Madoff Fraud Driven by Novice Workers, Accountant Tells Jury [BB] Bernard Madoff “utilized” workers with a low level of education and professional training to keep his $17 billion Ponzi scheme alive for so long, a government witness told a jury in the trial of five former employees.Bruce Dubinsky, a forensic accountant whose team analyzed the fraud in 2011, made the remark about the workers in a 2012 deposition and confirmed the words yesterday under cross-examination by defense lawyers in Manhattan federal court. Inexperienced workers “were being utilized to continue the scheme,” Dubinsky said in the deposition, which was taken in a lawsuit brought against former Madoff customer Saul Katz, an owner of the New York Mets, by the trustee unwinding Madoff’s company.
TIGTA: IRS Cannot Account for 23% of its IT Assets [TaxProf] The IRS Information Technology organization controls more than 306,000 information technology assets worth almost $720 million using the Knowledge, Incident/Problem, Service Asset Management (KISAM) system. Our review determined that weaknesses in controls over asset management create an environment in which information technology assets are vulnerable to loss. The risk of loss, theft, or the inadvertent release of sensitive information can decrease the public’s confidence in the IRS’s ability to monitor and use its resources effectively.
Toshiba medical unit boss fired over accounting fraud [Economic Times] Toshiba said that it had fired a renegade manager for falsely inflating profits at a medical subsidiary, and that the unit's chief executive would quit. The Japanese engineering conglomerate said the unnamed employee had "overstated numbers and made misstatements" in what it described as "inappropriate" accounting at Toshiba Medical Information Systems. The false accounting happened over a six-year period starting in 2006, the conglomerate said, adding that it inflated the division's profits by about USD 100 million in total.
Booz & Co. Lands Buyout From Accounting Giant PwC [FOX Business] In a bid to bolster its consulting prowess, accounting behemoth PricewaterhouseCoopers announced on Wednesday a buyout of privately held Booz & Co. The transaction is subject to approval by regulators as well as Booz & Co.’s partners, who are scheduled to vote on the acquisition in December. Combined with PwC’s other services, the deal will “create a stand-out professional services organization that delivers first class quality services to a broad range of stakeholders,” PwC Chairman Dennis Nally said in a statement.
PCAOB Sets Sights on Revenue Auditing [Compliance Week] The audit of revenue is starting to appear on the horizon as a target area for tougher enforcement, according to recent remarks by Jay Hanson, a member of the Public Company Accounting Oversight Board. It's not on the standard-setting agenda yet, but new accounting standards are expected to be final soon, so it's only natural that a new auditing standards should follow, said Hanson in a speech at a recent accounting conference. “It is my hope that the PCAOB will soon devote substantial resources to an audit standard project in this area, and that we will be able to issue a proposal on auditing revenue with sufficient lead time to allow new accounting and auditing standards to become effective at or around the same time,” he said.
Clock Is Ticking on Some Major Tax Breaks [CFO Journal] When Congress resumes the budget debate on Wednesday, many companies will be nervously counting the days. That is because 55 federal tax breaks are scheduled to expire at the end of the year. The uncertainty over their fate already is muddying financial forecasts for next year, corporate executives say. Topping the list of business breaks: a tax credit for investing in research and development; the so-called “look through rule” that allows multinational companies to shift some profits between their foreign subsidiaries tax free; and the bonus-depreciation rule that allows a company to write off half of its equipment purchases in a single year. “I don’t know that there’s a real champion for [these measures] right now” in Congress, said Hank Gutman, director of accounting firm KPMG LLP’s Tax Governance Institute and a former chief of staff for Congress’s Joint Committee on Taxation. “In terms of the bigger issues that the country’s facing, they are not high on anybody’s radar now, even though they are of significance for the business community.”
Twitter's 'anti-Facebook' IPO tactics win over some investors [Reuters] Institutional investors who met with Twitter Inc this week say they are optimistic about its initial public offering and see little sign of the irrational exuberance that preceded Facebook Inc's splashy coming-out party in 2012. On Monday and Tuesday, Twitter Chief Executive Dick Costolo and Chief Financial Officer Mike Gupta met with large fund managers and analysts in New York and on the East Coast to sell them on an IPO that seeks to raise up to $1.6 billion for the loss-making social media company. Closely watched by Wall Street and Silicon Valley, Twitter's relatively conservative offering has differed from Facebook's $16 billion IPO in a panoply of ways, from its vastly smaller deal size to a decision to list on the New York Stock Exchange over Nasdaq.
Woman to give 'obese' children letters, no candy [USA Today] A Fargo, N.D., woman says she will give trick-or-treaters that she deems "moderately obese" a letter instead of candy this Halloween. "I just want to send a message to the parents of kids that are really overweight. … I think it's just really irresponsible of parents to send them out looking for free candy just 'cause all the other kids are doing it," the woman said in a morning radio interview with Y94. She wouldn't identify herself. The letter states: "You [sic] child is, in my opinion, moderately obese and should not be consuming sugar and treats to the extent of some children this Halloween season."