Please ensure Javascript is enabled for purposes of website accessibility
September 28, 2023

Accounting News Roundup: Chinese Blowups Lead to Auditor Lawsuits; Nixing Tax Strategy Patents; Helmsley Canine Heir Goes to Heaven | 06.10.11

Troubled Audit Opinions [NYT]
On one side is an assessment of a company with a clean audit opinion from the Toronto office of Ernst & Young, and with bonds rated just below investment grade by Standard & Poor’s and Moody’s. It has raised billions in capital markets. On the other is an investment research firm using the name Muddy Waters Research. It says the company, the Sino-Forest Corporation, is a fraud, and that its shares are worthless. As this is written, there is no definitive answer as to who is right. But the initial reaction of the markets seemed to be that they had more trust in the short-seller — a company whose Web site gives no the auditor’s opinion.

Auditors face suits over Chinese blowups in U.S. [Reuters]
Investors who have suffered a drubbing from accounting scandals at U.S.-listed Chinese companies are starting to sue the auditors who blessed their financial statements, but it will be tough for them to win in American courts. Shareholders already have sued a string of China-based, U.S.-listed companies for fraud, saying they lost money when stocks tanked after financial scandals emerged. They contend companies invented sham businesses, inflated revenue or gave vastly different information to U.S. and Chinese regulators.

$100 Million Claim Against Deloitte & Touche [CNS]
SBP Capital, formerly known as Ameriquest Capital, claims Deloitte & Touche cost it $100 million by giving it bum advice on “tax issues related to Ameriquest’s securitizations” of mortgage lending and “related activities.”

Is Groupon’s Business Model Sustainable? [DealBook]
In its less than three years of existence, Groupon has established itself as the king of social buying sites. As feverish speculation mounted about its impending initial public offering, analysts and investors could only await further details of how much money it was minting. But with its I.P.O. filing now public, Groupon faces significant questions about the sustainability of its business model. A look at the company’s overall financials shows a steep decline in how much money it is wringing from its fast-growing subscriber base.

Bill Aims at Tax-Strategy Patent [WSJ]
U.S. patent No. 7,698,194 isn’t an ingenious new machine or a break-through medical treatment. It is a method of analyzing taxes related to college-savings plans. It also is one of 144 patented tax strategies and 162 pending applications, as of late May, that tax preparers say have burdened their job and made it harder for citizens to pay their taxes. Consumer and tax groups have pushed since 2007 to get such patents banned. When it returns from recess this week, the U.S. House is expected to vote on an overhaul of the patent system that would effectively prohibit patenting tax strategies.

Leona Helmsley’s rich dog is dead [DMWT]
No more Trouble.

Retief Goosen Birdies at FedEx St. Jude Classic, Bogeys in Tax Court [TaxProf]
Swapping a caddy for a CPA could be an option.

Payroll-Tax Break Said to Be Discussed by Obama Aides Amid Slowing Economy [Bloomberg]
President Barack Obama’s advisers have discussed seeking a temporary cut in the payroll taxes businesses pay on wages as they debate ways to spur hiring amid signs that the recovery is slowing, according to people familiar with the matter. The idea, which is in preliminary stages of discussion, is among several being talked about at the White House as the economy holds center stage for the administration and Congress, the people said on condition of anonymity to discuss internal deliberations.

What Divorce Means For Your Taxes [SmartMoney]
Divorce has no season.

Troubled Audit Opinions [NYT]
On one side is an assessment of a company with a clean audit opinion from the Toronto office of Ernst & Young, and with bonds rated just below investment grade by Standard & Poor’s and Moody’s. It has raised billions in capital markets. On the other is an investment research firm using the name Muddy Waters Research. It says the company, the Sino-Forest Corporation, is a fraud, and that its shares are worthless. As this is written, there is no definitive answer as to who is right. But the initial reaction of the markets seemed to be that they had more trust in the short-seller — a company whose Web site gives no address — than in the auditor’s opinion.

Auditors face suits over Chinese blowups in U.S. [Reuters]
Investors who have suffered a drubbing from accounting scandals at U.S.-listed Chinese companies are starting to sue the auditors who blessed their financial statements, but it will be tough for them to win in American courts. Shareholders already have sued a string of China-based, U.S.-listed companies for fraud, saying they lost money when stocks tanked after financial scandals emerged. They contend companies invented sham businesses, inflated revenue or gave vastly different information to U.S. and Chinese regulators.

$100 Million Claim Against Deloitte & Touche [CNS]
SBP Capital, formerly known as Ameriquest Capital, claims Deloitte & Touche cost it $100 million by giving it bum advice on “tax issues related to Ameriquest’s securitizations” of mortgage lending and “related activities.”

Is Groupon’s Business Model Sustainable? [DealBook]
In its less than three years of existence, Groupon has established itself as the king of social buying sites. As feverish speculation mounted about its impending initial public offering, analysts and investors could only await further details of how much money it was minting. But with its I.P.O. filing now public, Groupon faces significant questions about the sustainability of its business model. A look at the company’s overall financials shows a steep decline in how much money it is wringing from its fast-growing subscriber base.

Bill Aims at Tax-Strategy Patent [WSJ]
U.S. patent No. 7,698,194 isn’t an ingenious new machine or a break-through medical treatment. It is a method of analyzing taxes related to college-savings plans. It also is one of 144 patented tax strategies and 162 pending applications, as of late May, that tax preparers say have burdened their job and made it harder for citizens to pay their taxes. Consumer and tax groups have pushed since 2007 to get such patents banned. When it returns from recess this week, the U.S. House is expected to vote on an overhaul of the patent system that would effectively prohibit patenting tax strategies.

Leona Helmsley’s rich dog is dead [DMWT]
No more Trouble.

Retief Goosen Birdies at FedEx St. Jude Classic, Bogeys in Tax Court [TaxProf]
Swapping a caddy for a CPA could be an option.

Payroll-Tax Break Said to Be Discussed by Obama Aides Amid Slowing Economy [Bloomberg]
President Barack Obama’s advisers have discussed seeking a temporary cut in the payroll taxes businesses pay on wages as they debate ways to spur hiring amid signs that the recovery is slowing, according to people familiar with the matter. The idea, which is in preliminary stages of discussion, is among several being talked about at the White House as the economy holds center stage for the administration and Congress, the people said on condition of anonymity to discuss internal deliberations.

What Divorce Means For Your Taxes [SmartMoney]
Divorce has no season.

Latest Accounting Jobs--Apply Now:

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

Related articles

Funny white cat-an athlete in a yellow sports headband, lying with yellow footballs, dumbbells and a yellow alarm clock standing nearby.

Monday Morning Accounting News Brief: PwC Is Turning Work Down?; TIL the President of Nigeria Worked at Deloitte | 9.11.23

Yay it’s Monday again! Praise Pacioli, there’s actually some stuff going on this morning. Meet a 29-year-old accountant whose ‘resentment’ only climbed after her firm raised her salary from $60k to $90k as she made millions for them. She has her own firm now: Stephanie Heredia’s promotion came a year too late and more than […]

Tuesday Morning Accounting News Brief: Getting Roofied at KPMG?; PwC: ‘Burnout Should Be a Concern’ | 9.5.23

Good morning and happy Tuesday. Hope everyone had a nice Labor Day, I had a productive weekend of being AFK at Meat Week (get your minds out of the gutter, it’s Fallout). Let’s get right into it. It is suspected someone spiked a colleague’s drink at a KPMG NZ get together, it isn’t the first […]