Author: Caleb Newquist

Founding editor, Going Concern.

Accounting News Roundup: RIP Steve Jobs; Dems Dare GOP to Block Millionaire Tax; Tax Reform Poster Boys | 10.06.11

Apple’s Visionary Redefined Digital Age [NYT]
RIP, Steve. Thanks for the fun toys.

Steve Jobs Was Always Kind To Me (Or, Regrets of An Asshole) [The Wirecutter]
Brian Lam: “I just feel lucky I had the chance to tell a kind man that I was sorry for being an asshole before it was too late.”

Historic day online: Twitter reaction to Steve Jobs’s death hits record [The Age]
The death of Steve Jobs has provoked the biggest online reaction of any event in recent history, with social media monitoring firm SR7 expecting official Twitter figures to come in at 10,000 tweets per second.

Steve Jobs’s Best Quotes [WSJ]
“I wish [Bill Gates] the best, I really do. I just think he and Microsoft are a bit narrow. He’d be a broader guy if he had dropped acid once or gone off to an ashram when he was younger.”

Dems Seek 5% Millionaire Tax for Job Plan [Bloomberg]
Senate Democratic leaders proposed imposing a surtax on people earning at least $1 million a year to pay for President Barack Obama’s jobs plan, an idea immediately rejected by Republicans as lawmakers head for a showdown over how to boost the economy. Majority Leader Harry Reid, a Nevada Democrat, said yesterday the 5 percent tax would generate $450 billion, enough to cover the cost of the administration’s proposal. Democrats dared Republicans, who oppose tax increases, to block the plan. “The addition of this proposal makes it very tough for Republicans to oppose the president’s jobs package,” said Senator Charles Schumer of New York, the chamber’s third-ranking Democrat. “Republicans will be hard-pressed to explain why they’d allow teachers and firefighters to be laid off rather than have millionaires and billionaires pay their fair share.”


Mouchel chief quits after contract error [FT]
Mouchel, which provides services such as road and building maintenance, said on Thursday that it had overestimated the profits from one contract by £4.3m because of an actuarial error. In June, it had predicted that a one-off gain from the contract – believed to be with a local government client – would insulate it from disappointing trading elsewhere. In a second setback, Mouchel also announced on Thursday that it was increasing accounting provisions related to other contracts by a further £4m or so following a review by Rod Harris, its new finance director. It said the larger provisions reflected “the continuing challenging business environment”.

Billionaire Poster Boys For Tax Reform: Mellon, Buffett, Schwarzman…And Koch? [Forbes]
And we don’t want to see them in their Farrah Fawcett versions.

Accounting Firm Merger Mania: LarsonAllen and Clifton Gunderson Feeling Each Other Out

It’s been quite awhile since we heard a good merger rumor and this past week we finally heard one that doesn’t involve Moss Adams or Grant Thornton.

Rumor has it Larson Allen and Clifton Gunderson are merging. Vote approved by Larsen Allen, vote pending by CG.


We checked with another source, someone familiar with dealings within the accounting industry, who confirmed that the two firms are talking. According to this person, the combination would make sense as both LA and CG are “sleepy” firms that don’t perform public company audits and have been making small acquisitions here and there. Also it would strengthen CG in areas like Virginia/Maryland where they are rumored to be lowballing engagements and Larson in places like Illinois, Indiana, and Wisconsin where CG has a big presence. This person also said that the deal was “probably 50/50 right now” with the rumored name of the new firm being “CliftonLarsonAllen”.

Clifton Gunderson CEO Krista McMasters told Going Concern that this is “not a story” right now because the firms are simply in “exploratory discussions” and there has not been a vote by the CG partners. Ms. McMasters also denied that there had been any decision on the name of the combined firm, reiterating that they are simply feeling each other out.

Even though it doesn’t sound like things are hot and heavy yet, we rammed a few details together from Accounting Today’s most recent Top 100 Firms list to see what the CliftonLarsonAllen firm would look like:

• A combined $470 million in revenues. That would be good enough to be the 10th largest firm in the U.S.

• 60 offices (probably some consolidation) in 24 states and The District of Columbia.

• Over 300 partners and 3,000 total employees.

A spokesman at LarsonAllen declined to comment but was trying to get someone in the know to call us back. So far, we haven’t heard anything. If you’re in the loop and have more details to share, email us.

Hans Hoogervorst Doesn’t Want the U.S. to Worry Its Pretty Little Head About Losing Influence Over Accounting Rulemaking

Hoogervorst said U.S. sovereignty would be protected by the SEC having a final say before any IASB rule is introduced. “Such endorsement mechanisms provide an important ‘circuit breaker’ if the IASB produced a standard with fundamental problems for the United States,” Hoogervorst told an accounting conference. The SEC would remain in full control of enforcement. “So there is absolutely no danger of importing different enforcement standards from abroad into the United States,” the former Dutch finance minister added. [Reuters]

West Virginia University to Offer PhD Program in Forensic Accounting and Fraud Investigation

Did you ever have dreams of being a doctor that busted the bad guys? Something like Quincy. Or maybe Robert Langdon. When you opted to go into accounting, you probably thought those dreams were hopeless.

Well, we have good news for you aspiring number-crunching crime fighters who still yearn for the “Dr.” prefix. West Virginia University’s College of Business and Economics is announcing (later today, we’re told) that they will be offering the first doctoral program in Forensic Accounting and Fraud Investigation. The program will admit its first students in August 2012 and will prepare individuals for a career in accounting research and teaching at the university level.

Shall we hear from scholarly types? Okay!


“West Virginia University’s Forensic Accounting and Fraud Investigation program has been a model for other colleges and universities across the country,” said WVU President Dr. Jim Clements. “Our expertise has made us a national leader in this field, and the addition of the Ph.D. program will provide WVU with an important opportunity to create scholars in the areas of fraud, forensics and ethics. I applaud the faculty for all they have done to make this possible.”

Dr. Clements is referring to WVU’s Graduate Certificate in FAFI and the new PhD program will simply add to the University’s scholarly fraud-busting prowess. Dr. Jose V. Sartarelli, Milan Puskar Dean, of the school said, “This new Ph.D. program is the next logical step in building a complete educational offering in these specific areas, and that step is due to the commitment and expertise of our excellent faculty. This program is a reflection of their long and dedicated work.”

So this is a pretty exciting for the accounting sleuths (amateur or professional) out there if you’re interested in taking your wonkiness to the next level. Whether or not it has the Sam Antars of the world shaking in the boots is another question.

Anyone interested should contact Dr. Tim Pearson or check out the program on the WVU website. Get crackin’.

Accounting News Roundup: Dems Discuss a More Palatable Millionaire Tax; IRS Gives Oakland Dispensary a Buzzkill; Again with the Tax Shelters, KPMG? | 10.05.11

U.S. and New York Sue BNY Mellon [WSJ]
Bank of New York Mellon Corp. was hit by a one-two legal punch that escalates a currency-trading crisis for one of the nation’s largest banks. The Justice Department and New York’s attorney general filed separate civil lawsuits alleging that the bank fraudulently charged clients for currency transactions. Filed within hours of each other late Tuesday, the suits allege that BNY Mellon defrauded or misled state and public pension funds, private companies, universities and banks in a decade-long scheme of overcharging for foreign exchange.

Democrats discuss tax on US millionair=”http://www.ft.com/intl/cms/s/0/dc930870-eed7-11e0-959a-00144feab49a.html#axzz1ZuZb93Gd” target=”_blank”>FT]
Democrats in the Senate have discussed a new tax on US millionaires to pay for at least part of $447bn in fresh economic stimulus measures pushed by the White House. According to a Democratic congressional aide, no final decisions were made on Tuesday on whether to present a new tax on the wealthiest citizens, and there were no estimates on how much money it was intended to raise.

Robbers Invade CEO’s Midtown Home [WSJ]
The armed thieves took more than $260,000 worth of cash, jewelry and other valuables in the Monday robbery at the home of George Bardwil, the CEO of Bardwil Industries, police said. Mr. Bardwil, 59 years old, was meeting with a business consultant and an accountant in his East 51st Street apartment when there was a knock on the door about 2:30 p.m. As Mr. Bardwil answered, two gunmen shoved their way inside and ordered the men to get to the ground. The attackers tied up the men and ordered them to keep their eyes closed and not look at them, according to a police official with knowledge of the matter. They then went into Mr. Bardwil’s bedroom, where they removed cash and jewelry from a safe.

For some of the rich, budget and tax battles bring worries — of paying too little [WaPo]
“It is going to be really bad for rich people,” said Charlie Fink, 51, a former AOL executive, imagining an American financial collapse that could wipe out his wealth. “It’s going to be [bad] for everybody. But most people are living close to the bone anyway. So they have less to lose.”

Oakland medical cannabis club owes IRS millions in back taxes [SVMN]
“They’re attempting to tax us out of business,” Harborside owner Steve DeAngelo said Tuesday by telephone. Ironically on the same day he received the IRS letter, DeAngelo was photographed handing the city treasury a check for $360,000. The payment was the third installment of $1 million in city-owed taxes generated by the dispensary in 2010. Oakland’s four dispensaries pay a 5 percent tax to Oakland on top of regular sales taxes that contributed about $2 million to California’s budget.


U.S. wins three tax cases involving big banks, KPMG [Reuters]
United States prosecutors said on Tuesday they had won three major cases against American clients of questionable tax shelters including ones used by a Dallas billionaire and Wells Fargo Co. and others designed by Citibank and accounting firm KPMG LLP. The separate cases, the verdicts of which were rendered last Friday, represent a significant victory for the US Justice Department, which was sued by each of the three clients when the Internal Revenue Service denied as improper their claimed deductions that totaled hundreds of millions of dollars.

Frank Wolf Has Grover Norquist’s Attention

Earlier we learned that Virginia Congressman Frank Wolf is completely creeped out by Tax Terminator Grover Norquist’s BSD status in the Republican Party.

It’s been bothering Mr. Wolf so much that his “conscience” compelled him to give a speech on the House floor today to remind everyone what kind of Grover company keeps (i.e. the “unsavory” kind).

And since Grover has Viking DNA coursing through his veins, you’d be a monkey’s uncle if you thought that he was going to let this shit slide:

Norquist branded Wolf’s speech a “hissy fit” and a “compilation of whack job criticisms.” He added that he thought the Virginia Republican, one of the relatively few GOP members of Congress to have not signed the tax pledge, was lashing out at him because he did not want to call out his Republican colleagues. “He is the only Republican arguing that tax increases are a good idea,” Norquist told The Hill. “What he has is a problem with the American people and the modern Reagan Republican Party.”

But hey, GN is old political cat; he knows how the game is played:

“[I]f he wants to chew on my ankles, I can take it.”

How’s that for a visual?

Norquist: GOP lawmaker’s criticism ‘beneath him’ [OTM/The Hill]

Warren Buffett Dares Rupert Murdoch to Whip It Out

His tax return, people. His tax return. Remember last week when the Journal told O^3 he should put up or shut up since he’s so gung ho about increasing taxes on the ultra-rich? Well, he sure does and he seemed delighted when someone asked him about it today:

Asked about the editorial on Tuesday at Fortune’s Most Powerful Women Summit, Buffett said he was willing to release his tax returns, on one condition: “I think it might be a terrific idea if they would just ask their boss, Rupert Murdoch, and he and I will meet at Fortune, and we’ll both give you our tax returns and you can publish them,” Buffett said. “I’m ready tomorrow morning,” he added.

Your move, Rupes.

Buffett challenges Murdoch on tax returns [CNN]

Where Is Ernst & Young Finding All This Musical Talent?

Look, I understand that these firms want well-rounded individuals but when more and more people start showing talents that outshine their professional services skills, it makes you wonder if the recruiting folks need a talking to. I bring this up because, unbeknownst to us, FORTUNE puts together a Battle of the Corporate Bands every year and this year’s winner is American PI, a 12-member band, 11 of which are E&Y employees. Granted, they won’t be winning Record of the Year any time soon since they’re simply covering I Heard It Through the Grapevine, Southbound, People Get Ready, and Superstition but they did have three members win “best of” awards.

And with this triumph by American PI, E&Y now has rock, show tunes, and hip-hop covered. It’s probably only a matter of time until they manage to poach the PwC pianist.

[via AT]

Grover Norquist Gives Congressman Frank Wolf the Heebie Jeebies

“My conscience has compelled me to come to the floor today to voice concerns I have with the influence Grover Norquist, the president of Americans for Tax Reform, has on the political process in Washington,” Wolf read from a statement on the floor of the House of Representatives today. Wolf listed a series of associations that he said undermines Norquist’s credibility as a policy advocate. Among them, he cited a relationship Norquist had with former lobbyist and convicted felon Jack Abramoff. “Mister Abramoff essentially laundered money through ATR and Mister Norquist knew it,” Wolf said. [Bloomberg]

Comp Watch: Vault Ranks the Firms That Give You the Most Bang for Your Buck

All of you people have dreams. Not your-name-in-lights dreams, however. Most of you are more interested in shopping-at-Bergdorf’s dreams. But which firm is going to give you the best combination of salary/bonus/Omaha Steaks to make you happy? Vault’s Compensation Ranking should give you an idea. Here’s your Top 5 out of 20 (previous year’s ranking in parenthesis):

1 (11) SS&G Financial Services
2 (5) Armanino McKenna
3 (8) WithumSmith + Brown
4 (7) Dixon Hughes Goodman
5 (1) Marcum


Where are the Final 4 Horsemen of the Accounting Firm Apocalypse, you ask? Well, a couple of them are completely MIA. Here are the other two plus some notables:

9 (10) Rothstein Kass
10 (NR) Grant Thornton
14 (19) CBIZ/Mayer Hoffman McCann
15 (18) Moss Adams
19 (20) PwC
20 (17) Deloitte

Seriously, I think Stephen Chipman is putting something in the water at Grant Thornton. Whatever it is, KPMG and E&Y would be wise to get their hands on it. Check out the full ranking if you’re not satisfied. And feel free to share feelings on your firm’s presence (or lack thereof).

Accounting Firms Rankings 2012: Best to Work For: Compensation [Vault]

Accounting News Roundup: Here Comes Little GAAP; China Still Stonewalling; Giant Snails Crawling Around Your South Florida Office | 10.04.11

Proposal Would Create New Accounting Standard-Setter for Private Companies [NYT]
The parent organization of the Financial Accounting Standards Board will propose on Tuesday that a new body be set up to modify accounting rules for private companies, some of which have complained that existing rules are too complicated and costly. The new group, to be called the Small Company Standards Improvement Council, would be able to modify or allow exceptions to Generally Accepted Accounting Principles, known as GAAP, for nonpublic companies. The new group would be led by a member of FASB, ad include all seven members of the accounting standards board, said John J. Brennan, the chairman of the Financial Accounting Foundation, which appoints members of the accounting board. Decisions would be subject to ratification by FASB, which presumably would want to keep variations in standards to a minimum.

No big outflows since trade scandal: UBS CFO [Reuters]
“We saw no material change in net new money flows as a result of the trading incident,” CFO Tom Naratil told an investor conference in London. “We believe there is further upside to our overall performance,” he also said.

SEC Asks Apple CFO for Information on Nokia Patent Litigation Settlement [Bloomberg]
The two mobile-phone makers had been in litigation since October 2009, when Nokia filed a lawsuit accusing Cupertino, California-based Apple of infringing patents. Nokia also demanded royalties on the millions of Apple iPhones sold since the device’s introduction in 2007. Nokia said in March it had 46 patents asserted against Apple in civil lawsuits and complaints lodged with the U.S. International Trade Commission.

U.S.-Chinese Progress on Accounting Is Dealt Setback [WSJ]
U.S.-Chinese negotiations to allow American audit-firm inspectors into China suffered a setback Monday, as U.S. regulators indicated that a planned visit to Washington by their Chinese counterparts to continue the talks has been postponed. Regulators previously said the Chinese were slated to visit Washington this month for a second round of the talks, which began in Beijing in July. The two countries are negotiating on whether to allow inspectors from the Public Company Accounting Oversight Board, the U.S.’s auditing regulator, into China to scrutinize the work of Chinese accounting firms which audit U.S.-traded companies.

Crowe to Merge in Perry-Smith [AT]
Puts CH in the San Francisco and Sacramento markets.


Giant Alien Snails Attack Miami, Though They’re Not in Much of a Rush [WSJ]
Floridians have grown accustomed to invasions of exotic creatures, like the Burmese pythons slithering throughout the Everglades. But residents here are especially grossed out by the latest arrivals: giant African land snails that grow as long as eight inches, chew through plants, plaster and stucco, and sometimes carry a parasite that can infect humans with a nonlethal strain of meningitis.

Fannie Mae Waited on Loan Abuse Action [Bloomberg]
The inspector general of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, released a report today on outside law firms hired by the government- sponsored firm to handle mortgage defaults. Among other things, the report said, Fannie Mae didn’t act on the December 2003 allegation from an unidentified shareholder until it hired a law firm two years later to look into the matter. In May 2006, the law firm reported to Fannie Mae that Florida-based foreclosure attorneys were “routinely filing false pleadings and affidavits.” Fannie Mae didn’t notify its regulator of the findings, according to the inspector general.

Ernst & Young Just Gave the New York Attorney General 22.9 Billion Reasons to Feel a Little More Motivated Today

Because business is good at E&Y. Not PwC good or Deloitte good but good enough.

Ernst & Young today announced combined global revenues of US$22.9 billion for the financial year ended 30 June 2011, compared with US$21.3 billion in 2010, a 7.6% increase. In local currency, revenues grew 5.3%. “We have had a very strong year in each of our four geographic areas. We continue to see very positive reactions to the way we have globalized our organization over the last few years, our investments in emerging markets and the great dedication and commitment of our people,” said Jim Turley, Global Chairman and CEO of Ernst & Young.

Also, Jimbo says that E&Y is “focused on building lifelong relationships with our people. This ensures we have outstanding talent to provide our clients the best service wherever they do business.” So if your heart belongs to show business, fine. But your ass belongs to Ernst & Young.

[via E&Y]