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Accounting News Roundup: KPMG Quits on Another Chinese Client; PwC Fined Over Commingling at JP Morgan; Dissecting Romney’s Tax Plan | 01.06.12

KPMG Quits as China Forestry Auditor, Deepening Concerns About Accounting [Bloomberg]
China Forestry Holdings Co. (930), the Chinese timber company whose shares have been suspended since January last year because of accounting irregularities, said its auditor KPMG LLC resigned citing valuation concerns. China Forestry needs to verify the ownership and valuation of its plantations and log inventories, a statement yesterday from the Beijing-based company cited KPMG as saying. The former auditor also said it was still awaiting results from a broader probe into the irregularities it identified last year.

PwC hit with record fine for UK audit failures [Reuters]
Top auditor PricewaterhouseCoopers has been fined a record 1.4 million pounds ($2.2 million) in Britain for wrongly telling local regulators for seven years that JPMorgan Securities was keeping client money safe. The case brought by the Accountancy and Actuarial Discipline Board was the latest sign regulators have been taking a harder line on auditors, seen by policymakers as being too soft on banks in the run-up to the financial crisis. The AADB said on Friday PwC, one of the world's so-called "Big Four" auditors which check the books of nearly all blue-chip companies, admitted it failed to obtain "sufficient appropriate evidence" to report JPMorgan Securities complied with strict client money rules over several years. Most of the client money from futures and options trading was being "swept" daily into interest-bearing, unsegregated accounts overnight at JPMorgan Chase bank, the firm's parent, the AADB said.
Woodford to sue Olympus over firing, drops CEO bid [Reuters]
he ousted British CEO of disgraced Olympus Corp, who blew the whistle on a $1.7 billion accounting fraud, dropped his bid to return to lead the medical device maker, blaming cozy ties between its management and big Japanese shareholders and saying the saga had taken its toll on his family. Michael Woodford's campaign against its management rocked the once-proud maker of endoscopes and cameras, but failed to win over Japanese institutional shareholders including Olympus' main lenders, who support a board that has been castigated for insufficient oversight. "Despite one of the biggest scandals in history, the Japanese institutional shareholders have not spoken one single word of criticism, in complete and utter contrast with the overseas shareholders who were demanding accountability," Woodford told a news conference in Tokyo on Friday.
KPMG plans timely return of MF Global assets [Reuters]

MF Global UK administrator KPMG plans to start returning to clients the $1.2 billion of cash and assets frozen at the defunct broker as early as this month in a move that will placate customers ahead of their showdown with KPMG next week. Richard Heis, joint special administrator of MF Global UK, told Thomson Reuters on Thursday the administrator had recovered the majority of client monies and almost all outstanding client assets, and hoped to start returning these to owners shortly. "At the end of December we had recovered some 82 percent of client monies and substantially all of the client assets. We hope to commence the return of client assets and an interim distribution of monies as early as this month," Heis said.

Satyam auditor, CFO found ‘guilty [Times of India]
Nearly three years after the Satyam scam broke out, the Institute of Chartered Accountants of India (ICAI) has finally found Vadlamani Srinivas, erstwhile chief financial officer (CFO) of Satyam Computers, and Talluri Srinivas, former partner of PriceWaterhouseCoopers (PWC), then statutory auditors of Satyam, guilty of professional misconduct. According to G Ramaswamy, president, ICAI, while Vadlamani was found guilty of not conducting proper due diligence, Talluri was held guilty for not complying with professional standards. "The high powered disciplinary committee found both Vadlamani and Talluri guilty of professional misconduct. We will give them a final opportunity to defend themselves after which a final hearing will be held this month and the punishment determined," he explained. 

Mazars fees grow 8.2% in 2011 [Accountancy Age]
Fees reached €957m for 2010/2011, with 6.9% income growth from services to public interest entitites and a 7.5% increase in fees from tax activities. The overall growth was achieved through a 3.4% increase on a constant basis, with external growth delivering 4.8%. he firm has also updated its governance structure. President and CEO Patrick de Cambourg is named chairman, and will sit on the firm's group governance council which includes two independent members: Denise Fletcher and François de Carbonnel. Douglas A. Phillips, managing partner of WeiserMazars, is vice chairman along with Pierre Sardet.

Romney’s Tax Plan: Big Benefits for the Wealthy and Higher Deficits [TaxVox]
Howard Gleckman: "Romney says he’d rewrite the entire tax code–someday. But he doesn’t say how or when. Until he does, a Romney Administration’s revenue agenda would look a lot like President George W. Bush’s, just more so."
The GOP's Weird Obsession With Poor People Not Paying Enough Taxes [The Atlantic]
Step it up, poors. 
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