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Accounting News Roundup: U.S., China Bicker Over Big 4; GOP Wants Some Tax Cut Action; Chuck Schumer Is No Friend of Eduardo Saverin | 05.18.12

Inside J.P. Morgan's Blunder [WSJ]
On April 30, associates who were gathered in a conference room handed Mr. Dimon summaries and analyses of the losses. But there were no details about the trades themselves. "I want to see the positions!" he barked, throwing down the papers, according to attendees. "Now! I want to see everything!" When Mr. Dimon saw the numbers, these people say, he couldn't breathe.

U.S., China Feud Over Audit Firms [WSJ]

Beijing has moved to assert more control over Chinese affiliates of major accounting firms by requiring that Chinese citizens lead those firms and make up most of the partners. That action came after U.S. regulators increased pressure on a Chinese audit firm to force it to cooperate with a U.S. investigation. At issue is which superpower holds sway over accounting oversight and control of Chinese accounting firms—including affiliates of the so-called Big Four—that audit U.S.-traded companies. U.S. authorities want the firms to help them investigate suspected accounting fraud, while Chinese officials insist on maintaining tight control over any information about the Chinese companies that the audit firms possess. An all-out confrontation isn't imminent, and a compromise between U.S. and Chinese authorities is still possible. U.S. audit regulators say they are making progress in getting their inspectors into China so they can evaluate the work of the Chinese accounting firms, for instance. Some observers think there is too much at stake for the two sides not to come to an agreement on oversight.
Senate GOP to Dems: Move on Bush tax cuts this summer [The Hill]

Forty-one senators in all said that Congress should move this summer on continuing all of the current tax cuts, first enacted under George W. Bush and last extended in 2010, and that failing to extend the rates would be an anchor on an economy that is also scheduled to absorb steep automatic spending cuts. That combination of tax increases and spending cuts has been alternately dubbed a fiscal cliff or taxmageddon, and analysts have said that the full weight of both could send the U.S. stumbling back into recession. Current tax rates expire at the end of the year, while the spending reductions start in January. “We can think of no better steps to take than to address the recessionary threat of Taxmageddon and eliminate some of the uncertainty that continues to contribute to economic malaise,” they wrote to Majority Leader Harry Reid (D-Nev.).
Facebook Prices IPO at Record Value [WSJ]
The social network priced at the top end of the range it set earlier this week, when it said it would price its IPO at $34 to $38 a share from $28 to $35 a share, in a sign of the tremendous investor appetite for the offering. At $38 a share, Facebook is valued at $104 billion, the biggest-ever valuation by an American company at the time of its offering.
Schumer Proposes Tax On People Like Facebook’s Saverin [Bloomberg]
“Eduardo Saverin wants to de-friend the United States of America just to avoid paying taxes,” Schumer, a New York Democrat, told reporters today. “We aren’t going to let him get away with it.”
Auditing and Accounting Standards in Transition [AT]
Groupon Stock Spike Probed [WSJ]

A Wall Street regulator is examining trading in Groupon Inc. that sent its stock price soaring hours before a favorable earnings announcement Monday, according to a person familiar with the matter. The review by the Financial Industry Regulatory Authority, or Finra, is at an early stage, the person said. It follows unusually heavy trading in shares of the online-coupon company in the run-up to its release of strong financial results.
Cornell Joins Harvard As IRS Examines Ivy League Schools [Bloomberg]
Joanne DeStefano, Cornell’s chief financial officer, told a congressional committee yesterday in Washington that the IRS completed its probe in March, according to a copy of her testimony. She said at a hearing on tax-exempt organizations that the university’s tax filings were examined along with its operations that produce so-called unrelated business income, which is federally taxable.
Dixon Illinois: Fifty Three Million Dollars Go Missing — So Who Let the Horses Out? [Re:Balance]
Jim Peterson finds an appropriate quote from Ronald Reagan to apply to #40's boyhood home.
Finance and accounting workers feel secure in jobs, according to survey [JofA]
So that's nice.



Posted in ANR