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Accounting News Roundup: A Rare Breed: Audit Committee Member That Blows the Whistle; GOP Leader Tempers Tax Reform Talk; EY Caught Between Rich Client and IRS | 02.26.14

A China Fraud Dissected: Part 1 Milton Webster, AgFeed Audit Committee Member and Whistleblower [Re:The Auditors]
An Audit Committee member blowing the whistle? That's a rare bird. Francine McKenna spots one: "Milton Webster, an AgFeed whistleblower, was a member of the company’s board of directors, an Audit Committee member, who says he saw problems with the company’s accounting almost immediately after joining the board on February 24, 2011. He subsequently resigned on February 14, 2012.  It is highly unusual for a board member, especially an Audit Committee member, to be a fraud whistleblower in a public company."

Many big U.S. corporations pay very little in taxes: study [Reuters]
The Citizens for Tax Justice report claims that 26 out of the 288 companies studied "paid no federal income tax in the five-year period." One of these companies, General Electric, isn't impressed. Here's their spokesman Seth Martin: ""For each year cited by Citizens for Tax Justice, GE paid income taxes in the U.S., as well as billions in other state, local and federal taxes in the U.S. CTJ inaccurately uses the current tax provision – a book accounting number – to make definitive statements about our U.S. income taxes. This is not the same as the cash income tax that we pay for a given year." 

Zynga wins dismissal of fraud lawsuit linked to IPO [Reuters]
Movin' on up in Lawsuitville! " Zynga Inc has won the dismissal of a lawsuit in which shareholders accused the online gaming company of fraudulently misleading them about its financial and business prospects before and after its December 2011 initial public offering. U.S. District Judge Jeffrey White in San Francisco said that despite their 'excessively long and prolix' 110-page complaint, the shareholders failed to include "relevant, basic factual details" to support their claims against Zynga, company officials including founder Mark Pincus, and underwriters led by Morgan Stanley and Goldman Sachs & Co."

Someone's getting excited:

McConnell douses tax reform talk [The Hill]
Although it seems Grover's excitement is all for nothing: "The House’s top tax writer on Tuesday ran into roadblocks from his own party the day before the release of a long-awaited reform plan. Senate GOP Leader Mitch McConnell (Ky.) poured cold water on tax reform’s prospects, insisting that the differences between Democrats and Republicans were too great to overcome. He suggested the GOP would be better served waiting until after the midterm elections, when his party might have majorities in both chambers of Congress."

Ernst & Young Sued Over Georg Schaeffler Tax Probe [Bloomberg]
Getting caught between a rich client and the IRS is part of the cost of doing business: "Ernst & Young LLP was accused by the U.S. of failing to comply with an Internal Revenue Service request for documents in an investigation of the tax liability of the billionaire chairman of industrial-bearing maker Schaeffler AG. The agency had asked for testimony and 'books, records and other data' tied to a probe of Georg F. W. Schaeffler, the office of Manhattan U.S. Attorney Preet Bharara said in a lawsuit filed yesterday."

KPMG getting new Columbus market chief in Matt Kramer [CBF]
He's taking over for Philip Smith "who's being promoted."

Biden: ‘I may be a white boy, but I can jump’ [WaPo]
Best. Veep. Ever.

Posted in ANR