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December 5, 2022

Accounting News Roundup: IBM Defends Cloud Accounting; FRC Drops Probe of KPMG Audits of BAE; Sales Tax Holidays This Weekend | 08.01.13

IBM Defends Cloud-Computing Accounting Amid SEC Probe [Bloomberg]
International Business Machines Corp. (IBM), facing a U.S. Securities and Exchange Commission investigation into how it reports revenue from offsite cloud services, said it stands by its accounting methods. IBM is cooperating with the SEC in the probe, which it learned about in May, it said today in a filing. The company books its revenue from cloud services, such as storing customers’ data and software applications remotely, under generally accepted accounting principles, said Ed Barbini, a spokesman for Armonk, New York-based IBM. “IBM’s reporting of cloud revenue is the result of a rigorous and disciplined process, and we are confident that the information we have provided has been consistently accurate,” Barbini said.

UK watchdog ends inquiry into KPMG audits of BAE [Reuters]
The Financial Reporting Council (FRC) said in a statement it has closed the inquiry it began in 2010 because it would have to include audits done before the 1997 to 2007 period it originally targeted. These years cover commissions paid by BAE to third parties in arms deals and BAE paid nearly $450 million in 2010 to settle a transatlantic bribery investigation by U.S. and UK prosecutors. The FRC said any sanction against KPMG would have to be approved by an independent tribunal and there was no realistic prospect it would make an adverse finding on work done so long ago if earlier years were also included.

IRS Employee Charged with Laundering Drug Money [AT]
Maggie Cooper, 62, of Memphis, Tenn., a 27-year veteran IRS tax analyst, was indicted last Thursday in a 38-count indictment charging her with money laundering and money laundering conspiracy. The indictment alleges that beginning in or about 2011 and continuing through September 2012, Cooper conspired with others to conduct financial transactions with proceeds obtained from marijuana trafficking. According to prosecutors, she would make purchases in her name with money derived from her co-conspirators’ unlawful activity, with the understanding that the purchased items would be paid for and owned by the co-conspirator, including the purchase of a 2007 Jaguar XKR.

Draft audit critical of Stockton officials, accounting practices [LAT]
A leaked early draft of state Controller John Chiang's audit of Stockton's finances found that more than half of the accounting controls investigated were ineffective and that Stockton leaders had missed warning signs, according to the Stockton Record. The Central Valley port city of 300,000, epicenter of California's agricultural exports, filed for bankruptcy protection in June 2012, becoming California's largest city to fail. It was the nation's largest city to seek bankruptcy until Detroit filed for protection this month.

12 states have sales tax holidays this weekend [DMWT]
FYI: AL, AR, FL, IA, LA, MO, NM, NC, OK, SC, TN, VA.

Liz Cheney, husband late on paying Wyoming tax bill [AP]
U.S. Senate candidate Liz Cheney and her husband were more than two months late paying property taxes on a $1.6 million home they bought last year in the tony community of Jackson Hole, according to Teton County records. The oversight arose when Cheney and her husband, Philip Perry, misunderstood the terms of their purchase of the four-bedroom, four-bath log home with views of the Teton Range, Cheney said Wednesday. "As soon as we learned the tax hadn't been paid for the first half of the year, we paid the tax," she said. Cheney said that instead of the seller paying the taxes for the first half of 2012 at closing, as she and her husband thought had happened, money for those taxes was deducted from the amount they paid at closing.

American tourist killed in Thai beach town after refusing to stop singing with bar’s band [AP]
Bobby Ray Carter Jr., 51, died at a hospital of a stab wound in his chest after a brawl broke out early Wednesday at the bar at Ao Nang beach in Krabi province, police Lt. Col. Jongrak Pimthong said.He said Carter, a Texas native, was intoxicated, began singing with the band and refused to leave the stage to let other customers sing. “Witnesses said Carter got angry when the band played ‘Hotel California’ instead of the song he requested, and he refused to step down,” Krabi city police chief Col. Taksin Pochakorn said. Police said the band then stopped playing and Carter and his 27-year-old son got into a furious argument with the musicians. Jongrak said Carter was stabbed in his chest with an iron rod during the fight outside the bar and his son was injured in the head.

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