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Accounting News Roundup: IRS Audits of Wealthy Nearly Double; Why the New 1099 Rules Are NBD; E&Y Fired by China Agritech | 03.15.11

Futures Tumble After Nikkei Plunges [WSJ]
In Japan, the Nikkei Stock Average plunged 11%, sparking broad declines in Asian and European markets. Germany’s DAX 30 index was particularly hard hit, down 4.2%in intraday trading. Against this backdrop, futures for the Dow Jones Industrial Average were down 232 points to 11694 about 90 minutes before the opening bell. They had fallen as low as 11611.

IRS Boosted Auditing of Richest Taxpayers, Almost Doubling Rate Last Year [Bloomberg]
The Internal Revenue Service audited 18.4 percent of taxpayers reporting income above $10 million last year, up from 10.6 percent the previous year. Audit rates increased in 2010 for all income groups, except for people with no adjusted gross income, according to data released today in Washington for the fiscal year that ended Sept. 30.

Kraft CFO to leave in mid-2011 [BBW]
Chief Financial Officer Timothy McLevish is leaving the company in mid-2011 to “pursue opportunities in general management.”

Is Happiness Overrated? [WSJ]
[R]esearchers say happiness as people usually think of it—the experience of pleasure or positive feelings—is far less important to physical health than the type of well-being that comes from engaging in meaningful activity. Researchers refer to this latter state as “eudaimonic well-being.” Happiness research, a field known as “positive psychology,” is exploding. Some of the newest evidence suggests that people who focus on living with a sense of purpose as they age are more likely to remain cognitively intact, have better mental health and even live longer than people who focus on achieving feelings of happiness.

Why the New 1099 Rules Aren’t That Bad for Small Businesses [You’re the Boss/NYT]

China Agritech, Inc. Dismisses Ernst & Young Hua Ming As Auditor [PR Newswire]
The dismissal of Ernst & Young Hua Ming was made after thorough consideration by the Audit Committee, and the Board of Directors of the Company. The decision to dismiss the auditor was the result of Ernst & Young (China) Advisory Limited Beijing Branch Office entering into a SOX 404 service agreement including performing the test of the Company’s internal controls from 2008 to 2010. Recently, the public and the management team have raised doubts about this service agreement’s impact on Ernst & Young Hua Ming’s independence to act as the Company’s auditor.

Professional gamblers gain with tax ruling [LVRJ]
A January ruling by the U.S. Tax Court changed a portion of a half-century-old opinion that equated expenses related to a gambling trip with gambling losses — they were deductible only to the extent of their winnings. The court now believes the expenses to reach a casino or racetrack, and other expenses associated with the activity of gambling, can be written off.

Taking Stock of India’s New Accounting Standards [WSJ]
The Indian Ministry of Corporate Affairs recently notified that it had converged 35 Indian accounting standards with international guidelines. This is an important first step in bringing International Financial Reporting Standards (IFRS) to India, and making Indian companies’ financial statements comparable to that of their global peers. However, several deviations of the proposed Indian standards from international practices have raised concerns among investors.

Posted in ANR