Accounting News Roundup: Stanford Jury Still Working; BDO’s PCAOB Inspection Report; Mortgage Deduction Setback for Gay Couples | 03.06.12

Posted on by Caleb Newquist

Stanford trial jury told to continue deliberations [AP]
U.S. District Judge David Hittner on Monday gave jurors in Houston an order meant to prod juries toward a unanimous verdict. A short time later, the jury ended work for the day. Deliberations were to resume Tuesday

PwC 'queried Centro debt error' [SMH]
When PricewaterhouseCoopers partner Stephen Cougle realised in late August 2007 that the Centro accounts he was about to finalise were missing at least $1.1 billion of short-term debt, he fetched the ASX listing rules to check disclosure requirements, a court has heard. Mr Cougle then asked a colleague to ask managers of the Centro property group if they planned to tell the stock exchange that the company's preliminary accounts, released a few weeks earlier, needed correcting. The Federal Court in Melbourne, which is hearing a major class action case, yesterday heard that Centro relayed to Mr Cougle that it would not announce the error to the stock exchange but instead disclose the correct figure in a note to the group's final accounts.

Porsche’s Former CFO Said to Be Among Three Charged With Refinancing Fraud [Bloomberg]
Former Porsche SE (PAH3) Chief Financial Officer Holger Haerter is one of the people charged with fraud in Germany over statements made when refinancing a 10 billion- euro ($13.2 billion) loan, according to two people familiar with the matter. Three men are accused of understating Porsche’s liquidity needs by 1.4 billion euros if all purchase options the company held on Volkswagen AG (VOW) (VOW3) shares had been exercised, Stuttgart prosecutors said in an e-mailed statement today, without identifying the suspects or the bank by name. The managers also withheld some information about put options tied to VW shares that Porsche sold, prosecutors said. Haerter, who is also under investigation for manipulating the price of VW shares, is one of them, said the people who declined to be identified because prosecutors haven’t made the suspects’ names public.
 
Whistleblower files suit against IRS, says agency owes him a reward [Federal Eye/WaPo]

Joseph A. Insinga was the ultimate whistleblower. A former executive with a Dutch bank, he says he divulged to the Internal Revenue Service details about how his employer for years helped U.S. companies dodge taxes. Now Insinga is taking tax authorities to court for failing to give him a reward that he says he is owed by the federal government. “I gave substantial documents to the IRS,” said Insinga,61, who is retired and lives in Floral Park, N.J. “It was only a matter of time before some of the companies had to pay money they owed. We thought [IRS officials] were going to process an award.”
 
PCAOB Faults BDO USA for Audit Failures [AT]
The PCAOB reviewed 31 audits and found significant deficiencies with audits of eight companies in the board’s 2010 inspection of the firm. “The inspection team identified matters that it considered to be deficiencies in the performance of the audit work it reviewed,” said the PCAOB report. “Those deficiencies included failures by the firm to identify, or to address appropriately, financial statement misstatements, including failures to comply with disclosure requirements, as well as failures by the firm to perform, or to perform sufficiently, certain necessary audit procedures. In some cases, the conclusion that the firm failed to perform a procedure was based on the absence of documentation and the absence of persuasive other evidence, even if the firm claimed to have performed the procedure.” The PCAOB inspection team considered some of the deficiencies to be “audit failures.”
 
In Loss For Gay Couples, Celebrity Shrink Gets Mortgage Deduction Shrunk [Janet Novack/Forbes]
A  U.S. Tax Court judge ruled today that celebrity psychiatrist Charles J. Sophy and his domestic partner can deduct the interest on only $1.1 million in mortgage debt, combined, for the two houses they own together.  The court ruling, the first on the issue, supports a March 2009 Internal Revenue Service Chief Counel Memo that surprised and disappointed accountants for affluent same sex and unmarried couples.
Posted in ANR

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Accounting News Roundup: SEC Accused of Pulling an Arthur Andersen; The Bathroom Is NOT a Home Office; Canadians Want a Simpler Tax Code Too | 08.18.11

SEC Accused of Destroying Files [WSJ]
An employee at the Securities and Exchange Commission has accused the regulatory agency of destroying at least 9,000 documents relating to inquiries of Wall Street banks and hedge funds. Documents that were destroyed related to corporate giants including Goldman Sachs Group, Deutsche Bank, Lehman Brothers, Citigroup, Morgan Stanley, Wells Fargo, Bank of America, convicted fraud operator Bernard Madoff and hedge fund SAC Capital Advisors, according to a letter from the employee’s attorney released Wednesday by Sen. Charles E. Grassley (R., Iowa).

Obama to issue neweation, debt reduction [WaPo]
President Obama has decided to press Congress for a new round of stimulus spending and tax cuts as he seeks to address the great domestic policy quandary of his tenure: how to spur job growth in an age of austerity. Obama will lay out a series of ideas in a major address right after Labor Day, when he and a largely antagonistic Congress will return from vacation, the White House said Wednesday.

Accounting Chinese Audit Regulators Plan Washington Visit [WSJ]
A delegation of Chinese regulators will visit Washington in October as the U.S. and China continue talks on allowing American inspectors to scrutinize Chinese audit firms, the U.S.’s top auditing regulator said Wednesday.

Mandatory Auditor Rotation — The PCAOB Sails Off the Charts [Re:Balance]
In case you thought Jim Peterson was too heady for your liking, he opens this post with an exchange between Otter and Bluto.

Tax Court: Accountant Cannot Deduct Bathroom as Home Office [TaxProf]
What?!? Lots of business gets done in there!

Tracking time [ABD]
Again, we’ll refer you here if you have further questions.

Canadian Accountants Call for Simplification of Canada’s Tax Code [Tax Foundation]
Is there a trend yet?


PCAOB: Chinese regulators can no longer shut the door [Accountancy Age]
Chairman James R Doty […] said an arbitrary position of refusing cross-border collaboration “will no longer fly”, claiming market pressures make capitulation inevitable.

US appeals court backs government in tax shelter case [Reuters]
A federal appeals court has upheld a ruling against a former senior tax lawyer at Grant Thornton LLP and Coopers & Lybrand that banned him from selling bogus tax shelters costing the United States government up to $800 million in unpaid taxes. A three-judge panel for the 8th U.S. Circuit Court of Appeals on Tuesday rejected an appeal filed by A. Blair Stover Jr., who had sought to overturn a Missouri federal court decision in August 2010 barring him from promoting three tax schemes deemed abusive by the Internal Revenue Service.