Companies May Face Rule to Shift Audit Firms [NYT]
Publicly traded companies may be forced to change their audit firms after several years, the chief regulator of the industry said Thursday. James R. Doty, who became chairman of the Public Company Accounting Oversight Board this year, said in a speech that he had been disturbed by evidence turned up by board inspectors that many auditors failed to show sufficient independence from their clients. “Considering the disturbing lack of skepticism we continue to see,” he told a conference at the University of Southern California, “the board is prepared to consider all possible methods of addressing the problem of audit quality — including whether mandatory audit firm rotation would help address the inherent conflict created because the auditor is paid by the client.”
Deloitte attacked for appointing former RBS auditor as chairman [Telegraph]
A group of institutional investors has launched an extraordinary attack on Deloitte Touche Tohmatsu for appointing the former auditor of the Royal Bank of Scotland as its new global chairman. The investors are angry that Steve Almond, who was responsible for vetting the accounts of RBS between 2005 and 2009, has been promoted to the head of one of the “Big Four” audit firms.
Virgin America hiring new CFO from Pinnacle Air [AP]
Peter D. Hunt will become CFO and senior vice president effective July 11, replacing Holly Nelson, who is leaving “to pursue other opportunities,” Virgin America said. Hunt has spent six years at Pinnacle, which operates regional flights for Delta, Continental and US Airways through subsidiaries that include Colgan Air and Mesaba Aviation.
IRS Loosens Aug. 31 Deadline for Offshore Tax Disclosures [Bloomberg]
The Internal Revenue Service will let taxpayers with undeclared offshore accounts apply for a 90-day extension of the Aug. 31 deadline for coming forward. The change, announced on the IRS website today, would let taxpayers seek the extension in writing by showing that they have made a “good-faith attempt” to meet the deadline and explain what information they are missing. “This would be a welcome relief to many taxpayers,” said Barbara Kaplan, an attorney at Greenberg Traurig LLP in New York. “There is difficulty in getting the records together.”
Groupon’s Non-GAAP Measures Raise Questions [CFO Journal]
Beware non-GAAP accounting measures. In the case of Groupon’s IPO filing, at least, they seem to raise more questions than they answer about the company’s earnings prospects.
SEC Probes China Auditors [WSJ]
The SEC has publicly indicated it was examining accounting and disclosure issues regarding Chinese companies that engaged in “reverse mergers,” which allow companies to list on U.S. exchanges without as much regulatory scrutiny as an initial public offering. People familiar with the matter say the investigation also includes auditors, which hadn’t previously been known. As part of its inquiry, the SEC has suspended trading on some Chinese companies, questioning their truthfulness about their finances and operations.
Key Dem: Tax reform should not hurt working families [The Hill]
Rep. Sandy Levin, the top Democrat on the tax-writing House Ways and Means Committee is set to say Friday that, while there is a need for tax reform, an overhaul of the code should not punish working families. Officials on both sides of the aisle have called tax reform a priority, and Republicans are pushing a plan to reduce both the top corporate and individual rates to 25 percent, down from their current 35 percent.