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November 25, 2022

Accounting News Roundup: Fancy Office Spaces and Accounting Scam Nicknames | 05.02.17

accounting-offices

Nice office. Too bad they’re all dying inside.

Office space

By the sounds of this EY press release,  you’d think that all you need to build a successful business is a fresh coat of paint and the inspiration of a tacky, corporate bistro:

The firm’s new office features approximately 14,500 square feet of office space and brand new construction including an innovative open layout, more collaboration rooms, tech-enhanced work spaces, a coffee hub with café-style tables, and panoramic views of the Salt Lake City valley and downtown area.

And from this article on Grant Thornton, a high concentration of slightly used buzzwords:

“We borrowed a phrase from the CEO of Zappos,” [Jamie] Fowler said, referring to Tony Hsieh. “He likes to set up the work spaces so that his people have ‘positive collisions’ throughout the day. We work hard to facilitate those positive collisions and they are always on behalf of our clients and the marketplace.”

What if those collisions suck the life out of you? Is there enough coffee and USB ports in the place to regenerate the accountants? You’ll feel pretty silly if you spend all this money on fancy decor only to learn later that people still think it’s a crappy place to work.

SEC enforcement

MagnaChip, a South Korean-based semiconductor manufacturer and its former CFO, Margaret Sakai, settled charges with the SEC yesterday over a “panoply of accounting tricks to artificially meet its financial targets.” I sincerely hope “panoply of accounting tricks” is required language in all SEC press releases for accounting actions going forward.

In any case, the order contains all the lovely details of the tricks Sakai pulled, including this beauty:

Finance employees in Korea, under Sakai’s responsibility, also engaged in a series of improper transactions to make it appear as if MagnaChip had collected approximately $16 million of uncollected receivables from distributors, when it had not. As part of this pattern of conduct, MagnaChip repurchased its own, unsold products from Korea-based distributors and disguised the transactions as purchases from certain vendors based in Korea.  MagnaChip provided cash to the vendors, which pretended to sell equipment and related supplies to MagnaChip.  In actuality, the vendors used the money to buy MagnaChip goods from distributors, which in turn used that money to pay outstanding MagnaChip receivables. The payments were incorrectly recorded as being for outsourcing supplies and capital expenditures. Certain internal emails and documents that Sakai received referred to these transactions as “D-Project.” These improper transactions violated GAAP, which required MagnaChip to reverse the previously booked revenue associated with the cash payments it had made to those customers

If you ever find yourself giving your elaborate accounting scheme a nickname, maybe take a few minutes to examine the motives.

Accountants behaving badly

An accountant accused of embezzling $1.1 million from her employer from 2005-2016 made an unusual request during her arraignment hearing:

Elizabeth Edith Shaw, 69, entered no plea to 12 felony charges of grand theft at her second arraignment Monday. Instead, over an objection from the District Attorney’s Office, a judge accepted a request from Shaw’s attorney, Jay Peterson, to allow her to leave jail temporarily in order to sell assets.

I guess it makes sense. You can’t really hold a massive Craigslist auction of your allegedly hot assets from a prison cell.

Brought to you by Accountingfly

Beech Valley Solutions has an IPO project in Houston that’s paying $45-$70 an hour

Previously, on Going Concern…

I wrote about how you can work on your writing.

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