Accounting News Roundup: Who Will Watch the Watchmen?; An Emerging Firm in China; ‘Frankly, people can bake cupcakes’ | 04.17.13

It is time to audit our auditors [FT]
Audit Analytics, a service that tracks reports on publicly traded US companies, reports 12 resignations during 2013 thus far, but only 26 during 2012 and 33 in 2011. Of these resignations, with the exception of the recent KPMG debacle, not one was related to so-called “independence” issues – conflicts of interest – in 2013. There was only one independence-related resignation in 2012 and six in 2011. So, actually, to have a major accounting firm admit not only to discovering a breach of auditing standards but then to withdraw its previously issued audit reports, is indeed rare.

Auditors Should Open the Books [WSJ]
For a profession intimately involved in providing information, auditors are an uncommunicative bunch. Accountants' work is condensed into an anodyne, one-page report, telling investors virtually nothing they didn't already know. The pass/fail system—stating whether financial statements are fairly presented—offers no insight into judgments or concerns, or crucially where accountants and managers disagreed. Audits have been impenetrable black boxes for too long.
 
Stalking the Big Four [FT]
When Zhang Ke left Coopers & Lybrand in 1999 to set up his own accounting firm, some doubted the upstart would survive. Outside Coopers – now part of PwC – and the other big western outfits, the profession in China was weak. This did not deter Mr Zhang. “I thought China was so big, it should have some of its own accounting firms,” he recalls. Little more than a decade later, the gamble has paid off. ShineWing, the firm he started, is snapping at the heels of the industry’s biggest names in China and the avuncular, soft-spoken Mr Zhang has become perhaps the most influential accountant in the land. “He is the dean of the accounting profession right now in China,” says Paul Gillis, a professor at Peking University. “He’s the guy.”
 
IRS and States Swamped by Last-Minute Tax Filings [AT]

“Due to the significant increase in federal and state submissions transmitted on April 15th, the length of time to create federal acknowledgments and make them available for retrieval is taking longer than expected,” the IRS said in an email to tax professionals Tuesday evening. “The IRS is closely monitoring the acknowledgment rates and is working to close the gap as a top priority.” The IRS added that the majority of state tax returns are linked to the acceptance of the federal return, so the length of time it takes to make the state return available for state retrieval has also increased. It asked tax professionals not to re-transmit any tax returns if they have not yet received an acknowledgment.
 
The Gourmet-Cupcake Market Is Crashing [WSJ]

"The novelty has worn off," says Kevin Burke, managing partner of Trinity Capital LLC, a Los Angeles investment banking firm that often works in the restaurant industry. Crumbs now has 67 locations, nearly double the number it had less than two years ago. "These are singularly focused concepts," says Darren Tristano, executive vice president at Technomic Inc., a Chicago research and consulting firm that specializes in the food industry. "You're not going to Crumbs every day. It's a short-term trend and we're starting to see a real saturation," he adds. "Demand is flat. And quite frankly, people can bake cupcakes."

Lend Lease opens tender on audit role after 55 years with KPMG [Australian]
Breaking up with your auditor is hard to do.

Palm Beach accountant trained for Boston Marathon to fight tax season stress [PBP]
Michael Kaplanidis was 10 minutes from the finish when the bombs exploded.

Police clear scene in H&R Block threat [AP]
Two threats in two days. 

IRS Announces Three-Month Filing, Payment Extension Following Boston Marathon Explosions [IRS via DMWT]
File Form 4868 on July 15 if you need an additional three months after that.

Police: New Mexico man traded McDonalds for sex [KOB4]
Albuquerque police found Donald Jones, 58, at Bullhead Park with a woman he picked up near Central and Virginia. According to the criminal complaint, Jones picked up the woman in an area known for prostitution. Police watched Jones order food at a McDonald’s drive thru window and head to a nearby park. On their way to the park Jones told police he purchased the woman food and asked how she would reimburse him, the criminal complaint states. Police confronted the pair at the park and saw the woman pulling up her pants in the car.

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