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November 29, 2022

Accounting News Roundup: KPMG Shares Settlement in Fannie Mae Lawsuit; Rand Paul Going After FATCA; TAXSTUD | 05.08.13

Investors Get a Settlement by Fannie Mae [NYT]
Fannie Mae, the government-sponsored mortgage finance company, and KPMG, its former auditor, have agreed to pay $153 million to investors who bought Fannie’s stock from 2001 to 2004, a period when Fannie’s regulator determined the firm had overstated its income and violated generally accepted accounting principles. […] The settlement stemmed from a time when Fannie Mae was led by Franklin D. Raines, a former director of the Office of Management and Budget under President Bill Clinton and a man who was deemed to be quite powerful in Washington. The regulator of Fannie Mae had usually deferred to it, and Mr. Raines initially insisted the regulator was wrong about the accounting issues. He drew support from both the Fannie Mae board and from KPMG, the auditing firm that had certified the books that the regulator criticized. Mr. Raines asked that the staff of the Securities and Exchange Commission review the accounting, but stuck to his position even after the S.E.C. concluded Fannie had erred. It was not until the regulator, then known as the Office of Federal Housing Enterprise Oversight, demanded his ouster that the board fired him. At the same time, it dismissed KPMG.

Rand Paul Introduces Bill to Repeal Parts of FATCA [AT]
Sen. Rand Paul, R-Ken., has introduced legislation to repeal provisions of the Foreign Account Tax Compliance Act that he contends undermine the privacy of U.S. citizens. FATCA was included as part of the HIRE Act of 2010 and would require foreign financial institutions to report on the account holdings and assets of U.S. taxpayers to the Internal Revenue Service. The law has provoked controversy abroad from U.S.-born expatriates and dual citizens, as well as foreign governments that argue the law violates their own privacy and banking secrecy laws. In response, the Treasury Department has been signing and negotiating intergovernmental agreements with other countries to implement the FATCA provisions, including Switzerland.

Deal on taxes and spending in Kansas could be near [KCS]
Even with deeply rooted differences over renewing a sales-tax hike, key lawmakers say a bargain could crystallize as early as this weekend. “I have been very optimistic all along,” said Rep. Richard Carlson, a St. Marys Republican and one of the key budget negotiators. “We intend to find an amicable solution that benefits all the taxpayers in Kansas.”

Collecting sales tax online won’t lead to higher taxes—and might lower them [Quartz]

The only sales tax that will hit consumers is the one their elected local and state governments have set in place. If you don’t live in California or Illinois, you don’t pay their sales tax. The only thing that changes in other states is that online sellers will need to collect that sales tax, something most businesses already do. Now, it just gets more complicated, and while the law is taking steps to streamline that process, it’s understandable that some businesses, like eBay, aren’t thrilled about complying with the new rules. Other companies that already collect sales tax, from Wal-Mart to Amazon to Target, favor the new law, in part because they have the infrastructure to manage compliance already.

Five taxes you didn't know you were paying, in GIFs [Marketplace]
Including: Liquor.

Deloitte Ranks 11th on DiversityInc's Top 50 Companies for Diversity [Deloitte]
And there was much rejoicing [twirls finger in the air].

More on Tax License Plates [TaxProf]
A TAXSTUD in a Toyota.

Harrisburg: The City that Couldn’t Shoot Straight? [CFO]
The SEC uses the alleged incidence of fraud in Pennsylvania's state capitol to lecture public officials on their reporting responsibilities when issuing municipal bonds.

PCAOB reproposes related-parties auditing standard [JofA]
The PCAOB on Tuesday reproposed an auditing standard and amendments designed to improve the quality of auditing of related-party transactions and significant unusual transactions. The reproposed standard is designed to increase the auditor’s focus on the evaluation of how a company identifies, accounts for, and discloses its relationships and transactions with related parties. The reproposed amendments, meanwhile, are intended to help the auditor identify and evaluate a company’s significant unusual transactions. In addition, the reproposed amendments would require the auditor to perform new procedures as part of the process to assess the risk of material misstatement in the financial statements.

Gates Says Wealthy Should Pay More to Help Reduce Deficit [Bloomberg]
“There’s no doubt that as you look at balancing budgets to the degree you need more revenue” that lawmakers will need to look to the wealthy “to get a little bit more from them proportionately than you get from people as a whole,” Gates said in an interview with Bloomberg Television before speaking at the Peterson Foundation fiscal summit in Washington today. “I think that’s pretty likely.”

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