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Accounting News Roundup: Tax Reform Expectations; Lodging Taxes and Airbnb; EY Pays a Fine | 06.17.15

Posted on by Caleb Newquist

Ryan Aims to Make Corporate Tax Reform Part of the Election [CFOJ]
Paul Ryan asks that everyone be reasonable: "Don’t fight for the little tiny table scraps or the little carve out, or the little piece, or the exemption here, or the narrow benefit that might be good for your industry here. Think of the broader goal of getting rates down."

Former AIG Chief Greenberg to Appeal Damages Ruling in Bailout Case [WSJ]
Moral victories? Meh: "Mr. Greenberg has repeatedly said in interviews that he brought the lawsuit in 2011 to hold the U.S. government accountable. He has said he won’t allow the government to simply take what it wants, and has likened his lawsuit to a war."

Lodging Taxes and Airbnb Hosts: Who Pays, and How [NYT]
If Airbnb isn't collecting the taxes and paythem, then the host is supposed to.

Noble Group CEO Disputes Allegations About Company’s Accounting Practices [WSJ]
Noble Chief Executive Yusuf Alireza can't believe he has to do this: "Up to now I have chosen to ignore your ill-informed opinions. However, your recent call for the resignation of our founder and chairman is a step too far." 

EY fined over Hellas conflict of interest [FT]
Slaps on the wrists are a cost of doing business: "EY, the audit and professional services firm, has been hit with one of the biggest fines imposed by the UK insolvency regulator over a failure to declare a conflict of interest when it became the administrator of failed Greek company Hellas Telecommunications II. The Institute of Chartered Accountants in England and Wales has said it has fined EY £250,000, severely reprimanded the firm and ordered it to pay £95,000 in costs. EY partner Margaret Mills, the global co-ordinating partner for EY’s restructuring practices, has also been severely reprimanded and fined £15,000."

China screens 'Star Wars' in cinemas for first time nearly four decades late [AFP]
I hope Han shot first. 

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Accounting News Roundup: Is the ‘Era of Sloppy Accounting’ Over?; Rangel Running for Reelection; Supreme Court to Hear Skilling Appeal | 03.01.10

• Companies are making fewer accounting mistakes [USA Today]
“In another potential boost to investor confidence, the era of sloppy accounting appears to be ending,” declares USA Today. Okay but perfection is unattainable people, so until machines take over for you, keep at it. In the meantime, the results presented by Audit Analytics certainly indicate that things are going in the right direction.

We don’t want to be the party pooper here but if accounting is less sloppy, i.e. more sophisticated, doesn’t that mean that the methods for massaging the accounting are also more sophisticated? Just chew on that while you check the the findings.

The article lists three reasons for the improvement in reporting:

• There is steady and ongoing improvement. The number of companies with restatements and the number of restatements have declined in each of the past three years.

• Mistakes are getting caught sooner. Among the companies with restatements, errors covered a period of 476 days, or less than a year and a half. That’s down 7% from 2008 and well below the 716 days, or nearly two years, of problematic numbers restated in 2006.

• Restatements are less serious. Restatements reduced companies’ reported earnings by $4.6 million on average last year, down dramatically from the $7.2 million and $23.5 million hits in 2008 and 2006.

Even though it’s virtually impossible to eliminate restatements, we must admit that these are encouraging trends. Another thing to keep in mind is that accounting rules are becoming increasingly complex so it’s not like things will be on cruise control from here on out.

• Defiant Rep. Charles Rangel vows reelection bid despite uproar over alleged ethics violations [NYDN]
Ethics violations be damned! The 79-year-old announced over the weekend that he would be seeking reelection. It would be his 21st term in Congress, first winning election in 1970. Even if Rangs is able to do another victory dance, holding on to his Chairmanship of the Ways & Means will be a different matter entirely. PBO has already distanced himself from Chuck and some are saying that even Nancy Pelosi is getting creeped out a little too.

• Skilling Asks High Court for New Trial Minus ‘Tar and Feathers’ [Bloomberg BusinessWeek]
The Supreme Court will consider Jeff Skilling’s appeal today in the Enron scandal that he was convicted of four years ago. Skilling’s attorneys will argue that the trial should not have been held in Houston where it would have been “impossible” to get a fair trial.

Skilling’s appeal says the atmosphere in Houston when the trial began in January 2006 was one of hostility toward him, fed by unrelenting and “searing” media coverage. The appeal points to a Houston Chronicle column titled “Your Tar and Feathers Ready? Mine Are” and a local rap song, “Drop the S Off Skilling.”

The 12 jurors reflected that antipathy, Skilling contends. During pretrial questioning, three said they were “angry,” three said they had negative feelings toward Skilling or doubted his impartiality and one said that all CEOs were “greedy,” according to his appeal.

Skilling is currently doing far worse than tar and feathers (probably NBD in this day and age), serving a 24 year sentence in a Colorado prison. If the SCOTUS rules in his favor on the “jury-bias” issue Skilling would get a new trial which open old wounds and could create a media circus (we hope).