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Accounting News Roundup: Ernst & Young Cuts Out Lobbying for Big Audit Clients; The U.S. Tax System – Fair?; IRS Missed Some NFPs | 05.04.12

Ernst, audit clients cut lobbying ties-records [Reuters, Earlier]
Ernst & Young's lobbying unit is no longer listed as a lobbyist for three major U.S. companies, all of whom were 2011 audit clients of the accounting giant. The deregistration follows questions raised by two U.S. senators in March about whether the dual relationships crossed auditor independence boundaries. Documents filed last month with Congress showed that Washington Council Ernst & Young, the E&Y unit, was no longer registered as doing lobbying work for Amgen Inc, CVS Caremark Corp and Verizon Communications Inc. A lobbying-contract termination was also filed on March 31 for a fourth company, Nomura Holdings Inc, which, according to securities filings, uses an E&Y affiliate for auditing services. E&Y had provided lobbying services to Nomura since June 2011, according papers on file with Congress.

Jobs Data Point to Sluggishness [WSJ]
U.S. job growth slowed again in April, a fresh sign that the economy could be settling into a sluggish spring. Nonfarm payrolls grew by 115,000 last month, the Labor Department said Friday. The unemployment rate, obtained by a separate survey of U.S. households, ticked down a tenth of percentage point to 8.1%. Economists surveyed by Dow Jones Newswires expected a gain of 168,000 in payrolls and for the jobless rate to remain at 8.2% in April.

Facebook Targets $96 Billion Value [WSJ]
Facebook Inc. pulled back the curtain on how much it thinks it is worth, targeting a valuation as rich as $96 billion in what would be a record debut for an American company. The filing starts the clock for Facebook's executives to persuade investors ahead of a scheduled May 18 initial public offering that the social network deserves such a lofty price. Eight-year-old Facebook would become the most valuable U.S. technology company at the time of an IPO, exceeding Google Inc.'s $23 billion valuation in 2004.

Is the U.S. Tax System Fair? [TaxVox]
These days, some people want to impose a new Buffett tax on millionaires while others are outraged that low income people pay no income taxes at all and still others want to cut taxes on “job creators.” All in the name of fairness. Is the tax code fair? Should it be? It all depends on what you mean by fair, of course, but at an Urban Institute panel this week, two economists, a tax historian, and a philosopher agreed that in many important ways, it very likely is not.
IRS May Have Missed 15,000 Groups That Lost Tax-Exempt Status [AT]
The Internal Revenue Service identified 279,500 tax-exempt organizations that did not file a return or notice for three consecutive years, but it potentially did not identify more than 15,000 organizations that failed to file for three consecutive years, according to a new government report. Due to a programming error the IRS did not notify them that their tax-exempt status had been automatically revoked.
Fair Value Accounting Haunts Banking Sector [The Source/WSJ]

RBS made a big net loss in the first quarter of the year. But most of that was down to a £2.46 billion charge for the “fair value” of the lender’s own debt. “We wouldn’t be a bank if we didn’t have some interesting accounting charge below the line,” said RBS Chief Executive Stephen Hester.
Ex-PwC staffer excluded from ICAEW over false expenses [Accountancy Age]

A former PwC manager who falsely claimed nearly £4,000 in expenses has been excluded from membership of the ICAEW. The institute's disciplinary committee excluded and ordered costs against Lee Douglass, of Newcastle-upon-Tyne, for dishonestly claiming £3,858 in expenses from PwC between July 2007 and September 2008.
Slacker or go-getter? Brain chemical may tell [MSNBC]
What gives you the motivation to go the extra mile for a promotion or a perfect test score? It may be your levels of a brain chemical called dopamine. Researchers have found amounts of this chemical in three brain regions determine if a person is a go-getter or a procrastinator. Dopamine does different things in different areas of the brain. So while high levels in some brain regions were associated with a high work ethic, a spike in another brain region seemed indicate just the opposite — a person more likely to slack off, even if it meant smaller monetary rewards.


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