Accounting News Roundup: Ernst & Young Puts Up a Number; Oh Goodie, Congress Has a Plan; German Church Gets Shrewd | 10.02.12

Ernst's revenues rise 6.7 percent on advisory growth [Reuters]
Global audit firm Ernst & Young ERNY.UL said revenues for 2012 rose to $24.4 billion, but warned the coming months will be challenging because of the European sovereign debt crisis and the looming U.S. "fiscal cliff" at year-end. Led by double-digit growth in consulting and advisory services, Ernst's revenues for the fiscal year ended June 30 increased 6.7 percent from $22.9 billion in 2011.

J.P. Morgan Sued on Mortgage Bonds [WSJ]
New York's top prosecutor opened a new front in efforts to hold banks accountable for the financial crisis by filing a civil lawsuit against J.P. Morgan Chase & Co., alleging widespread fraud by the company's Bear Stearns unit in the sale of mortgage-backed securities. The case is the first to be brought under the aegis of a group of federal and state prosecutors and regulators formed by President Barack Obama in January. If successful, the lawsuit could point the way to significantly more financial pain for the big banks, which face threatened government actions and numerous investor lawsuits tied to mortgage securities that soured in the crisis.

Leaders at Work on Plan to Avert Mandatory Cuts [NYT]
Senate leaders are closing in on a path for dealing with the “fiscal cliff” facing the country in January, opting to try to use a postelection session of Congress to reach agreement on a comprehensive deficit reduction deal rather than a short-term solution. Senate Democrats and Republicans remain far apart on the details, and House Republicans continue to resist any discussion of tax increases. But lawmakers and aides say that a bipartisan group of senators is coalescing around an ambitious three-step process to avert a series of automatic tax increases and deep spending cuts.

IRS Could Buy Time on Fiscal Cliff [WSJ]
The prospect of the U.S. falling off the “fiscal cliff” is an ominous one for many economists, who warn that the U.S. could plunge into another recession. But exactly how painful a fiscal cliff-dive would be is a matter of debate, and some politicians and economists aren’t that troubled by it. One possible reason: the U.S. Treasury Department and the Internal Revenue Service have broad latitude to adjust withholding rates for Americans – or not adjust them. If the current tax breaks expire on Dec. 31, but tax administrators decided to leave withholding at current levels, some tax experts say that could cushion the economic blow considerably at the beginning of next year, and give Congress more time to reach a compromise.

Danger Ahead? Taxes and the Fiscal Cliff [Urban Institute]
Just the thing to get you all worked up for tomorrow's debate.

Romney Advisor Advocates Tax Hikes [Martin Sullivan]
Marty would like everyone to look at Marty.

No tax, no blessing: German church insists on levy [AP]
The road to heaven is paved with more than good intentions for Germany's 24 million Catholics. If they don't pay their religious taxes, they will be denied sacraments, including weddings, baptisms and funerals. A decree issued last week by the country's bishops cast a spotlight on the longstanding practice in Germany and a handful of other European countries in which governments tax registered believers and then hand over the money to the religious institutions. In Germany, Catholics, Protestants and Jews pay a surcharge of up to nine percent on their income tax bills — or about €56 ($72) a month for a single person earning a pre-tax monthly salary of about €3,500 ($4,500).

Queens teacher suing city claiming he was beaten up by a first-grader [NYP]

A hulking Queens gym teacher and former college football player claims a pupil fractured his ankle, injured his knee and forced him to go to a shrink for stress — even though the kid was only 50 pounds and in first grade. Burly, 220-pound PS 330 teacher John Webster, 27, said a 4-foot-2 Rodrigo Carpio, 6, also kicked and pinched the Elmhurst school’s principal, a security officer and another teacher during a rampage in April. “It’s sort of like an angel-devil sort of thing,” said the 5-foot-10 Webster, who recently filed a notice of his intent to sue the city and says he must now wear braces on his right ankle and knee.

 

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