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Accounting News Roundup: Everyone Hates Barnier’s Audit Reform Ideas; GOP Backs Payroll Tax Cut; IRS Seattle Office Finally Gets Bedbugs | 11.30.11

Hey gang, I’m in San Jose, California today to talk to youknowwho. How do you west coasters do it? You do realize that you’re three hours behind the *rest of the world*, don’t you? Anyway, you’ve still got time to submit some questions for BoMo, so jump over and try to avoid repeating any of the trolls asking how to get a job at PwC.

Big four auditors face breakup to restore trust [Reuters]
The world’s top four audit firms will have to split up and rename themselves under a far-reaching draft European Union law to crack down on conflicts of interest and shortcomings highlighted by the financial crisis. “Investor confidence in audit has been shaken by the crisis and I believe changes in this sector are necessary,” Internal Market Commissioner Michel Barnier said on Wednesday. Large auditors said the plans won’t improve audit quality, while smaller rivals accused Barnier of a climbdown. Policymakers have questioned why auditors gave a clean bill of health to many banks which shortly afterwards needed rescuing by taxpayers as the financial crisis began unfolding. Barnier said recent apparent audit failures at AngloIrish and Lehman Brothers banks, BAE Systems and Olympus “would strongly suggest that audit is not working as it should”. More robust supervision is needed and “more diversity in what is an overly concentrated market, especially at the top end”, he said.

Olympus Panel Said to Release Accounting Probe Report as Soon as This Week [Bloomberg]
Olympus Corp. (7733)’s independent panel investigating acquisitions and accounting by the Japanese camera maker may release findings as early as this week, a person involved in the investigation said. The committee plans to complete its report before Olympus announces earnings, the person said, asking not to be identified because the probe is confidential. The investigation is ongoing, so the report could be delayed, the person said.

Arrests in Olympus scandal could take weeks: lawyers [Reuters]
Even if criminal complaints are filed against former executives or others involved in the scam, which dates back two decades, arrests might not take place by end-year. This is partly to allow both suspects and prosecutors to spend the new year’s holidays at home, since the turn of the new year is Japan’s biggest traditional holiday, akin to Christmas in the West. Suspects can be held for a total of 22 days before either being indicted or released. “I think it would be hard to make arrests in early December and after December 10, they won’t take people into custody,” said lawyer Yasuyuki Takai, a former prosecutor. “It’s the turn of the year.”

PwC Reports Increase in Fraud, Cyber Crime [AT]
Overall, 45 percent of U.S. respondents from 158 companies reported their organization had suffered fraud in the last year, up 10 percent from 2009. Of those respondents, 40 percent were affected by cyber crime.

GOP Set to Back Payroll-Tax Cut [WSJ]
“I think at the end of the day, there’s a lot of sentiment in our conference—clearly a majority sentiment—for continuing the payroll-tax relief that we enacted a year ago in these tough times,” Senate Minority Leader Mitch McConnell (R., Ky.) said.

More Big Bank Troubles: Lower Corporate Tax Rates Mean More Writedowns [GOA]
The Grumpies admit that the banks are probably way ahead of the game: “[D]o we really think for one second that the big bank lobby will permit a corporate tax reduction without some special provision that protects them from the adverse consequences that we have projected?”

Macomb County tries to offset $5M accounting error [DFP]
The error — an approximately $5-million discrepancy that began in 2006 — was created by the county and missed during yearly audits. Commissioners expressed their displeasure with accounting firm Rehmann of Troy during a special Finance Committee meeting Nov. 22 by voting 8-1 to ask County Executive Mark Hackel to consider canceling the firm’s contract.

Bedbugs found in Seattle IRS offices [KOMO]
An IRS worker first spotted a single bedbug at the Seattle office in October. An exterminator trapped a second bug, and that was enough for IRS officials to send in the hounds.

IRS Dives into the Bonus Pool [CFO]
Reversing a position it had maintained for 36 years, the Internal Revenue Service ruled in November that a corporation can deduct the entire amount of its bonus pool even though incentive payments for some employees can’t be determined before the end of the year.

Rooney, first KPMG LI managing partner, dies [LIBN]
Gerald Rooney started the LI office with 30 professionals in 1966.

Norquist, Chamber press for repatriation [The Hill]
Your token GGN link.

Posted in ANR