Accounting News Roundup: PwC: Don’t Change Auditors Just Cuz; Sequestration By State; Legit Marijuana Business’s Tax Rates | 02.25.13

Deloitte Pledges Vigorous Defense in ChinaCast Lawsuit [CC/WSJ]
“We do not believe that the plaintiffs have a valid basis for bringing this action against Deloitte Touche Tohmatsu CPA Limited and, accordingly, we will defend ourselves vigorously.”

PwC: Don't change auditor for change's sake [Accountancy Age]
We believe that the Competition Commission has grossly underestimated the influence and effectiveness of the audit committee. The professionalism of audit committees has grown, assisted by aspects of the Combined Code and evolving market practices. The vast majority now perform a thorough review of external audit quality at least annually. They have also increased the level of reporting of their activities to shareholders, including scrutiny and disclosure of fees paid to ensure they reconcile with the provision of a quality audit. We seem to be losing sight of the fact that it is in the best interests of shareholders to have a quality audit and not to measure success by change for the sake of change.

Sequestration: Expecting a tax refund? It may be delayed [Politico]
Absent a last-minute deal, the 8.2 percent funding cut facing the cash-strapped IRS will most likely translate to fewer specialists on hand to help taxpayers with their returns and to root out fraud — two tasks that watchdog groups say need more, not fewer, hands. And while the sequester isn’t great for any federal agency, it amounts to particularly bad timing for the IRS. That’s because, depending on union negotiations, furloughs could come just as millions of Americans are trying to pay their income taxes. “At a minimum, it’s probably going to take longer for people to get through on the phone; it’s going to take longer for refunds to be processed,” said Floyd Williams, a senior tax counsel at Public Strategies Washington.

The state-by-state impacts of sequestration [WaPo]
Is it Friday yet?

Marijuana dealers get slammed by taxes [CNN]
Thanks to a decades-old law targeting drug runners, entrepreneurs in the nascent medical marijuana industry face a unique burden: an effective federal income tax rate that can soar as high as 75%. The hefty levy is the result of a 1982 provision to the tax code, known as 280E, that stemmed from a successful attempt by a convicted drug trafficker to claim his yacht, weapons and bribes as businesses expenses, according to 280E Reform, a group working to overturn the statute. Enacted in the wake of that PR debacle, the rule bars those selling illegal substances from deducting related expenses on their federal income taxes. It may have been effective against cocaine dealers and smugglers of other hard drugs, but the law now means purveyors of medical marijuana in the 18 states that have legalized the drug can't can't take typical things like rent or payroll as a business expense.

Accounting Industry Leaders Want Changes to Corporate Reporting [AWEB]
"The downturn that has affected nearly every part of the global economy has called into question some basic tenets of our economic system," writes KPMG Global Chairman Michael Andrew in the foreword of his firm's recently released report The Future of Corporate Reporting: Towards a Common Vision. "If there is one point of consensus . . . it is that corporate reporting definitely needs to move on. It has to evolve if it is to be fit for purpose in a rapidly changing world." […] KPMG Global Head of Audit Joachim Schindler said, "Auditors would be willing to expand the content of their audit reports if the agreed parameters were right. As long as we have clear lines of responsibility, we are in favor of expanding the auditor's report. We have to do this. The issue is defining what more we should report." 

KPMG narrows choices for new downtown Dallas office [DMN]
Just so long as there's walking workstations.

Work-Family Guilt Is Wasted Energy [HBR]
The easy solution is to just keep working.

Condoms, a $12,000 Vacation, and Other Ludicrous Gifts in 9-year-old Quvenzhan√© Wallis’ Oscar Swag Bag [Gawker]
The Vampire Facelift at $5,000 and Bonita Platinum Tequila will both come in handy.

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