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November 29, 2022

Accounting News Roundup: Tax Plan Promises; PCAOB Stalemate; FASB Takedowns | 01.19.16

A Closer Look at Campaign Tax Promises [BloombergView]
If you're a tax accountant, it's probably worth your time to pay attention to the proposed tax plans of POTUS candidates, but it's definitely not worth your time worrying too much about whether they'll be enacted or not. This is one of those classic, "You're a CPA, people expect you to know this crap" situations. Since questions from clients about this stuff are inevitable, keeping a go-to response handy so you can express an opinion without committing too much thought to it. Like this one:

On taxes, there can be three realities: The United States’ burden is not especially high compared with other industrial nations; tax cuts alone don’t generate enough economic activity to avoid deficits; and there is not enough money in taxing the rich to pay for big new social programs.

Of course if your client prefers red meat from one side or the other, that will hardly be satisfying. Also, Tony Nitti has an excellent take on Bernie Sanders' plan: "Democratic Presidential hopeful Bernie Sanders took a break from yelling at clouds long enough to release his tax plan today, and it’s, how should I put this…aggressive."

The SEC vs. The PCAOB and Jim Doty: Impasse or Détente? [Re:The Auditors]
Francine McKenna does most of her writing for MarketWatch these days, however, she still manages a blog post on her old site now and then and this recap of the PCAOB/SEC/Big 4 drama is excellent, especially this:

[In the realm of financial regulation, [the PCAOB is] still sort of a unicorn. According to Wikipedia, Marco Polo described unicorns as “scarcely smaller than elephants. They have the hair of a buffalo and feet like an elephant’s. They have a single large black horn in the middle of the forehead… They have a head like a wild boar’s… They spend their time by preference wallowing in mud and slime. They are very ugly brutes to look at.” 

I think many, including the Big Four public accounting firms, might agree with that comparison.

She also mentions that PCAOB Chair Jim Doty recently said, "I expect to be here." 

FASB Fiddles (Again) While Banks Burn (Us Again) [Accounting Onion]
From one iconoclast to another: Tom Selling blisters the FASB like few writers out there and in this post he suggests the Board's current makeup needs a makeover:

[T]here are at present three species of Board members:

  • Three former Big Four Partners, whose former clients are strongly opposed to expanding the use of fair value to loans or investments in debt instruments.
  • One member to contribute a “strong private company financial reporting perspective.”  Private companies are even more vehement in their opposition to fair value measurements.
  • Three generally reliable advocates for investors.

Selling says the SEC needs to step in and "the Financial Accounting Foundation must forfeit its privilege to appoint FASB members."

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