September 25, 2022

Accounting News Roundup: KPMG Chair’s Defense of Auditors; Is Boehner Blinking?; CPA Makes Change | 12.17.12

Top Auditor Defends the Industry [WSJ]
Michael Andrew, global chairman of accounting giant KPMG, is a vigorous debunker of perceived wisdom concerning his profession. Since the global economy started to unravel in 2007-2008, accounting firms have been criticized for being too few, too close to the companies they audit, too noncompetitive, and for having missed the greatest financial catastrophe since the 1930s. Mr. Andrew, a 56-year-old plain-speaking Australian, thinks most of these criticisms are wrong and many of the reforms being suggested for the industry, especially those being considered by the European Union, are misguided. "Auditors had actually a pretty good financial crisis. We actually got most of it right," he says.

GOP Poses Millionaire Tax-Rate Increase [WSJ]

A fresh proposal from House Speaker John Boehner to raise tax rates on millionaires marked a breakthrough in stalled budget negotiations with President Barack Obama, suggesting a potential framework for avoiding year-end spending cuts and tax increases known as the fiscal cliff. The proposal, which the speaker offered privately to Mr. Obama Friday, calls for raising $1 trillion in tax revenues over 10 years, up from the $800 billion Mr. Boehner previously proposed, and cutting about $1 trillion from spending. While the White House objected to major parts of the proposal, senior Democrats described it as a tipping point that moves talks away from deadlock. Instead, it cleared the way for both sides to engage in nitty-gritty haggling over exactly where the new income threshold might be set and what should comprise the spending cuts.
 
Boehner offers debt-ceiling increase in cliff compromise [WaPo]
House Speaker John A. Boehner has offered to push any fight over the federal debt limit off for a year, a concession that would deprive Republicans of leverage in the budget battle but is breathing new life into stalled talks over the year-end “fiscal cliff.” The offer came Friday, according to people in both parties familiar with the talks, as part of the latest effort by Boehner (R-Ohio) to strike a deal with President Obama to replace more than $500 billion in painful deficit-reduction measures set to take effect in January.
 
Tax Plan Is Popular, but Not Quite Fair [NYT]

Mr. Romney’s proposal to limit itemized deductions to a fixed dollar amount, which surfaced during the campaign as a way to close loopholes for the wealthy and broaden the tax base, has attracted a surprising amount of bipartisan support, given its origins in conservative Republican circles. “There’s renewed interest” in the cap on deductions, Senator Kent Conrad, the North Dakota Democrat who heads the Senate Budget Committee, told The Times last month as budget negotiations heated up. The political appeal of a proposal that limits deductions without actually naming any — inciting the powerful interests and lobbyists that support them — seems obvious. But many tax experts said that a fixed dollar cap is anything but the evenhanded approach to closing loopholes it appears to be.
 
KPMG shifts towards decentralisation [FT]

KPMG has moved towards a more decentralised structure in Europe amid tough trading conditions that have eaten into its profits. The audit and consulting network’s main European arm, KPMG Europe, has pledged to make more decisions at national level, citing the need to respond more nimbly to a “long and lingering downturn”. KPMG Europe covers 19 countries in which it used to have independent national fiefdoms, including the UK, Germany, the Netherlands, Switzerland and Spain. The initial formation of the combined firm in 2006 was seen as a groundbreaking move that mimicked the structure of the multinational companies KPMG so often serves. Now, however, Rolf Nonnenmacher, KPMG Europe chairman, said a shift back to a more local focus was necessary for it to fare better in a “very competitive market”.
 
£3m farewell to KPMG chief in financial regulator's chair [Guardian]
John Griffith-Jones – who will become non-executive chairman of the Financial Conduct Authority (FCA) – received a £1.97m salary in 2012, plus an additional £1.2m in retirement provisions. His salary was £700,000 lower than a year ago.
 
Prince of Wales defends tax status [FT]
Clarence House has defended the Prince of Wales' financial arrangements after antimonarchy campaigners accused the Duchy of Cornwall of using "a highly questionable interpretation" of its legal status to avoid corporation tax. Republic, which campaigns for an elected head of state, said it had written to HM Revenue & Customs (HMRC) asking it to investigate and "take the necessary steps to ensure that the Duchy is paying corporation tax in line with normal practice for corporate entities." But Clarence House said on Saturday there was no legal basis for the Duchy to pay corporation tax as the Duchy was a trust set up to generate income for Princes of Wales. It said: "The Prince voluntarily pays income tax on income generated by the Duchy, so there is no legal requirement to pay corporation tax and to do so would result in double taxation.".
 
Lil Wayne pays $7.72 million in back taxes to Miami-Dade [MH]
FYI.

Syracuse accountant gives Salvation Army 47 years of pocket change [SPS]
Hank Fust estimates that it was about $3,500.

Rowdy Crowd Gets 'Jesus' Lookalike Thrown Out [ABC]
Nathan Grindal, who has long hair and a full beard, was sitting in the crowd at the Cash Converters Players Championships finals at Butlins Minehead resort when some nearby spectators who believed he resembled popular depictions of Jesus Christ began to chant, "Jesus! Jesus!" According to a report in This is Somerset, a newspaper that covers the area, the chanting spread among the 5,000-or-so spectators who had gathered to watch Phil Taylor and Kim Huybrechts battle it out in the tournament finals that were being televised live. Fearing Taylor and Huybrechts would become distracted by the reaction to the 33-year-old Grindal, organizers asked him to leave.

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