Please ensure Javascript is enabled for purposes of website accessibility
November 27, 2022

ANR: Ernst & Young Walking Fine Line; Diamond Foods Execs Quit Board; You Say “Error,” The SEC Says, “Change in Estimate” | 03.09.12

Ernst & Young tightropes between audit, advocacy [Reuters]
Corporate audit giant Ernst & Young operates a lobbying firm in Washington, D.C., that has been hired in recent years by several corporations that were at the same time E&Y audit clients, prompting two senior lawmakers to demand closer regulatory scrutiny. Amgen Inc (AMGN.O), CVS Caremark Corp (CVS.N) and Verizon Communications Inc (VZ.N) have ongoing lobbying contracts with Washington Council Ernst & Young, an E&Y unit, while also using the audit firm to review the corporations' books, according to documents reviewed by Reuters. The same arrangement occurred in the past with E&Y, its lobbying unit and AT&T Inc (T.N), Fortress Investment Group LLC (FIG.N) and Transocean Ltd (RIG.N), records show. Those lobbying contracts ended between 2006 and 2011. U.S. rules on "auditor independence" include one that bars auditors from serving in an "advocacy role" for audit clients. The rule is focused on legal advocacy, such as providing expert witness testimony, but several accountants said the general prohibition on advocacy may cover lobbying, as well. The rules, which were beefed up nearly a decade ago after the Enron-era accounting scandals, are designed to ensure auditors are impartial when they review clients' books.

Diamond Says Two Quit Board [WSJ]
The former chief executive and chief financial officer of Diamond Foods Inc. resigned from the board, ending their formal roles at the snack company following accounting irregularities. The one-time walnut growers' cooperative dismissed CEO Michael J. Mendes and CFO Steven M. Neil from their executive positions last month after an internal probe found it had wrongly accounted for payments to walnut growers and would have to restate financial results for two years. The two executives remained on the board as they negotiated terms of their exits.

MF Global Still Set to Pay Bonuses [WSJ]
Three top executives of MF Global Holdings Ltd. when it collapsed could get bonuses of as much as several hundred thousand dollars each under a plan by a trustee overseeing the securities firm's bankruptcy case, people familiar with the matter said. Louis Freeh, the former Federal Bureau of Investigation director now in charge of unwinding what is left of the New York company, is expected to ask a bankruptcy-court judge as soon as this month to approve performance-related payouts for the chief operating officer, finance chief and general counsel at MF Global, these people said. All three executives kept their jobs after the company's Oct. 31 failure in order to help Mr. Freeh untangle the firm's assets and maximize payouts to creditors.

Greek debt swap paves way for bailout [FT]
Greece was due to complete the largest ever sovereign debt restructuring on Friday as it prepared to squeeze out dissenting bondholders in a move likely to trigger a credit event. Participation in the €206bn debt exchange would reach 95.7 per cent, up from 85.8 per cent, if so-called collective action clauses are used to make the deal binding on holdouts, the Greek finance ministry said.
 
Taking the CPA exam? Read this. [CPA Success]
Especially you Marylanders. 
 
JCOM: When Will the SEC Call an Error an Error? [GOA]
Grumpies: "The business enterprise j2 Global Communications (JCOM) in its first quarter 2011 filing made an accounting change and called it a change in estimate.  As several observers have noted, what the Company called a change in estimate is really an accounting error.  What we would like to know is when will the SEC take JCOM’s managers to the woodshed and call an error an error. Gradient Analytics may have been the first to report this anomaly.  In its November 21, 2011 report, it gave JCOM an earnings quality grade of “F” (boy, were they grumpy or what?).  In part, this failing grade was due to the Company’s mislabeling an error as a change in estimate.  Basically, JCOM through transparency right out the window."
 
Green Mountain falls as Starbucks takes on Keurig [Reuters]

hares in Green Mountain Coffee Roasters Inc (GMCR.O) tumbled 14 percent on Friday, on fears that it may lose its near monopoly in the U.S. single-cup coffee market after partner Starbucks Corp (SBUX.O) outlined plans to launch a rival coffee and espresso machine. Analysts, however, said Starbucks' new coffee and espresso machine would not be a meaningful threat to Green Mountain, as it would cater to different types of customers. Starbucks already sells coffee packs under its own label for Green Mountain's Keurig machines, and said on Thursday that it plans to continue that partnership.

 

Latest Accounting Jobs--Apply Now:

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

Comments are closed.

Related articles

woman working on a laptop with a dog beside her

Monday Morning Accounting News Brief: The Leadership Void; KPMG Gets Fined (Again); PwC Ups Leave | 10.3.22

Deloitte launches Global Sustainability & Climate learning program that aims to enhance skills and capabilities of Deloitte people to help address a global societal challenge. Dubai’s financial regulator has provisionally fined KPMG and one of its former partners $2 million over the firm’s auditing of Abraaj, the emerging markets private equity group that collapsed in […]

a woman enjoying a coffee while she reads accounting news with her dog

Monday Morning Accounting News Brief: KPMG Drama; MBA Beats CPA?; ISO: Managers and Senior Managers | 9.26.22

Why is the Ontario Securities Commission examining Canadian audit firm ethics? Spurred by some critical comments, EY UK chair and managing partner Hywel Ball shares his opinion on the EY split: “Audit quality is going to be better.” KPMG and Deloitte alumni are doing some startup automation stuff. KPMG UAE is still working out some […]