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November 27, 2022

Accounting News Roundup: Deloitte Dodges HP Investor Lawsuit (For Now); Norquist v. Buffett; New SEC Chair Has CPA Genes | 11.27.12

Long Before H-P Deal, Autonomy's Red Flags [WSJ]
When Autonomy Corp. was starting up in this historic university town, founder Mike Lynch stuck a sign on an office door that read "Authorized Personnel Only." Behind the door, he told visitors, were 500 engineers working on "hush-hush" projects. The door, in fact, led to a broom closet, Mr. Lynch recounted in a 2010 speech. By then, Autonomy had grown from its founding in 1996 to one of Europe's largest and fastest-growing software companies. Hewlett-Packard Co. bought it in October 2011 for more than $11 billion. Now, following allegations last week by H-P that Autonomy made "outright misrepresentations" to inflate its financial results, U.S. authorities are trying to establish whether much of the company's business may also have been a facade. Meanwhile, questions are mounting about how H-P failed to uncover the alleged irregularities ahead of buying Autonomy, particularly as some outside analysts raised concerns about Autonomy's accounting for years.

HP Investor Sues Over Losses From Alleged Autonomy Fraud [BBW]
It took less than a week!
 
Tax Cuts, Tax Rates and Tax Shares [Economix]
Bruce Bartlett has a fun exercise, "Last week, the Internal Revenue Service posted the latest individual income tax data for tax year 2010. Supporting the Republican worldview, the data show that the share of total income taxes paid by the rich increased; supporting the Democratic worldview, they show that the wealthy’s share of total income increased more, leading to a decline in their average tax rate. Sorting through these competing facts is a bit like determining whether the glass is half-empty or half-full, but I’m going to try."

Norquist hits back against Buffett op-ed, calls argument 'silly' [The Hill]
On Monday The New York Times published an op-ed by Buffett criticizing Norquist's anti-tax pledge and urging Congress to pass legislation rolling back the Bush-era tax rates for incomes above $500,000 a year. Later on Monday Norquist appeared on Fox News and called Buffett's argument silly, and said Buffett got rich by "gaming the system." "Warren Buffett has made a lot of money, some of it off of gaming the political system. He invests in insurance companies and then lobbies to raise the death tax, which drives people to buy insurance. You can get rich playing that game but it's all corrupt," Norquist said. "It’s not investing; it’s playing crony politics and economics. That’s a shame. He’s done the same thing with some green investing. Shame on him for gaming the system and giving money to politicians who write rules that make your assets go up. 

Mortgage Interest Deduction, Once a Sacred Cow, Is Under Scrutiny [DealBook]
There is legitimate excitement in the air: “This is definitely a chance worth jumping for,” said Amir Sufi, a professor at the Booth School of Business at the University of Chicago. “For a fixed amount of revenue, it’s better to remove deductions than increase marginal tax rates.”

Incoming SEC Chairman Elisse Walter: Not Only a Lawyer – But A Math Major, And Daughter of a CPA! [FEI]
Speaking of legitimate excitement.
 
The Power of the Son-in-Law [WSJ]
A new study to mess with your heads: "In couples where the husband initially reported being close to his wife's parents, the risk of divorce over the next 16 years was 20% lower than for the group overall. Yet when the wife reported being close to her in-laws, that seemed to have the opposite effect: The risk of divorce with these couples was 20% higher."
 
Police Who Made Teenagers Do Push-ups In Rhode Island Face Punishment [AP]

Acting North Providence Police Chief Paul Martellini said a woman called police Friday morning to report her mailbox was damaged. Officers soon found a bright yellow sports car that matched the description, he said. Several teenagers were inside. Mayor Charles Lombardi told WPRO-AM on Monday the officers thought the best way to reprimand the teens was to have them do pushups. A neighbor videotaped the stop from across the street and posted it online. […] The video shows four police cars parked in a residential neighborhood behind a yellow car. People can be seen doing more than a dozen pushups next to the police cars while four uniformed officers watched. Once they were done doing pushups, they were allowed to leave.

 

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