October 7, 2022

Accounting News Roundup: UK Launches Second Grant Thornton Probe; Bezos and Taxes; Some IPO Basics for Twitter | 08.07.13

UK watchdog launches second Grant Thornton investigation [Reuters]
The Financial Reporting Council (FRC) said on Wednesday it was investigating how Grant Thornton audited and accounted for interest rate swap arrangements in Manchester Building Society's accounts, prompting a financial adjustment last year. The inquiry is the watchdog's fifth this year as it cracks down on the quality of audits. Investigations can take around a year and, if breaches are found, lead to a series of sanctions including a fine or, in extremis, licence suspension. The FRC, which on Tuesday announced an investigation into the independence of Grant Thornton's audit of drinks group Nichols (NICL.L), said it had received information from the Prudential Regulation Authority regulator about the auditor's conduct while appointed by Manchester Building Society.

Tax rules could force Bezos to play active role at Washington Post [Reuters]
To realize the business tax benefits, Bezos may need to spend 500 hours a year in managing The Post's business, tax experts said, citing Internal Revenue Service rules. That comes to an average of 9.6 hours a week. Such rules may influence Bezos' participation at the Post. An Amazon spokesman for Bezos did not respond to requests for comment. A Post spokeswoman declined to comment. The law is murky in defining what qualifies as business activity for tax breaks, and subject to interpretation, but it generally includes making decisions and telling people what to do, experts said. "A lot of it depends on how you count hours … It's a fair amount of time you have to spend, it's not inconsequential," said Bill Smith, a managing director with CBIZ MHM, an accounting firm.

Jeff Bezos plays active role in tax fights [Politico]
At one point, he thought about launching Amazon on an Indian reservation to avoid paying taxes. He parks profits in low-tax countries like Luxembourg and donated to the effort to defeat a Washington State ballot initiative that would have raised taxes on the wealthy.

How Twitter Can Avoid Facebook and Groupon’s IPO Blunders [CFO]
“Just be straight up with respect to the accounting,” says Anthony Catanach, accounting professor at Villanova University and Maguire Fellow at The American College. “There’s no need to get particularly aggressive about revenue recognition or go wild with non-GAAP metrics. The markets understand net income and operating cash flows.”
 
Lotteries are Winners, Except for the People [Tax Analysts/David Brunori]
Am I the only person who finds it bizarre that the government would raise money from a regressive lottery and then celebrate by giving the money back to the poor and dispossessed in the form of scholarships? Don't get me wrong, I do not care if you gamble. But lotteries — as revenue raisers — are designed to hurt the poor. If scholarships were so important, why not use real taxes on income, sales, or property to pay for them? Because politicians are cowards. 
 
Tax gavel is Ryan's — if he wants it [The Hill]

It has long been an open secret in Washington that [Paul] Ryan’s wanted to lead the tax-writing Ways and Means Committee, a spot that would give him great influence over the fiscal issues on which he’s made a career. Already the party’s most respected voice on those matters, Ryan gained celebrity status in the House GOP after Mitt Romney picked him to serve as his running mate in 2012. He was the only senior Republican to gain a rare waiver of the three-term limit for committee leaders after the November election, and is now serving his fourth term as the top GOP member of the Budget Committee. In interviews, a range of Republican lawmakers, senior aides and lobbyists said Ryan remained the heavy favorite to win the Ways and Means chairmanship in 2015, even if the panel’s well-liked current chief, Rep. Dave Camp (R-Mich.), sought his own waiver for a fourth term.

Taco Bell Will Soon Sell Waffle Tacos Across the Country [Gawker]
Coming to a busy season near you.

 

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