Author: Caleb Newquist

Report: Repatriation Tax Holiday a ‘Failed’ Policy [WSJ]
The 15 companies that benefited the most from a 2004 tax break for the return of their overseas profits cut more than 20,000 net jobs and decreased the pace of their research spending, according to report from the Democratic staff of the Senate Permanent Subcommittee on Investigations released Monday night. The report warned against repeating the tax break, calling the 2004 effort “a failed tax policy” that cost the U.S. Treasury $3.3 billion in estimated lost revenues over 10 years and led to U.S. companies directing more funds offshoretionals often defer bringing back profits earned abroad to avoid paying U.S. taxes on them.

Sky China shares plunge in Singapore after auditor quits [Reuters]
Shares of Singaporelisted Sky China Petroleum Services Ltd slumped as much as 32 percent to a record low on Tuesday after the company said its auditors, Ernst & Young LLP, had resigned. This is the latest in a string of auditor resignations that have hit Chinese stocks listed in Singapore and the United States, sending investors running.

Protest Gets Green Light [WSJ]
Mayor Michael Bloomberg said Monday the city would allow an anti-corporate protest to remain in a Lower Manhattan park indefinitely, his strongest affirmation that authorities would tolerate the demonstrations—as long as they remained law-abiding. “The bottom line is—people want to express themselves. And as long as they obey the laws, we’ll allow them to,” said Mr. Bloomberg as he prepared to march in the Columbus Day Parade on Fifth Avenue. “If they break the laws, then we’re going to do what we’re supposed to do: enforce the laws.”

Call for News Corp vote against Murdochs [FT]
News Corp faced intensifying pressure for corporate governance changes on Monday as the biggest investor advisory group in the US recommended shareholders vote against the re-election of 13 of the media company’s 15 directors, including Rupert Murdoch, chairman and chief executive. The ISS advisory group said that the phone-hacking scandal at News Corp’s London-based newspaper group had “laid bare a striking lack of stewardship and failure of independence” by the board that had led to enormous financial and reputational costs to shareholders.

Taxing Millionaires Casts Obama as ‘Warrior’ for Middle Class Americans [Bloomberg]
Democrats have turned to an agenda that Republicans are calling class warfare, as President Barack Obama presses a “Buffett Rule” to tax the rich, Senate Democrats offer a millionaires’ tax instead and party leaders fulminate against Bank of America’s $5 debit-card service fee. Campaigning for re-election, Obama welcomes the charge. “Then guess what? I’m a warrior for the middle class,” he declared Sept. 22, standing at a Cincinnati bridge linking the home states of the Republican leaders of the House and Senate and setting a new course for his own party.

NBA’s First Two Weeks of Season Canceled [WSJ]
NBA Commissioner David Stern canceled the first two weeks of the season after two straight days of last-ditch negotiating sessions failed to resolve the labor dispute. Mr. Stern said both sides were “very far apart on virtually all issues….We just have a gulf that separates us.” The cancellation came after a seven-hour meeting at a Manhattan hotel on Monday. There are no further meetings scheduled and no timetable for when more games could be axed. Mr. Stern said that any financial losses incurred in the stretch will be factored in as negotiations move forward. The league has said it stands to lose hundreds of millions of dollars.

At Long Last, Facebook Releases an iPad App [Bits/NYT]
Trite status updates including “Loving this fall weather!” coming to a tablet near you.

They fuck you up, accountants [AccMan]
Indeed they do.

Ernst & Young employees get dirty, entertain kids at annual day of service [WaPo]
“I came home exhausted and filthy,” said Kevin Virostek, Ernst & Young’s Greater Washington managing partner. “But I never had a better day at Ernst & Young.”

Quarter of KPMG new partners are women [Accountancy Age]
Quite ironic that the article doesn’t quote any women.

Corporate audit fees up? Beware of trouble ahead [Reuters]
A high or rising audit fee can indicate one of two things, experts say. Either the auditor is charging a risk premium, aiming to cover future legal costs to them of something going awry, or they may just be doing more work on the audit, digging into areas where results are uncertain. The studies’ findings come at a moment when regulators are considering requiring auditors to give out even more information. A proposal under consideration by the U.S. Public Company Accounting Oversight Board might have auditors disclosing more than the current minimal thumbs up or down. seem to be telling a valuable story.

U.S. Corporate Profit Rebound Loses Steam [Bloomberg]
Earnings per share for the Standard & Poor’s 500, excluding financial companies, rose 14 percent in the third quarter, the smallest gain since the end of 2009, analysts’ estimates compiled by Bloomberg show. That compares with 19 percent in the second quarter and 20 percent in the first. Analysts have begun reducing forecasts for the current quarter and beyond. S&P 500 futures rose today, indicating the index will extend last week’s rally.

Judge puts brakes on SEC’s Deloitte case [Reuters]
A federal judge on Friday put the brakes on the government’s attempt to quickly get documents related to possible accounting fraud at Chinese companies listed on U.S. stock exchanges. U.S. Magistrate Judge Deborah Robinson questioned whether she could force a Chinese unit of accounting firm Deloitte & Touche to hand over records to the U.S. Securities and Exchange Commission. In September the SEC asked the court to enforce a subpoena it sent to Deloitte seeking information about its Chinese unit’s audits of Longtop Financial Technologies Ltd, a Chinese company under investigation by the SEC.

Qwikster Is Gonester: Netflix Kills Its DVD-Only Business Before Launch [ATD]
While Netflix had to use some strained logic to explain its decision last month, this one is straightforward: It’s not going to force customers to use two different services to rent DVDs and streaming video, because customers hated that idea.

Surrey accountant completes two-thirds of run across US [BBC]
A Surrey accountant aiming to run 3,080 miles (4,957km) across the US to raise £10,000 for Help for Heroes is about two-thirds of the way into his route. Chris Finill, 52, of Cranleigh, has been running about 40 miles (64km) a day since he left San Francisco with athlete Steve Pope on 17 August. The pair, who plan to get to New York by 6 November for the city’s marathon, have just run through Iowa. They said gravel surfaces made recent runs a “nightmare” in a Twitter post.

Accountants Outpace CPAs in Job Listings [CPA Trendlines]
This doesn’t mean you can stop studying for the CPA.

Consistency in Accounting and Legal Discourses: The Overtime Cases [GOA]
Grumpies: “For several years battles have raged in several courtrooms concerning whether accounting firms have a legal obligation to pay junior accountants overtime. We are sympathetic to the position of the accounting firms, but worry about the soundness of their legal reasoning and conclusions. Do accounting firms have to be consistent in different domains? For example, does the logic in legal briefs and oral arguments have to be congruent with ethical principles and auditing standards?”

Practitioners Raise Concerns About Fingerprinting Proposal at IRS Hearing [JofA]
“We have serious concerns regarding the level of burden that the user fee regulations will place on CPA firms, particularly small and medium-size CPA firms,” AICPA Tax Executive Committee Chair Patricia Thompson, CPA, told the IRS panel. According to IRS estimates, 70% to 80% of those affected by the fees are operating as or employed by small entities. Thompson’s testimony focused on the fingerprinting requirement for nonsigning staff working under the supervision of a CPA, and she said the IRS should consider an alternative that would allow CPA firms to use a consumer reporting agency instead. Under that scenario, the costs per applicant would be significantly below what the IRS is likely to charge, and less burdensome to implement ,Thompson said.

Cain’s ‘9-9-9’ tax reform plan under fire from both left and right [OTM/The Hill]
Cain’s so-called “9-9-9” plan has liberals and tax analysts worried that the plan would not take in enough revenue, and that it would cause lower- and middle-income families to pay more. But conservatives have a different concern – that Cain’s plan to install a 9 percent national sales tax, paired with income and corporate taxes at that same rate, would give Democrats a brand new tax stream to try to squeeze out more revenue.

An Accountant’s Soul Presides Over the P&L at Apple [ATD]
[O]verlooked in the homages we’ve seen recently to Jobs’s spirit of innovation, his artistry and sheer force of will is one other aspect of the man that made him one-of-a-kind: his fiscal acumen. Jobs was a true visionary, but he was also a businessman as Jim Kelleher of Argus Research reminds us. “Consumers who gush over the beauty and efficacy of Apple products rarely quibble or complain about Apple’s premium pricing,” Kelleher writes in a note to clients. “Behind the tech-weenie veneer on transformative products, there is an accountant’s soul presiding over the P&L ang>World facing worst financial crisis in history, Bank of England Governor says [Telegraph]
FYI.

Obama challenges Republicans to explain opposition to jobs bill [WaPo]
“If Congress does something, then I can’t run against a do-nothing Congress,” Obama said in response to a question at a morning news conference. “If Congress does nothing, then it’s not a matter of me running against them. I think the American people will run them out of town, because they are frustrated, and they know we need to do something big and something bold.”

Britons are driven to doughnuts [FT]
Total sales at the Autocentres division, which Halfords said this year would not meet the targets it set when the business was acquired, increased 9 per cent, with like-for-like revenues up 2.7 per cent. But like-for-like sales in the core retail business fell 1.9 per cent as drivers shunned “car enhancement” products in particular. Cycle sales improved, partly thanks to high petrol prices. Halfords forecast first- half pre-tax profit of £53m-£55m ($82m-$85m), compared with £69m last time. By contrast, Greggs, the bakery chain, said it had sold almost 1.5m “Superstar Doughnuts” since they were introduced five weeks ago. They have been marketed on YouTube and Facebook as talking doughnuts that have their own personalities. “It has captured the imagination,” said Ken McMeikan, chief executive.

It’s Too Hard to Know Who Is Too Big to Fail [Jonathan Weil/Bloomberg]
JW: “Two years ago if you had asked whether the commercial lender CIT Group Inc. (CIT) was too big to fail, the answer would have been an emphatic no. The Treasury Department had rejected its latest bailout plea. In November 2009, after 101 years in business, CIT filed for bankruptcy. Ask that same question about CIT today, though, and the best answer would be: Who knows?

Apple Talked With Police Before Jobs’s Death [Bloomberg]
Apple was supposed to inform the police of Jobs’s death before making a public announcement so the department could prepare, said Brown. Instead, police learned he had died when the company issued a press release at about 4:30 p.m. local time on Oct. 5. As it turned out, Brown said, only about 40 people showed up around Jobs’s home that day. “Here’s a guy who’s a billionaire and lives in a regular neighborhood, not behind a gated estate with all the security guards,” said Bruce Gee, a former Apple employee who drove up from his home a couple miles away. “On Halloween, people go trick or treating there like everyone else.”

House Republican wants IRS answers on tax-exempt groups [OTM/The Hill]
Rep. Charles Boustany (R-La.), in a letter dated Thursday, requested a breakdown of how many tax-exempt groups are in good stead with the IRS, what sort of resources the agency dedicates to nonprofit oversight and how many tax-exempt organizations have been audited since 2008. The letter, sent to IRS Commissioner Doug Shulman, comes after Boustany and other House Republicans pressed the IRS to investigate the nonprofit status of AARP, the powerful seniors lobby. AARP rejected GOP claims that it’s more concerned with profits than with its members. But on Thursday, Boustany, chairman of the House Ways and Means subcommittee on Oversight, said the group and others look more like for-profit enterprises than anything else.

Maryland cigarette tax increase of 50% proposed, following alcohol tax hike [DMWT]
Is nothing sacred?