Judge's Ruling On Accounting Firms In China Touches on Hong Kong Units [WSJ]
Paul Gillis's post from last week about KPMG Hong Kong signing opinions while relying on a Mainland firm's work gained some traction in the Journal: "The ruling by Judge Elliot cites at least three Chinese companies whose documents the SEC sought that had such audit arrangements–a biodiesel company, a petrochemical company and a chemical maker. KPMG's Hong Kong affiliate was the principal auditor in all three cases, but KPMG's Chinese affiliate did more than 90% of the audit work, said the judge, who didn't identify the companies. The judge didn't opine on whether such arrangements were proper. Yet where an audit is done makes a difference to investors, who may see the quality of the Chinese firms' audit work as questionable–more than 130 U.S.-traded Chinese companies have come under scrutiny in the last few years over accounting and disclosure issues."
IBM Uses Dutch Tax Haven to Boost Profits as Sales Slide [Bloomberg]
IBM gets its own Google/Apple/GE tax planning story: "IBM ended 2013 with a tax provision $1.84 billion lower than it initially projected, thanks to a tax rate of 15.6 percent — compared with its forecast of 25 percent. Without the lower rate, the company’s earnings per share would have fallen from the previous year instead of rising, and net income would have missed analysts’ estimates by about 14 percent instead of 2.9 percent, according to data compiled by Bloomberg."
Next Up On The “Operation Broken Gate” Agenda? Could Be PwC and Thomson Reuters [Re:The Auditors]
Francine McKenna thinks PwC/Thomson Reuters will be the SEC's next stop on the independence violation gravy train: "Thomson Reuters sells its software products all over the world and they are used by PwC member firms for their clients in at least the US, UK and now in China. Thomson Reuters is dual listed on the New York Stock Exchange and the Toronto Stock Exchange. Thomson Reuters recently changed auditors effective with the 2012 fiscal year—from the PwC Canada firm to the PwC US firm. That may not seem like a big deal but it is. The fees, $41 million in 2012, crossed the border with no disguises or fake passports necessary."
I sincerely hope they knew of Crtl+F.
SEC filing semantics: $NFLX replaced every reference to subscribers with the word members in 10K filed today.
— footnoted (@footnoted) February 4, 2014
Wells Fargo director resigns for health reasons [Reuters]
Howard V. "Rick" Richardson served as the bank's audit and examination committee chair. He'll be replaced in that role by former Deloitte CEO Jim Quigley.
The 13 Weirdest Interview Questions You'll Hear in 2014 [Mashable]
My favorite comes from Goldman Sachs: "How many square feet of pizza are eaten in the U.S. each year?"
Super Bowl Tax Tale Of The Tape: Who Ya’ Got? [Double Taxation]
Sorry we missed this since Tony posted it on Saturday, but it's still worth sharing. Although, nothing on it indicates the Broncos were only going to score 8 points.