Accounting News Roundup: More Corruption Fun at Olympus; Clinging to Hope at MF Global; The Jobless Generation | 08.01.12

Olympus Refers Possible Corrupt Practice Incident To U.S. [Bloomberg]
Olympus Corp. (7733), the world’s largest maker of endoscopes, uncovered “irregularities” at a doctor- training program in Brazil that may have violated U.S. law and reported them to the Department of Justice, Chairman Yasuyuki Kimoto said. The DOJ is also examining the company’s marketing operations in the U.S., he said. “We might agree to some sort of violation of the Foreign Corrupt Practices Act in Brazil,” Kimoto said in his first interview since becoming chairman in April. “We understand DOJ is trying to gather lots of information on us.” At issue in Brazil may be the way the company handled doctors’ expenses for travel, meals or entertainment, Kimoto said in a July 23 interview. The country accounts for less than 2.5 percent of the company’s sales. The two enquiries come after revelations of a 13-year accounting fraud sparked a sell-off that wiped about $3.7 billion off its market value last year.

Hope for MF Global Clients [WSJ]
In written testimony submitted to the Senate Agriculture Committee for a hearing Wednesday, trustee Louis J. Freeh said farmers, ranchers, traders and other investors still owed an estimated $1.6 billion "eventually will be made whole," according to a copy of the testimony reviewed by The Wall Street Journal. After MF Global collapsed in October under the weight of a customer panic caused by the New York company's giant bets on European debt, investigators worried they might never recover the missing customer money. 
 
Payroll Tax Cut on Track to Quietly Expire [WSJ]

Amid a high-decibel fight over the nation's budget, there is one emerging area of agreement: Both parties appear willing to quietly let a major tax cut expire—a payroll tax break enjoyed by about 122 million people. Congress, aiming to give wage-earners a few extra dollars in each paycheck, first cut the payroll tax, which funds Social Security, to 4.2% from 6.2%, for the 2011 calendar year. A Democratic proposal to extend the tax cut for 2012 was the subject of a pitched battle last year before it narrowly passed in December. This time, the White House isn't pushing for another extension. "That was always intended to be a temporary measure to support job creation and economic growth," Jason Furman, a top White House economic adviser, said recently. "It's not something that we have at this stage called for extending into next year."
 
Jobless generation puts brakes on US [FT]
The share of American 18- to 24-year-olds who were employed fell to 54 per cent last year, the lowest since the labour department began tracking data in 1948, according to the Pew Research Center. The share who are in college has risen, but the researchers say this only partly explains the drop. The jobless rate for Americans age 16 to 24 is above 16 per cent, more than twice the national rate. Youth unemployment has reached crisis levels around the world, with almost 13 per cent of the global youth labour force out of work this year, according to the International Labour Organisation. But the problem has a unique flavour in the US, where the weak job market has collided with record levels of educational debt – about $25,000 for the average graduate. Together, they pose a threat to the future earning power of young Americans such as Mr Grzywacz – and could have long-lasting effects on US growth.
 
Lawmakers expected to watch Postal Service default [The Hill]
Lawmakers appear ready to let the cash-strapped U.S. Postal Service default for the first time on Wednesday, when a required payment to the federal government of more than $5 billion is due.  USPS said in a statement this week that it would not make the $5.5 billion prepayment for retiree healthcare due on Aug. 1, nor a second payment of a similar size due at the end of September. The expected default comes as postal reform legislation remains stalled in Congress, with House Republicans having yet to act on their measure that aims to give the service more fiscal security. 
 
Mitt Romney campaign CFO described himself as ‘financial outsourcing consultant’ on professional networking site [BG]
The Mitt Romney campaign’s chief financial officer described himself as a “financial outsourcing consultant” on the professional networking website LinkedIn until at least July 17, according to a cached version of his profile page, but has since changed the description to “political/finance professional.”
 
Doing Away With Stupid Rules [WSJ]

Right now, somewhere in your company, one of your employees is rolling his eyes. Make no mistake, it's because of a policy or rule that leadership created. The eye-roll—and its cousin, the defeated shrug—are the silent protests of people in every area of your company.
 
Prospect, Ky. man steals "ethical issues" textbook [WDRB]
According to an arrest report, 25-year-old Terry J. Davis walked into the Barnes & Noble college bookstore on S. Floyd St., near the University of Louisville campus, and stole a book titled, "Resolving Ethical Issues." Police say he then left that bookstore and went to a local Gray's College Bookstore, where he attempted to sell the book back.

 

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