UK watchdog pulls back on corporate accounting shake-up [Reuters]
Britain's Competition Commission set out on Monday the changes it plans to introduce in an accounting market dominated by Deloitte, KPMG, PricewaterhouseCoopers and Ernst & Young, with the principal reform being a requirement for companies to put their audit work out to tender every five years. That is a significant hardening of a new rule from the sector's regulator, the Financial Reporting Council (FRC), which has asked companies to consider once every decade putting their audit work out to tender. However, the watchdog decided against forcing companies to actually switch auditor on a regular basis or to require two auditors to check the books of a company. It also did not impose more curbs on the type of advisory work an accountant can offer a company whose books it already checks.
Frayed Prospects, Despite a Degree [NYT]
At a time when many job seekers complain that their résumés vanish into a black hole, Charles Wells managed to get a high-level recruiter at Ernst & Young to meet with him in person, twice. But the end result was disheartening: Mr. Wells was told, he said, that company policy required him to have at least two years of experience in the field before he could be hired. If Mr. Wells were a newly minted college graduate, he would not have had that problem. Ernst & Young recruits heavily on college campuses for entry-level positions, no experience required. But Mr. Wells graduated in 2011, during one of the worst job markets in history, and his work record since then — like countless numbers of his peers — doesn’t measure up to what employers like Ernst & Young demand for “experienced” applicants.
Rude shock as Ernst & Young rebrands [AFR, Earlier]
The Aussies finally got to this one, although they do not disappoint: “This is a definite balls-up,” marketing and brand expert Mark Ritson said.
Wealth Taxes: A Future Battleground [NYT]
The next major struggle — in economic terms at least — will be over whether taxes on personal wealth should rise — and by how much. The mathematical reality is that wealth is becoming more important, relative to income. In a new paper, “Capital Is Back: Wealth-Income Ratios in Rich Countries 1700-2010,” Professors Thomas Piketty and Gabriel Zucman of the Paris School of Economics have performed the heroic task of measuring wealth for eight leading economies: the United States, Canada, Britain, France, Italy, Germany, Japan and Australia. Their estimates reveal some striking trends. For instance, wealth accumulation in these eight countries has risen relative to yearly production. Wealth-to-income ratios in these nations climbed from a range of 200 to 300 percent in 1970 to a range of 400 to 600 percent in 2010. Behind the changing ratios is some bad news, namely that slow productivity growth and slow population growth have depressed income growth, but also some good news — that relative peace and capital gains have preserved wealth.
The tax break that corporate America wants kept secret [Fortune]
Fortune discovers Advanced Pricing Agreements: "When Oracle reported its latest quarterly earnings last month, most investors focused on the fact that its dividend doubled. The number that got less notice in its annual report a week later was its low tax bill — nearly half the standard 35% corporate rate. It's a significant change from a decade ago, when the software giant began thinking about higher tax costs amid plans for growth. It turned to an obscure solution: confidential pacts forged between the Internal Revenue Service and multinational corporations that critics say can unwittingly bless aggressive tax strategies. In 2003 Oracle disclosed for the first time that it had sealed two such long-term pacts with the IRS and was negotiating additional ones."
Financial watchdog calls for accounting probe [Telegraph]
Last month a group of powerful investors demanded an urgent review of IFRS after they commissioned a legal opinion by George Bompas, QC, that said the standards had "substantial legal flaws". The bombshell opinion was submitted to the Parliamentary Commission on Banking Standards which has called for further investigation into the chaotic state of UK accounting standards. The Commission said it found that auditors and their standards were responsible for "dismal" failures that resulted in "questionable" bank accounts. The FRC, which was instrumental in introducing the standards to replace UK GAAP, has commissioned its own review after Mr Bompas's opinion was made public. In a statement, the FRC said: "The FRC is carefully considering the [Bompas] opinion and is discussing it with a number of parties." If IFRS is found to be illegal under UK Company Law, the FRC will either have to seek an amendment to law or bow to pressure to have IFRS radically changed.
Three South Dakota men say income taxes don't apply to them [AL]
Theodore John “Ted” Nelson Jr. and son Steve Nelson were indicted this month on charges of conspiracy to defraud the United States, failure to file income tax returns and impeding the IRS. The indictment alleges they hid income and assets by transferring funds using fake tax ID numbers and failed to file tax returns since at least 2007. It’s the second South Dakota case in a little over a year in which the defendants claim they are sovereign citizens who don’t have to abide by federal tax laws. Jerome Adrian, who owns a Sioux Falls sod business, also faces a range of tax and conspiracy charges. Prosecutors say he hasn’t paid income taxes since 2001.
Phil Mickelson Wins British Open—And California Taxes It [Forbes]
Approximately $1.4 million (although I'm sure there's a KPMG bonus in it for him, too).