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September 24, 2023

Accounting News Roundup: Mass Fired Deloitte After Paying $54m; Twitter’s Accountant Chief’s Chops; The Rich Have Recovered | 10.04.13

$54m later, state fired computer contractor [BG]
The commissioner of the state Department of Revenue, Amy Pitter, vividly remembers her employees’ reaction during a disastrous test run last year for a $114 million computer system that was supposed to revolutionize the way Massachusetts residents file tax returns. The system couldn’t print forms or calculate interest and penalties, despite the fact the state had already paid $54 million on the project. “Holy cow, this is not good,” Pitter recalled. “This is horrible.” So she eventually did what public officials rarely do when they are faced with substandard work by a contractor, in this case, Deloitte Consulting of New York. She fired them. In a statement, Deloitte spokeswoman Courtney Flaherty said her company and the Department of Revenue “mutually agreed to terminate the contract when the project changed direction. We met our obligations and were paid for the work we performed.’’

Guilty Banks Can Avoid Death Penalty [Bloomberg]
Perhaps a criminal case against a major U.S. financial institution wouldn’t be such a big deal after all, especially if resolved swiftly. It may come down to outside perceptions of the government’s intent. If prosecutors show they are determined to put a firm out of business — say, by getting an indictment and pushing to strip its licenses — investors, customers and counterparties would understandably react harshly. Not every case has to be this way. Even a settlement that includes a guilty plea could be designed to have few collateral consequences, as long as the bank’s regulators go along. “The question is always going to be: Are they going to be debarred? Is there a chance they could lose their banking charter as a result of a conviction?” says Brandon Garrett, a University of Virginia law professor who is working on a book about corporate prosecutions. “If a settlement could be structured the right way, a guilty plea could work in terms of punishing the company without destroying it.”

Some background on Twitter Principal Accounting Officer Luca Baratta: 

CPA Firms Evolving With The Times [AWEB]

CEO Quits to Spend Time With Family—Really [WSJ]
I'm flabbergasted that the Journal would admit that the resignation excuse "to spend more time with his family" is complete bullshit.

Wealthy Californians have recovered from the recession [LAT]

GOP Rep Defends Keeping Salary During Shutdown: "I Need My Paycheck" [Gawker]
Rep. Renee Ellmers (R-NC) is adamant about making sure her $174k/year plus benefits remain undisturbed. "I need my paycheck. That's the bottom line," Rep. Ellmers told ABC affiliate WTVD. "I understand that there may be some other members who are deferring their paychecks, and I think that's admirable. I'm not in that position." Ellmers, a registered nurse by trade, took office in 2011 after defeating seven-term Democrat Bob Etheridge. Ellmers husband is a general surgeon who runs his own practice.

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