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ANR: Survey Reminds Us That Everyone Hates the Proposed Lease Accounting Standard; McGladrey Is in the Dog House; Tax Prep Ads on One Dollar Bills | 01.29.14

Posted on by Caleb Newquist

Deloitte Survey: Preparation for Lease Accounting Compliance Stalls as Concerns over IT and Data Systems Rise [Deloitte]
I think we're officially at the kicking and screaming point when Deloitte is doing surveys that receive this kind of response: "The quality of data, the complexity of compliance, and a lack of confidence in IT systems are the main concerns for companies ahead of the finalizing of a new lease accounting standard, with almost 80 percent of executives believing that compliance with the new standard will be difficult, according to a new Deloitte survey on the proposed standard."

British Land drops Deloitte as auditor [Economia]
PwC will take it from here.

Meanwhile, back on campus:

Obama renews corporate tax proposals [The Hill]
Has the President considered using a cattle prod to get things moving? "Both Democrats and Republicans have argued that our tax code is riddled with wasteful, complicated loopholes that punish businesses investing here, and reward companies that keep profits abroad.  Let’s flip that equation.”  

H&R Block Stops Income Tax Ads on Dollar Bills After Complaints [KCS]
"I reported it to the Department of the Treasury," said [Lindsay] Dressler, an Idaho resident. "Think of the precedent that would set if we allowed companies to advertise on currency. It would get out of control very quickly. It should be off limits for advertising." — Advertising? Out of control? I can't imagine such horror!

A Chinese Puzzle: What If Its Auditors Really Are Barred from Practice in America? [Re:Balance]
Jim Peterson covers all the angles.

Real woman to quit her job during GoDaddy's Super Bowl ad [Today]
Sounds like someone missed a chance to read their farewell email on TV.

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Accounting News Roundup: Financial Reform Fail; KPMG Wins Latest Round of Auditor Musical Chairs; Philly Tax Amnesty Close to Reaching Goals | 06.24.10

A Missed Opportunity on Financial Reform [WSJ]
Former SEC Chairman Arthur Levitt is none too pleased with the financial reform bill that’s likely to get approved by the Senate and he says exactly why in an op-ed in today’s Journal, “One of many bad ideas that made it into the bill: Public companies will now have a wider loophole to avoid doing internal audits investors can trust. This requirement was the most important pro-investor reform of the last decade, and it worked. Of the 522 U.S. financial restatements in 2009, 374 were at small firms not subject to auditor reviews.”

But that’s not all! Mr Levitt outlinespic failure including:

• “Chuck Schumer’s wise idea to let the Securities and Exchange Commission (SEC) become a self-funded agency will likely be killed by appropriators who are unwilling to give up the power of the purse.”

• “Barney Frank’s (D., Mass.) effort to pass a new law to overcome the legal precedent of the 2008 Supreme Court’s Stoneridge decision, which allows third-party consultants, accountants and other abettors of fraud to avoid liability. Again, another sellout of investor interests.”

• “Congress didn’t deal with the massive problems of Fannie Mae and Freddie Mac. It’s one thing to fail to see trouble before it happens. Now, there’s no excuse. The central role played by these two organizations in the financial crisis is indisputable. Congress had a chance to fully restrict these agencies from anything but the most basic market-making activities, and it didn’t.”

What does all this (and more!) mean? Oh, nothing really. Levitt says that we’ll just have to wait for the next financial apocalypse to get it right.

InfoLogix Announces the Engagement of KPMG, LLP as the Company’s Independent Registered Public Accounting Firm [PR]
McGladrey resigned on June 10th and the company’s filing stated that were no disagreements yada, yada, yada although McGladrey had identified a material weakness in the company’s internal controls and their most recent audit opinion included a going concern paragraph. It wasn’t enough to spook KPMG, who got the blessing from InfoLogix’s audit committee on Tuesday. Enjoy.

BP Relied on Faulty U.S. Data [WSJ]
“BP PLC and other big oil companies based their plans for responding to a big oil spill in the Gulf of Mexico on U.S. government projections that gave very low odds of oil hitting shore, even in the case of a spill much larger than the current one.

The government models, which oil companies are required to use but have not been updated since 2004, assumed that most of the oil would rapidly evaporate or get broken up by waves or weather. In the weeks since the Deepwater Horizon caught fire and sank, real life has proven these models, prepared by the Interior Department’s Mineral Management Service, wrong.”


Leadership changes at Wichita Grant Thornton office [Wichita Business Journal]
“Lori A. Davis is the new managing partner at the Grant Thornton office in Wichita, the company announced Wednesday.

Davis will take the place of Jarod Allerheiligen, who will become the managing partner of the Grant Thornton operations in Minneapolis. The change in responsibilities is scheduled to take place Aug. 1.”

Ex-Detroit Mayor Kwame Kilpatrick indicted by feds on 19 mail fraud, tax counts [Detroit Free Press]
“Despite Kilpatrick’s repeated claims to the contrary, the indictment says he used fund money for campaign and personal expenses, ranging from polling to yoga and golf lessons to college tuition for relatives.

Prosecutors contend he failed to report more than $640,000 in taxable income while mayor that he received in the form of cash, flights on private jets and perks paid for out of the civic fund.”

$2 million payment to Phila. tax-amnesty program [Philadelphia Inquirer]
Philly’s tax amnesty program received a $2 million payment on Tuesday, it’s biggest since the program started on May 3. Collections so far have reached $18 million, according to city officials. They also expect to reach their goal of receiving between $25 and $30 million by the end of the program on Friday.

Feinberg to quit pay czar post to focus on BP fund [Reuters]
This guy is a glutton for punishment.

Accounting News Roundup: A Clucked Up Audit; Audit Committees Still Worried; CPA No More | 02.13.15

Utah Firm Settles SEC Accounting Case Over Chinese Poultry Company [WSJ]A Utah accounting firm and […]

Accounting News Roundup: Remembering Enron, Andersen; Zynga’s Zany Accounting; The Battle at Olympus | 10.17.11

The Shadow of Enron Still Lingers [WSJ]
The beginning of the end for Enron Corp. came exactly a decade ago. Yet the energy giant’s colossal collapse casts a long shadow over the government’s efforts to punish wrongdoing during the financial crisis. In October 2001, the highflying Houston company jolted investors with a big loss. Less than two months later, Enron was bankrupt, and the scandal led to 42 civil enforcement actions by securities regulators and criminal charges against 33 people and the company’s auditor, according to a tally by law firm Davis Polk & Wardwell LLP. More than a dozen peoFormer Enron President Jeffrey Skilling, now 57 years old, is serving a 24-year sentence in a Colorado federal prison following his 2006 fraud conviction. Some people who helped untangle the Enron mess say the results show how regulators and prosecutors are coming up short as they work on cases tied to the financial crisis. So far, no high-profile executive has been sent to prison for crisis-related wrongdoing.

Lessons From Auditor’s Fall [WSJ]
Joseph F. Berardino says he “turned the page” on an accounting career that lasted more than 30 years. “Fate has given me an opportunity to do something different.” Mr. Berardino was chief executive of Andersen Worldwide, the parent company of Arthur Andersen, when the accounting firm was hit with a criminal charge in March 2002. He soon resigned, watching from the outside as a jury convicted Arthur Andersen of obstructing justice by shredding documents relating to its botched audit of Enron. The conviction meant Arthur Andersen was banned from auditing public companies. It was a death sentence. By the time the Supreme Court overturned the conviction in 2005, the 89-year-old firm was essentially out of business. At its peak, the firm employed 28,000 people around the world. “It’s left us with just four big accountancy firms, and I don’t know anyone these days who thinks that’s a good outcome,” Mr. Berardino says now.

Cain defends ‘9-9-9’ tax overhaul plan [WaPo]
Republican presidential candidate Herman Cain acknowledged Sunday that some Americans would see a tax increase under his “9-9-9” plan, but he insisted that “most people will pay less” under his proposal to overhaul the country’s tax code.

Zynga’s Profits Get Zyngier [GOA]
The Grumpies take on Farmville: “Zynga, Inc. filed another amendment to its registration statement. The fourth-amended S-1 for Zynga involves a change in the revenue recognition, which fortuitously turns a semi-annual loss into a semi-annual profit. Ain’t accounting great!”

Accounting Gain Boosts Citigroup Profit [WSJ]
Citigroup booked a $1.9 billion gain tied to a change in the valuation of its own debt, and continued improvement in losses from soured loans allowed the bank to reduce its loan-loss reserve by $1.4 billion. Even without the accounting gain, Citigroup’s $3.74 billion profit exceeded analysts’ expectations.

How California Was Diminished by 1978 Tax Revolt [Bloomberg]
California voters approved Proposition 13 to rein in property taxes that had doubled in 10 years. More than three decades later, that rebellion has mortgaged the state’s future, saddling it with the nation’s highest debt and lowest credit rating. The measure led to reductions that dropped per-student school spending from seventh to 29th nationally, prompted cities to pursue sprawling retail development to compensate for lost revenue, and pushed the state into budget gridlock, including a $705 million revenue shortfall announced Oct. 10, by requiring two-thirds approval for any tax increase. “Proposition 13 set up an unfair and dysfunctional two- tiered system of property taxes,” said Kevin Starr, a history professor at the University of Southern California and the author of a series of books on the state. “It choked off a source of revenue, and the lack of that revenue has brought California to the edge.”


Olympus Adviser Payments Should Be Probed, PWC Report Says [BBW]
Olympus Corp. may face regulatory and legal scrutiny because of payments made to advisers in a 2008 transaction, according to a PricewaterhouseCoopers report commissioned by ousted president Michael C. Woodford. Potential offenses include false accounting, financial assistance and breaches of duties by the board, according to an Oct. 11 report that Woodford provided to Bloomberg News. Chairman Tsuyoshi Kikukawa said at an Oct. 14 press conference that the board fired Woodford, a 30-year veteran of the Japanese company, because he “wouldn’t listen” to warnings from Kikukawa. The British executive, who is now back in the U.K., said he was fired after he challenged the transactions.

‘Capitalists of the World Unite!’ [WSJ]
You don’t have to be camped out with the protesters to be angry at Wall Street. Contrary to what you may hear, actual capitalists—those providing capital—get a raw deal down on the Street of Shame.