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September 25, 2023

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

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.

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