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September 30, 2023

Accounting News Roundup: PwC Accused of Being a Tax Avoidance Factory; Inversions’ Heyday; McGladrey Acquires Fesnak | 12.09.14

PwC sold ‘tax avoidance on industrial scale’ [FT]
This sounds fun: "MPs accused a firm of accountants of 'selling tax avoidance on an industrial scale' on Monday after a tense parliamentary hearing sparked by the leak of hundreds of Luxembourg tax rulings. In the course of a two-hour grilling, MPs on the public accounts committee angrily denounced professional services firm PwC for devising financing structures that allowed companies to secure very low tax rates in Luxembourg."

PriceWaterhouseCoopers chief Kevin Nicholson denies lying over tax deals [The Guardian]
Also: "In a series of fractious exchanges on Monday, the committee’s chair, the Labour MP Margaret Hodge, said: 'We’ve asked you to come back to see us because we’ve reflected on the evidence that you gave us on 31 January 2013, and tried to relate that to the revelations around the Luxembourg leaks that have been in the press. I think I have a very simple question for you: did you lie when you gave evidence to us?' Nicholson responded: 'I didn’t lie and stand by what I said.' " 

U.S. Accuses Deutsche Bank of Skirting Millions in Back Taxes [DealBook]
From a transaction effected in 2000: "Federal prosecutors in Manhattan on Monday sued Deutsche Bank, claiming that it owes the United States government about $190 million in unpaid taxes, penalties and interest. Prosecutors contend the tax liability stems from a transaction that Deutsche Bank undertook 14 years ago."

A Brake on Reincorporating Abroad via Mergers [DealBook]
You'll never see the likes of these inversions again! "This was unprecedented," said Robert Willens, an independent corporate tax adviser. "I’ve never seen a situation where the tax benefits associated with a transaction were so influential. This was a once-in-a-lifetime phenomenon."

Corporate Profit Forecasts Ride on Politics [CFOJ]
Assuming that Congress will accomplish something seems like an awfully big risk to take with your financial projections: "In recent weeks, dozens of companies have reaffirmed financial forecasts that include millions of dollars in tax credits and deductions. It’s a risky bet as companies start to close their books on 2014. But, if history is any guide, the political drama in Congress could end with extensions and handshakes. The House voted late last week to extend the tax breaks only through 2014. The Senate must vote on the matter before its holiday recess or the debate will drag into next year. Despite the political brinkmanship, President Barack Obama ’s administration has signaled he will sign the bill into law."

McGladrey acquiring Fesnak in major accounting firm merger [PBJ]
The deal will make McG the 5th largest firm in Philadelphia.

Regulators Crack Down on Auditor Independence Violators [CFO]
"To ensure the integrity of our financial reporting system, firms cannot play the roles of auditor and preparer at the same time," said an SEC official.

2-Faced Cat, Frank And Louie, Dies At 15 [AP]
They (?) had cancer. RIP, Frank and Louie.

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