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Accounting News Roundup: BofA Gets Sued For ‘Massive Fraud’; U.S. and China Try To Get Along on Audits; Groupon Dumps ACSOI | 08.08.11

AIG sues BofA for $10 billion over “massive fraud” [Reuters]
The insurer American International Group Inc (AIG.N) is suing Bank of America Corp (BAC.N) to recover more than $10 billion of losses from a “massive fraud” on mortgage debt, deepening the morass of litigation faced by the largest U.S. bank. AIG, still largely owned by taxpayers after $182.3 billion of government bailouts, is the latest of a growing number of investors filing lawsuits seeking to hold banks responsible for losses on troubled mortgages that contributed to the financial crisis.

US and China Fail to Agree on Cross-Border Auditing Standards [Business Insider]
On July 11-12, US regulators flew to Beijing in part to address the series of financial scandals of Chinese companies listed in America, but failed to agree upon a standard set of cross-border auditing standards with their Chinese counterparts. In an alphabet soup of acronyms, a U.S. delegation from the Securities and Exchange Commission (SEC) and The Public Company Accounting Oversight Board (PCAOB) and Securities and Exchange Commission (SEC) met with Chinese counterparts at the Ministry of Finance and the China Securities Regulatory Commission (CSRC).

Exclusive: Groupon Will Dump Controversial ACSOI Accounting in Amended IPO Filing [All Things D]
According to numerous sources close to the situation and after regulatory pressure, Groupon will amend its S-1 public offering filing to remove references to an unusual accounting treatment that has attracted controversy. Sources said the new filing by the social buying company, which is helmed by CEO and co-founder Andrew Mason (pictured above), will likely occur as early as Monday.

Less than zero: How companies can end up with negative revenues [Globe and Mail]
Even savvy investors are often puzzled at how some companies arrive at the bottom lines on their income statements. Now, as a result of ever more elaborate new accounting standards and complex corporate structures, the top line can be just as bewildering.

IRS auditing Louisville high school booster club [AP via]
The Internal Revenue Service is auditing a high school booster club’s books to find out why it has as much as $480,000 in funds that are unaccounted for.

MetLife Says 30 Jurisdictions Are Auditing Unpaid Benefits [Bloomberg via the SF Chronicle]
MetLife Inc., the largest U.S. life insurer, said more than 30 U.S. jurisdictions are auditing its practices in a review of whether the industry is holding unclaimed funds owed to policyholders, beneficiaries or states. The audits may lead to more payments to beneficiaries, administrative penalties or changes in procedures, New York- based MetLife said today in its quarterly filing with the U.S. Securities and Exchange Commission.

Google App Engine now officially secure [ZDnet]
The announcement got lost in the pre-weekend shuffle, but Google has announced that both the Google Apps cloud productivity and collaboration suite and the Google App Engine application platform have received the SSAE-16 security certification. If you can get past the alphabet soup, this news could open a lot of doors for Google in the enterprise.

SEC, Rajat Gupta Drop Their Cases, for Now [WSJ]
The Securities and Exchange Commission dropped its civil administrative proceeding against former Goldman Sachs Group Inc. director Rajat Gupta, but left the door open to pursue insider-trading charges against him in a civil lawsuit. The agency “is fully committed to the case and will proceed as appropriate,” a spokesman said Thursday. Specifically, the agency said that “it is in the public interest” to dismiss the administrative case but that “dismissing these proceedings will not prevent the Commission from filing an action against Mr. Gupta in United States District Court.”

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