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November 26, 2022

Accounting News Roundup: PwC and MF Global; Republicans for the Millionaire Tax; Hands Off SOx | 10.31.11

Corzine Races to Save Firm [WSJ]
Jon S. Corzine, the former New Jersey governor, raced over the weekend to find a buyer for MF Global Holdings Ltd. in an attempt to rescue the securities firm he now runs from a crisis partially of his own making. MF Global was nearing a deal late Sunday night to file for Chapter 11 bankruptcy protection as soon as Monday and sell assets to Interactive Brokers Group, said a person familiar with the matter. The tentative agreement, reached after a marathon weekend of negotiations, could end the short tenure for Mr. Corzine at MF Global.

MF Global: 99 Problems And Auut None [Forbes]
FM: “According to the latest proxy, MF Global spent almost $12 million on total fees to PwC last year. That’s pretty paltry for a firm with the issues and complexity MF Global has.”

U.S. Economy Revives as Consumers Still Spend [Bloomberg]
While household-sentiment measures are at levels typically observed during a recession, an increase in spending during the third quarter boosted growth to the highest level of the year, Commerce Department figures showed Oct. 27. The schism partly reflects consumer ire with the government’s failure to reduce 9.1 percent unemployment or stem rising deficits, said James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management. “Emotionally based indicators are suspect,” Paulsen said. “There is a lot of anger out there. In a calmer time, these indicators might provide a better guide. Consumers are scared to death, but they are still spending.”

PWC Saw No Sign of FMS Accounting Errors, Reports Now Adjusted [Bloomberg]
The auditor said it had “no indication” of any mistakes in FMS’s 2010 financial statement, based on its examinations and the documents it received. “Significant” parts of FMS’s accounting have been outsourced, PWC said in the statement.

A Tax Bracket Divided Over a Plan to Pay More [NYT]
At a wine-and-cheese reception in his office here, Terry M. Barr, president of Samson Oil and Gas, made a pitch to industry executives to donate to the Republican Party of Colorado so that they could defeat President Obama and elect more Republicans at the federal, state and local levels. After his guests left, Mr. Barr offered a surprising postscript: He agrees with a proposal by Congressional Democrats to impose a surtax on income over $1 million a year. Republicans in Congress deride the proposal for a so-called millionaires’ tax as class warfare. But in an interview, Mr. Barr said, “Wealthy people in the U.S. should be paying more tax, and I’m one of them.”

More SEC Reports on IFRS Coming: Will they be Genuine Analysis or Just More Dithering? [AO]
Tom Selling: “The public interest and investors would be better served if the Staff were to finally acknowledge that IFRS is not clearly superior to U.S. GAAP; and, eight years after its report to Congress, the necessary conditions for principles-based standard setting to occur (especially at the IASB) are still not in place.”


For PricewaterhouseCoopers, China Accounting Scandals Not A Game Changer [Forbes]
PricewaterhouseCoopers, or PwC, won’t be leaving China anytime soon following a rash of accounting scandals on small and mid-cap mainland companies listed on the New York Stock Exchange. The company told Shanghai Daily on Monday that it intends to stick around and open up five new offices despite auditors like PwC getting caught up in the middle of ugly international class action lawsuits against Chinese firms for accounting fraud allegations.

Rolling back accounting fraud protections will kill, not create, jobs [WaPo]
The recently released interim report from the President’s Council on Jobs and Competitiveness is brimming with suggestions for ways to get Americans back to work. But it also contains provisions aimed at rolling back protections against accounting fraud, which actually could result in killing jobs. One proposal calls for weakening, at all but the nation’s very largest public companies, nearly 10-year-old rules targeting accounting fraud. That would be bad news for employees and investors in Washington area companies, since it is employees and investors who suffer most when executives cook the books.

Corzine Races to Save Firm [WSJ]
Jon S. Corzine, the former New Jersey governor, raced over the weekend to find a buyer for MF Global Holdings Ltd. in an attempt to rescue the securities firm he now runs from a crisis partially of his own making. MF Global was nearing a deal late Sunday night to file for Chapter 11 bankruptcy protection as soon as Monday and sell assets to Interactive Brokers Group, said a person familiar with the matter. The tentative agreement, reached after a marathon weekend of negotiations, could end the short tenure for Mr. Corzine at MF Global.

MF Global: 99 Problems And Auditor PwC Warned About None [Forbes]
FM: “According to the latest proxy, MF Global spent almost $12 million on total fees to PwC last year. That’s pretty paltry for a firm with the issues and complexity MF Global has.”

U.S. Economy Revives as Consumers Still Spend [Bloomberg]
While household-sentiment measures are at levels typically observed during a recession, an increase in spending during the third quarter boosted growth to the highest level of the year, Commerce Department figures showed Oct. 27. The schism partly reflects consumer ire with the government’s failure to reduce 9.1 percent unemployment or stem rising deficits, said James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management. “Emotionally based indicators are suspect,” Paulsen said. “There is a lot of anger out there. In a calmer time, these indicators might provide a better guide. Consumers are scared to death, but they are still spending.”

PWC Saw No Sign of FMS Accounting Errors, Reports Now Adjusted [Bloomberg]
The auditor said it had “no indication” of any mistakes in FMS’s 2010 financial statement, based on its examinations and the documents it received. “Significant” parts of FMS’s accounting have been outsourced, PWC said in the statement.

A Tax Bracket Divided Over a Plan to Pay More [NYT]
At a wine-and-cheese reception in his office here, Terry M. Barr, president of Samson Oil and Gas, made a pitch to industry executives to donate to the Republican Party of Colorado so that they could defeat President Obama and elect more Republicans at the federal, state and local levels. After his guests left, Mr. Barr offered a surprising postscript: He agrees with a proposal by Congressional Democrats to impose a surtax on income over $1 million a year. Republicans in Congress deride the proposal for a so-called millionaires’ tax as class warfare. But in an interview, Mr. Barr said, “Wealthy people in the U.S. should be paying more tax, and I’m one of them.”

More SEC Reports on IFRS Coming: Will they be Genuine Analysis or Just More Dithering? [AO]
Tom Selling: “The public interest and investors would be better served if the Staff were to finally acknowledge that IFRS is not clearly superior to U.S. GAAP; and, eight years after its report to Congress, the necessary conditions for principles-based standard setting to occur (especially at the IASB) are still not in place.”


For PricewaterhouseCoopers, China Accounting Scandals Not A Game Changer [Forbes]
PricewaterhouseCoopers, or PwC, won’t be leaving China anytime soon following a rash of accounting scandals on small and mid-cap mainland companies listed on the New York Stock Exchange. The company told Shanghai Daily on Monday that it intends to stick around and open up five new offices despite auditors like PwC getting caught up in the middle of ugly international class action lawsuits against Chinese firms for accounting fraud allegations.

Rolling back accounting fraud protections will kill, not create, jobs [WaPo]
The recently released interim report from the President’s Council on Jobs and Competitiveness is brimming with suggestions for ways to get Americans back to work. But it also contains provisions aimed at rolling back protections against accounting fraud, which actually could result in killing jobs. One proposal calls for weakening, at all but the nation’s very largest public companies, nearly 10-year-old rules targeting accounting fraud. That would be bad news for employees and investors in Washington area companies, since it is employees and investors who suffer most when executives cook the books.

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