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Accounting News Roundup: The New COSO Tour, 2013; Grover Norquist’s Bracket; Taxing Superman | 03.21.13

Posted on by Caleb Newquist

H-P Raises Dividend by 10% [WSJ]
Hewlett-Packard Co.'s board authorized a 10% dividend increase as the technology company looks to deliver a greater return to investors. The company raised its quarterly dividend to 14.52 cents from 13.2 cents, starting with the next dividend declaration, expected to occur in May. Hewlett-Packard will spend about $106 million more a year for the higher payout. The company has about 2 billion shares outstanding. Moody's Investors Service on Monday said the amount of cash held by non-financial U.S. companies climbed 10% in 2012 from the prior year and the technology sector had the largest cash hoard. The computer maker's shareholders on Wednesday re-elected all of the company's directors at its annual meeting here, despite efforts by two shareholder advisory services to oust some of them. But each of the directors that came under fire received far lower vote totals than other board members, according to preliminary totals H-P disclosed.

Vestas Opposes Investor Call for Probe Into Accounting Change [Bloomberg]
Vestas Wind Systems A/S (VWS), the unprofitable Danish wind turbine maker, is fighting an attempt by investors to probe a change in its accounting policy that they say damaged the company’s share price. Vestas urged shareholders to vote against the proposal by Deminor International SCRL/CVBA, which represents about 100 investors, when they meet today at the manufacturer’s annual general meeting in Aarhus. Deminor wants an independent probe into the accounting-rule change in 2010 and whether it led it to revise earnings forecasts lower. “We feel the company has misled investors about its revenues, its order book and its expectation for future revenue,” Erik Bomans, managing partner at Deminor in Brussels, said in a phone interview. “Our clients have purchased shares at inflated prices during a period which investors were not informed about the true financial situation of this company.”

Ontario court approves $117M settlement between Ernst & Young, Sino-Forest [TS]

The Ontario Superior Court has approved a $117-million class-action settlement involving Sino-Forest Corp. and its former auditor, Ernst & Young. The agreed deal will see the accounting firm pay toward a fund to compensate shareholders of the troubled Chinese-Canadian company, which has been accused of fraudulently overstating its assets. It’s believed to be one of the largest settlements involving an auditor in Canadian history.
 
Eagerly anticipated COSO framework set for May release [JofA]
May 14. Write it down.

Congressman Demands IRS Release Star Trek Video [AT]
House Ways and Means Oversight Subcommittee chairman Charles Boustany, Jr., R-La., sent a letter Wednesday to IRS Acting Commissioner Steven T. Miller demanding a copy of the video parodies produced in the IRS’s television studio in New Carrollton, Md., claiming the studio may have cost taxpayers more than $4 million last year, according to a review of contracts.

ATR President Grover Norquist Releases NCAA Tournament Bracket [ATR]
FYI: "Hey taxpayers, I chose my winners based on the lowest top marginal income tax rate in each team's home state. In the case of a tie, I went with the Right to Work State. Good luck with your brackets. — Grover" 

PwC wins Cairn Energy audit tender [Accountancy Age]
More fierce competition, as P. Dubs steals Cairn from E&Y.

Ode to the VAT Bastard [Tax Analysts]
Impose a VAT at a rate of 10 to 15 percent. That would finance an exemption from income taxes for families making $100,000 in income or less. No more filing. No more paper-hunting. No more nightmares about the IRS at your door because you missed a piece of paper. Just peace of mind. For families making more than a $100,000, Graetz proposes a much simpler income tax than the one we have now with one rate, 25 percent. More peace of mind.

The Tax Consequences of Superman's Diamonds [TaxProf]
The important question: "[I]f Superman crushes carbon and makes diamonds, is that taxable income?"
Posted in ANR

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Accounting News Roundup: Olympus Under the Lens; Paterno’s House Sale; BDO Tax Shelter Case’s Shady Juror | 11.16.11

Purgatory for MF Global Customers [WSJ]
More than two weeks after MF Global filed for Chapter 11, some 33,000 customers are stuck in a sort of purgatory, with no access to their cash until a trustee liquidating the securities firm says they can get it. Late Tuesday night, the office of the trustee, James Giddens, in an apparent response to customer outcries, said he had sought court permission for a transfer of about 60% of the cash in about 21,000 customer accounts still frozen, or some $520 million. If he gains court approval, the statement said, distributions could be made within days. Earlier in the day,owledged customer “frustration” and sought court approval to expedite a claims process. A spokesman for the trustee said this week it is possible customers won’t get all their money back, due to the apparent shortfall at MF Global.

Olympus seeks to reassure lenders [FT]
Olympus is seeking to reassure its lenders that it has sufficient cash flow to repay its loans, in an effort to ensure continued financial support as it faces investigations into a cover-up of large losses related to past securities investments. Lenders including Japan’s three leading banks – Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho – and country’s largest life assurer, Nippon Life, met with Olympus on Wednesday.

UK’s SFO launches formal Olympus probe [Reuters]
Britain’s Serious Fraud Office (SFO) has launched a formal investigation into more than $1.0 billion of obscure payments and acquisitions made by Japan’s Olympus Corp., a source familiar with the matter said.[…] Olympus’s former chief executive Michael Woodford, a Briton who fled Japan around a month ago after blowing the cover on around $1.3 billion in unexplained fees and non-core acquisitions, promptly handed reams of documents to the agency.

Paterno Passed On Home to His Wife for $1 [NYT]
Lawrence A. Frolik, a law professor at the University of Pittsburgh who specializes in elder law, said that he had “never heard” of a husband selling his share of a house for $1 to his spouse for tax or government assistance purposes. “I can’t see any tax advantages,” Frolik said. “If someone told me that, my reaction would be, ‘Are they hoping to shield assets in case if there’s personal liability?’ ” He added, “It sounds like an attempt to avoid personal liability in having assets in his wife’s name.”


Daugerdas Judge Grants Hearing on Juror Conduct in Tax Case [Bloomberg]
U.S. District Judge William Pauley in Manhattan said today he will hold an evidentiary hearing on the conduct of Catherine Conrad, Juror No. 1 in the 10-week trial. He didn’t set a date. The defendants claim Conrad hid details of her background from the court, including a law degree, at least four arrests and the fact that she was serving a sentence of probation for shoplifting. The jury, including Conrad, convicted [Paul] Daugerdas in May on more than 20 criminal counts, including conspiracy, tax evasion and attempting to impede the Internal Revenue Service. The jury also returned guilty verdicts for Denis Field, the former chief executive officer at accounting firm BDO Seidman LLP; Donna Guerin, a Jenkens & Gilchrist lawyer; and David Parse, a former accountant for Deutsche Bank AG (DBK) unit Alex. Brown.

H&R Block drops TaxACT acquisition plan after antitrust opposition [KCBJ]
H&R Block Inc. has dropped its $287.5 million plan to buy the maker of TaxACT tax preparation software. In a Tuesday filing with the Securities and Exchange Commission, the Kansas City-based tax preparer (NYSE: HRB) said involved parties had agreed to terminate the merger agreement, effective Monday.

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Summers exit lets Obama retool team and message [Reuters]
“The departure of economic adviser Larry Summers opens the way for President Barack Obama to shake up leadership of his economic team and show he is taking seriously growing public frustration over the sluggish economic recovery.

Whoever replaces Summers ions constrained by a record $1.47 trillion budget deficit and the possible Democratic loss of control of the House of Representatives in November 2 congressional elections.”

The Obama Tax Plan: Who’s in the Crosshairs? [TaxVox]
“President Obama’s plan to raise taxes on the nation’s highest income households may not quite mean what you think. A closer look suggests that fewer people may get whacked than either Obama or his Republican critics suggest. And for many of the victims, the club won’t be the president’s plan to raise rates to 36 percent and 39.6 percent. Those rate hikes may be getting most of the attention, but the real cudgel would be higher taxes on capital gains and dividends going to high-earners.”

H&R Block Announces New Chief Financial Officer [MarketWatch]
“H&R Block (HRB 12.82, -0.08, -0.62%) announced today the appointment of Jeff Brown as chief financial officer. Brown has been the company’s interim CFO for the past five months. As an eight-year veteran of H&R Block, Brown has played an important role in a variety of financial functions.

‘I am very pleased with the leadership Jeff has provided me and the organization in his interim role,; said Alan Bennett, H&R Block’s president and chief executive officer. ‘Jeff has all the talent and personal characteristics needed to be highly successful as the permanent CFO. He has earned my full confidence, as well as that of the board of directors.’

Most recently, Brown served as H&R Block’s corporate controller. Prior to that, he was the corporate controller and vice president of finance (Americas) at Bacou-Dalloz, now Sperian Protection, and served in key positions at KPMG. Brown has a business administration degree from the University of Nebraska and is a certified public accountant.”


Sentencing of Petters’ accountant is postponed [Minneapolis Star-Tribune]
“Tuesday’s scheduled sentencing of James Wehmhoff, the accountant who helped Tom Petters file false tax returns, has been postponed until sometime in October. The postponement was ordered by U.S. District Judge Richard Kyle at his own behest.

Wehmhoff faces a prison sentence of between 70 and 80 months on tax charges, but federal prosecutors have asked Kyle to consider Wehmhoff’s cooperation in the Petters investigation and his previously “unblemished” career before he hooked up with Petters Group Worldwide. The government also noted that Wehmhoff was not part of the $3.65 billion Ponzi scheme that Petters and others orchestrated for more than 10 years.”

KPMG Continues to Add Restructuring Talent With Appointments of Tony Murphy, Tom Bibby [PR Newswire]
The House of Klynveld must be counting on more companies falling prey to their massive debt loads with the appointment of Tony and Tommy who both have “proven track records” as restructuring professionals.

Accounting Basics: A Guest Post From Robert B. Walker [Re:The Auditors]
“[New Zealand] follows an American model in which people who are to become accountants are ‘educated’ in Universities. There is minimal emphasis on double entry. Most of the courses are dedicated to theory, bullshit sociology, complex management accounting, auditing and so on. None of this makes any sense to a student if they first do not know the basics of accounting and that can only be gained by actually practicing the discipline.”

Comparing the Ethics Codes: AICPA and IFAC [JofA]
“Sharp increases in the number of multinational audits being performed by U.S. accounting firms means that more CPAs are performing services under the International Federation of Accountants (IFAC) audit and attest standards. Although auditors must comply with the specific standards adopted in each jurisdiction, familiarity with IFAC’s International Ethics Standards Board for Accountants (IESBA) Code of Ethics for Professional Accountants (IESBA Code) in addition to the AICPA Code of Professional Conduct (AICPA Code) is a critical first step. When specifications differ, members should comply with the more restrictive of the applicable standards.”