone paying attention to some of the things these guys do? They borrow money — they’re not supposed to, but they figure out a way — they make you pay more in withholding to help their cashflow out, they sell off the assets, they defer the payments, they sell off the revenues from tobacco.” [HuffPo]

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AICPA Announces International CPA Exam Locations

Have you, like many foreigners, been tripping about getting into the US to take the CPA exam, battling with strict post 9/11 Visa rules and other assorted red tape? Trip no more, the CPA exam is about to go international. This is huge because the exam is also about to get an international makeover (like IFRS testing in FAR and international audit standards in AUD) but that couldn’t at all be coincidentally related to this announcement from the AICPA:

The Uniform CPA Examination will be offered outside the 55 U.S. jurisdictions for the first time in its history in 2011. The American Institute of Certified Public Accountants, National Association of State Boards of Accountancy and Prometric – the three organizations that jointly offer the CPA Examination in the United States – reached an agreement to administer the exam in international locations.

The CPA Examination next year will be offered in Japan, Bahrain, Kuwait, Lebanon and the United Arab Emirates.

The international exam will be the same as the one offered in the U.S., using the same computerized format and administered in English. As in the U.S., the purpose of taking the examination will be to qualify for licensure as a CPA through U.S. state boards of accountancy.

Security has been one issue for the AICPA in deciding where to offer the CPA exam even though it will continue to administer the exam through Prometric. International testing will be subject to the same state board or jurisdiction rules that determine eligibility for CPA exam candidates since there is no Dubai Board of Accountancy. Just as now, potential international candidates will have to meet the requirements of whichever jurisdiction they choose to apply. Which I guess makes all the residency-requirement states out of the running to be a part of this epic new spin on the computerized CPA exam?

Some have mentioned on earlier bitch sessions about the AICPA that their motivation is a monetary one. Expanding membership, for example, brings in revenue. Increasing the passing CPA exam score (thereby causing more failures and, one would imagine, more subsequent $$$ retakes after) is another example though that’s just a rumor last I heard. So if one were inclined to postulate as to the motive behind this move and approach it skeptically, you might come to the conclusion that this could equal a pretty significant payday for the AICPA as well as NASBA, Prometric, ChoicePoint and all the CPA review courses who make a living off of this exam. I’m not against it.

I guess we will find out what significance the U.S. CPA exam still holds for the rest of the world. Even if we end up looking pretty bad when international candidates do way better on the AICPA’s new international exam content in 2011.

Social Media Poses Enough of a Risk to Overstock.com That They Disclosed It in Their 10-K

It’s been quite some time since we picked up the Overstock beat but Gary Weiss picked up something in the company’s recently filed 10-K yesterday that makes us wonder if the company was shooting for irony or if they’ve given up on blaming the “shorts” turning instead to “social media,” which, similar to the anti-short campaign would allow them to encompass a number of villains without naming anyone directly.


From “Note 1A: Risk Factors” section of the company’s notes to the financial statements:

There has been a marked increase in use of social media platforms and similar devices, including weblogs (blogs), social media websites, and other forms of Internet-based communications which allow individuals access to a broad audience of consumers and other interested persons. Consumers value readily available information concerning retailers, manufacturers, and their goods and services and often act on such information without further investigation, authentication and without regard to its accuracy. The availability of information on social media platforms and devices is virtually immediate as is its impact. Social media platforms and devices immediately publish the content their subscribers and participants post, often without filters or checks on accuracy of the content posted. The opportunity for dissemination of information, including inaccurate information, is seemingly limitless and readily available. Information concerning the Company may be posted on such platforms and devices at any time. Information posted may be adverse to our interests, it may be inaccurate, and may harm our performance, prospects or business. The harm may be immediate without affording us an opportunity for redress or correction. Such platforms also could be used for dissemination of trade secret information, compromise of valuable company assets all of which could harm our business, prospects, financial condition and results of operations.

As Gary points out, this disclosure is especially rich since Patrick Byrne had a goon using Facebook to stalk critics like Gary, Sam Antar, Barry Ritholtz among others which of course was disseminated in various social media outlets. Newsflash to Overstock’s risk managers: when people are being pursued by creeps on the Internet, they complain about to EVERYONE THEY KNOW.

One could easily argue that Segway accidents at the office pose just as great of a risk to key employees – and thus a disclosable item – but perhaps that’s covered under their D&O policy? It still seems plausible that disclosure would still be warranted. Additionally, the risk of a good snowfall might cause some of Salt Lake City-based company’s employees to call in sick to enjoy the fresh pow could have resulted in a late filing which is certainly something the SEC would want to know. We know KPMG has a crack squad of auditors all over this engagement but it’s conceivable that they overlooked some other risks. If you’ve got ideas on what those might be, let us know below.