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Accounting News Roundup: End the Audit Mandate; 10 Years at One Job?; Fear the Frankenstorm | 10.26.12

‘Fiscal cliff’ already hampering U.S. economy, report says [WaPo]
The “fiscal cliff” is still two months off, but the scheduled blast of tax hikes and spending cuts is already reverberating through the U.S. economy, hampering growth and, according to a new study, wiping out nearly 1 million jobs this year alone. The report, scheduled for release Friday by the National Association of Manufacturers, predicts that the economic damage would deepen considerably if Congress fails to avert the cliff, destroying nearly 6 million jobs through 2014 and sending the unemployment rate soaring to near 12 percent.

Nobody Should Have Audits Crammed Down Throat [Bloomberg]
Jonathan Weil: "The question of whether audits should be mandatory is one I have been chewing on for years. And for me at least, the findings by the Senate Permanent Subcommittee on Investigations, led by Senator Carl Levin of Michigan, were the last straw. For example, here’s what one Ernst & Young tax adviser, Margie Rollinson, wrote to colleagues on the HP account in a September 2007 e-mail: “Documents and/or workpapers that indicate an intention to circumvent or otherwise abuse the spirit of section 956 could prove particularly troublesome and thus should be avoided.” (She was referring to a section of the tax code.) That should dispel any notion that the Big Four accounting firm was looking out for the public interest. All the more reason Congress should strip the profession of its government franchise and make outside audits voluntary for public companies. Maybe we can’t stop audit firms from promoting schlocky tax shelters. But at least let’s stop subsidizing them."

Why Freddie Mac Resisted Refis [ProPublca]
Freddie Mac, the taxpayer-owned mortgage giant, made it harder for millions of Americans to refinance their high-interest-rate mortgages for fear it would cut into company profits, present and former Freddie Mac officials disclosed in recent interviews. In closed door meetings, two Republican-leaning board members and at least one executive resisted a mass refi policy for an additional reason, according to the interviews: They regarded it as a backdoor economic stimulus. Freddie's policy was financially brutal: During the worst years of the Great Recession, when homeowners most needed the savings they could have gotten from refinancing to lower interest rates, Freddie helped keep millions of borrowers locked in high-interest-rate mortgages. A more aggressive refi program by both Freddie and its sister company Fannie Mae would have helped an additional nine million homeowners to refinance, saving them nearly $75 billion in interest payments to date, Columbia University housing economist Christopher Mayer estimates. In addition, it would have prevented hundreds of thousands of delinquencies and foreclosures, he says.

10 Reasons to Stay in a Job for 10 Years [HBR]
Ten years in public accounting might as well be 100.

Judge says no to reduced sentence for embezzler, former SC lobby group accountant [The State]
That's unfortunate.

'Frankenstorm' Headed to Region [WSJ]
Greater New York began preparing on Thursday for Hurricane Sandy as an unusual confluence of weather patterns started taking shape that could produce what meteorologists dubbed a "Frankenstorm." In New York, Gov. Andrew Cuomo's office warned in a news release of "heavy rain, high winds, flooding, tornadoes, coastal surges, and widespread power outages" as soon as Tuesday and said state agencies would be on alert. New Jersey officials said they had begun monitoring flood-prone areas that may have to be evacuated. In Connecticut, power companies were bracing for a test of a revamped storm-preparation system. "It's definitely something that everyone should be watching", said Nelson Vaz, a meteorologist with the National Weather Service in Upton, N.Y. "A storm that maintains its strength, coming in to central New Jersey would focus the storm surge in the New York harbor area."

Man Augments Testicle With Chin Implant: Journal of Sexual Medicine [HP]
Doctors in Mexico augmented a 45-year-old man's left testicle with an implant normally used for shaping a chin, according to Live Science. The surgery was reported in this month's issue of the Journal of Sexual Medicine. The unnamed man was born with one tiny right testicle and a normal sized left one. Doctors initially removed the smaller testicle and replaced it with an implant, but that still left him with an uneven pair. As a result, in a separate surgery, doctors augmented the left testicle with a silicone chin implant to make both balls evenly sized. This is reportedly the first time such a procedure has been tried. Urologist and lead author Fernando Ugarte said the man suffered from body dysmorphic disorder, a preoccupation with a specific physical defect often seen in people with anorexia or bulimia. "We are starting to have the same kind of problems that the ladies have with body image," Ugarte said. "There are many people who are probably not feeling satisfied with their testicular size, and now they have a new option."

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