FDIC win against PwC could finally force auditors to look for fraud [MarketWatch]
Francine McKenna reports that representatives from PwC have given contradictory testimony in separate civil trials in the past year about the firm’s responsibility to design its audits to detect fraud. In the Colonial case where Judge Barbara Jacobs Rothstein ruled that PwC failed to design its tests to detect fraud, the damages that the firm will be ordered to pay will be public, a rarity since details of many past settlements are private. One defense attorney is quoted, “Any [penalty] with a ‘B’ in it is going to be an extraordinary burden to any firm. Whether it is enough to tip a firm into non-existence is one thing, but it certainly would be enough to change the cost of the audits going forward.”
Bonus reading: At heart of FDIC’s win v. PwC, an unsettled theory
The New ‘Qualified Business Income Deduction’ Varies Based On Your Business Type – Or Does It? [Forbes]
Tony Nitti continues his yeoman’s work on breaking down the Tax Cuts and Jobs Act, particularly the pass-through deduction under Section 199A. He lays out various scenarios of the same business with different entity types to see if results differ. Nitti writes, “If we are to interpret Section 199A based on its most obvious reading, the new law will provide anomalous results, rewarding some business types over the other at one level of income, and then reversing those results at a different income level.”
Deadlines Loom for Reporting Tax Act’s Impact [CFO]
Yes, the SEC guidance says your company can admit to not having enough information to explain the impact, but a Deloitte partner told CFO, “[Y]ou can’t go pencils down.”
Steinhoff CFO steps down amid probe into accounting irregularities [FT]
Ben la Grange isn’t totally peacing out. He will “focus on the preservation and procurement of liquidity for the group, as well as the ‘finalisation of the company’s audited 2017 consolidated financial statements.'”
Former accountant sentenced for using Oklahoma Beef Council as her ‘personal cash cow’ [TulsaWorld]
File to Accountants Behaving Badly: It’s easier than raising venture capital. If you recall, Melissa Day Morton wrote about 790 fraudulent checks to herself over seven years “to finance a children’s clothing boutique.” All told, she embezzled $2.68 million, and that earned her 57 months in prison.
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Previously, on Going Concern…
Jason Bramwell talked to six controllers about their big priorities for 2018.
In Open Items, a user wonders about someone at a Big 4 firm “basically contract[ing] off all their work to a freelancer.”
In other news:
- 2017 Set a Record for Losses From Natural Disasters
- Uber Co-Founder Travis Kalanick Plans to Sell 29% of Stake
- World’s biggest passenger jet forced to land at small New York airport thanks to blizzard
- A Space Station Is Expected to Fall Out of the Sky. You’ll Probably Be Fine.
- All the rude things people have said about Oregon since the new gas law went into effect
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