Accounting News Roundup: Big 4 ‘Insufficiently Independent’; Non-Big 4 Barely Restrain Themselves; Washington’s Cigarette Tax Evasion Problem | 02.22.13

Posted on by Caleb Newquist

UK watchdog takes aim at UK accounting deals [Reuters]
Britain's listed companies could be forced to switch accountants to boost competition and end the cozy relationships that have dismayed shareholders, a UK watchdog warned on Friday. Competition in the UK audit market is restricted by factors that make it hard for companies to switch accountants, the Competition Commission said in preliminary findings from a probe it began in 2011. There is also a tendency for auditors to focus on satisfying management rather than shareholder needs, it said.

Big four accountants 'insufficiently independent and sceptical' of City [Guardian]
Companies are overpaying for lower-quality audits from the "big four" accountancy firms because of a lack of competition, according to the Competition Commission. The review into how Ernst & Young, Deloitte, KPMG and PwC, audit 90% of UK-listed blue-chip businesses said they were "insufficiently independent from executive management and insufficiently sceptical in carrying out audits". While the commission found no evidence of collusion between the four, it said there was a restricted amount of competition in the market. As a result "companies are offered higher prices, lower quality and less innovation" than would be the case in a more competitive market.

Big Four’s rivals welcome audit shake-up [FT]
Mazars, one of the firms that wants to pick up big contracts from the leading quartet, called the regulator’s provisional findings “a clear indictment” of the market for FTSE 350 audits.
 
Xerox Exec to Join IASB as Newest U.S. Member [AT]
That would be chief accounting officer Gary Kabureck.
 
Bellingham tax preparer sentenced for 'outrageous' stalking of ex-girlfriend [BH]
A Bellingham accountant pleaded guilty Thursday, Feb. 21, to stalking his ex-girlfriend by gluing her home's doors shut, turning off the gas, cutting her phone and cable lines, and dumping paint remover all over her car. Charles Lysander Storrs IV, 54, harassed the woman for almost a year and a half before police had enough evidence to arrest him.
 
Holy Smokes! Washington Loses $376 Million to Cigarette Tax Evasion in 2012 [TF]

The Washington Department of Revenue released a report last month estimating that over 35 percent of total state cigarette sales illegally evaded cigarette taxes. That amounts to $376.4 million in lost revenue. To put that in perspective, that’s enough to buy nearly 42 million packs of cigarettes in Washington State. By comparing in-state per capita cigarette sales with per capita consumption, the Department concluded that there were 147.9 million packs of untaxed cigarettes consumed during the 2012 fiscal year. Just over 46 million of those packs were legally exempted from taxation, leaving 101.4 million illegally untaxed packs sold in 2012.

Revealed: al-Qaeda's 22 tips for dodging drones [Telegraph]
News you hopefully don't have to use.

 

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Accounting News Roundup: UBS Deal Back on Track; Allen Stanford’s Circus Causes Problems for Co-Defendants; Zynga Lands $147 Million | 06.15.10

Swiss Parliament Backs UBS Pact [WSJ]
After telling U.S. and IRS to drop dead last week, the lower House of Swiss Parliament has approved the deal to turn over 4,450 names as part of UBS’ settlement involving their assistance to taxpayers in the U.S. evade their obligations through offshore accounts.

There’s one small problem remaining – the lower house wants to put the agreement to a popular referendum while the upper house in parliament is opposed to the idea. The two have until Friday to reconcile their differences, otherwise another vote will be necessary to settle the referendum issue.

The problem with the referendum is that it could take months for happen and it could cause the Swiss to miss the August deadline that it agreed to. This could lead to fresh charges against UBS and further extending a story that pretty much everyone has grown tired of.


Stanford’s Co-Defendants Try to Flee the ‘Circus’ [DealBook]
Stanford’s Chief Investment Officer, Chief Accounting Officer and Controller are all attempting to sever themselves from Al’s proceedings because he’s an absolute drama whore.

Former CIO Laura Pendergest-Holt’s motion to have her trial severed describes RAS’ conduct as ‘egregious and circus-like conduct,’ using the term “circus” at least eight times.

So while a circus is infinitely fun for the rest of us, it doesn’t really do co-conspirators any good when they are trying to get a fair trial.

Dealing With a Toxic Resumé [FINS]
How can you move past a job with a tax company like Stanford, Countrywide, Bear Stearns et al.? You might just want to GIVE UP (and that could be advisable if you were a perp) but there are some things you can do to wash away that taint on your resumé.

For starters don’t bad mouth the old company, even though they probably deserve it. Secondly, you might attach an addendum to your resumé in order to explain the whole sitch and you can always turn the situation into a positive by explaining how you’ve learned from working at such a lousy company.

Keep your chin up, you’ll be back to being a white collar working stiff in no time.

Duke boy dodges tax hazard [Tax Watchdog]
John Schneider, aka Bo Duke, and his wife owe California about $28,000 in back taxes. Turns out his old accountant left him ‘high and dry’ so he’s working it out with Arnie.

Zynga Receives $147 Million Investment From Japan’s Softbank [Bloomberg BusinessWeek]
Memo to Farmville Haters: it’s here to stay and there will be more to come.