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Accounting News Roundup: Diamond’s Numbers Have Been Nutty for a While; Will Fraudsters Love JOBS?; The Tax Return Inventory | 03.19.12

~ Good morning, capital market servants. Hopefully you managed to emerge from the haze of corned beef and green beer in one piece and nothing added to your permanent record. Posting will be on a light schedule today, as I'll be speaking to faculty and students at James Madison University in Harrisonburg, VA all day. I'll be tweeting various musings throughout the day, so if you simply can't live without updates, I suggest you follow the feed (you may even win something). If anything interesting happens in the mean time like a career emergency or 5-hour overdose, be sure to email us or drop us a line in the tip box.

Seeds of trouble sown at Diamond Foods years ago [Reuters]
The accounting scandal at snack maker Diamond Foods in recent months may have shocked shareholders and some California walnut farmers. But a number of accounting and industry experts spotted red flags some time before. A close examination of business practices at Diamond Foods, the nation's largest walnut processor and maker of Emerald nuts, points up a number of warning signs, including unusual timing of payments to growers, a leap in profit margins, and volatile inventories and cash flows. The picture that emerges is of a company that for years seemed to push hard on every lever to meet increasingly ambitious earning targets and allowed top executives to pull in big bonuses, according to interviews with former Diamond employees and board members, rivals, suppliers and consultants, in addition to reviews of public and non-public Diamond records.

The JOBS Act: Plutocracy in Action [Accounting Onion]
Attention any burgeoning Sam Antars: Tom Selling has something you might be interested in knowing: "[The JOBS Act is] an ugly piece of securities legislation that only a fraudster – or an investment banker – could love. I'll be the first to admit that the securities laws may not be perfect, but surely this is not one of the first places to look if one wants to create an environment that is more hospitable to real jobs growth."
GAO: IRS Continues to Put Taxpayer Information at Risk; 89 of 105 Internal Control Weaknesses Remain [TaxProf]
The Corporate Disclosure Assault [WSJ]
The Journal's Opinion page assault's the assault: "Shareholder proxy season is coming up, and along with it a new batch of politicized shareholder resolutions. The underreported story this year is the flowering of a long-planned political campaign intended to stop companies from exercising their free-speech rights to influence government. Corporate directors need to know what they're up against."
IRS expects to process 239.3 million tax returns in 2012 [DMWT]
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Posted in ANR