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Accounting News Roundup: Yahoo, Dell Like a Dutch Sandwich; Fewer New CEOs Are Number Wizards; Tiger Feels Phil’s Pain | 01.23.13

Yahoo, Dell Swell Netherlands’ $13 Trillion Tax Haven [Bloomberg]
Inside Reindert Dooves’ home, a 17th century, three-story converted warehouse along the Zaan canal in suburban Amsterdam, a 21st-century Internet giant is avoiding taxes. The bookkeeper’s home office doubles as the headquarters for a Yahoo! Inc. (YHOO) offshore unit. Through this sun-filled, white walled room, Yahoo has taken advantage of the law to quietly funnel hundreds of millions of dollars in global profits to island subsidiaries, cutting its worldwide tax bill. The Yahoo arrangement illustrates that the Netherlands, in the heart of a continent better known for social welfare than corporate welfare, has emerged as one of the most important tax havens for multinational companies. Now, as a deficit-strapped Europe raises retirement ages and taxes on the working class, the Netherlands’ role as a $13 trillion relay station on the global tax-avoiding network is prompting a backlash. 

HP's Autonomy Debacle: Mistakes were Capitalized? [Accounting Onion]
Companies overpay to acquire other companies all the time; but Hewlett Packard Co. just might be the new record holder for getting fleeced. I don't have the exact amount, but let's say that the goodwill HP initially recorded from the E.D.S. and the Autonomy acquisitions combined was on the order of $20 billion. Given the subsequent goodwill impairment charges for most of it, and the revelations that surrounded those charges, it should come as no surprise that investors have expressed dissatisfaction with everyone – management and the board, their outside financial advisors and auditors – associated with the decision making and the accounting for these ill-fated investments.
 
Caterpillar’s China accounting scandal is all too common [Quartz]

Machinery giant Caterpillar has stunned investors with an announcement it will write off $580 million of the value of an acquisition in China, after alleging the firm it purchased did not have much of the inventory that was listed on its books. If Caterpillar’s allegations are true, it will be only the latest in a long series of foreign investors coming up against irregular accounting in China. US investors have lost billions of dollars after more than 100 Chinese companies trading on North American exchanges were delisted following allegations or findings of accounting issues. A few years ago, investors in Singapore suffered a similar spate of losses from Chinese companies which traded there.

KPMG asks staff to warn them of ‘inappropriate coverage’ of firm on net [The Journal]
Accountancy Firm KPMG has sent an email to staff warning them to be “vigilant around the pervasiveness of social media” and the risk that inappropriate use of it can have on an “individual’s personal and professional reputation”. The email also asks staff to notify management of any “inappropriate coverage of KPMG” on the internet or other social networks. The email, seen by the TheJournal.ie, was sent to staff in the company’s Irish office this week. It comes just a few weeks after there was controversy surrounding the posting of a video on YouTube of a young girl who repeatedly referred to her father being a partner in KPMG.

EU and UK audit reforms hit by delays [Accountancy Age]

The Competition Ccommission's probe into the Big Four's dominance of the UK audit market has been delayed for a second time, while a separate EU reform was also put back. The much-anticipated provisional findings of the commission's investigation into whether the PwC, Deloitte, KPMG and Ernst & Young exert an unfair grip on the audits of FTSE 350 companies are now due in mid-February. A final report is expected in June, after the initial deadline for the provisional findings was postponed from November last year.

CEO Hires With Finance Chops Become Rare: Study [CFOJ]

Large U.S. companies last year hired the lowest percentage of chief executives with a finance background since before the crisis, according to the forthcoming 2012 Volatility Report from executive recruiter Crist|Kolder Associates. Less than a quarter, or 15, of the 61 CEOs hired last year among 669 big companies tracked by the firm had “financial DNA,” meaning they had spent part of their career as a CFO or in a lesser finance role, such as controller or treasurer, or were once an investment banker. Those companies are drawn from the Fortune 500 or the Standard & Poor’s 500-stock index, or both.

Tiger Woods admits he left California because of high tax rates after rival Phil Mickelson apologizes for saying he may quit West Coast [DM]
Tiger Woods said today that the reason he left California in the mid-Nineties was because the state's taxes were too high. The golfer spoke at a press conference on Tuesday about his decision to move to Florida in 1996. Speaking at Torrey Pines Golf Course in La Jolla, California, Woods said: 'I moved out of here back in ’96 for that reason.' Woods, who is worth an estimated $600million, was referring to comments made by fellow golfer Phil Mickelson on Sunday that he will make 'drastic changes' because of federal and California state tax increases. Referring to his rival, 37-year-old Woods added: 'I enjoy Florida, but also I understand what he was, I think, trying to say.'

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