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Accounting News Roundup: Big 4 Got Hong Kong Backwards; Inversion Importance in the Fine Print; Deloitte’s Florida Hiring Spree | 07.07.14

Accounting firms’ objections to Chinese protests don’t add up [BG]
This Globe editorial says that the Big 4 doesn't seem to understand Chinese politics: "[P]rotesters annoy governments all the time, in almost every country where the four accounting firms do business, and they should have known better than to scold those calling for democracy in Hong Kong. In their ads, the companies said that participation in protests could endanger Hong Kong’s standing as a financial center. But they’ve got it exactly backwards. What has made Hong Kong an international financial center is the strength of the rule of law there and restraints on government power, and what would endanger Hong Kong the most would be its falling under the same authoritarian rules as the rest of China."

The Real Internal Revenue Scandal [NYT]
The IRS audited 24% of tax returns with $10 million in income in 2013; that's down from 30% in 2010. Great news for rich people, says the NYT editorial board, "But it is bad news for building roads, keeping the air clean, protecting the nation’s security, and countless other vital government tasks. Revenue collected by I.R.S. enforcement actions has fallen by more than $4 billion over the last four years, according to a new report from the Center on Budget and Policy Priorities. And every dollar spent on enforcement yields $6 in additional revenue. Many I.R.S. computers use obsolete Windows XP operating systems and cannot keep up with a growing problem of identity theft that is directing refunds to criminals." 

A Mad Scramble for Young Bankers [NYT]
The battle between Investment banks and private equity firms for young talent makes accounting sound downright polite: "To recruit young talent today, the private-equity firms make offers as long as 18 months before a job begins. This timing is repellent to many bank executives, and not only because their workers are being poached. Promising to take a job with a particular firm can create a conflict of interest for an investment bank analyst, especially one assigned to work with private-equity firms on deals, bankers say. Goldman Sachs, for example, requires junior workers to resign soon after accepting a job at a private-equity firm. Such a rule is at odds with private equity’s recruiting timeline, leaving many junior bankers to ignore it. And the recruiting process, despite a recent attempt to change it, has grown only more frenzied."

Acquirers Plot Escape From a Turn on Taxes [WSJ]
Companies get an out if an inversion goes bad: "
The effort by companies to lower their taxes through deals has sparked outcry from U.S. policy makers, some of whom are threatening to change the rules to limit the tax advantage of these tie-ups. To protect themselves, companies increasingly are adding details to merger agreements that allow them to walk away from a deal without paying a penalty, or breakup, fee should the tax advantage suddenly be taken away. Such detailed language regarding inversions shows just how important tax benefits are in many overseas deals, despite efforts by many executives to play down taxes as a reason for an acquisition."

Can Deloitte bring 1,000 jobs to Lake Mary? [OS]
Maybe! "There's growing anticipation that Deloitte is bringing hundreds of new jobs to a new location in Lake Mary. Deloitte had a table at a recent job fair at East End Market. According to several people who attended the event, Deloitte recruiters talked openly about hiring hundreds of people and moving others to Central Florida."

The Summer's Most Unread Book Is… [WSJ]
You don't have to feel bad about not reading Thomas Piketty's Capital in the Twenty-First Century anymore. 

Posted in ANR