U.S. Sues S&P Over Ratings [WSJ]
The Justice Department sued Standard & Poor's Ratings Services late Monday, alleging the firm ignored its own standards to rate mortgage bonds that imploded in the financial crisis and cost investors billions. The civil charges by U.S. Attorney General Eric Holder against the New York company, one of the bond-rating industry's three giants, are the first federal enforcement action against a credit-rating firm over the crisis. Several state attorneys general are likely to join. S&P said in a statement earlier Monday that the government suit would be "entirely without factual or legal merit," and denied wrongdoing.
Clients Flounder And Fail But Auditor PwC Prevails [Forbes]
PricewaterhouseCoopers LLP audits several companies in the news recently but the global professional services firm seems to have escaped scrutiny for those clients’ serious missteps. Watchdog PwC never warned investors of faulty management and fraud that’s tanked shares, forced out top executives and resulted in expensive, ongoing private, civil, and potential criminal litigation.
Ending Corporate Welfare One Program at a Time [Bloomberg]
U.S. President Barack Obama took advantage of one of the largest audiences in television history to address the residents of Greenwich, Connecticut. Well, maybe it wasn’t that straightforward. But by using his pre-Super Bowl interview with CBS News to discuss tax reform, including the infamous carried-interest loophole that benefits hedge-fund and private-equity managers, he signaled a new willingness to do something about corporate welfare — whether it is embedded in the tax code or embodied by government policy. […] The federal government directly spends between $75 billion and $100 billion a year on everything from farm subsidies to research grants. Include indirect benefits from things like tariffs and corporate tax exclusions, and the favors granted by local and state governments, and the total is much higher — probably more than $1 trillion.
PCAOB Gains Access to Firms in France, Finland [CW]
That wraps up the "F" countries unless you include "fuckin' China" as it's rumored to be known at the Board.
Scope of auditors' report to be extended to include risk [Accountancy Age]
Auditors will be required to warn investors about risks within the companies they audit as part of a "step change" in the way audit reports are structured proposed by the FRC. In response to criticism that auditors' reports are uninformative, the reporting watchdog has launched a consultation to extend their scope to include a commentary of the "risks of material misstatement" identified by the auditor.
Review Slated of Accounting for Income Taxes Standard [AT]
The Financial Accounting Foundation plans to conduct a post-implementation review of the standard governing accounting for income taxes to gauge how well it has performed. The FAF, which oversees the Financial Accounting Standards Board and the Governmental Accounting Standards Board, has been conducting post-implementation reviews of several accounting standards to determine how well they have been performing for preparers and users of financial statements. Among them has been FIN 48, “Accounting for Uncertainty in Income Taxes.” The next review will be of a related standard, FAS 109, “Accounting for Income Taxes.” Financial Accounting Statement No. 109 establishes financial accounting and reporting standards for the effects of income taxes that result from an organization’s activities during the current and preceding years.
Figuring it out [SV]
For every day she worked at City Hall in 2010, ex-Comptroller Rita Crundwell stole an average of $37,478.52. Further, of the more than $55 million in city funds she deposited into her secret bank account over two decades, only $1.338 million actually went back to the city for expenses. She spent the rest – nearly $54 million – building up her world renowned horse breeding business, traveling around the country for horse shows, renovating several homes, and buying expensive jewelry. She also “turned a blind eye” to the fact that the city faced severe financial hardship and was forced to reduce the services it provided to citizens, according to federal prosecutors.
PwC Names Kayla Gillan to Lead Firm's New Investors' Resource Institute [PwC]
FYI.
Brooksville man was drunk, driving a shopping cart, police say [WFLA]
Timothy Carr of Brooksville is facing charges of disorderly intoxication and felony retail theft. Police say Sunday night, just before 9 o'clock, they found Carr inside the Walmart at 7305 Broad Street. Investigators say he was drunk, and driving around the store on a motorized shopping cart. They say he had removed an alcoholic beverage from a shelf, and was drinking it, while knocking other items off the shelves.
