In a November 15 letter to the SEC, FAF chairman John J. Brennan wrote that reducing FASB’s role in setting U.S. financial reporting standards “may weaken the positive leverage that U.S. GAAP and U.S. standard setting have provided to improving accounting standards for investors in the world’s most robust and transparent capital markets.” The FAF also disputed the SEC staff’s proposed goal of achieving one set of global accounting standards. Instead, the organization feels that “a more practical goal for the foreseeable future is to achieve highly comparable (but not necessarily identical) financial reporting standards among the most developed capital markets that are based on a common set of international standards.” [CFO]
Author: Caleb Newquist
Founding editor, Going Concern.
Former KPMG Partner Wants a Job That Is Worse Than Being a KPMG Partner
I kid, I kid. There are plenty of KPMG partners who couldn’t be happier if they were PwC partners. ANYWAY, that’s beside the point. What is the point is that former House of Klynveld partner Leslie Coolidge is running for U.S. Congress in Illinois’ Sixth District. Why would a seemingly normal person CPA opt for a career in the dungeon asylum hellhole that is the House of Representatives? Well, she has her reasons:
“Like many of us, I have become increasingly dismayed by the apparent unwillingness of our current Congress to address the critical issues facing our country today,” Coolidge, 52, said. “As I watched the brinksmanship this summer as Congress actually considered letting our country go into financial default, I knew I could no longer sit on the sidelines. As a CPA, I can delve into and understand complex financial matters and create innovative solutions that make sense. In addition, much of my career was spent negotiating among parties with divergent views to find ways to successfully move forward, something Congress is not doing.”
An agent of change! A uniter, not a divider! All that crap! How could it go wrong?
Grant Thornton CEO: Makeovers Don’t Win
As we all know, Grant Thornton has upped its game in the past few months. It rolled out a new fancy schmancy ad campaign that explains how not to be a loser and was the surprise top dog in this year’s Vault rankings.
Yesterday, the Purple Rose of Chicago announced that more good times are coming via its new “Growth Platform” that will give all those dynamo clients a spurt. Hey! there’s even a website for the whole thing.
So in case things aren’t clear, growth is winning. And it’s not just for the lucky clients who count GT as their professional services provider. The firm itself is a weed of dynamism, says Stephen Chipman:
Grant Thornton has growth plans of its own. “We want to grow ourselves,” said Chipman. “We’re dynamic and we’re on the move. We want to, over time, raise the bar on the growth agenda and be committed to it for the long haul.” The firm plans to continue with its global expansion plans, especially in emerging markets. “We’ve been very vocal about how the global organization has an ambitious five-year strategy to double our market share, and that’s consistent with our plans here in the United States,” said Chipman. “There will be organic growth, it will be strategic growth. We will invest in new talent and expertise, and it will be M&A growth through mergers and acquisitions.”
Right! Connecticut! What’s more exciting than the Constitution State? Wait, don’t answer that. You’re probably wondering if all this excitement means that GT will go for a sexy new makeover. You know, something less Northwestern and maybe something more…Ohio State, perhaps? Well, as of now, that won’t be necessary:
The new brand positioning will not extend as far as changing the firm’s logo or slogan, at least not yet. “We are not changing our logo,” said Chipman. “You will see the same Grant Thornton logo, but you will see a lot of branded material focused on supporting the growth agenda.” However, Grant Thornton may eventually evolve its strategy to incorporate new taglines or slogans. “As we move forward with this over the next several months, we will certainly be looking for different ways to innovate to present our messaging,” said Chipman.
So it sounds like the team colors will stay the same but could a message focused on “growth” actually involve something that tangibly “grows” like say, “roses”? And by extension, could this mean tangos will make a comeback? God, please make it so.
Layoff Watch ’11: The IRS Says Tomato
You may have heard some carefully coiffed pols shouting about the need for our government to “cut spending.” If you’re a Republican, this means everything is fair game with the exception of the defense budget. For Dems, it’s entitlements. Since these two sacred cows of the federal budget dare not be touched, all the stuff in between is on the chopping block. One of the easier areas of government for pols to offer up for sacrifice is the Treasury Department, specifically the IRS. Because GOD KNOWS we don’t need “a goon squad 5,000 IRS agents tromping around the country.”
It appears that all the budget thumping has worked and the IRS is looking for volunteers to help move this along:
The Internal Revenue Service has offered buyouts to 5,400 employees as it begins preparing for a likely budget cut of more than 3 percent.
The agency, which had 94,711 workers in fiscal 2010, plans to accept no more than 1,600 buyout applications. A second round of buyouts could follow. The Obama administration has said that as many as 4,000 IRS jobs could be cut over the next year, including some that would reduce tax enforcement and collections.
“This is really focused on trying to deal with the current budget situation and the uncertainty that we’re facing at this point in time,” Beth Tucker, deputy IRS commissioner for operations support, said in an interview today.
IRS officials directed the first round of buyout offers to back-office employees who don’t interact with taxpayers. A potential second set of cuts would affect “a wider range of employees who deal directly with taxpayers in service and enforcement matters,” commissioner Douglas Shulman wrote in a Nov. 4 memo to employees.
First off, putting 4,000 people out of work won’t make for a balanced budget. Secondly, I’m not saying these “buyouts” are actually “layoffs” but if you consider the fact that these “buyouts” include current employees will receive money and not be required to report to their cubicles EVER AGAIN sounds pretty similar to how “layoffs” work. Maybe it’s just me.
IRS Offers Buyouts to 5,400 Employees [Bloomberg]
Accounting News Roundup: Olympus Under the Lens; Paterno’s House Sale; BDO Tax Shelter Case’s Shady Juror | 11.16.11
Purgatory for MF Global Customers [WSJ]
More than two weeks after MF Global filed for Chapter 11, some 33,000 customers are stuck in a sort of purgatory, with no access to their cash until a trustee liquidating the securities firm says they can get it. Late Tuesday night, the office of the trustee, James Giddens, in an apparent response to customer outcries, said he had sought court permission for a transfer of about 60% of the cash in about 21,000 customer accounts still frozen, or some $520 million. If he gains court approval, the statement said, distributions could be made within days. Earlier in the day, owledged customer “frustration” and sought court approval to expedite a claims process. A spokesman for the trustee said this week it is possible customers won’t get all their money back, due to the apparent shortfall at MF Global.
Olympus seeks to reassure lenders [FT]
Olympus is seeking to reassure its lenders that it has sufficient cash flow to repay its loans, in an effort to ensure continued financial support as it faces investigations into a cover-up of large losses related to past securities investments. Lenders including Japan’s three leading banks – Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho – and country’s largest life assurer, Nippon Life, met with Olympus on Wednesday.
UK’s SFO launches formal Olympus probe [Reuters]
Britain’s Serious Fraud Office (SFO) has launched a formal investigation into more than $1.0 billion of obscure payments and acquisitions made by Japan’s Olympus Corp., a source familiar with the matter said.[…] Olympus’s former chief executive Michael Woodford, a Briton who fled Japan around a month ago after blowing the cover on around $1.3 billion in unexplained fees and non-core acquisitions, promptly handed reams of documents to the agency.
Paterno Passed On Home to His Wife for $1 [NYT]
Lawrence A. Frolik, a law professor at the University of Pittsburgh who specializes in elder law, said that he had “never heard” of a husband selling his share of a house for $1 to his spouse for tax or government assistance purposes. “I can’t see any tax advantages,” Frolik said. “If someone told me that, my reaction would be, ‘Are they hoping to shield assets in case if there’s personal liability?’ ” He added, “It sounds like an attempt to avoid personal liability in having assets in his wife’s name.”
Daugerdas Judge Grants Hearing on Juror Conduct in Tax Case [Bloomberg]
U.S. District Judge William Pauley in Manhattan said today he will hold an evidentiary hearing on the conduct of Catherine Conrad, Juror No. 1 in the 10-week trial. He didn’t set a date. The defendants claim Conrad hid details of her background from the court, including a law degree, at least four arrests and the fact that she was serving a sentence of probation for shoplifting. The jury, including Conrad, convicted [Paul] Daugerdas in May on more than 20 criminal counts, including conspiracy, tax evasion and attempting to impede the Internal Revenue Service. The jury also returned guilty verdicts for Denis Field, the former chief executive officer at accounting firm BDO Seidman LLP; Donna Guerin, a Jenkens & Gilchrist lawyer; and David Parse, a former accountant for Deutsche Bank AG (DBK) unit Alex. Brown.
H&R Block drops TaxACT acquisition plan after antitrust opposition [KCBJ]
H&R Block Inc. has dropped its $287.5 million plan to buy the maker of TaxACT tax preparation software. In a Tuesday filing with the Securities and Exchange Commission, the Kansas City-based tax preparer (NYSE: HRB) said involved parties had agreed to terminate the merger agreement, effective Monday.
Memo to Anyone Under the Impression That There Is Some Secret Backdoor Escape Hatch in the Taxpayer Protection Pledge That Says a Hike in the Capital Gains Tax Is Allowed: There Isn’t One
Because a whole slew of people out there seem to have severe memory loss and there are rumors that the not-so-Supercommittee is kicking around a hike in the capital gains tax, Americans for Tax Reform will go over this ONE. MORE. TIME.
The Congressional “Super Committee” is now in its final week of deliberations. Rumors are constantly swirling around Washington about what they are talking about. One rumor we have heard is that the Super Committee might consider hiking the capital gains tax rate paid by a wide range of investment partnerships, including partners and employees at private equity, venture capital and real estate firms. The Taxpayer Protection Pledge commits signers to “oppose any and all efforts to increase the marginal income tax rates for individuals and/or businesses.” This clearly precludes any hike in the capital gains tax rate.
Does Grover Norquist have to slap you people?
Lloyd Blankfein Would Like Everyone to Get with Program Re: Mark-to-Market Accounting
This means you, Steve Schwarzman. And you, writers of FASB hate mail. It’s about time you all got on board.
“We are not moving away from mark-to-market accounting,” Mr. Blankfein said Tuesday. “The more we work with it and live with it the more I wish that everybody else would act in a corresponding way.”
You have your orders.
David Cay Johnston Has A Few Questions
Why do we let corporations pick their auditors? Why do we have only four big firms instead of a dozen, a score or more? Why doesn’t government do the audits, as the IRS does tax audits? Why is law enforcement handcuffed by inadequate budgets and rules that hinder investigations? Why are auditors allowed to quietly resign instead of being required to blow the whistle? Auditing needs a shakeup, fundamental restructuring and the accounting firms need a serious debate about their failings, practical and moral. [DCJ/Reuters]
Deloitte Taking Precautions for Possible Unwelcome Guests
This just in:
WFC Update
Zuccotti Park EvacuationAs a result of the evacuation of protestors in Zuccotti Park early this morning, there will be limited access into 1 and 2 WFC until further notice.
Currently, the walkway bridge that connects 1 and 2 WFC will be closed. All building tenants must present identification to gain access. For visitors, the name of the tenant and person visiting will need to be provided to building security.
Access restrictions are subject to change, as information and updates from building management are changing rapidly.
We appreciate your cooperation and will continue to keep you informed through this mailbox. If you have any questions or concerns please do not hesitate to reach out to myself [redacted email] or [redacted].
[Guy who gets to deal with these sorts of things]
Area Operations Manager
Deloitte Services LP
Accounting News Roundup: Occupy Out (For Now); Olympus Smelled Funny in the 90s; PwC Goes Sailing | 11.15.11
Police Clear Zuccotti Park of Protesters [NYT]
Hundreds of police officers early Tuesday cleared the park in Lower Manhattan that had been the nexus of the Occupy Wall Street movement, arresting dozens of people there after warning that the nearly two-month-old camp would be “cleared and restored” but that demonstrators who did not leave would face arrest.
Olympus accounting tricks queried back in 1990s [Reuters]
An investment banker raised concerns about dubious accounting at Japan’s disgraced Olympus Corp as long ago as the 1990s, after he discovered it was using Bermuda-based funds to “invent” assets and patch up its balance sheet, he told Reuters. The banker’s concerns, which he says were discussed inside Wall Street bank PaineWebber, his employer at the time and the arranger of Bermuda schemes for Olympus, is one of the earliest red flags known to have been raised over the Japanese company’s accounting irregularities, which continued for two more decades. “The Japanese accounting regiment at that time was very strange,” said the banker, explaining he had raised questions because Olympus was exploiting a loophole in accounting rules that mislead investors about its real financial health.
U.S.-listed China firms welcome to come home [Reuters]
Chinese firms listed in the United States would be welcomed home, a senior Shanghai Stock Exchange official said, chiding the main U.S. auditor watchdog and other American institutions for having politicized company accounting issues. Zhou Qinye, the exchange’s vice general manager, said while only a few firms have real accounting issues, many overseas investors are short-selling Chinese companies for profit. “The current situation is the result of some institutions seeking to politicize the matter, and it’s difficult to predict where things are heading,” Zhou told a conference, referring to a spat between U.S. and Chinese regulators over cross-border inspection of audit firms.
Hire a vet, fire someone else [Tax Update]
Joe Kristan shows why wrapping your tax policy with the flag is dumb.
Overstock Abandons O.co [SA]
The shine on the trophy hasn’t even faded!
Timing Questions Emerge on MF Global Cash [WSJ]
Hundreds of millions of dollars might have gone missing from customer accounts at MF Global Holdings Ltd. as far back as four days before the securities firm filed for bankruptcy protection, people familiar with the situation said Monday. The possibility of a shortfall in customer funds on Oct. 27 suggests problems might have emerged sooner than MF Global officials initially indicated to regulators and exchange operator CME Group Inc.
PwC gets America’s Cup deal [SFBT]
A less prestigious firm simply wouldn’t be acceptable for an event that Larry Ellison is obsessed with.
Uncategorized
IASB, FASB Trying to Get Everyone in the Ballpark on Revenue Recognition
The aim is for companies across the world to recognise revenue consistently as part of wider efforts to forge a single set of global acccounting rules to help investors. The core principle that a company must recognise income from contracts when it transfers the goods or services to the customer remains unchanged. But the proposal has been simplified in parts and contains more guidance after several sectors like construction and telecoms raised concerns. “Our proposals will give analysts and investors the confidence that revenue is being presented on a consistent basis, across industries and continents,” IASB Chairman Hans Hoogervorst said in a statement. “We plan to conduct additional outreach with interested parties during the comment period to help people understand the proposed guidance and to listen to any remaining concerns,” said FASB Chairman Leslie Seidman. [Reuters]
Uncategorized
Is Grant Thornton Finally Coming to Connecticut?
Sounds like it. By way of gobbling up a firm that sounds like it should belong to John Fogerty.
[CCR, LLP] [t]he full-service accounting and advisory firm announced Monday that it has entered into “exclusive negotiations” with Chicago-based Grant Thornton, one of the largest U.S. accounting firms that currently lacks a Connecticut presence. Its closest office is Boston. Neither party elaborated on terms and boundaries of their talks, except to say in a written statement that “a resolution is expected by year-end.” CCR, with offices in Connecticut, Massachusetts and Rhode Island, is the 13th largest accounting firm in the Hartford Region with 44 employees and 22 CPAs[.]
CCR has five office locations, none of which were born on the bayou, and only one – Glastonbury – that’s in the Constitution State. So technically, they’d be in CT but I mean, COME ON.