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November 27, 2022

Accounting News Roundup: Koss’ Suit Against Grant Thornton Will Proceed; Number of Women CFOs Doesn’t Budge; Senators Ask IRS to Clarify Rules for Same-sex Couples | 06.23.11

Koss suit against former auditor to proceed [MJS]
Koss Corp.’s lawsuit against the company’s former auditor, Grant Thornton, will move forward in Cook County, Ill., according to a ruling from a judge in Chicago this week. Koss accuses Grant Thornton of gross negligence for not uncovering the $34 million embezzlement by its former vice president of finance. Sujata “Sue” Sachdeva is serving an 11-year sentence in federal prison for the crime, which came to light in December 2009 when American Express notified Koss of the fraud.

New York’s Schumer Gives ‘Newfound Life’ to Tax Holiday Sought by Apple [Bloomberg]
The lobbying campaign by Apple Inc. (AAPL), Pfizer Inc. (PFE) and Duke Energy Corp. (DUK) to allow companies to bring overseas profits to the U.S. at a low tax rate gained new traction after Senator Charles Schumer of New York signaled that Democrats might back the idea. The Senate’s No. 3 Democrat said yesterday that his caucus is exploring the potential of using the short-term revenue a repatriation holiday would generate to fund an infrastructure bank. The focus on infrastructure, he said, would “guarantee” job creation and address a key line of Democratic opposition.

Women CFOs: Still at 9% [CFO]
As of June 1, there were 45 female finance chiefs in the Fortune 500. That’s just one more than in 2010 and 2009, for a percentage of 9%.

Challenges in Chasing Fraud [WSJ]
Some legal experts said the SEC’s struggles reflect the difficulty of going after specific individuals and companies when so many more made decisions that backfired into catastrophic losses during the financial crisis. Corporate executives argue that the crisis was caused by good-faith moves that went sour rather than by the desire to short-change investors. Some lawyers say that the agency’s enforcement lawyers haven’t done enough to prove that high-ranking executives bore the ultimate responsibility for the most controversial mortgage-bond deals.

CFOs Say Corporate Cash Levels Are Appropriate [CFOJ]
“People have cash because there is a strategy,” said Suresh Senapaty, CFO at Wipro. He added that CFOs know cash has one of the lowest returns on investment for shareholders. “There are good reasons why they have it — otherwise they’re not doing their job as CFOs,” he said during a group discussion at The Wall Street Journal’s annual CFO forum held in Washington, D.C. Tuesday.

Senators call on IRS to clear up rules for same-sex couples [MSNBC]
This week, eight Democratic U.S. senators sent a letter to IRS Commissioner Douglas Shulman, calling on the IRS to clear up confusion for same-sex couples who encounter problems trying to file accurate tax returns. […] In the letter, the senators noted that some state tax laws recognize same-sex marriages or domestic partnerships, even though the federal government does not. That’s creating confusion for couples who want to file accurate returns but are classified differently by state and federal tax regulators, they said. They asked the IRS to offer guidance.

The IRS’s Charity Purge [WSJ]
The Internal Revenue Service announced this month that 275,000 nonprofit groups—around 18% of the country’s tax-exempt organizations—have lost their federal exemptions because they failed to file Form 990s. The announcement was a long time in the making, but it’ll take even longer for the IRS to dig itself out of the administrative and policy mess that it represents.

Hong Kong’s Li Says Exchange Will Avoid Worst of China Accounting Scandals [Bloomberg]
The MSCI China Index of 147 stocks available to foreign investors is down 10 percent since reaching a five-month high on April 21. That compares with a 28 percent plunge by Chinese companies that went public through U.S. reverse mergers, in which a closely held company buys a publicly traded shell and retains the U.S. listing. While bearish bets on the MSCI China have climbed to a record, Li says companies listed in Hong Kong are subject to too much scrutiny to deceive the market for long.

Koss suit against former auditor to proceed [MJS]
Koss Corp.’s lawsuit against the company’s former auditor, Grant Thornton, will move forward in Cook County, Ill., according to a ruling from a judge in Chicago this week. Koss accuses Grant Thornton of gross negligence for not uncovering the $34 million embezzlement by its former vice president of finance. Sujata “Sue” Sachdeva is serving an 11-year sentence in federal prison for the crime, which came to light in December 2009 when American Express notified Koss of the fraud.

New York’s Schumer Gives ‘Newfound Life’ to Tax Holiday Sought by Apple [Bloomberg]
The lobbying campaign by Apple Inc. (AAPL), Pfizer Inc. (PFE) and Duke Energy Corp. (DUK) to allow companies to bring overseas profits to the U.S. at a low tax rate gained new traction after Senator Charles Schumer of New York signaled that Democrats might back the idea. The Senate’s No. 3 Democrat said yesterday that his caucus is exploring the potential of using the short-term revenue a repatriation holiday would generate to fund an infrastructure bank. The focus on infrastructure, he said, would “guarantee” job creation and address a key line of Democratic opposition.

Women CFOs: Still at 9% [CFO]
As of June 1, there were 45 female finance chiefs in the Fortune 500. That’s just one more than in 2010 and 2009, for a percentage of 9%.

Challenges in Chasing Fraud [WSJ]
Some legal experts said the SEC’s struggles reflect the difficulty of going after specific individuals and companies when so many more made decisions that backfired into catastrophic losses during the financial crisis. Corporate executives argue that the crisis was caused by good-faith moves that went sour rather than by the desire to short-change investors. Some lawyers say that the agency’s enforcement lawyers haven’t done enough to prove that high-ranking executives bore the ultimate responsibility for the most controversial mortgage-bond deals.

CFOs Say Corporate Cash Levels Are Appropriate [CFOJ]
“People have cash because there is a strategy,” said Suresh Senapaty, CFO at Wipro. He added that CFOs know cash has one of the lowest returns on investment for shareholders. “There are good reasons why they have it — otherwise they’re not doing their job as CFOs,” he said during a group discussion at The Wall Street Journal’s annual CFO forum held in Washington, D.C. Tuesday.

Senators call on IRS to clear up rules for same-sex couples [MSNBC]
This week, eight Democratic U.S. senators sent a letter to IRS Commissioner Douglas Shulman, calling on the IRS to clear up confusion for same-sex couples who encounter problems trying to file accurate tax returns. […] In the letter, the senators noted that some state tax laws recognize same-sex marriages or domestic partnerships, even though the federal government does not. That’s creating confusion for couples who want to file accurate returns but are classified differently by state and federal tax regulators, they said. They asked the IRS to offer guidance.

The IRS’s Charity Purge [WSJ]
The Internal Revenue Service announced this month that 275,000 nonprofit groups—around 18% of the country’s tax-exempt organizations—have lost their federal exemptions because they failed to file Form 990s. The announcement was a long time in the making, but it’ll take even longer for the IRS to dig itself out of the administrative and policy mess that it represents.

Hong Kong’s Li Says Exchange Will Avoid Worst of China Accounting Scandals [Bloomberg]
The MSCI China Index of 147 stocks available to foreign investors is down 10 percent since reaching a five-month high on April 21. That compares with a 28 percent plunge by Chinese companies that went public through U.S. reverse mergers, in which a closely held company buys a publicly traded shell and retains the U.S. listing. While bearish bets on the MSCI China have climbed to a record, Li says companies listed in Hong Kong are subject to too much scrutiny to deceive the market for long.

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