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December 4, 2022

Accounting News Roundup: Panel Less Eager to Blame EY for Lehman Brothers; Hertz Still Working on Restatement; Remembering Lois Lerner’s Hard Drive | 08.12.14

Arbitrators Ease Blame on Ernst & Young for Audits of Lehman Brothers [DealBook]
Back in April, an arbitration panel found no cause for a malpractice claim against EY. That could throw a wrench into the NYAG's suit against the firm: "The previously unreported ruling could complicate a pending lawsuit the New York attorney general’s office filed against Ernst & Young in 2010 over the collapse of Lehman. The lawsuit accused the company of helping Lehman engineer an accounting fraud that made it look less leveraged than it truly was in the months before its collapse in September 2008."

Kinder Morgan’s Reorganization Puts Master Limited Partnerships in Question [DealBook] 
Are MLPs being put out to pasture? "[W]ith Kinder Morgan restructuring as a traditional corporation, questions have emerged about what will happen to the many other master limited partnerships. If Kinder Morgan no longer wants to be one, does the structure still make sense for other companies?"

Welcome to the World of 'Pension Smoothing' [WSJ]
I can hear the collective groan for pension accounting: "President Barack Obama on Friday signed a $10.8 billion transportation bill that extends a 'pension-smoothing' provision for another 10 months. In short: companies can delay making mandatory pension contributions, but because those payments are tax-deductible some businesses will pay slightly higher tax bills, which will help pay for the legislation." 

Hertz Delays Quarterly Earnings on Accounting Review [Bloomberg]
The restatement fun continues: "
Hertz wasn’t able to meet yesterday’s deadline, or a five-day extension period, for submitting its 10-Q form to the U.S. Securities and Exchange Commission because of a “previously announced thorough review of its internal financial records” for the three years through 2013, the Naples, Florida-based company said today in a filing. The rental provider’s audit committee said in June that financial statements for 2011 need to be restated, affecting figures reported in the next two years."

Study finds decrease in accounting mistakes among large US companies [Phys.Org]
A study commissioned by the Center for Audit Quality for Kansas accounting professor Susan Scholz has some interesting findings, including SOX's effect on the "culture" of auditing: 
"This is a story about regulation, having a good effect, but it's also a story of a shock to the system that caused a cultural shift," Scholz said. "Auditors are there to make sure financials are correct, and they really returned to their roots. It was a reminder that being an auditor is a very important role in society, because having good, accurate information that people believe in and can act on is vital to a strong economy."

IRS officials don't recall physical damage to Lerner's hard drive [The Hill]
That's where we are now with the IRS scandal: Asking a couple of IT guys to remember what a hard drive's physical condition was 3 years ago.

Local News Station is All Over McDonalds Chicken Sandwich Controversy [Gawker]
A swastika on the inside of a bun of a chicken sandwich has a North Carolina news station working hard.

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