Please ensure Javascript is enabled for purposes of website accessibility
September 30, 2023

Accounting News Roundup: IASB Chair Not Satisfied; Yahoo’s ‘Perception of Tax Risk’; Bad Auditing | 12.11.15

International Accounting Regulators Not Doing Cartwheels Over SEC’s Idea [MB/WSJ]
Yesterday we discussed the SEC's consideration of allowing US companies to include IFRS as an "add-on" to their financial statements. That is, they're considering if they should consider it. It's being called a middle ground approach between the complete dismissal of IFRS and converting outright. Compromise or not, IASB chairman Hans Hoogervorst doesn't like it:

Hans Hoogervorst, chairman of the International Accounting Standards Board, is unimpressed with the move. He says the SEC’s idea wouldn’t actually prompt significantly greater U.S. use of the global rules – because companies think they already have to disclose too much and are trying to reduce the volume of their disclosures, not increase it.

“In a world where everyone is complaining about disclosure overload, I don’t think many (companies) will be jumping up and down to see this as an additional disclosure,” Mr. Hoogervorst said Thursday at an accounting conference in Washington. While he said he is “glad the SEC is looking at a serious proposal” that could lead to greater U.S. use of the global rules, he also said the world isn’t seeing “strong American leadership” on the issue. “I do not believe this situation to be healthy.”

He's probably right. No company interested in using IFRS is likely to jump at the chance just because the SEC says they can. Sorta like the audit partner disclosure, a company could drop some IFRS financial statements in the footnotes or somewhere else if it really wanted to. On the other hand, it's naive to think that mandatory disclosure of IFRS would lessen the complaining. Either direction they take this, there will be grumbling.

Yahoo’s Spinoff Plan Does Not Change Its Tax Risk [DealBook]
Victor Fleischer is "flummoxed" by Yahoo's message behind the company's new plan to spin off its core business:

The board’s careful choice of words — perception of tax risk, not actual tax risk — reveals that it is a true believer in sophisticated tax planning as the path to salvation. Instead of a “forward” spin, Yahoo is now planning a “reverse” spinoff, with the company’s core business assets and its stake in Yahoo Japan to be placed in a newly formed subsidiary distributed to shareholders, leaving its stake in Alibaba behind.

[…]

The direction of the spin has no legal relevance; the tax problem arises when either the distributing corporation (RemainCo) or the controlled corporation (SpinCo) has mostly investment assets in relation to operating assets.

He has a handful of ideas of why Yahoo is taking this approach, among them is that Yahoo will bide its time while it moves allies into place to let the deal sail through.

SEC Suspends Public Accountants for Bad Auditing
I'll be taking a closer look at the SEC orders, but the press release is promising. Here's a sample:

According to the SEC’s orders finding violations by Peter Messineo and his firm Messineo & Co., Charles Klein and his firm DKM Certified Public Accountants, Robin Bigalke, Joseph Mohr, and Richard Confessore:

  • Messineo and his firm, which had more than 70 corporate clients, skipped mandatory quality reviews for their own audits and performed deficient quality reviews for audits by another audit firm.
  • To cover up these violations, Bigalke falsified and backdated audit documents in her role as Messineo & Co.’s senior accountant. She also arranged with Mohr, the firm’s quality reviewer, the backdating of quality review documents.
  • Mohr falsely identified himself as a certified public accountant during a time when was not licensed as a CPA.

In other news:

Latest Accounting Jobs--Apply Now:

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

Related articles

Funny white cat-an athlete in a yellow sports headband, lying with yellow footballs, dumbbells and a yellow alarm clock standing nearby.

Monday Morning Accounting News Brief: PwC Is Turning Work Down?; TIL the President of Nigeria Worked at Deloitte | 9.11.23

Yay it’s Monday again! Praise Pacioli, there’s actually some stuff going on this morning. Meet a 29-year-old accountant whose ‘resentment’ only climbed after her firm raised her salary from $60k to $90k as she made millions for them. She has her own firm now: Stephanie Heredia’s promotion came a year too late and more than […]

Tuesday Morning Accounting News Brief: Getting Roofied at KPMG?; PwC: ‘Burnout Should Be a Concern’ | 9.5.23

Good morning and happy Tuesday. Hope everyone had a nice Labor Day, I had a productive weekend of being AFK at Meat Week (get your minds out of the gutter, it’s Fallout). Let’s get right into it. It is suspected someone spiked a colleague’s drink at a KPMG NZ get together, it isn’t the first […]