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Accounting News Roundup: Former IRS Agent Guilty in Prostitution Charge; Jefferson County Debt Breaks Records; Green Mountain’s Growing Inventories | 11.10.11

Posted on by Adrienne Gonzalez

Alabama Governor Fails to Prevent County’s Record $4 Billion Bankruptcy Filing [NYT]
Last-ditch efforts by the governor of Alabama to prevent a record-breaking municipal bankruptcy in his state broke down on Wednesday, as the Jefferson County Commission voted 4 to 1 to declare bankruptcy on roughly $4 billion of debt.

Ex-IRS agent pleads guilty to prostitution charge [AP]
A retired IRS agent who once investigated a fugitive Nevada brothel boss and was partners in a failed rural Nevada bordello venture pleaded guilty Wednesday to transporting a California woman across state lines to commit prostitution.

Tokyo Police Investigate Olympus Accounting [WSJ]
The Tokyo Stock Exchange on Thursday placed shares of Olympus Corp. on its watch list for possible delisting, as the Japanese police launched an investigation into the company’s decades-long cover-up of investment losses.

Are Rising Inventories at Green Mountain a Bad Omen? [The Street]
On Wednesday’s conference call, Green Mountain said it’s “confident” that no accounting fraud has occurred. The questions from analysts about growing inventories seem to signal unease about both sales projections and the merit of capital spending increases.

L.A. councilman says business tax report had editorial spin [LA Times]
The drive to dismantle -– and possibly scrap –- the business tax in Los Angeles moved forward Wednesday as a City Council committee called for an independent economic analysis of several proposals to cut it, including one that would phase it out over four years.

MF Global Commodity-Account Transfers to Brokers ‘Substantially’ Complete [Bloomberg]
The transfer of MF Global Inc. commodities accounts to other brokers is “substantially” complete, a spokesman for the liquidator of the bankrupt broker- dealer said. Many of the firm’s 150,000 customer accounts are “out of date, inactive, or very small,” leaving a much smaller number to deal with, said Kent Jarrell, a spokesman for trustee James W. Giddens.

Goldman, Morgan Stanley mull reducing mark-to-market accounting [Reuters]
Market not so great, eh?

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Accounting News Roundup: Skilling Wants Conviction Overturned; Deloitte Survey: Half of Internal Auditors Lack Adequate Staff; Addressing Fair Tax Hype | 11.02.10

Skilling Pursues Case to Overturn His Conviction [DealBook]
On Monday, Mr. Skilling’s lawyers traveled to Houston to argue before a three-judge panel of a federal appeals court that his conviction should be overturned as a result of the Supreme Court’s ruling. The argument took place in the same courthouse where Mr. Skilling and his colleague Kenneth L. Lay were convicted more than four years ago. Mr. Skilling’s wife and brother (the popular Chicago weatherman Tom Skilling) attended the hearing, according to Bloomberg News.

Terror Trade Tax []
The Terror Trade Tax, as I would name the required additional spending on cargo inspection, will, on the margin, raise costs and therefore discourage trade. It might also raise costs more for exports from countries deemed most suspect, but recall that this package, if not found, might have blown up a plane flying from London to the United States. Had it exploded over the Atlantic, it might have been impossible to know where the package originated.

Officer breaks ‘little’ accountant’s arm, but no charges laid [Toronto Star]
Accountant abuse in Toronto.

Employee-Benefit Costs Concern CFOs Most [Real Time Economics/WSJ]
A new survey of 508 U.S. chief financial officers and senior comptrollers find far more of them (84%) worried about rising employee benefit costs than worried about rising raw material (27%) or energy costs (21%).

The survey found 30% are planning on reducing health-care benefits in the coming year, 23% are planning on reducing bonuses and 18% are planning on reducing stock options or equity based compensation. The survey was conducted by Grant Thornton LLP during the first half of October.

Shortage of internal auditors to fight fraud [Accountancy Age]
A little more than half of internal auditors say they have too few staff to deal with fraud. The research in Deloitte’s first Fraud Survey also concludes that a fifth of those polled said their companies had no formal fraud policy. More than 60% said their vulnerability to fraud had increased in the past 18 months.


Poll: CEO pay needs reform [On the Money/The Hill]
“The corporate governance provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act focused on policies such as ‘say on pay’ and ‘clawbacks,'” said PwC partner Catherine Bromilow in prepared remarks. “Our survey uncovered other areas that may go further to address CEO pay. As compensation issues continue to be a concern, boards will be well-served by closely examining their compensation policies and how their rewards link to company performance.”

Fair Tax Isn’t Just a Bad Tactic; It’s a Bad Idea [Tax Update Blog]
Joe Kristan sheds light on the fair tax hype.

The Tax Increase No One’s Talking About [TaxVox]
The stimulus bill (the American Recovery and Reinvestment Tax Act of 2009) provided $287 billion in tax cuts for 2009 and 2010 but most provisions expire at the end of this year. (Congress extended some of the business tax cuts during the summer.) The big kahuna is the Making Work Pay credit—nearly $60 billion a year going to most workers—but partial exemption of unemployment compensation, expansion of EITC and education credits, and greater refundability of the child credit deliver nearly $20 billion more. Taxes will jump for more than 95 percent of Americans when those cuts evaporate come January.