Author: Caleb Newquist

Founding editor, Going Concern.

Accounting News Roundup: There Is a Substantial Doubt as to Osama bin Laden’s Ability to Continue as a Going Concern | 05.02.11

Bin Laden Is Dead, President Obama Says [NYT]
Osama bin Laden, the mastermind of the most devastating attack on American soil in modern times and the most hunted man in the world, was killed in a firefight with United States forces in Pakistan on Sunday, President Obama announced. In a dramatic late-night appearance in the East Room of the White House, Mr. Obama declared that “justice has been done” as he disclosed that American military and C.I.A. operatives had finally cornered Mr. bin Laden, the Al Qaeda leader who had eluded them for nearly a decade, and shot him to death at a compound in Pakistan.

Satyam Investors’ U.S. Lawsuit OvPwC for $25.5 Million [Bloomberg]
Investors in Satyam Computer Services Ltd. (SCS) settled a lawsuit against PricewaterhouseCoopers LLP for $25.5 million related to its audit of the Indian firm that included a $1 billion overstatement of assets. Satyam, the software exporter embroiled in India’s biggest corporate fraud probe, reached a $125 million settlement in February in the class action in New York. Satyam agreed last month to pay $10 million to settle a U.S. Securities and Exchange Commission lawsuit.

The Osbournes — 357,000 More Tax Problems [TMZ]
Clearly the moral of the story is, don’t cancel meetings with your accountants.

Ohio accounting students meet fraud expert [AW]
The old cliché, “If you want to build a better hen house, ask a fox,” rang loud and clear today at The Ohio State University Fisher College of Business. You’re probably familiar with Enron, WorldCom, and Madoff scandals, but do you remember the ZZZZ Best Carpet Cleaning fraud from the 1980s and the man behind it, Mark Morze? Morze was found guilty of stealing $100 million and creating more than 10,000 phony documents and several fake tax returns. None of the auditors, lawyers, and bankers who were charged with examining the books detected the fraud. This legendary tale of deception is now must-read material for accounting and business students, helping them prepare to be able to make decisions that will shape their own careers and lives.

Is Going Public Going Out of Style? [CFO]
No matter how you slice it, the number of publicly traded companies in the United States continues to fall. On the major exchanges, there were 5,091 companies, including foreign-based ones, listed at the end of February, a 2% drop from 2009 and a 42% decline from the peak of 8,823 in 1997, according to new data from Grant Thornton. Looking across all U.S. exchanges, including the over-the-counter (OTC) market, the number of U.S.-based companies has fallen more than 30% since 2000, according to Audit Analytics.

Some Closer than Others: Inside The Berkshire Hathaway Annual Meeting [Forbes]
Aka: Francine goes to Omaha.


Deloitte’s leader makes her case for diversity in the executive suite [Boston Globe]
With less than a month to go as chairman of Deloitte, Sharon Allen continues making the rounds.

E&Y awaits ruling on challenge to ICAI [FT]
Ernst & Young is due to learn this month if it can proceed with a legal challenge that could derail an investigation into its auditing of Anglo Irish Bank, the property lender that had to be rescued by the Irish government in 2009. The Irish arm of the global accountancy network has objected to the way that the Institute of Chartered Accountants in Ireland has probed its work at Anglo Irish before its nationalisation.

New H&R Block CEO Cobb gets $900,000 sign-on bonus [KCBJ]
H&R Block Inc. will pay new CEO William Cobb a base annual salary of $950,000 on top of a $900,000 cash sign-on bonus, plus the potential for millions of dollars in additional compensation. Former CEO Alan Bennett will stay with H&R Block full time until July 31, then get a monthly fee of $15,000 under a one-year consulting contract, according to a Friday filing with the Securities and Exchange Commission. After that, he’s eligible for a one-time cash bonus to be determined by the board.

Who Would Have Guessed That Texas CPAs Would Oppose the Elimination of Oil and Gas Tax Breaks?

Next thing you know you’ll hear about CPAs in Iowa (with the exception of one with whom we’re acquainted) opposing the repeal of ethanol credits.

The Texas Society of CPAs’ Federal Tax Policy Committee addressed the issue in its “Analysis of Legislative Proposals to Repeal Certain Tax Treatments of Domestic Oil and Gas Exploration and Development”.The committee agrees that reducing the deficit is of utmost importance, but said that any effort to cut tax incentives for oil companies and raising taxes on oil and gas exploration and development should be weighed against its potential to exacerbate the current underemployment issue, and the need for a secure source of energy.

As noted in the analysis, the committee said it believes repealing tax benefits and allowances for the industry could adversely impact the state’s oil and gas industry, and the economies of Texas and the U.S.

Texas CPAs Oppose Elimination of Oil and Gas Tax Breaks [AT]

Wanted: Auditors for Inventory Count Who Won’t Get Queasy at the Sight of a Few Dead Chickens

Did I say a few?

The Alabama Poultry and Egg Association estimated that five million chickens probably died in the tornadoes, which slammed the northern part of the state, where the industry is centered.

Not to worry though, you’ll still be able to get your McNugget™ fix:

That alone isn’t enough to disrupt chicken supplies nationally. The state usually produces about 21.5 million chickens in a week. The U.S. produces roughly nine billion chickens annually.

Storms Destroy Hundreds of Poultry Houses [WSJ via JDA]

Let’s Speculate About: Grant Thornton’s ‘Major Brand Repositioning’

As we mentioned this morning, Accounting Today reported – in an exclusive with Stephen Chipman! – that Grant Thornton is “planning a major marketing campaign later in the year to reposition the Chicago-based firm around the world.” Having had the luxury of watching a rival firm go through the process, we can’t help but think that GT won’t make as bold of a change but we’d love to be wrong about that.


Chipman told AT that GT wasn’t trying to jam into the Bigs saying, “We made it clear that we’re not building a firm to audit GE. Let’s get clear about the verticals and the skills.” So if you take SC at his word what exactly will this major brand repositioning involve? Some initial thoughts:

1. Underpants Gnome Accounting will become a specialty advisory service.

2. Poaching a certain golfer from a competitor.

3. Opting for pastel pinks and blues in a new logo to provide an “alternative.”

4. Four words: Gary Busey, Tax Partner.

5. Your ideas.

Accountant Demonstrates Poor Athleticism in Most Unfortunate Way Possible

Today in doing a disservice to accountants everywhere, Matthew Benjamin Mundy, a double-entry maven in Australia, was fined $500 for accidentally hitting an off-duty federal police officer with an egg.

Apparently MBM was attempting to hit his friend with the ellipsoidal embryo container, missed, and hit the officer who was sitting at a café. Accidents happen but Mundy’s employer better hope his professional misfires are far less material. [ABC]

PwC Partner Has Mixed Feelings on the Royal Wedding

As you may have heard, there was a wedding today in London. It just so happened that this little event landed smack-dab in between Easter and May Day which has resulted in a lot of extra time off for our friends across the pond. While the majority of people are using this alignment of holidays to take long vacations or extended benders, a few people still have to get some work done. The good news is that with so many people away you can enjoy elevator music in solitude, whistle in the john and lose the pants behind the desk in one’s office and not feel anxious that someone could walk in at any time.

The bad news, as one PwC partner explained to the Journal, is that the lack of subordinates can sometimes hinder productivity:

“I am being super efficient while everyone is away, but I keep running into the fact that people I need to get a hold of are not here,” said Hemione Hudson, a partner in the banking division of PricewaterhouseCoopers LLP in London.

PWC’s London offices would normally have more than 2,500 people passing through on a given day, says Ms. Hudson, but this week, there have been far fewer. Many employees took the opportunity to get away after a busy audit season, she says. That’s meant quicker elevators and no lines for coffee, she says.

Among those remaining behind are her boss, PWC Senior Partner, United Kingdom Ian Powell and “many of the executive board.”

Still, “it’s not so great for business’ bottom lines,” Ms. Hudson points out. April has felt like a very short month, even for those working throughout, she says.

Makes you wonder why people feel pressure to work so much, doesn’t it?

U.K. offices find pros, cons to holiday week [WSJ]

Accounting News Roundup: Schapiro Aide Leaving for PwC; Grant Thornton Getting a Makeover?; Extra Important Hand-washing | 04.29.11

Schapiro Aide Said to Be Leaving SEC for PwC Accounting Firm [Bloomberg]
Kayla J. Gillan, a senior adviser to U.S. Securities and Exchange Commission Chairman Mary Schapiro, is resigning to take a job at PricewaterhouseCoopers LLP, according to people familiar with the matter. Gillan will be a principal in a new group at the firm focusing on regulations affecting auditing firms, according to one of the people, who spoke on condition of anonymity because the move hasn’t been announced.

Grant Thornton Plans Global Brand Repositioning [AT]
Grant Thornton LLP is planning a major marketing campaign later in the year to reposition the Chicago-based firm around the world. “Look for a major brand repositioning for us in the fall,” CEO Stephen Chipman said in an interview.

GE’s Immelt resigned from NY Fed board last month [Reuters]
Immelt had been a member of the New York Fed’s board since January 2006, helping provide anecdotal input to policymakers about developments in the U.S. and global economy. “I am, with great regret, tendering my resignation as a member of the Board of Directors of the Federal Reserve Bank of New York given the increased demands on my time,” Immelt wrote in a letter to New York Fed President William Dudley dated March 9.

Crocs Q1 beats estimates, but Q2 profit view falls short [Reuters]
The company also said it named Jeff Lasher as its new chief financial officer. He was Crocs’ principal accounting officer and interim principal financial officer since January 2011.


House Republicans grill IRS on healthcare reform funds [The Hill]
Republicans on the Ways and Means Committee wrote to IRS Commissioner Douglas Shulman on Thursday demanding to know how much money the Internal Revenue Service is getting from Democrats’ healthcare reform law. The law created a $1 billion Health Insurance Reform Implementation Fund, and the letter alleges that the IRS has already received “tens of millions of dollars from this fund to implement parts of the health care overhaul.” The funding is believed to be on top of the $473.3 million the IRS would get in healthcare related funding under President Obama’s 2012 budget.

William’s Royal Giggle Fest [TDB]
According to The Guardian, the workers who made the dress had to wash their hands every 30 minutes to keep the lace clean. As Kate entered Westminster Abbey, the cameras respectfully panned away from Prince William, who seemed to suffer an attack of the giggles as his future wife made her way up the aisle. When the couple were finally face to face, William mouthed, “You look beautiful,” and a billion hearts melted around the globe.

Have You Entered Our End of Busy Season Giveaway?

I’ve been convinced to inform you (probably not for the last time) that there’s only one week left to enter our End of Busy Season Giveaway. If you’re not interested in a chance to win an iPad, a travel voucher, Best Buy gift cards or GC tchotchkes, feel free to stop reading.


Once again, here’s the loot up for grabs:
• One Grand Prize of an iPad 2 valued @ $500
• 1 Airline Gift Card valued @ $300
• 2 Best Buy Gift Cards valued @ $100
• 20 Going Concern Prize Packs valued @ MTM

If you’re signed up than you have nothing else to do but grab your nearest rabbit’s foot, horseshoe or Deloitte CEO’s clean scalp. For those who are new or suffering from STML, entry is easy – just jump over the You Survived Another Busy Season Giveaway page and sign up for the newsletter and you’re in the game.

Tony Little, Gazelle™ and Ponytail Enthusiast, Duped by Former Accountant (Allegedly!)

Mark Schreiber, a former controller of fitness guru Tony Little’s business empire, has been accused of embezzling nearly $600k by forging Little’s signature. Apparently Schreiber was involved in some “online horse wagering” which must not have gone too well since he ended up…stealing money (allegedly).

According to T. Little’s lawyer, Latour “L.T.” Lafferty, the $600k is pocket change to his client but he’ll be damned if they aren’t going to pursue every means necessary to get every cent back:

“We’re certainly going to pursue any legal avenues to recover every cent that was taken from Mr. Little,” said his attorney, Latour “L.T.” Lafferty. “It doesn’t impact the financial well-being of Mr. Little. But certainly it’s a significant blow and a serious breach of Mr. Schreiber’s place as controller of his business operations.”

Since TL is a man of health and fitness and not of numbers, it’s not surprising that he’s found himself in this conundrum but he did have his suspicions:

Little realized something was amiss last year, according to court records, when he moved to fire Schreiber as a controller overseeing his Pinellas Park companies’ finances. He was dissatisfied with Schreiber, records show. He set up a July 27, 2010, meeting.

But before they could meet, Schreiber sent an e-mail: “I quit.”

After Little’s new accountant had been poking around for awhile, it was pretty obvious things weren’t kosher. They called in a forensic expert who discovered that 152 checks were drawn over 11 months to the sum of $583,379.

Right now the “degenerate gambler” motive seems to be the most plausible scenario, although it’s entirely possible that Mr Schreiber was sick with jealousy over the sexual tension between Little and his infomercial leading lady, Darla Haun. We’ve presented some footage that will likely be introduced into evidence during Schreiber’s trial:

It’s Unlikely You’ll Hear More Rumors About a Grant Thornton and Moss Adams Merger

That’s because a source close to GT has told us “the deal with Moss Adams is dead.”

You’ll recall we first heard this rumor back in January which was denied by Moss Adams internally (GT was its typical mute self).

As for the why, our source told us, “The feedback from the Moss Adams board was that the MA partnership would not adequately support the merger.” Whether or not that’s true doesn’t take away from the fact that MA squeezed by GT in the GC Coolest Accounting Firm bracket and, thus, no MA partner worth their salt would want to join forces with GT and have to decipher hand-written notes from Stephen Chipman.

Despite this setback, that doesn’t mean GT isn’t on the prowl but we’ve got no idea who they might have their eye on, so we’d invite you to speculate on who that might be and get in touch if you know anything.

Dilemma: Administrator Concerned About Partners Giving Significant Others No-show Jobs

Today in predicaments from across the pond, a concerned employee wonders if a couple of partners who have given their wife and girlfriend no-show jobs are up to some financial shenanigans. Of course this prospecting employee is thinking about approaching said partners about this. What could go wrong?

The partners of the LLP I work for have added their wife and girlfriend to the payroll of the company even though neither said wife or girlfriend actually work here. I believe the reason being is to reduce profit, partner remuneration etc to ultimately reduce the amount of tax paid by the partners at the end of each financial year.

The ‘salaries’ are fairly low (£16,500 [$27k USD] and £13,000 [$21.4k USD] per annum) and Tax and NI etc is processed as normal through PAYE. One of the ladies even has student loan deductions. Periodically each lady will have a large ‘bonus’ of around £15,000. I assume the payments go directly in the wife/girlfriend’s bank accounts.

I’m sure there must be some sort of law against this as it seems, to me, too obvious to be a loophole. Does anyone one know what these laws are and the repercussions should the partners get caught?

I work as an administrator for the company and rely solely on accounting and payroll software and therefore only have very limited knowledge on the subject. I am hoping to approach the partners on the matter so any help/information would be greatly appreciated 🙂

Maybe this “administrator” has too much time on their hands and is simply jumping to conclusions (which we applaud) but then again, a no-show job is a no-show job. They are violating NCAA rules or anything but for the puritanical types this could seem a little sketchy.