Accounting News Roundup: Audit Quality Indicators; Suit Over EY’s IndyMac Audit Tossed; Business Doubting Bitcoin | 04.25.14

House G.O.P. Members Face Voter Anger Over Budget [NYT]
After 10 days of trying to sell constituents on their plan to overhaul Medicare, House Republicans in multiple districts appear to be increasingly on the defensive, facing worried and angry questions from voters and a barrage of new attacks from Democrats and their allies. The proposed new approach to Medicare — a centerpiece of a budget that Republican leaders have hailed as a courageous effort to address the nation’s long-term fiscal problems — has been a constant topic at town-hall-style sessions and other public gatherings during a two-week Congressional recess that provided the first chance fo reaction to the plan.

Navistar Sues Its Former Auditor Deloitte & Touche [Bloomberg]
Navistar International Corp. (NAV), a maker of medium- and heavy-duty trucks, accused its former auditor Deloitte & Touche LLP of professional malpractice in a lawsuit seeking $500 million in damages. Navistar claimed shoddy work by Deloitte & Touche accountants from 2002 to 2005 forced the company to revise its financial statements, according to a 134-page complaint filed today in Illinois state court in Chicago. “Deloitte lied to Navistar and, on information and belief, to Deloitte’s other audit clients, as to the competency of its audit and accounting services,” the Warrenville, Illinois-based truckmaker alleged in its complaint.

H&R Block names former eBay exec as CEO [KCS]
William Cobb takes over for Alan Bennett.

Congress Wrangles With Taxman’s Take in U.S. Deficit Reduction Talks [Bloomberg]
Many Republicans, determined to prevent tax increases, say federal revenues shouldn’t exceed 18 or 19 percent of gross domestic product, the nation’s total output. Senate Republicans have offered a constitutional amendment that would cap the federal take below 17 percent of GDP. President Barack Obama, meanwhile, has proposed a budget that would push revenue to 20 percent of GDP by the end of the decade and announced a proposal April 13 that would raise that number even higher.

Litigation Piling Up At Ernst & Young [Forbes]
Keeping the lawyers in business.

Warner Says Gang of Six Debt Plan Weighs $3 in Cuts to $1 in Taxes Raised [Bloomberg]
While the emerging proposal by the so-called Gang of Six won’t increase tax rates, the Virginia Democrat said it will include scrapping some tax breaks and limiting others, such as shrinking to $500,000 from $1 million the size of mortgages on which interest payments can be written off or scaling back deductions for charitable giving.

Understanding Your Unemployed Friend [The Awl]
Stop saying “funemployment”; it’s really not.

Ex-Facebook CFO, Khosla VC Gideon Yu Goes To…The San Francisco 49ers [BI]
Yu’s résumé also includes a stint as YouTube’s CFO.

Yelp Plans To Go Public, Despite Booming Private Market [WSJ]
Yelp Inc., the consumer-reviews website, is declining to seek another round of financing and instead has its sights set on going public, the start-up’s chief executive officer, Jeremy Stoppelman, said in an interview. “An IPO is back on the table for us,” Mr. Stoppelman said. He declined to say exactly when the company would look to go public, but did say “the process hasn’t officially started yet.” The seven-year-old start-up is actively looking to hire a new chief financial officer with public company experience to guide it through the process, Mr. Stoppelman confirmed.

Americans Favor Budget Cuts Over Raising Corporate Tax [NYT]
While most Americans say corporations do not pay their fair share in taxes, they still prefer cuts in government spending to increasing taxes on corporations as a means of cutting the federal budget deficit, according to a recent New York Times/CBS News poll. But when given a choice between raising taxes on corporations and raising taxes on households that make more than $250,000 a year, almost two-thirds of respondents opt for taxing businesses.

Hedge Accounting: Convergence Crunch Time [Accounting Onion]
The CFA Institute wrote a 39-page letter to the IASB criticizing its hedge accounting exposure draft. E&Y wrote a similarly lengthy comment letter; a very different letter.

Trade group: Administration wants to expand corporate tax umbrella [The Hill]
A trade association is concerned that the Obama administration is working on a tax reform plan that would make more businesses pay taxes as corporations. An executive at the National Association of Publicly Traded Partnerships (NAPTP) recently signaled that the group had received information indicating that the administration wanted large so-called pass-through entities — businesses that pay taxes through the individual code — to be subject to corporate taxation.

IRS considers tax deadline extension for storm victims [BBJ]
Victims of severe storms, tornadoes, straight-line winds and flooding beginning April 15 in parts of Alabama may qualify for tax relief from the Internal Revenue Service. Individuals who reside or have a business in these counties may qualify for tax relief: Autauga, Bibb, Blount, Calhoun, Cherokee, Choctaw, Colbert, Cullman, DeKalb, Elmore, Etowah, Fayette, Franklin, Greene, Hale, Jackson, Jefferson, Lawrence, Limestone, Madison, Marengo, Marion, Marshall, Morgan, St. Clair, Sumter, Tallapoosa, Tuscaloosa, Walker, Washington and Winston.

IRS Recognized for Clear Writing [AT]
The Internal Revenue Service received an award for the written clarity of its official notices, while insurance provider CareFirst Blue Cross Blue Shield of Maryland received an award for the most confusing language. The Center for Plain Language gave the IRS its Grand ClearMark Award for the clearest language with its simplified notices, while CareFirst got the WonderMark Award of confusion for its muddled explanation of health care benefits “The IRS has worked hard to overcome its image with Americans and these two revised notices are a sign that the IRS has changed,” said Annetta Cheek, PhD, chair of the board of directors of the Center for Plain Language.

Global Accounting Rules at Risk [CFOJournal]
When U.S. securities regulators let foreign companies stop reconciling their financial results with U.S. GAAP in 2007, it seemed inevitable that U.S. companies would one day adopt International Financial Reporting Standards (IFRS) themselves. But over the past few years, the SEC turned its focus to the financial crisis and slowed down efforts to set a formal date for the switch. Now some think support is waning and full adoption of the standards in the United States is no longer possible.

Deloitte Survey: Two Out of Three Employees at Large Companies Looking for the Exit Sign [Deloitte]
Despite the sobering news, dissatisfied employees are transparent about their leading turnover drivers, providing executives and talent managers with a clear picture of the most effective employee retention strategies. When asked to list their top three retention incentives, 53 percent of the respondents ranked promotion/job advancement first, followed by increased compensation at 39 percent, and additional bonuses or other financial incentives at 34 percent. Boosting employee support/recognition from their managers, a non-financial incentive, was also ranked as an effective retention tactic by a strong 30 percent of the surveyed employees.

State Cigarette Excise Tax Rates [Tax Foundation]
From a monetary standpoint, why anyone in the tri-state area smokes, is a mystery.

Why Gingrich's Tax Plan Beats Romney's [WSJ]To minimize the damages taxes cause the economy, the […]