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Accounting News Roundup: Is There an Answer for Our Tax Policy Problems?; Brits Skeptical of Mandatory Rotation; E&Y Appoints New Carolinas Leader| 08.19.11

Silicon Valley Seeks CFOs to Hop on IPO Train [CFOJ]
The IPO boom in Silicon Valley is creating another mini-boom in demand for experienced financial executives. While demand for new chief financial officers has been somewhat slow at Fortune 500 companies and private-equity backed firms this year, executive recruiters say the market is on fire in Silicon Valley.

No Easy Answer on Tax Issue [WSJ]
After two decades of bipartisan tax policy, nearly half of all American households don’t pay federal income taxes. Now, Republican presidential candidates are making a politically challenging case to change that fact. Most working Americans do pay Social Security and Medicare payroll taxes. But because of tax breaks for seniors and inducements for work and raising children, among other accumulated changes to the tax code, many manage to avoid income taxes altogether. The nonpartisan Tax Policy Center in July pegged that number at 46% of U.S. households for this year.

Democrats’ road tour strikes back at GOP’s stand against raising taxes [WaPo]
On Wednesday morning, as his tinted black bus pulled into Randy Hultgren’s congressional district, President Obama told residents that Republicans like Hultgren must be willing to raise taxes to reduce the deficit. A few hours and 90 miles away, Hultgren’s own constituents had picked up the message, repeatedly hectoring the freshman congressman at a town hall meeting to raise taxes on the wealthy and corporations.[…] “I just have one question for you tonight,” said another [man]. “Did you sign Grover Norquist’s pledge to never raise taxes?” — referring to the promise that has been signed by most congressional Republicans, including Hultgren. “Don’t you have the confidence in your own ability in Congress to make up your own mind? You need Grover Norquist to tell you?” the man continued.

BofA’s Moynihan Says to Expect 3,500 Job Cuts [Bloomberg]
Bank of America Corp. (BAC) Chief Executive Officer Brian T. Moynihan told his managers at the biggest U.S. lender to expect 3,500 job cuts this quarter. Some employees have already been informed of the firings, which are in addition to 2,500 reductions made this year, Moynihan said in a memo to staff yesterday. The cuts aren’t part of the Charlotte, North Carolina-based firm’s expense-trimming effort called Project New BAC, according to the document.

Let the “Condorsement” Games Begin [TAO]
Tom Selling: “The SEC has finally conceded that its efforts to adopt IFRS have failed. Damage control has begun in earnest, but the ship is still taking on water.”

Institutes attack US mandatory rotation plan [Accountancy Age]
UK institutes have questioned whether forced firm rotation will have the desired impact, saying it could be detrimental to quality and increase audit errors. ICAEW executive director Robert Hodgkinson said mandatory firm rotation has been debated for decades, concluding: “The evidence to date has not been supportive and has pointed towards a potential loss of audit quality”.

Top Stock Picker Jain Won’t Touch Chinese Banks on Bad Debt [Bloomberg]
“We have not owned a Chinese bank, and I don’t see owning one any time soon,” said Jain, who oversees about $15 billion, including three funds that beat 99 percent of peers this year, data compiled by Bloomberg show. “If you look at the accounting, I don’t see how anyone could put a penny there.”

Analysis: Critics say new law makes them tax agents [Reuters]
A U.S. law meant to snuff out billions of dollars in offshore tax evasion has drawn the criticism of the world’s banks and business people, who dismiss it as imperialist and “the neutron bomb of the global financial system.” The unusually broad regulation, known as FATCA, or the Foreign Account Tax Compliance Act, makes the world’s financial institutions something of an extension of the tax-collecting Internal Revenue Service — something no other country does for its tax regime.

Ernst & Young Announces Leadership Additions in the Carolinas [E&Y]
Charlotte OMP Curt Fochtmann will now run the entire Carolinas region.

Posted in ANR