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November 29, 2022

Accounting News Roundup: IASB Not Impressed with Greek Debt Writedowns; Posthumous Taxes Less Certain for Ken Lay; PwC Leadership Appointments | 08.30.11

IASB criticises Greek debt writedowns [FT]
In a letter sent to the European Securities and Markets Authority, the European Union’s market regulator, the International Accounting Standards Board criticised the inconsistent way in which banks and insurers have been writing down the value of their Greek sovereign debt. “This is a matter of great concern to us,” Hans Hoogervorst, IASB chairman, said in the letter, which was published on Tuesday after the IASB’s concerns were revealed by the Financial Times. People familiar with the IASB’s thinking said the intervention was unprecedented and reflected its belief that some European compaking enough provisions for Greek sovereign debt losses.

Dead Enron CEO Lay Beats IRS in Tax Court [Bloomberg]
Kenneth Lay, the deceased chief executive officer of Enron Corp., defeated the Internal Revenue Service in the agency’s bid to collect $3.9 million from his estate and his wife, the U.S. Tax Court ruled. The case decided yesterday involved transactions among Lay, his wife, Linda, and Enron that were executed on Sept. 21, 2001. The Lays sold $10 million in annuities to Enron as part of an agreement for him to retake the CEO position, under the stipulation that the annuities would be returned to Lay if he worked a 4.25-year term. The company didn’t survive that long, and it filed for bankruptcy protection in December 2001.

House Tax Chief Pitches No-New-Revenue Plan to Wary Voters [Bloomberg]
Representative Dave Camp’s summer- recess ritual of visits with constituents at a retirement home, the Rotary Club and an airport construction site was punctuated this past week by voters’ misgivings about the deficit fight in Washington in which Camp plays a central part. As he crisscrossed his hometown district of Midland, Michigan, on Aug. 25, the chairman of the House Ways and Means Committee repeated to residents — some of whom he has known since childhood — his promise not to raise taxes to cut the deficit. The 11-term Republican House member encountered voters who supported him while expressing doubt that Congress can tackle a $1.3 trillion budget deficit. “They need to grow up and get together,” John Church, a retired Midland retailer, said of Congress.

The Case Against a Payroll Tax Cut [Economix/NYT]
It’s rare for Republicans to find a tax cut they don’t support, but last week The New York Times reported on just such an exotic creature. Many leading Republicans, it seems, are extremely cool to the idea of extending the temporary cut in the Social Security tax that took effect on Jan. 1 and expires on Dec. 31. It has lowered employees’ share of the payroll tax to 4.2 percent, from 6.2 percent.

Auditor in China case makes case for Janus [Thomson Reuters]
In the latest twist in a four-year-old shareholder lawsuit alleging a $132 million accounting fraud at China Expert Company, PKF New York, one of the company’s former auditors, contends that a recent Supreme Court ruling should shield it from litigation. In a brief filed Friday in Manhattan federal court, PKF New York cites the Supreme Court’s June ruling in Janus Capital Group v. First Derivative Traders. Judge Alvin Hellerstein this month already granted PKF New York’s motion for a rehearing on a previous motion to dismiss (more on that later), citing the Janus ruling; on Friday PKF filed a detailed brief laying out just why it believes that Janus protects it from the shareholders’ accusations.

Fraud trial of Teaneck accountant ends in deadlock [NJ/The Record]
Andrew Muhlstock, 58, was spared a jury decision following a three-week trial in Trenton federal court, despite a guilty verdict returned against an owner of Total Time Solutions, which handled payroll and tax withholding for New Jersey companies.

Grant Thornton advertises its goal to run with the bulls [Crain’s]
The new work departs from earlier humorous campaigns to more aggressively support CEO Stephen Chipman’s charge to pursue “dynamic” companies that have ambitious growth plans, whether a Fortune 100 firm or a small company. The ad campaign asserts what wins, what doesn’t and that these firms know what wins, and that’s why they chose Grant Thornton. “It’s not about the size of the firm. It’s, do they have game on and are they really attacking the market?” said Tricia Conahan, chief marketing and sales officer of the city’s largest Chicago-based accounting firm.

BDO Canada acquires KPMG’s consumer insolvency wing [G&M]
BDO Canada Ltd. has acquired KPMG’s consumer insolvency practice for an undisclosed price, making it one of the country’s largest providers of such bankruptcy and credit counselling services. The integrated services — which offer trustees in consumer bankruptcy, proposal administrators and credit counsellors — began operating under the BDO Canada Ltd. name effective last Friday.

PwC Appoints Niloufar Molavi as U.S. Energy Leader [PwC]
The firm’s (now) former Chief Diversity Officer.

PwC US Appoints Tom Archer as U.S. Technology Sector Leader [PwC]
Succeeding Rob Gittings.

IASB criticises Greek debt writedowns [FT]
In a letter sent to the European Securities and Markets Authority, the European Union’s market regulator, the International Accounting Standards Board criticised the inconsistent way in which banks and insurers have been writing down the value of their Greek sovereign debt. “This is a matter of great concern to us,” Hans Hoogervorst, IASB chairman, said in the letter, which was published on Tuesday after the IASB’s concerns were revealed by the Financial Times. People familiar with the IASB’s thinking said the intervention was unprecedented and reflected its belief that some European companies had not been making enough provisions for Greek sovereign debt losses.

Dead Enron CEO Lay Beats IRS in Tax Court [Bloomberg]
Kenneth Lay, the deceased chief executive officer of Enron Corp., defeated the Internal Revenue Service in the agency’s bid to collect $3.9 million from his estate and his wife, the U.S. Tax Court ruled. The case decided yesterday involved transactions among Lay, his wife, Linda, and Enron that were executed on Sept. 21, 2001. The Lays sold $10 million in annuities to Enron as part of an agreement for him to retake the CEO position, under the stipulation that the annuities would be returned to Lay if he worked a 4.25-year term. The company didn’t survive that long, and it filed for bankruptcy protection in December 2001.

House Tax Chief Pitches No-New-Revenue Plan to Wary Voters [Bloomberg]
Representative Dave Camp’s summer- recess ritual of visits with constituents at a retirement home, the Rotary Club and an airport construction site was punctuated this past week by voters’ misgivings about the deficit fight in Washington in which Camp plays a central part. As he crisscrossed his hometown district of Midland, Michigan, on Aug. 25, the chairman of the House Ways and Means Committee repeated to residents — some of whom he has known since childhood — his promise not to raise taxes to cut the deficit. The 11-term Republican House member encountered voters who supported him while expressing doubt that Congress can tackle a $1.3 trillion budget deficit. “They need to grow up and get together,” John Church, a retired Midland retailer, said of Congress.

The Case Against a Payroll Tax Cut [Economix/NYT]
It’s rare for Republicans to find a tax cut they don’t support, but last week The New York Times reported on just such an exotic creature. Many leading Republicans, it seems, are extremely cool to the idea of extending the temporary cut in the Social Security tax that took effect on Jan. 1 and expires on Dec. 31. It has lowered employees’ share of the payroll tax to 4.2 percent, from 6.2 percent.

Auditor in China case makes case for Janus [Thomson Reuters]
In the latest twist in a four-year-old shareholder lawsuit alleging a $132 million accounting fraud at China Expert Company, PKF New York, one of the company’s former auditors, contends that a recent Supreme Court ruling should shield it from litigation. In a brief filed Friday in Manhattan federal court, PKF New York cites the Supreme Court’s June ruling in Janus Capital Group v. First Derivative Traders. Judge Alvin Hellerstein this month already granted PKF New York’s motion for a rehearing on a previous motion to dismiss (more on that later), citing the Janus ruling; on Friday PKF filed a detailed brief laying out just why it believes that Janus protects it from the shareholders’ accusations.

Fraud trial of Teaneck accountant ends in deadlock [NJ/The Record]
Andrew Muhlstock, 58, was spared a jury decision following a three-week trial in Trenton federal court, despite a guilty verdict returned against an owner of Total Time Solutions, which handled payroll and tax withholding for New Jersey companies.

Grant Thornton advertises its goal to run with the bulls [Crain’s]
The new work departs from earlier humorous campaigns to more aggressively support CEO Stephen Chipman’s charge to pursue “dynamic” companies that have ambitious growth plans, whether a Fortune 100 firm or a small company. The ad campaign asserts what wins, what doesn’t and that these firms know what wins, and that’s why they chose Grant Thornton. “It’s not about the size of the firm. It’s, do they have game on and are they really attacking the market?” said Tricia Conahan, chief marketing and sales officer of the city’s largest Chicago-based accounting firm.

BDO Canada acquires KPMG’s consumer insolvency wing [G&M]
BDO Canada Ltd. has acquired KPMG’s consumer insolvency practice for an undisclosed price, making it one of the country’s largest providers of such bankruptcy and credit counselling services. The integrated services — which offer trustees in consumer bankruptcy, proposal administrators and credit counsellors — began operating under the BDO Canada Ltd. name effective last Friday.

PwC Appoints Niloufar Molavi as U.S. Energy Leader [PwC]
The firm’s (now) former Chief Diversity Officer.

PwC US Appoints Tom Archer as U.S. Technology Sector Leader [PwC]
Succeeding Rob Gittings.

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