October 4, 2022

Accounting News Roundup: That Herbalife 10-Q Might Be a While; DOJ May Want to Rethink Prosecuting Elderly Widows; Sage Advice for Enterprising Tax Fraudsters | 04.30.13

Here's Herbalife Form 12b-25 notifying everyone that their first quarter 10-Q is going to be late [SEC]
Filed just before 5:30 yesterday afternoon: "Herbalife Ltd. (“we,” “our,” “us,” “Company” and “Herbalife”) was unable, without unreasonable effort or expense, to file a complete Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2013 (the “First Quarter 10-Q”) with the Securities and Exchange Commission (the “SEC”) because of previously disclosed events. Specifically, as previously disclosed on April 8, 2013, KPMG LLP (“KPMG”) notified the Company 5that KPMG was resigning, effective immediately, as the Company’s independent accountant. KPMG stated it had concluded it was not independent because of alleged insider trading in the Company’s securities by one of KPMG’s former partners who, until April 5, 2013, was the KPMG engagement partner on the Company’s audit. KPMG advised the Company it resigned as the Company’s independent accountant solely due to the impairment of KPMG’s independence resulting from its now former partner’s alleged unlawful activities and not for any reason related to the Company’s financial statements, its accounting practices, the integrity of the Company’s management or for any other reason. While the Company has not engaged a new independent accounting firm, it has begun a search process to identify KPMG’s successor."

Implications of the KPMG Insider Trading Case for Companies and Auditors [AT]
From the co-head of Fried Frank's Professional Services Defense practice: "[W]hile individual auditors are identified by name in audit reports filed in certain jurisdictions outside the United States, the litigation landscape in this country remains singularly harsh. Some firms have argued that individual audit partners may face heightened liability under the federal securities laws if they are identified by name in audit reports or PCAOB filings, and that the specter of such expanded liability may discourage qualified CPAs from serving as public company auditors." 

Big four accounting firms PwC, Deloitte, KPMG, E&Y back in consulting business [ET]
Here's something KPMG's Michael Andrew said, "We are really driving the transformation space. CEOs come to us saying: 'I have a problem, can you fix this?' Now we say: 'we can help you fix not only the finance and the tax part, we can also help you fix people, processes, IT, all of it." 

Offshore account holders win a victory in government tax case [CNN]
Federal judges usually dislike tax evaders, and in recent years they have imposed hefty fines, lengthy probation, and even prison sentences on dozens of Americans with offshore bank accounts. But the watershed case of Mary Estelle Curran, a 79-year-old widow who earned five seconds of probation for not disclosing an inherited Swiss account, is different. Curran was supposed to be a showcase takedown of users of Swiss bank secrecy, a whopper indictment involving a well-heeled resident of Palm Beach, Fla., who failed to report to the IRS that she held $43 million at UBS, the Swiss bank giant, and other foreign banks. Instead, her case unexpectedly turned into a black eye for the Justice Department, as a sympathetic judge last Thursday gave Curran five seconds' probation and excoriated the prosecutors, who had originally sought a jail term of up to six years. The judge, Kenneth Ryskamp of Federal District Court in West Palm Beach, even urged prosecutors to seek a presidential pardon for Curran, a homemaker who said she had relied on advisors and rushed to disclose the accounts she inherited from her deceased husband.

Kinston accountant pleads guilty to possessing child pornography [N&O]
William Walter Barker, 44, of Kinston, pleaded guilty Monday in federal court to possessing child pornography, according to a news release from the U.S. Department of Justice. According to the investigation, Barker was employed by an accounting firm in Kinston and attended a meeting in the Freemont Town Hall to present and discuss the town audit. After that meeting, a USB thumb drive, found near where Barker had been sitting, contained images of child pornography along with other documents belonging to him. Also, a search of Barker’s residence in Kinston on Nov. 29, revealed a laptop computer that contained more than 4,000 images and 100 videos of child pornography.

Twenty Years Ago Today the World Wide Web Went Public [Gizmodo]
What is that in human years?

Managers to Millennials: Job Interview No Time to Text [USAT]
A male graduate student seeking a managerial position in Avery Dennison's research and development unit took a call on his smartphone about 15 minutes into the interview. The call, which lasted about a minute and wasn't an emergency, ruined his near-certain chance for a job offer, [Jonathan] Singel says. "If he thought that was OK, what else does he think is appropriate?" he says.

Jailed tax cheat’s warning: Just ‘don’t do it’ [TBO]
Russell Simmons says it was just too easy to steal hundreds of thousands of dollars from the federal government. Speaking from the Pinellas County Jail, where he was waiting to be transferred to a federal prison to serve his 15-year sentence, the notorious tax fraud criminal had a message for others who would follow in his footsteps: “Don’t do it.”

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