Accounting News Roundup: Should E&Y Resign as HP Auditor?; Deduction Cap Momentum; Big 4 Is Good with HRC | 04.04.13

Posted on by Caleb Newquist

U.S. Economy Adds Just 88,000 Jobs [WSJ]
Employers added 88,000 jobs last month, the Labor Department said Friday. The unemployment rate, obtained by a separate survey of U.S. households, fell one-tenth of a percentage point to 7.6%. Economists surveyed by Dow Jones Newswires expected that nonfarm payrolls would rise by 200,000 and the unemployment rate would hold steady at 7.7% Offsetting some of March's weakness, February payrolls were revised up to a gain of 268,000 from the originally reported 236,000, while January was revised to a gain of 148,000 from the previously reported 119,000. The latest snapshot of the labor market comes amid an array of economic cross-currents. Business and consumer spending has been solid, and the housing market has strengthened this year. But higher taxes and federal-government spending cuts, known as the sequester, may be starting to affect the economy.

Autonomy deal debacle takes toll at HP [FT]
Anne Simpson, head of corporate governance for Calpers, the pension fund, welcomed the [resignation of chairman Ray Lane], but said shareholders had made their intentions clear and that further change was necessary: “It’s not quite leaving them in a room with a brandy and a revolver, but we expect them to do the right thing.” Calpers, which in addition to its direct holding of HP stock has $1bn invested with Mr Whitworth’s Relational Investors investment fund, has been in active discussions with HP. Ms Simpson said that “all those who presided over the disaster should step aside”, including Ernst & Young, auditor to HP for 14 years.

Plan to Cap Tax Breaks Is Gaining Steam [WSJ]

The Obama administration appears likely to propose a 28% limit on tax breaks for the wealthy in its budget proposal next week, according to groups lobbying to avoid such a move. The 28% cap has been a feature of President Barack Obama's tax proposals since he took office in 2009. But it has only recently started gaining support in Congress, as lawmakers look for ways to tackle the federal deficit. Groups that would be adversely affected by the move—including charities, home builders, pension-plan advisers and city and state leaders—are bracing for disappointment when the budget plan comes out. Many of them have stepped up their efforts to win exemptions for their preferred breaks. But the groups generally expect the proposal to make no exceptions. "We've reached out to folks in the administration, and it's clear to me from what's being said to us unofficially…they are not making changes to the proposal," said Diana Aviv, president of Independent Sector, a coalition of philanthropic groups that seeks to preserve the deductibility of charitable contributions.
 
Accounting and Finance Outsourcing to Surpass $25B [AT]
The report, by KPMG and HfS Research, found that 90 percent of finance and accounting business process outsourcing engagements have been consistently meeting their cost-reduction targets and initial delivery performance. Corporate leaders are looking at more radical strategies to increase productivity and global business effectiveness in the aftermath of the recession. Enterprises overwhelmingly want to look at new ways to take advantage of lower-cost operations and standardized financial processes, where there is little competitive differentiation to be achieved by operating inhouse.
 
Best Places to Work 2013 [HRC]
All of the Big 4 on our the Human Rights Campaign's list.
 
Say Goodbye to the Office Cubicle [WSJ]
As the nation's economy recovers, office-furniture makers, who were hit hard by the recession, are racking up sales by persuading companies that newer office layouts can encourage collaboration and, in some cases, shrink their space requirements and costs. Herman Miller Inc., which helped spawn the cubicle craze more than 40 years ago, is one of the suppliers leading the charge. 
 
Unkind to Charity [DCJ/Tax Analysts]
DCJ: "We can, and should, debate the appropriate range of charities that qualify for tax deductions. A hard look at gargantuan endowments that keep raising more money and investing offshore in speculative hedge funds would be a good idea. And an investigation of pseudo-churches whose leaders live in mansions and fly in private jets is also long overdue. But as the well-to-do are discovering, when meeting with their tax advisers this spring, no matter how pure their intent they no longer get to deduct all of their charitable gifts." 
 
Ex-Rutgers Coach Due $100k Bonus [AP]
Seems about right.
Posted in ANR

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Vote on Boehner Plan Delayed Amid Opposition [NYT]
House Republican leaders were forced on Tuesday night to delay a vote scheduled on their plan to raise the nation’s debt ceiling, as conservative lawmakers expressed skepticism and Congressional budget officials said the plan did not deliver the promised savings.

What’s Wrong With America’s Job Engine? [WSJ]
Between the end of 2007 (when American employment peaked) and the end of 2009 (when it touched bottom), the U.S. economy’s output of goods and services fenumber of workers fell by a much sharper 8.3%. Today’s puzzle: How and why employers managed to boost productivity, or output per hour of work, like never before during the worst recession in decades?

Americans ‘Disgusted’ as Politicians Fail to Compromise on Debt [Bloomberg]
“They’re not in touch with reality,” said Cheryl Carroll, 51, who lives in Tinton Falls, New Jersey, with her two daughters. She has been applying for jobs in retail and subsisting off her family’s investments since her husband died last year. “They should really get an average American in Congress who knows how to balance their checkbook,” Carroll said. “It would be fixed in a week.”

Obama’s ‘70 million checks’ per month: Actually, it’s even more than that. [WaPo]
The mind-boggling number challenges a common critique of the federal government as a creaky apparatus where tax dollars are lost in the bureaucratic cracks. From the vantage point of the 70 million or 80 million checks, the government is a finely tuned machine that brings in revenue and disperses it back out across the country.

IRS is investigating Bell finances [LAT]
The Internal Revenue Service has opened an investigation into the handling of bonds and employee compensation packages in the financially struggling city of Bell, according to sources familiar with the ongoing probe. At least two IRS agents have been assigned to the investigation and have been in and out of Bell’s red-brick city hall since February, one source said. “They’re sifting and combing through everything,” the source said. The sources requested anonymity because they were not authorized to talk about the investigation.

CPA: Can’t Prepare Anymore [Tax Update]
Definitely not “Current Power of Attorney.”

Employees Can’t Use IRS Computers for Craigslist, eHarmony, Facebook, Foursquare, Gmail, TaxProf, Twitter, Yelp [TaxProf]
Or simply, “Any use that reduces productivity or interferes with the performance of official duties.”

Next Accounting Standard Project: Dairy Cows? [CFOJ]
Bovines at fair value?

ICAEW helps US focus on global standards [Accountancy Age]
International financial reporting standards are in focus at the ICAEW, which is to chair an American Accounting Association debate on the future of the global standards in the US. The panel will include former chairman of US regulator the FASB, Robert Herz, and forms part of the AAA’s annual conference from 6 – 10 August.

Cops: Calif. man tries to fix hernia with butter knife [MSNBC]
The man’s wife called police to say her husband was sick and tired of waiting to get surgery for his rupture and decided to take matters into his own hands on Sunday evening, Glendale Police Sgt. Tom Lorenz told msnbc.com. When officers arrived at the couple’s apartment, they discovered the man, naked and sprawled out on a lawnchair, with a butter knife protruding from his abdomen, Lorenz said. The man was cooperative and even pulled out the knife when asked, he said.

Accounting News Roundup: Groupon CFO Not Interested in Dealing with SOX; The Latest in Tax Denial; Cheap Beer, Redefined | 02.08.11

Obama Vows to ‘Knock Down’ Business Barriers [WSJ]
President Barack Obama told business leaders at the U.S. Chamber of Commerce they should stop hoarding cash and start hiring in return for tax breaks and other government support for exports and innovation. Mr. Obama’s speech Monday on the home turf of the nation’s biggest business lobby was part of an effort by the White House to patch up relations with the Chambers after two years of clashes over health care, regulatory policy and tax issues. Mr. Obama offered conciliatory words, but the thrust of his speech was a call to business leaders to use the $2 trillion ince sheets to “get in the game” and start adding jobs in the U.S., despite slow growth in consumer demand.

Groupon CFO Jason Child: ‘I Don’t See Any Limits’ [Daily Finance]
To the business, that is. An IPO, on the other hand, “If we’re a public company, I have to spend time thinking about Sarbanes-Oxley, fair disclosure requirements. I have to think about balancing the need to report sufficient information to investors without giving too much to competitors.”

Michael Moore sues Weinsteins over Fahrenheit 9/11 [Reuters]
Filmmaker Michael Moore has sued Harvey and Bob Weinstein, accusing the brothers of “Hollywood accounting tricks” and “financial deception” that cheated him out of at least $2.7 million in profits from the hit documentary “Fahrenheit 9/11.” In a lawsuit filed Monday in Los Angeles Superior Court, Moore says the Weinsteins and an affiliated entity called the Fellowship Adventure Group agreed to split profits from the film 50-50 but then diverted monies to hide them from Moore.

Unlearning the Income Tax: Another Journey to Frivolity [Taxable Talk]
Russ Fox shares the latest in “taxes are illegal” education, from the Institute of Unlearning: “[I]ts proprietor, one Patrick Mooney, espouses that, ‘[A] private sector worker’s earnings are not legally subject to the federal tax on income. They never have been, and as long as we still have a Constitution, they never will be.’ Mr. Mooney was highly confident in his beliefs, so he filed a 2005 tax return with all zeroes, and claimed a refund of $2,647.48, the amount he had withheld in federal tax during the year.”


Private-Label Beers Take a Shot at Earning Joe Sixpack’s Respect [WSJ]
Your low-price alternative, “Supervalu, the third-largest U.S. grocery chain by revenue, began selling Buck Range Light, a low-priced domestic brew, in December. Drugstore chain Walgreens recently began offering Big Flats 1901 for as little as $2.99 a six pack. The retailers are trying to tempt shoppers with lower-priced alternatives to domestic mass-market brews such as MillerCoors LLC’s Keystone Light. The effort comes amid declining sales volumes for the beer industry, which has been hurt by stubbornly high unemployment.”

Fees will rise as Audit Commission is abolished [Accountancy Age]
David Heald, professor of accountancy at the University of Aberdeen Business School, said that auditors would have to charge local authorities higher fees to pay for insurance, which is currently covered by the commission itself. Speaking at the first hearing of the Commons communities and local government select committee inquiry on the future of council auditing, he said: “One of the reasons I am skeptical of audit fees going down is that private audit firms will have to buy insurance in the market, meaning that some councils will find it very hard to get audited.”