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Accounting News Roundup: Deloitte’s Big Number; E&Y Resigns from SinoTech; Big Tax Bust in KC | 09.23.11

Deloitte reports record 2011 revenue of $28.8 billion [Reuters]
Deloitte’s member firms worldwide reported a record $28.8 billion in revenue, up 8.4 percent from 2010. In local currency terms, not accounting for fluctuations in the value of the dollar, revenue grew 7.7 percent for the fiscal year that ended May 31, 2011. Deloitte will likely post similar growth in fiscal 2012, despite a challenging economic picture, the firm’s global chief executive, Barry Salzberg, said on Thursday. “Our first quarter (fiscal 2012) results are very much in line with what we’ve achieved in the prior year,” Salzberg said in an interview.

Pressure Mounts to Create Private Accounting Standards Board [AT]
On Thursday, the AICPA released a sampling of comments in support of creating a separate standard-setting board for privately held companies, and said that 99 percent of the 2,800 comments received so far support the establishment of an independent standard-setter. The Institute has organized a letter-writing campaign urging the Financial Accounting Foundation, which oversees FASB and the Governmental Accounting Standards Board, to create a separate board for private company standards […]. The FAF has set up a trustee working group to review the recommendations of a report released in January by a Blue-Ribbon Panel on Standard Setting for Private Companies, which backed the creation of a separate board under the oversight of the FAF. The working group is expected to release its proposals by early October[…].

SinoTech Says Ernst & Young China Arm Resigns As Auditor [Dow Jones]
-Nasdaq-listed SinoTech Energy Ltd. […] said Friday that Ernst & Young’s China unit has resigned as the company’s auditor, citing concerns over a SinoTech financial transaction with SinoTech’s chairman. The Chinese oil-field service provider said in a statement that Chief Financial Officer BoXun Zhang has resigned. It added that Jing Liu has resigned as chairwoman of the company’s audit committee.

Candor by SEC Cheered in House [WSJ]
Securities and Exchange Commission Chairman Mary Schapiro said Thursday she had apologized to the other members of the commission for not informing them that the agency’s former top attorney had a potential conflict in the agency’s investigation of the Bernard Madoff Ponzi scheme. Her remarks, at a joint hearing hosted by the House Financial Services and House Oversight subcommittees, came as some Democratic lawmakers dismissed the idea that the SEC’s former general counsel, David Becker, committed criminal acts.

House approves spending measure opposed by Senate; shutdown possible [WaPo]
Washington lurched toward another potential government shutdown crisis Friday, as the House approved a Republican-authored short-term funding measure designed to keep government running through Nov. 18 that Democrats in the Senate immediately vowed to reject. In an after-midnight roll call, House Republican leaders persuaded conservatives early Friday morning to support a stop-gap bill nearly identical to one they had rejected just 30 hours earlier.

Obama Takes Aim at Tax ‘Targets,’ Fires Blanks [Bloomberg]
Two weeks ago, President Barack Obama unveiled his $447 billion plan to put Americans back to work. Eleven days later, he told us how he’d pay for it: $1.5 trillion in tax increases over 10 years and $3 trillion in spending cuts — on top of the $1 trillion already agreed to in last month’s Budget Control Act. He outlined the principles of a comprehensive tax reform that would lower rates, broaden the base, cut “inefficient and unfair” tax breaks, encourage job creation and reduce the deficit. In other words, every economist’s dream.

Meg Whitman Is Named Hewlett-Packard Chief [NYT]
Hewlett-Packard replaced its embattled chief executive on Thursday with the former eBay chief executive Meg Whitman, saying that the company’s strategy to transform its business was sound, but that it needed new leadership to carry out the plan. The upheaval at H.P. came after several weeks of mounting concerns among board members, senior executives and investors about how the former chief, Léo Apotheker, had handled a major strategy shift at the company announced last month, according to interviews with several people briefed on the board’s discussions.

14 indicted in massive tax refund scam [KCS]
A three-year scheme that allegedly tried to defraud the Internal Revenue Service out of millions in inflated tax refunds unraveled Thursday in Kansas City as authorities announced charges against 14 defendants from around the country. U.S. Attorney Beth Phillips described it as the largest false tax claims case ever prosecuted in Missouri. “Kansas City was the hub of a nationwide conspiracy that attempted to receive nearly $100 million in fraudulent tax refunds,” Phillips said.

Obama’s Buffett Rule: Keep Your Eye on Capital Gains [TaxVox]
President Obama didn’t quite get around to saying so when he rolled out his latest deficit reduction plan on Monday, but his Buffett Rule—that no one making more than $1 million should pay a lower tax rate than those in the middle-class—is mostly about investment income.

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