Author: Caleb Newquist

Unhappy Workers Stay In Current Jobs, for Now [WSJ]
Only 1.4% of employees voluntarily left their jobs in April, the most recent month for which data are available, down from seasonally adjusted monthly rates of more than 2% before the recession started, according to the U.S. Department of Labor. Overall, voluntary turnover is still nearly at its lowest point since the Labor Department began to track it in 2000.

Merck Can’t Recoup $473 Million in U.S. Taxes, Court Rules [Bloomlough argued that funds it received as the result of two interest-rate swap transactions weren’t taxable as proceeds of loans from foreign subsidiaries and that the company was being treated unfairly by the IRS, which hadn’t demanded the same taxes from other companies that were in similar situations. U.S. District Judge Katharine Hayden ruled after a five- week non-jury trial in 2008 that Schering-Plough failed to prove it deserved a refund, and in April 2010 she denied the company’s request for a new trial. The U.S. Court of Appeals in Philadelphia upheld Hayden’s ruling today, saying the transactions were loans and that the IRS may treat taxpayers differently.

A Reboot for Internal Controls [CFO Journal]
A group of accountants and corporate executives met in New York on Monday to hash out some of the details of a proposed update to the nearly twenty-year-old internal control framework created by the Committee of Sponsoring Organizations (COSO). The reboot is expected to add in controls for information technology commonly used in business operations today, such as email and automated work processes, as well as address more theoretical issues, like how risk management and internal controls should work together. The update will also incorporate newer ideas about governance to better define the current role and responsibilities of audit and compensation committees.

Thomson Reuters Acquires CorpSmart From Deloitte [MW]
CorpSmart provides multinational corporations (MNCs) in South Africa with intelligent corporate tax compliance software. Using this web-based solution, MNCs are able to prepare monthly, quarterly and annual income tax computations as well as file South African IT14 tax returns.

Mandatory Auditor Rotation — Further Thoughts on PCAOB Chairman Doty’s Bad Idea [Re:Balance]
Jim Peterson continues to pick apart rotation.

Insurers fear volatility of IFRS ‘black hole’ [Accountancy Age]
Insurers have met to discuss fears surrounding the possible impact of phase II of International Financial Reporting Standards, saying the move “would introduce very significant but really meaningless volatility.”

Fraud at senior management level is highlighted in KPMG report [Guardian]
When it comes to “white collar” crime, finance directors, chief executives and other senior management are far more likely to be involved in fraud – such as the mis-statement of financial results, theft and expense abuse – than junior staff. The economic downturn has also made it a lot easier to commit fraud, according to research by KPMG, which warned that scams go undetected for longer.

Japanese manufacturers ‘need more time’ for IFRS switch [Accountancy Age]
The Japanese Financial Services Agency and Financial Accounting Standards Federation initially proposed a three-year switch over period, after which use of IFRS would become mandatory for listed companies. They argued holding off on IFRS adoption would make Japanese companies look guilty of failure to disclose adequate information at a time when many other countries were switching. However, last month 22 companies and organisations – including heavyweights Mitsubishi, Nippon and Toyota – wrote to the head of the FSA asking for more time, and describing the change over as “a significant burden.”

Lawyers and Accountants Once Put Integrity First [NYT]
It will take decades to fully untangle the causes of the 2008 financial crisis, but as our economy fitfully heals, it would be prudent to ask whether lawyers and accountants offer the same protection against corporate misconduct that they once did.

Dems are lukewarm on Obama’s push for a payroll tax holiday [The Hill]
“The extended tax credits will help stimulate the economy, and giving tax credits to businesses will in fact help with the unemmes Clyburn of South Carolina, the House’s No. 3 Democrat, said on MSNBC on Wednesday. But other Democrats and liberals say the current payroll tax break for employees, which passed Congress in December, has not given the economy much of a spark. They also expressed concerned about what augmenting the holiday would do to both the revenue stream and Social Security, which is funded by the payroll tax.

Companies Push for Tax Break on Foreign Cash [NYT]
“For every billion dollars that we invest, that creates 15,000 to 20,000 jobs either directly or indirectly,” Jim Rogers, the chief of Duke Energy, said at the conference. Duke has $1.3 billion in profits overseas. But that’s not how it worked last time. Congress and the Bush administration offered companies a similar tax incentive, in 2005, in hopes of spurring domestic hiring and investment, and 800 took advantage. Though the tax break lured them into bringing $312 billion back to the United States, 92 percent of that money was returned to shareholders in the form of dividends and stock buybacks, according to a study by the nonpartisan National Bureau of Economic Research. This money comes from overseas operations and in some cases accounting maneuvers that shift domestic profits to low-tax countries. The study concluded that the program “did not increase domestic investment, employment or research and development.”

Happy Father’s Day to 1.8 million single dads & their head of household tax status [DMWT]
Ties not mandatory.

D.A.: Man stole $110,000 tax refund deposited in error [OCR]
A Laguna Beach man who received someone else’s $110,000 federal tax refund in error spent the money on foreclosure debt and student and car loans, prosecutors said.

Chinese Firms Need to Open Up Books [WSJ]
The Securities and Exchange Commission is investigating accounting and disclosure issues at a number of U.S.-listed Chinese companies that acquired backdoor listings through so-called reverse mergers, and even top-name Chinese companies are inviting new scrutiny. Renren Inc., a social-networking site that launched its shares to much fanfare in early May, now trades at about half its IPO price. Renren itself stirred controversy when it lowered the growth rate of its user base without explanation in its IPO prospectus and the head of its audit committee resigned just before the listing. Shares of Toronto-listed Sino-Forest Corp. have plunged 80% since late May after a short seller alleged problems in the forestry company’s accounting, which the company denies. Hong Kong-listed Chinese companies, too, are drawing new scrutiny over their accounting. Not all Chinese companies are shady. But investors are right to ask: How do you know which aren’t?

An Actor, Inventor, Accountant, and Now, a 9/11 Victim [NYT]
Mr. Borg died last Dec. 15 of complications of pulmonary sarcoidosis, an inflammatory disease of the lungs. The New York City medical examiner ruled that he had died from inhaling toxic substances in the dust cloud thrown up by the collapsing twin towers, and on Friday, Mr. Borg, who was 63, became the 2,753rd official victim of the Sept. 11 attack on the trade center.