Prolonged disputes
Late on Friday, the news broke that two former AIG executives, including the company’s founder Hank Greenberg, settled a 12-year accounting fraud case with the New York Attorney General. The New York Times report gives the distinct impression that both sides were equally satisfied with result but also reveling in their spite for each other:
In a statement on Friday, [NYAG Eric] Schneiderman said, “Today’s agreement settles the indisputable fact that Mr. Greenberg has denied for 12 years: that Mr. Greenberg orchestrated two transactions that fundamentally misrepresented A.I.G.’s finances.”
In his statement, Mr. Greenberg said he “initiated, participated in and approved these two transactions”; as a result, A.I.G.’s public filings “inaccurately portrayed the accounting, and thus the financial condition and performance for A.I.G.’s loss reserves and underwriting income.”
In an interview, David Boies, Mr. Greenberg’s lawyer, called the agreement a “nuisance settlement,” noting that Mr. Greenberg had avoided two penalties sought by the state that would have barred him from working in the securities industry or as an officer of a public company.
It’s a shame that such wonderful bickering was all over insurance accounting.
Adventures in non-GAAP accounting
Here’s a Wall Street Journal story about comments the SEC sent to pharmaceutical company Allergan PLC about its non-GAAP reporting. On the one hand, it’s certainly newsworthy that the SEC suggested that it will “consider whether additional comprehensive non-GAAP staff guidance is appropriate.” However, my favorite part of the letter where they make note that the “adjusted” in “adjusted earnings per share” is a bit generous:
[T]he title should be consistent with the fact that you typically exclude more than half of all operating expenses.
I have to agree that excluding half of all operating expenses would require a new title, but what do you call an EPS that excludes half of all operating expenses? “Uber adjusted earnings per share”? “Not-really earnings per share”? “Are-we-there-yet earnings per share”? “Somewhere-between-here-and-there earnings per share”? I don’t love any of of those, so send your best ideas to Allergan’s accounting department.
Grant Thornton cuts a ribbon
Grant Thornton officially opened a new Rosslyn, Virginia office last week:
The office, located on the 14th floor of 1000 Wilson Blvd, can hold about 1,500 staffers. Grant Thornton is moving around 1,000 of its employees to the office and will be hiring 348 additional staffers as part of the opening.
Does 1,000 (soon to be 1,300+) people on one floor seem like a lot? Will they need bunk-cubicles in some areas? I’m no fire code expert; just genuinely concerned about the welfare of our GT friends.
Previously, on Going Concern…
Rachel Andujar wrote about busy season burnout. I asked if any CPAs want to work in Hawaii. In Open Items, someone’s wondering about the tax practices of the Big 4 in Atlanta.
In other news:
- Demystifying marketing for accountants
- Ford to Invest $1 Billion in Artificial Intelligence Start-Up
- A revised TPC calculator shows the tax costs—or benefits—of marriage
- Big Companies Don’t Pay as Well as They Used To
- Your Dog Is Judging You for Being a Jerk
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Image: iStock/Cooks786
