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December 4, 2022

Accounting News Roundup: Big 4 All Over Spain’s Banks; California Wrings Mayer Hoffman for Bell Audit; IFRS’ Infeasibility | 06.04.12

"Big Four" to audit Spain's banking sector [Reuters]
Spain has picked the "Big Four" accounting firms KPMG, PwC, Deloitte and Ernst & Young to carry a full, individual audit of its ailing banks, a source with knowledge of the decision told Reuters on Saturday. The review, which should take a few months, will complement an ongoing exercise to stress test Spain's banking sector by consultors Oliver Wyman and Roland Berger, whose first results are expected around mid-June. "I can confirm (the names)," the source said.

California disciplines accounting firm that missed Bell irregularities [LAT]

Mayer Hoffman McCann must pay a $300,000 fine and as much as $50,000 for the cost of the investigation, according to the settlement with the California Board of Accountancy. In addition, its license is suspended for six months, although that was stayed, meaning the firm can continue practicing in the state while it serves two years' probation. The settlement was reached May 29, five days after the Board of Accountancy filed a 13-page accusation against the firm. "We have taken the events at Bell and the findings … very seriously, and we have used this as an opportunity to renew our commitment to high-quality audit services," William Hancock, president of Mayer Hoffman McCann, said in a prepared statement.
 
Feds Eye MF's False Promise [WSJ]

Federal investigators are scrutinizing a series of conversations among MF Global Holdings Ltd. employees shortly before the securities firm erroneously told regulators that its customer funds were safe, said people with knowledge of the probe. Three days before MF Global filed for bankruptcy-court protection, CME Group Inc. was assured by the New York company of a $200 million cushion in accounts that ensured customer funds were being kept separate from the firm's own money. But the customer accounts actually were in the red, and the deficit ballooned to more than $900 million on the night of Oct. 30. MF Global tumbled into Chapter 11 on Oct. 31. The bankruptcy trustee trying to recover money for the firm's U.S. customers has estimated that the shortfall now is roughly $1.6 billion. A large chunk of the money is stuck outside the U.S.
 
A $1 Cigarette Tax Starts a $47 Million Brawl in California [NYT]
An array of health and anticancer groups has rallied behind a ballot initiative to impose a new $1-a-pack cigarette tax to finance cancer research. And that has provoked a $47 million storm of advertisements, overwhelmingly financed by the tobacco industry, which is outspending proponents by nearly four to one to defeat the biggest threat it has faced in California in more than a decade.
 
Jeb Bush OK with tax hike in debt deal [The Hill]
Bush told a House panel he could get behind a plan that combined 10 dollars in spending cuts for every dollar of new revenue, and also noted that he did not sign the anti-tax pledge administered by Grover Norquist’s Americans for Tax Reform when he ran for governor in the Sunshine State. “If you could bring to me a majority of people to say that we’re going to have 10 dollars of spending cuts for one dollar of revenue enhancement – put me in coach,” Bush told the House Budget Committee. “That would be wonderful. Let’s see it. That’d be spectacular.”
 
CFOs report difficulty finding accounting and finance talent [CGMA Magazine]
Yes, apparently there's a magazine.
 
Vote against AICPA seats on CIMA council, urges ex-president [Accountancy Age]

Peter Layhe, the former CIMA president who has been a vocal critic of the institute's joint designation venture with the AICPA, wants byelaw changes rejected by CIMA members. The changes would allow CIMA to place four non-members onto council, which it plans to fill with AICPA representatives. "We need CIMA members running CIMA affairs," said Layhe. "These [byelaw changes] open the door for council to co-opt non-members to council as council of the day think fit but with a limit of four – for the time being. There is presumably a counter arrangement whereby AICPA will allow some CIMA members to sit on their board equivalent -although the papers make no such reference even by way of comment, nor show how they will be selected." Layhe has previously criticised the joint venture between CIMA and AICPA, where they share new designatory letters, as "adding nothing".
 
Global accounting rules – an unfeasible aim [FT]

The IASB and US Financial Accounting Standards Board have committed significant resources since 2002 trying to agree on common accounting standards. Despite their efforts, IFRS have not been approved by the Securities and Exchange Commission for US adoption. The SEC may never risk the political backlash from ceding control of its accounting to a non-US body. We can learn from the euro debacle and assess not only if the vision of one set of global accounting standards is achievable but also if it is desirable.

Navigant Consulting Sues Stockman Over Forensic Accounting [BBW]
David Stockman, the former Reagan administration budget director, was sued by the forensic accounting firm Navigant Consulting Inc. over claims he failed to pay $297,000 for work done for his defense in a fraud case. Stockman was indicted in 2007 on charges that he misled investors in Collins & Aikman Corp. when he served as its chief executive officer. U.S. prosecutors in New York dropped the case two years later.

 
The Osbournes Take $700,000 Bite Out of Massive Tax Bill [TMZ]
FYI.

Catalina Clouser, Pot-Smoking Mother, Drives Off With Baby On Roof [Reuters]
A marijuana-smoking woman was arrested on Saturday in Phoenix after she accidentally drove away with her five-week-old son in a child safety seat on the roof of her vehicle, police said. The baby fell off the car in the middle of an intersection and was found unharmed and strapped into the seat, said Phoenix police spokesman James Holmes. The mother Catalina Clouser, 19, was booked into jail on child abuse and aggravated assault charges, he said. The infant was taken to a local hospital as a precaution and is in the custody of state Child Protective Services. "It appears the suspect put the baby on the roof of the car and drove off, forgetting he was still on the roof," Holmes said in a written statement.

 

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