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Accounting News Roundup: Will E&Y Take the Brunt of Lehman’s Bankruptcy?; Texting Japan Donations; Richard Hatch’s Light Sentence | 03.14.11

Japan Battles Nuclear Meltdown as Millions Without Power, Water [Bloomberg]
Workers battled to prevent a nuclear meltdown after a second blast rocked an atomic plant north of Tokyo, as helicopters and convoys of army trucks headed toward areas worst-hit by Japan’s strongest earthquake. No large release of radiation was detected after the explosion, which didn’t breach Fukushima power station’s No. 3 reactor and followed a build-up of hydrogen gas, Chief Cabinet Secretary Yukio Edano told reporters in Tokyo today. The risk of a large leak is very small, he said.

BOJ Takes Action to Bolster Money Markets [WSJ]
The Bank of Japan jumped into action Monday to temper the economic blow from the earthquake, tsunami and nuclear emergency that hit northern Japan, doubling the size of its asset-purchase program and pouring a record 15 trillion yen ($183.17 billion) into money markets to ease liquidity concerns. “What we were most concerned about was the possibility that increases in anxiety and risk-aversion moves would negatively affect the real economy, so we judged it appropriate to mainly boost purchases of risk assets,” BOJ Gov. Masaaki Shirakawa said after the bank’s policy board meeting, which was cut to one day from two because of the crisis.

Lehman Auditor May Bear The Brunt [WSJ]
Federal investigators have grown increasingly doubtful they can prove Lehman executives violated the law by using an accounting maneuver known as Repo 105, which obscured the amount of risk Lehman held, making the firm’s finances look better than they were, The Wall Street Journal has reported. But Ernst & Young, Lehman’s auditor, is fighting fraud charges filed in December by the New York attorney general for, among other things, allegedly failing to adequately follow up on a whistleblower’s claim that Lehman was misstating the value and size of its assets.

Texting Japan earthquake donations [DMWT]
$10 will be added to your next phone bill for contributions to the following charities: American Red Cross, Salvation Army, Convoy of Hope, GlobalGiving and World Relief.

Big 4 Bias – Can We Ever Overcome It? [BDO/CEO Insights]
BDO Global CEO Jeremy Newman wants some respect!

Nine Months is Not a ‘Severe Punishment’ Fitting Survivor Winner Hatch [Yahoo]
Hatch famously failed to pay the taxes due on the $1 million prize won from the first season of “Survivor” more than 10 years ago. He was convicted of tax evasion and subsequently served more than three years in prison. He also, obviously, was ordered to refile amended tax returns that accurately reflect his 2000 and 2001 income and pay the income taxes due. Though any reasonable person disinterested in spending any more time in federal prison would have immediately filed corrected tax returns and pay the taxes due, Hatch failed to do so, and according to the Hollywood Reporter, he has been sentenced to prison for an additional nine months. Hatch was released from prison in 2009, and since then has been serving a three year term of supervised release.

India’s IFRS Carve-Outs and the Pipedream of Global Accounting Standards [The Accounting Onion]
If IFRS adoption was ever a goal worth pursuing, it has long since vanished, and the political motivations of its remaining supporters are now deprived of any pretense of legitimacy. It’s time to let the rest of the world “countdown to IFRS” if they want to, but If the SEC were really serious about protecting investors, it would scrap the IFRS roadmap. In it’s place, there should be a new plan for making U.S. GAAP unquestionably the pre-eminent financial reporting system in the world.

AIG Adopts Poison Pill to Preserve $65 Billion NOL [TaxProf Blog]
AIG, like GM and Citigroup before it, has adopted a poison pill to preserve its $65 billion NOL by ensuring that no investor acquires a 5% stake and triggers the change of ownership rules.