Accounting News Roundup: Ernst & Young Faces Resurrected Lawsuit; Taxpayer Advocate Wants Overhaul of Code; PwC Supports GLBT Youth | 04.15.11

Ernst & Young must face class action over Broadcom’s option backdating [LAT]
A lower-court judge had dismissed the case against Ernst & Young after concluding the plaintiffs hadn’t shown that the auditors knew that the value of Broadcom’s stock was probably inflated by the company’s manipulation of its financial statements. Thursday’s ruling by the U.S. 9th Circuit Court of Appeals in San Francisco reversed that dismissal and scolded Ernst & Young for not acting to stop the $2.2-billion backdating scheme.

Obama $1 Trillion Tax Proposal Slams Into Republican Wall [Bloomberg]
President Barack Obama’s call for raising taxes by focusing on spending in the tax code was immediately rejected by top Republicans, signaling that any effort to increase the government’s take from the economy would be difficult to move through Congress.

IRS Watchdog Seeks Overhaul Of Corporate, Individual Tax Code [Dow Jones]
National Taxpayer Advocate Nina Olson Wednesday told lawmakers the U.S. tax code is “a mess,” and in dire need of simplification, but any overhaul should rework rules for corporate and individual taxes at the same time. “I believe that fundamental tax reform must be made a priority,” Olson said in her written testimony to the House Small Business Committee. “However, in order to be effective and far-reaching, such fundamental tax reform should include both corporate tax reform and individual tax reform.”

BofA Q1 profit lower than expected; names new CFO [Reuters]
Bank of America Corp (BAC.N) posted an unexpectedly sharp decline in first-quarter profit, plagued by losses in the mortgage business, and the bank named a new chief financial officer.

PwC Says “It Gets Better” in Support of GLBT youth [PwC]
As far as work-life balance…well, that’s another question entirely.

Chinese Man Arrested in LA For Creating a Fake Army [JDA]
Wait, that’s a crime?

Zale says SEC not to recommend action against co [Reuters]
Zale Corp said the U.S. Securities and Exchange Commission does not intend to recommend action against the company following a probe into the accounting errors that prompted the jewelry retailer to restate results. Zale had restated results for 2008 and some quarters in 2009 due to accounting errors related to prepaid advertising and loss carryforwards. Loss carryforwards are used to cut tax liability by offsetting losses in a certain year against future profits. These carryforwards can be used in one of the seven years following a loss.

IRS Chief Lays Out Vision For Agency’s Future [NPR]
The Commish wants to fosters a more pleasant tax compliance experience.

Ernst & Young must face class action over Broadcom’s option backdating [LAT]
A lower-court judge had dismissed the case against Ernst & Young after concluding the plaintiffs hadn’t shown that the auditors knew that the value of Broadcom’s stock was probably inflated by the company’s manipulation of its financial statements. Thursday’s ruling by the U.S. 9th Circuit Court of Appeals in San Francisco reversed that dismissal and scolded Ernst & Young for not acting to stop the $2.2-billion backdating scheme.

Obama $1 Trillion Tax Proposal Slams Into Republican Wall [Bloomberg]
President Barack Obama’s call for raising taxes by focusing on spending in the tax code was immediately rejected by top Republicans, signaling that any effort to increase the government’s take from the economy would be difficult to move through Congress.

IRS Watchdog Seeks Overhaul Of Corporate, Individual Tax Code [Dow Jones]
National Taxpayer Advocate Nina Olson Wednesday told lawmakers the U.S. tax code is “a mess,” and in dire need of simplification, but any overhaul should rework rules for corporate and individual taxes at the same time. “I believe that fundamental tax reform must be made a priority,” Olson said in her written testimony to the House Small Business Committee. “However, in order to be effective and far-reaching, such fundamental tax reform should include both corporate tax reform and individual tax reform.”

BofA Q1 profit lower than expected; names new CFO [Reuters]
Bank of America Corp (BAC.N) posted an unexpectedly sharp decline in first-quarter profit, plagued by losses in the mortgage business, and the bank named a new chief financial officer.

PwC Says “It Gets Better” in Support of GLBT youth [PwC]
As far as work-life balance…well, that’s another question entirely.

Chinese Man Arrested in LA For Creating a Fake Army [JDA]
Wait, that’s a crime?

Zale says SEC not to recommend action against co [Reuters]
Zale Corp said the U.S. Securities and Exchange Commission does not intend to recommend action against the company following a probe into the accounting errors that prompted the jewelry retailer to restate results. Zale had restated results for 2008 and some quarters in 2009 due to accounting errors related to prepaid advertising and loss carryforwards. Loss carryforwards are used to cut tax liability by offsetting losses in a certain year against future profits. These carryforwards can be used in one of the seven years following a loss.

IRS Chief Lays Out Vision For Agency’s Future [NPR]
The Commish wants to fosters a more pleasant tax compliance experience.

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