October 4, 2022

ANR: IFRSomeday; Japan Regulator Knocks KPMG, E&Y Over Olympus; Accountant Sues for Infernal Work Environment | 07.06.12

Jobs Data Indicate Slowing Growth [WSJ]
Nonfarm payrolls grew by 80,000 last month, the Labor Department said Friday. The politically important unemployment rate, obtained by a separate survey of U.S. households, was unchanged at 8.2%.

Delay Seen (Again) For New Rules on Accounting [WSJ]
After weighing the issue for nearly 2½ years, the Securities and Exchange Commission's staff expects to issue a final report within weeks on International Financial Reporting Standards, the accounting rules adopted by most other countries. But the SEC acknowledges the report won't recommend to the agency's commissioners whether and how they should switch to the new standards, known as IFRS. The staff will make such a recommendation, but separate from the report, and there is no timetable, an SEC spokesman said. That suggests the SEC's much-delayed decision on the global rules will be pushed back even further, probably into next year. "I don't think we're going to hear from them until 2013," said Joel Osnoss, global leader for IFRS at Deloitte Touche Tohmatsu Ltd., one of the Big Four accounting firms.

Japan regulator raps KPMG, Ernst & Young for Olympus work [Reuters]
Japanese regulators criticized accounting groups KPMG and Ernst & Young on Friday for lacking proper operational management controls that allowed Olympus Corp to conceal $1.7 billion in investment losses and ordered the firms to improve their systems by August. The Olympus scandal, one of corporate Japan's worst, raised questions over the roles of the two audit firms, which signed off on the accounts of the maker of medical equipment and cameras before the 13-year fraud finally surfaced in October last year. Japan's Financial Service Agency (FSA) said it did not find "any intentional acts or grave negligence" by the two firms in connection with the Olympus fraud. Rather, the regulator said the two accounting firms lacked operational management systems to ensure proper auditing that would spot and flag dubious transactions.

AutoChina tycoon baffled by US probe [AP]
A probe of AutoChina by the Securities and Exchange Commission into allegations of market manipulation is complicated by frictions between U.S. and Chinese authorities over the sharing of financial information, a lack of transparency, and outright clashes of business cultures and practices. It was delisted from the Nasdaq last year after falling behind on its financial reporting. In April, the SEC said it was suing 11 AutoChina investors and Hui Kai Yan, one of the company's directors, for allegedly placing fraudulent trades to create the false impression that the stock was traded more actively. The regulator said the company and the investors made hundreds of questionable trades starting in October 2010, using more than $60 million that had been deposited into U.S. brokerage accounts. "Investors may think many Chinese companies are faking their accounts, and that may be true, I'm afraid, but I have never had any problems," Li [Yonghui] said. "Our company has had no problems either in terms of its operations or its finances," he said.

Will Enough People Enroll in Obamacare? [TaxVox]
If past experience is any guide, the vast majority of people will get insurance—mostly because, well, having health insurance is a good idea. Besides, government will subsidize premiums for many. But will this mix of subsidies and taxes be enough to avoid the sort of adverse selection problems that some economists fear could wreck the system?

Accountant Claims Working For This WPP Agency Is Pure Hell [BI]
An accountant formerly employed at WPP agency I-Behavior, which tracks consumer purchase data, says her job was so stressful she was hospitalized twice, and that she was forced out of her job after her doctor told her the pressure at work could cause heart damage. Tammy Armstrong of Rapid City, S.D., alleges in a lawsuit filed in Colorado federal court that she was subjected to "verbal abuse, assault, and massive amounts of work" while employed at I-Behavior as a senior accountant from November 2007 through August of 2011.

Rihanna sues ex-accountants for millions in losses [AP]
By the "Last Girl on Earth" tour in 2009, Rihanna learned that the tour had managed "significant net losses" despite robust revenues, though the defendants had managed to pocket 22 percent of the tour's total revenues while paying Rihanna just 6 percent of revenues, the lawsuit said. It said Berdon's unusual accounting practice of paying itself a percentage of gross tour income as commissions left it no incentive to "counsel" Rihanna to reduce expenses or put in place appropriate financial controls.
Potato Chip Trail Led To Suspect [AP]

Police say they followed a trail of potato chips to catch a southwestern Pennsylvania burglary suspect. Washington police say 21-year-old Benjamin Sickles was arrested early Thursday after he allegedly broke into a Subway restaurant and stole several bags of snacks. Investigators say Sickles broke a glass door before trying to open the cash register. They say he made off with nine bags of chips after he couldn't get to the cash. Officers say they followed a trail of chip bags to Sickles, who had a bloody hand and foot when he was taken into custody.

 

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