Accounting News Roundup: CEO Pay > Taxes Paid; Auditors Now Under Heat for Greek Debt; Ripping off the Old People | 08.31.11

Some companies pay their CEOs more than Uncle Sam, study says [WaPo]
It has become a bipartisan article of faith in some quarters that the income tax on U.S. corporations must be lowered. But for many large U.S. companies, the burden of U.S. taxation pales in comparison with what they pay their chief executives, according to a study released Wednesday by the Institute of Policy Studies, a liberal think tank. Of last year’s 100 highest-paid corporate executives in the United States, 25 earned more in pay than their company recorded as a tax expense in 2010.

[Bloomberg]
Memo to Grover Norquist.

GOP Tax Expert to Lead Deficit-Committee Staff [WSJ]
The panel’s co-chairmen chose as their staff director Mark Prater, a senior aide and chief tax counsel to Republicans on the Senate Finance Committee. “Mark has a well-earned reputation for being a workhorse who members of both parties have relied on,” said the committee’s co-chairmen, Sen. Patty Murray (D., Wash) and Rep. Jeb Hensarling (R., Texas).

SEC Lawyer Blew Whistle Before [WSJ]
Darcy Flynn, who started in the SEC’s enforcement division in 1995, earned the large payout after reporting alleged Medicare fraud in 1993 as an insurance-claims auditor in Michigan, according to public records and people familiar with the case. Nearly two decades later, Mr. Flynn is again accusing his employer of misbehavior. This time, Mr. Flynn is targeting the Wall Street regulator, which hired him to ferret out wrongdoing. He was initially asked to probe accounting scams, insider trading and other financial frauds. Since early 2010, Mr. Flynn has been supervising record-keeping related to enforcement cases that have been closed.

Auditors under fire over Greek debt [FT]
Auditors and regulators have come under fire for allowing European financial institutions to take wildly divergent approaches to Greek government bond writedowns. The criticism comes amid claims that some banks and insurers should have reported bigger Greek losses than they had acknowledged in recent first-half results announcements. “Auditors have not enforced a consistent approach among their clients,” said analysts at JPMorgan Cazenove in a report drawing attention to the way that some significant financial institutions had written down Greek sovereign debt holdings by half, while others had cut their value by only a fifth.

SEC recovers bonus from ex-Beazer CFO [Reuters]
The former finance chief of Beazer Homes USA (BZH.N) has agreed to reimburse the company for over $1.4 million that he earned in bonus payments and stock sale profits when the Atlanta-based homebuilder was committing accounting fraud, the SEC announced on Tuesday. The Securities and Exchange Commission said James O’Leary had not been charged with misconduct, but was still required under the Sarbanes-Oxley Act to pay back the money he received while the fraud was going on.

Ex-Rite Aid exec Franklin Brown freed after resentencing on accounting scandal charges [PN]
Brown, 83, of Susquehanna Twp., had served 71 months of a 7 1/2-year prison term that Rambo imposed last September, but that was overturned by a federal appeals court in May. In 2003, a federal jury convicted Brown of multiple conspiracy and other charges for an accounting fraud that prosecutors said cost East Pennsboro Township-based Rite Aid more than $18 million.

Bellevue accountant stole nearly $1 mil. from elderly couple, police claim [SPI]
A Bellevue accountant swindled an elderly couple – his clients of more than 15 years – out of nearly $1 million through a fake investment, King County prosecutors claim. Filing securities fraud and felony theft charges, prosecutors contend Shawn Eric Stoller bilked a 90-year-old man and an 88-year-old woman to pay off his own house and motor home.

Some companies pay their CEOs more than Uncle Sam, study says [WaPo]
It has become a bipartisan article of faith in some quarters that the income tax on U.S. corporations must be lowered. But for many large U.S. companies, the burden of U.S. taxation pales in comparison with what they pay their chief executives, according to a study released Wednesday by the Institute of Policy Studies, a liberal think tank. Of last year’s 100 highest-paid corporate executives in the United States, 25 earned more in pay than their company recorded as a tax expense in 2010.

Buffett Idea Withstands ‘Write a Check’ Critique [Bloomberg]
Memo to Grover Norquist.

GOP Tax Expert to Lead Deficit-Committee Staff [WSJ]
The panel’s co-chairmen chose as their staff director Mark Prater, a senior aide and chief tax counsel to Republicans on the Senate Finance Committee. “Mark has a well-earned reputation for being a workhorse who members of both parties have relied on,” said the committee’s co-chairmen, Sen. Patty Murray (D., Wash) and Rep. Jeb Hensarling (R., Texas).

SEC Lawyer Blew Whistle Before [WSJ]
Darcy Flynn, who started in the SEC’s enforcement division in 1995, earned the large payout after reporting alleged Medicare fraud in 1993 as an insurance-claims auditor in Michigan, according to public records and people familiar with the case. Nearly two decades later, Mr. Flynn is again accusing his employer of misbehavior. This time, Mr. Flynn is targeting the Wall Street regulator, which hired him to ferret out wrongdoing. He was initially asked to probe accounting scams, insider trading and other financial frauds. Since early 2010, Mr. Flynn has been supervising record-keeping related to enforcement cases that have been closed.

Auditors under fire over Greek debt [FT]
Auditors and regulators have come under fire for allowing European financial institutions to take wildly divergent approaches to Greek government bond writedowns. The criticism comes amid claims that some banks and insurers should have reported bigger Greek losses than they had acknowledged in recent first-half results announcements. “Auditors have not enforced a consistent approach among their clients,” said analysts at JPMorgan Cazenove in a report drawing attention to the way that some significant financial institutions had written down Greek sovereign debt holdings by half, while others had cut their value by only a fifth.

SEC recovers bonus from ex-Beazer CFO [Reuters]
The former finance chief of Beazer Homes USA (BZH.N) has agreed to reimburse the company for over $1.4 million that he earned in bonus payments and stock sale profits when the Atlanta-based homebuilder was committing accounting fraud, the SEC announced on Tuesday. The Securities and Exchange Commission said James O’Leary had not been charged with misconduct, but was still required under the Sarbanes-Oxley Act to pay back the money he received while the fraud was going on.

Ex-Rite Aid exec Franklin Brown freed after resentencing on accounting scandal charges [PN]
Brown, 83, of Susquehanna Twp., had served 71 months of a 7 1/2-year prison term that Rambo imposed last September, but that was overturned by a federal appeals court in May. In 2003, a federal jury convicted Brown of multiple conspiracy and other charges for an accounting fraud that prosecutors said cost East Pennsboro Township-based Rite Aid more than $18 million.

Bellevue accountant stole nearly $1 mil. from elderly couple, police claim [SPI]
A Bellevue accountant swindled an elderly couple – his clients of more than 15 years – out of nearly $1 million through a fake investment, King County prosecutors claim. Filing securities fraud and felony theft charges, prosecutors contend Shawn Eric Stoller bilked a 90-year-old man and an 88-year-old woman to pay off his own house and motor home.

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