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Accounting News Roundup: Auditors Manage One Victory in HP/Autonomy Lawsuits; SEC’s Medium Pace; ‘I’ve never paid taxes in my life. I’m probably going to jail.’ | 03.18.13

Cypriot Outrage Over Tax Could Derail Euro-Area Bailout [Bloomberg]
European policy makers signaled flexibility on the application of an unprecedented bank tax in Cyprus, seeking to overcome outrage that threatened to derail the nation’s bailout. European shares and the euro fell. While demanding that the levy raise the targeted 5.8 billion euros ($7.6 billion), finance officials said easing the cost to smaller savers was up to Cyprus. A vote on the tax, needed to secure 10 billion euros in rescue loans, was delayed for a second day. Banks may not reopen tomorrow after a holiday today, state-run broadcaster CYBC reported. “If the government wants to change the structure of the solidarity levy for the banking sector, the government can decide as such,” European Central Bank Executive Board member Joerg Asmussen said today in Berlin. “What’s important is that the planned revenue of 5.8 billion euros remain.”

HP Shareholder Claims Over Autonomy Accounting Are Withdrawn [Bloomberg]
A retirement fund withdrew its claims against Hewlett-Packard Co. (HPQ)’s directors and auditors, along with Autonomy Corp. founder Mike Lynch over alleged misstatements related to the 2011 purchase of the British software maker. The City of Birmingham Retirement and Relief System voluntarily dismissed its claims in one of at least two so- called derivative cases filed in federal court in San Jose, California, on behalf of Hewlett-Packard, according to a filing today.

EU committee votes for seven-year auditor tendering [Accountancy Age]
Regular tendering for audit appointments once every seven years has been voted by the European Parliament's Economic and Monetary Affairs Committee (Econ) meeting in Strasbourg. This is in place of the Commission's originally proposals for mandatory rotation after six years (nine years if a Big Four firm were to work with together with a smaller auditor firm). The Econ position is subject to final approval by the lead committee on audit reform, the Legal Affairs Committee (Juri), which has now delayed any decision on rotation, and, indeed, on its overall position, until April, probably late in the month.

Number of Cases Filed by SEC Slows [WSJ]
The Securities and Exchange Commission is filing significantly fewer civil fraud cases this year, as its efforts to punish misconduct related to the financial crisis start to ebb. The agency is likely to fall short this fiscal year of its record-breaking number of enforcement actions in the previous two years, said people familiar with the matter.

Companies paying the most in income taxes [USAT]
Impress your non-accountant friends.

The PCAOB’s Inspection Reports Nibble at PwC — A Reader Asks, “Where’s the Beef?” [Re:Balance]
Jim Peterson thinks PCAOB inspection reports should require a disclosure that warns of another horse byproduct.

How Deferred Tax Accounting Blunts Government-Provided Incentives to Invest in Renewable Energy [Accounting Onion]
Tom Selling gets around to addressing one of his passion projects.

UFC's Diaz says he's 'probably' going to jail because he's 'never paid taxes' [AP]
The revelation came after he talked about how poor his preparations were for UFC 158, a lopsided loss to champion Georges St-Pierre on Saturday night at the Bell Centre. Diaz was asked whether he was considering changing fight camps. “I can’t be jumping teams. I just have to invest a little bit more, now that I have a little bit more money,” the 29-year-old from Stockton, Calif., said. “You know what? I’ve never paid taxes in my life. I’m probably going to go to jail. “Nobody wants to hear about that, nobody wants to hear that kind of talk or what’s really going on with me,” he said. “I might as well as be a kid. I’ve had fight after fight after fight after fight. You don’t know what that does to somebody that didn’t graduate high school? You don’t understand.”

Golfer Sergio Garcia Loses in U.S. Tax Court on Endorsements [Bloomberg via TaxProf]
Sergio Garcia, the professional golfer, must pay additional taxes on income from endorsements that he claimed was exempt, the U.S. Tax Court ruled, because too much of the money was attributed to payment for his image. Garcia argued unsuccessfully that 85 percent of his income from an endorsement agreement with TaylorMade Golf Co. stemmed from image-derived royalty payments shielded from U.S. taxation because they flowed through a Swiss business entity and because he’s a resident of Switzerland. Judge Joseph Goeke in Washington ruled that “the compensation paid by TaylorMade under the endorsement agreement is allocated 65 percent to royalties and 35 percent to personal services.”

New York Is Sterilizing Its Rats. Here's How. [BBW]

No one knows exactly how many rodents reside in New York, but by some estimates, there may be as many rats as humans. What’s more, rats are remarkably fertile, sometimes birthing 12 pups per litter and as many as seven litters in a year. New York’s rats may not be so fecund for long: The Metropolitan Transport Authority has kick-started a pilot program to sterilize female rats. To do this, it is teaming up with Flagstaff (Ariz.)-based SenesTech, a company that invented ContraPest, a product that, when consumed orally by rats, accelerates egg loss and can cause infertility in days. (The company’s name comes from the world “senescence,” which means to age.) New York’s rat extermination proposals in the past have included everything from the deployment of World War I-era poison gas to a hunting spree led by rifle-bearing citizens. (The gas was used with some success on Riker’s Island; the hunting party was apparently called off at the last minute). This seems to be the MTA’s first effort to target the rodents’ reproductive organs.


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