Accounting News Roundup: Time for Auditors to Focus on Fraud?’ A New Tax Shelter; The Real Cost of the Government Shutdown | 10.09.13

Many in G.O.P. Offer Theory: Default Wouldn’t Be That Bad [NYT]
"We always have enough money to pay our debt service,” said [Senator Richard] Burr [R-NC], who pointed to a stream of tax revenue flowing into the Treasury as he shrugged off fears of a cascading financial crisis. “You’ve had the federal government out of work for close to two weeks; that’s about $24 billion a month. Every month, you have enough saved in salaries alone that you’re covering three-fifths, four-fifths of the total debt service, about $35 billion a month. That’s manageable for some time.”

Accountants Should Focus on Detecting Fraud, Experts Say [R&CJ]
While hard to believe, some CPAs believe detecting fraud still isn’t one of their core responsibilities, said Brian Fox, a certified fraud examiner and the founder and president of Confirmation.com, a cloud-based audit security tool used to prevent confirmation fraud. “For a long time we said finding fraud wasn’t our responsibility. Our responsibility was to find material errors in statements,” Mr. Fox said. “We’ve got great technology today, we don’t need to be paid to add up numbers. The public is relying on us to make sure accounting standards are being applied correctly and that management’s estimates are fairly stated and there is no fraud. They view us as the public’s watchdog.” Most auditors are not prepared to search for and identify the signs of financial fraud, and this lack of preparation is even more pronounced among staff and senior auditors, where the majority of the detailed audit work and client conversations take place, Mr. Fox said, adding this shows resistance remains as to whether this should be the responsibility of the accountant/auditor. “It’s also a bit of a legacy issue in  not training our folks on ways to find fraud,” he said. “We cover some of that material but if you ask people in the public who rely on our audited statements they say it is our responsibility to find fraud. But the CPA exam, less than 1% focuses on fraud, it’s somewhat surprising, somewhat of a  misalignment.”

New Corporate Tax Shelter: A Merger Abroad [DealBook]
Executives at a California chip maker, Applied Materials, highlighted a number of advantages in announcing a merger recently with a smaller Japanese rival, but an important one was barely mentioned: lower taxes. The merged company will save millions of dollars a year by moving — not to one side of the Pacific or the other, but by reincorporating in the Netherlands. From New York to Silicon Valley, more and more large American corporations are reducing their tax bill by buying a foreign company and effectively renouncing their United States citizenship. “It’s almost like the holy grail,” said Andrew M. Short, a partner in the tax department of Paul Hastings, which advises a number of American corporations on deals. “We spend all of our time working for multinationals, thinking about how we’re going to expand their business internationally and keep the taxation of those activities offshore,” he added.

Baker Tilly announces Tenon office mergers [Accountacy Age]
Baker Tilly has announced the areas in which it will merge the offices of RSM Tenon with its own. The firm plans to integrate the RSM Tenon offices in six regions: London, Milton Keynes, Basingstoke, Birmingham, Leeds, Manchester, Stoke, Edinburgh and Glasgow.

Fervent Battle Continues Over Same-Sex Marriage [Forbes]
Including the Kansas Department of Revenue's announcement that gay couples must continue to file separate state tax returns.

Big Ten tops all conferences in producing CFOs [JofA]
An actual study was conducted.

House members forced to reuse gym towels [The Hill]
Members don’t only have to pick up their towels — they have to reuse them for their showers, because there is no more laundering service. Lawmakers, including some who live in their offices during visits to Washington and use the gym’s showers to clean up, say they need the gym to stay open. “This job is very stressful and if you don't have a place to vent, you are going to go crazy and that's why I've used it all these years,” said Rep. Don Young (R-Alaska), who has used the facility since 1973. […] Members on Tuesday argued the gym isn’t some fancy club, even if it is hard to be a member. It costs members a $250 annual fee and is similar to a YMCA, said Rep. Jeff Duncan (R-S.C.). It contains cardio machines, a weight area, a swimming pool and a basketball court. “The gym is just a room, there are machines but there are no trainers,” Duncan added.

 
 

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