Author: Caleb Newquist

Founding editor, Going Concern.

FASB, IASB Making Damn Sure They Don’t Mess Up Their Revenue Recognition Proposals

Because, god, wouldn’t that be awkward?

The International Accounting Standards Board (IASB) and the US-based Financial Accounting Standards Board (FASB) agreed today to re-expose their revised proposals for a common revenue recognition standard. Re-exposing the revised proposals will provide interested parties with an opportunity to comment on revisions the boards have undertaken since the publication of an exposure draft on revenue recognition in June 2010.

It was the unanimous view of the boards that while there was no formal due process requirement to re-expose the proposals it was appropriate to go beyond established due process given the importance of the revenue number to all companies and the need to take all possible steps to avoid unintended consequences.

Sir David Tweedie admits that, “It is important that we get this right, first time,” and “the boards and staff have undertaken an unprecedented level of outreach to get us to this point, and why we are keen to treble-check that our conclusions are robust and can be implemented with minimal disruption.”

Maybe I’m reading too much into that statement but it sounds as though the Boards may be trying to stave off more nasty letters.

[via FAF/IFRS Foundation]

Broker-Dealers, Prepare Thyselves for More Intrusive Audits

SEC commissioners will vote today on proposed changes to broker-dealer auditing and reporting rules at a meeting in Washington. As with the 2009 rules, which tightened oversight of advisers’ custody of client assets after Bernard Madoff Ponzi scheme was exposed, the new changes increase oversight of the minority of about 300 broker-dealers who hold customers’ cash.

The proposals — which would be opened for a 60-day comment period — would require that a broker-dealer’s internal controls be checked by a registered public accounting firm and would let regulators examine the broker-dealer’s audits. Broker-dealers would have to file quarterly reports describing whether they have access to client money and how any access is controlled. [Bloomberg]

Accounting News Roundup: GM’s Lutz: Numbers Aren’t All Bad; Backpack Blowup Outside IRS; Barry Minkow’s Stripes | 06.15.11

Bob Lutz: I’m Not an Anti-Finance Guy [CFO Journal]
The former General Motors vice chairman has got a knack for numbers, and claims he even put a brake on unnecessary costs occasionally. But he’s got a beef with executives who focus solely on budgets and spreadsheets, instead of focusing on the product and on consumers. And he thinks that’s the biggest cause of Detroit’s downfall – and that Detroit is now back on the right track.

Pandora Prices Its I.P.O. at $16 a Share [DealBook]
Pandora Media on Tuesday priced its initial public offering at $16 a share, above its recently raised target range. The company, whose shares will start trading on the New York Stock Exchange on Wednesday under the ticker “P,” has raised $234.9 million, valuing the business at $2.6 billion.

Firms Squeezed on Tax Bills [WSJ]
During the financial crisis, hosts of small companies fell behind on their taxes for the first time, accountants and lawyers say. Their timing couldn’t have been worse.

Detroit bomb squad detonates suspicious package left outside IRS building [NYP]
Bomb squad officers in Detroit blew up a suspicious package early Wednesday outside a building that houses the Internal Revenue Service, the FBI and other federal offices. A black backpack that was found on the steps of the building around 4:30 am was blown up by bomb squad agents outside the building at around 6:45am after an X-ray unit showed it contained a power source.

What Happened to Barry Minkow? [Grumpy Old Accountants]
Zebra. Stripes. Or is it a tiger?

Happy Flag Day! 14 States Exempt Flags from Their Sales Taxes [Tax Foundation]
FYI for next year.

Crooked accountant rips off £450,000 from Coatbridge firm in just four months [Daily Record]
Sue Sachdeva is not impressed.

Deloitte Tax Expert Makes Statement That He’s Likely to Regret

“If there are Republicans who break with Grover Norquist’s position, I think that’s an important thing,” said Clint Stretch, managing principal of tax policy at Deloitte Tax LLP in Washington.

“I think it signals a willingness on their part to have the fight with him over whether every tax expenditure is a legitimate reduction in effective tax rate, or whether there are some that should be regarded the way they regard spending programs.” [Bloomberg, Earlier, Earlier]

BDO Slims Down to Four Regions, Names New National Heads of Assurance and Tax

Jay Duke will head up the assurance practice while Doug Sirotta will lead tax. They’ll both report to the most interesting CEO in the world.

The business line regional heads (chart below), who formerly reported to Jack Weisbaum, will now report report to Duke and Sirotta. Speaking of those regions, the Southeast Region (Florida, Georgia) will merge into the Atlantic and the Southwest (Texas and Tennessee) will join the Central. It all goes down on July 1. Messrs. Duke and Sirotta will give up their seats on the BDO Board of Directors to take their new national roles (demotion?).

SOMEWHAT RELATED: Christopher Tower, the head of assurance in the West, was one of the brainchildren behind the “Tattle on a Headhunter, Win a $5 Starbucks Card” idea. [BDO]

Region Assurance RBLL Tax RBLL
Northeast Alan Selitti Robert Pedersen
Atlantic Wayne Berson Wayne Corini
Central Steve Ferrara Paul Heiselmann
West Christopher Tower Rocky Cummings

Survey: Accountants’ Jobs Make Them Sick

Literally.

Almost two-thirds (63%) of accountants felt their firms should do more to support health and wellbeing, according to a new survey. More than half (55%) said their stress levels have increased over the past 12 months and 68% said their jobs have made them ill, citing stress as the main cause, Sovereign Health Care reports.

Chief executive Russ Piper said higher workloads combined with pay freezes have hit morale and dented employee contentment, noting 53% of accountants said they would change jobs for a better benefits package on the same salary.

Accountants bemoan unfeeling employers [Accountancy Age]

Accounting News Roundup: More Trouble for Chinese Companies; SCOTUS Won’t Hear Suit Against E&Y; LarsonAllen’s Latest Buy | 06.14.11

S.E.C. Seeks to Halt Sales of Stocks of 2 Chinese Companies [NYT]
Investigators say that China Intelligent Lighting and Electronics and China Century Dragon Media failed to disclose that their independent auditors had quit after questioning the accuracy of financial statements, according to separate orders released Monday. The S.E.C. is seeking a so-called stop order to keep the firms and shareholders from selling stock under the faulty statements, the agency said in a statement.

High Court Denies Suit Against E&Y Over Time-AOL Deal [Law360]
The U.S. Supreme Court on Monday declined to hear an appeal brought by an AOL Inc. investor alleging that Ernst & Young LLP approved tainted financial statements related to Time Warner Inc.’s merger with AOL. In rejecting the petition for certiorari, the high court dashed AOL investor Dominic Amorosa and co-petitioner attorney Christopher Gray’s claims that the Second Circuit failed to properly apply the Securities Litigation Uniform Standards Act of 1998 when it dismissed the fraud suit in February. The decision brings an end to 2003 suit claiming that Ernst & Young, the independent auditor for AOL, Time Warner and the merged company, engaged in fraud and abetted the companies’ fraud when it issued audited financial statements approving the companies’ allegedly faulty accounting.

The Importance of Being Audited [NYT]
When a company’s auditors resign and disclose that prior financial statements “should no longer be relied upon,” investors should head for the hills because there is a very good chance fraud has been discovered. Unfortunately if that company is a Chinese operation that obtained an American listing through a so-called reverse merger, then it is probably too late to salvage much if anything from the investment.

Candidate Johnson: I’d abolish the IRS [DMR]
“I think the biggest issue facing this country right now is that we are bankrupt and on the verge of a financial collapse,” Johnson told about 75 people at an Iowa Tea Party event at the Elks Lodge here. Johnson, who announced in April that he would seek the Republican nomination, predicted the nation’s financial troubles will be manifested in a bond market collapse. He vowed to fight for a balanced federal budget to avert such a calamity, adding he would replace federal personal and corporate income taxes with the so-called Fair Tax, in essence a national sales tax.

Iowa Senator Chuck Grassley “Clings Tightly” to His State’s Ethanol Subsidies [JDA]
As Adrienne might say, “WTFC?”

Is Green Mountain Coffee Roasters Fudging Its Reserve Numbers? [WCF]
Maybe! Or it’s simply that math isn’t someone’s strong suit.

LarsonAllen buys Seattle accounting firm [MBJ]
Lockitch Clements & Rice PS joins Club LA.

What Can Be Purchased at the McGladrey Store?

There are a few things that you take for granted when working at a public accounting firm. First, your superiors will take you to nice lunches. This practice starts at the top and trickles down to the lowliest associates getting approval to throw steaks at interns. Second, you get a computer. It may not be the greatest piece of technology you’ve every used but rest assured, you won’t be crunching numbers using a pencil and paper. Third, you get tchotchkes. Tons of them. Pens, Nalgenes, poorly knit polos. The works. All of the firm swag your little heart desires can be yours. So it’s especially shocking to learn that McGladrey has a “McGladrey Store,” where items can be purchased. We don’t have a copy of the mail-order catalog but it’s safe to assume that there are items emblazoned with “McGladrey” in ample supply.

I learned of this “store” because Mickey G’s is rolling out a “Work Smarter” initiative so that the firm’s employees can maximize their time doing “high-value” work. What “high-value” entails is not entirely clear but presumably it doesn’t involve doing “research on blogs.” ANYWAY, McG boss C.E. Andrews emailed the troops to encourage them to take an online training to learn a few “Work Smarter” tips and to get the creative juices flowing so that they can submit their own “Work Smarter” ideas to the brass. For the first 25 employees that manage to throw out ideas that aren’t completely awful, they will receive “$50 to spend at the McGladrey Store.”

After the training, you will probably find yourself full of good ideas on how McGladrey can Work Smarter. Don’t keep them to yourself! Share them through our Lean thinking website and be eligible to win prizes. The first 25 people who submit an actionable idea will win $50 to spend at the McGladrey Store.

Our tipster in this matter, expands with some details:

[T]his “lean fundamentals” initiative seems irritating similar to KPMG’s “Next Step” program that I’ve seen come across your website. The dangling carrot of $50 in McGladrey bucks (cash value: 1/100 of a Monopoly bill) is particularly patronizing. Just another example of the cheapskate culture that seems to ooze from the brass at Mickey G’s these days…unless of course we’re talking shelling out for putting green-sized cakes and headlining golf tournaments that take place during the freak show of the PGA season (aka the”Fall Series”).

Unfortunately, Oanda doesn’t have a exchange rate for “McGladrey bucks” so there’s no way for us to confirm this valuation at this time. Regardless, it’s still not obvious if the $50 is enough to get you a stress ball, let alone a chance to take Natalie Gulbis out for drinks. We’d love to see a product list with prices in order to confirm/disconfirm some of our suspicions, so do get in touch with any particulars.

Number of U.S. Expatriates Still Growing

Had it up to here [bridge of your nose or so] with taxes in the United States? Giving more thought to GTFO and never coming back? You’re not alone.

More people expatriated from the U.S. in the first quarter of 2011 than in the first quarter of 2010. This after the increase in Q1 of ’10 was more than double than Q1 of ’09. Perhaps this is due to some sort of a “I need to get the hell out of this country” resolution but you could also assume that these folks don’t align themselves with the Patriotic Millionaires.

[ITB via TaxProf]

Fraudbusters Get a Lesson in Internet Stalking

Yesterday I sat in a session at the ACFE Fraud Conference and Exhibit entitled “Effectively Using Social Networks and Social Media in Fraud Examinations” with a few hundred [?] fraudbusters and I got the impression that few people in the room were social media savvy (in the stalk-y sense, anyway). I came to this conclusion after watching most of the hands in the room go up when asked “who thinks social media is a waste of time?” and saw nearly same amount of hands raised when asked “do you have some sort of social network presence?”

Cynthia Hetherington, President of Hetherington Group, described herself as “[A] librarian, a technologist and licensed private investigator. So, I’m a nerd, I’m a geek and I’m a dick,” was the speaker for this particular session and a lot of her talk introduced the crowd to the idea of stalking people on the Internet. She knew her crowd well, as a joke about Laverne & Shirley’s apartment got plenty of laughs, while a quip about Snooki got crickets. This reinforced my suspicion that the idea that of curating information about financial crooks using Facebook and Twitter was new to many in the room.

Now, the majority of people listening may have known it was possible to find partially-nude pics on someone’s Facebook profile or Twitter account (which she demonstrated in one non-Anthony Weiner example) but maybe they hadn’t considered that they could learn a lot of other useful information about someone they were investigating.

In short, Ms. Herrington explained to the biz casual crowd that you can find out a lot of information about a person just by poking around their social media accounts. Whether it’s Facebook, Twitter, or LinkedIn, you can learn someone’s likes, dislikes, their political leanings, where they’ve lived, who their friends are, etc. and use that information to build a profile, analyze behavior or in some cases, find out where someone maybe hiding.

What does all this mean? Opportunity my friends. If you fancy yourself social media and Internet savvy, you probably have a leg up on many of the vets in the fraud and forensics business when it comes to poking around the Web and finding information on people of interest to you. Sure you may not have their years of investigative expertise, extensive contacts or an aging wardrobe but you may have successfully Web-stalked ex-significant others, crushes and completely random people to learn things that they’ve volunteered into cyberspace. And here you thought your creepy behavior was completely worthless.