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Accounting News Roundup: Toying with the Fiscal Cliff; California Feels Facebook’s Pain; More Shallow Tax Legislation | 08.03.12

Posted on by Caleb Newquist

Economy Adds 163,000 Jobs [WSJ]
U.S. payrolls increased by a seasonally adjusted 163,000 jobs last month, the Labor Department said Friday, but the unemployment rate, obtained by a separate survey of U.S. households, ticked up one-tenth of a percent to 8.3%. Economists surveyed by Dow Jones Newswires expected a gain of 95,000 in payrolls and an 8.2% jobless rate.

Geithner meets Murray amid fears lawmaker might not to stop fiscal cliff [The Hill]
Treasury Secretary Timothy Geithner met with Sen. Patty Murray Thursday amid increased fears in Washington that Congress might decide not to act to prevent the nation from going over the so-called fiscal cliff. Murray, (Wash.), the Democratic co-chair of the 2011 deficit supercommittee, recently said that Democrats would allow all of the Bush tax rates to expire and then seek to renew lower rates for the middle class, unless Republicans agree to raise taxes on the nation’s highest income earners. 

Facebook slide wipes billions off windfall [FT]
On paper, Facebook’s employees owned stock worth nearly $20bn at the time of the IPO, though most of those shares can only be sold when restrictions are lifted in November. Similar six-month limits also prevent employees at other recently floated internet companies from selling out early. As a result, California’s tax take from the Facebook IPO this year and next could be “hundreds of millions of dollars” less than the $1.5bn it had expected, the state’s Legislative Analysts’ Office warned this week. The outcome will depend on the company’s share price later this year.

Peregrine Financial Group CFO Cuypers Subpoenaed -Sources [DJ]

The chief financial officer of Peregrine Financial Group Inc. has been subpoenaed to testify before a federal grand jury looking into the events leading up to the brokerage firm's July 10 collapse, according to people familiar with the matter. Brenda Cuypers is expected to appear before the grand jury in mid-August, the people said. Peregrine's president and chief operating officer, Russell Wasendorf Jr., has received a similar subpoena, according to a person close to the situation. Investigators are examining an alleged 20-year fraud perpetrated by Russell Wasendorf Sr., the founder and chief executive of Peregrine, which came to light after the elder Mr. Wasendorf attempted suicide near the firm's Cedar Falls, Iowa, headquarters July 9.

Peoria's Schock proposes tax breaks for Olympic medalists [CT]
Congressman Aaron Shcok will see your pointless legislation, Marco Rubio.

FASB Floats Early Ideas on Private Company Accounting [CW]
The “invitation to comment” published by FASB maps out six critical issues that differentiate private companies from public companies, leading to the conclusion that accounting requirements for private companies should differ as a result. FASB says the type and number of users for financial statements are different for private companies than public companies, and they have more direct access to management to ask questions. Private companies have different investment strategies, and different ownership and capital structures. They have thinner resources than public companies to manage the accounting function, and as a result it takes them longer to get up to speed on new accounting pronouncements.

IRS leader's exit worries officials amid tax uncertainty [Reuters]
Doug Shulman, who became IRS commissioner in 2008 under President George W. Bush, has said he is not interested in another five-year term. His term ends in November. If he were to leave then, the IRS would likely have a temporary commissioner in charge just as Congress faces historic tax decisions following the November 6 general elections and as the agency readies for the upcoming 2013 tax filing season. The IRS faces "its most difficult filing season in decades next year," said Mark Everson, a former IRS commissioner, at a U.S. House of Representatives hearing. "The looming change in leadership at the agency does further compound the challenges," he told Reuters.

Grant Thornton LLP admits 27 new partners and principals to the firm [GT]
Yes, we know.
 
Missile Defense Staff Warned To Stop Surfing Porn Sites [Bloomberg]

The Pentagon’s Missile Defense Agency warned its employees and contractors last week to stop using their government computers to surf the Internet for pornographic sites, according to the agency’s executive director. In a one-page memo, Executive Director John James Jr. wrote that in recent months government employees and contractors were detected “engaging in inappropriate use of the MDA network.” “Specifically, there have been instances of employees and contractors accessing websites, or transmitting messages, containing pornographic or sexually explicit images,” James wrote in the July 27 memo obtained by Bloomberg News.

 

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Geithner said in a nationally broadcast interview that President Barack Obama strongly believes those reductions should be retained for the ’95 percent’ of taxpayers with individual incomes under $200,000 a year and families below $250,000.”

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Snooki Tanning-Bed Protest Splits Sin From Taxes [Bloomberg]
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SAP Business ByDesign 2.5: time to invest? [AccMan]
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Accounting News Roundup: Chief Accountant ‘Cautiously Optimistic’ on Convergence; Grant Thornton Auditors Barred by PCAOB; PwC’s front row seat at AIG, Goldman Dispute | 02.19.10

• James L. Kroeker [Web CPA]
The Chief Accountant sat down for a Q&A with Web CPA to talk about the Tiger Woods press conference, the upcoming Oscars, and how his own “situation” is far more impressive than anything you’ve seen on Jersey Shore.

Actually, no he didn’t. He talked about what you’d expect him to talk about including the so-called SEC roadmap that we’ve been wondering about:

We’ve been turning our focus back to the proposed roadmap. The staff has spent innumerable hours over the late summer, throughout the fall, and now the beginning of this year turning our attentiomment letters. It’s not that the volume of comment letters is extraordinary, but the depth of thought is particularly impressive

So in other words, those of you that took the time to write the letters, it’s your fault the Commission is so far behind. Sounds to us like your 50 page, single-space masterpieces aren’t exactly breezy reading. But don’t worry, they’re muscling through.

When asked about the June 2011 convergence “deadline”, Kroeker said that he was “cautiously optimistic” that the FASB and IASB will get the lion share of the work done even though the IASB has been sending mixed signals lately. At least someone is confident.


• PCAOB Disciplines Grant Thornton Auditors [Compliance Week]
The PCAOB layed the smackdown on two Grant Thornton auditors this week for not questioning some the accounting policies of Imergent, Inc., a Salt Lake City tech company.

Partner Ray O. Westguard and manager Jennifer Nakao, were barred from practicing public company audit work for two years and one year respectively for their lack of auditorness.

According to the PCAOB, the two failed to question the revenue recognition policies and the allowance for doubtful accounts of Imergent, despite the fact that these two issues were addressed by the concurring review partner. Regardless of those concerns, the issues eventually led to an SEC investigation, the restatement of the financial statements for FY ’03 and ’04 and the firing of GT as the auditor. Maybe Grant Thornton should just avoid Salt Lake City clients altogether.

• A Prisoner’s Dilemma: AIG and Goldman Sachs Game Each Other And PwC [re:The Auditors]
Our contributor Francine McKenna describes PwC’s front row seat for the negotiations between AIG and Goldman Sachs while the two were attempting to sort out their differences:

Why did PwC decide to point the finger at AIG? Neither AIG nor Goldman Sachs had been willing to defect or betray each other thus far, per the prisoner’s dilemma, even to save them both. The dispute had been going on for more than a month, more than a quarter, more than a year. It may have been excusable for PwC to allow a mismatch in valuation on the same assets in two of their clients for a month or a quarter due to timing differences in access to information. But a serious, contentious mismatch for more than a year, through several 10Q’s, and now going on two 10K’s?

The rest over at RTA.