Author: Caleb Newquist

Founding editor, Going Concern.

Accounting News Roundup: KPMG Survey: The Worst Is Over for U.S. Economy; Changes to COSO Coming?; Reasons You Hate Your Job | 03.28.11

Who Will Rescue Financial Reform? [NYT]
A direct assault on Dodd-Frank would be so blatantly biased toward banks that it would be sure to provoke a public backlash. So the Republican plan is to delay and disrupt reform. The effort is partly ideological — an insistence that regulation is unnecessary, no matter the evidence to the contrary. It is also a campaign fund-raising ploy, because Wall Street will reward the opponents of reform. Of course, Democrats are themselves not indifferent to Wall Street campaign cash, which raises the question of how effectively they will counter the Republicans’ aims.

US Economy Over the Worst: KPMG Executive Surv=”http://www.cnbc.com/id/42277311″>CNBC]
In another sign the American economy is on the comeback trail, a new survey from KPMG shows optimism is improving among U.S. manufacturing and service industry executives. Executives in both key sectors say the worst is behind us.

Why No Warnings? Investors Press Audit Regulator [Forbes]
Francine McKenna rounds up the haps from last Thursday’s Standing Advisory Group of the PCAOB meeting.

COSO Contemplates Expansion of 5 Component Internal Control Framework Into 20+ Principles; Potential Impact On Sarbox 404 Assertions [FEI]
In an update provided at the March 24, 2010 PCAOB Standing Advisory Group meeting, COSO Chairman Dave Landsittel described COSO’s current project to modernize and update its 1992 Internal Control- Integrated Framework. COSO plans to issue an Exposure Draft of a proposed revision later this year, followed by the release of two final documents in 2012.

The Washington Post Peddles Good TARP PR [JDA]
Check it out mostly for the graphic.


Networks, Advertisers Call New Plays Amid NFL Strife [WSJ]
Since the National Football League locked out its players about two weeks ago, some cable and broadcast networks have been preparing contingency plans to air alternative programming in case games are canceled this fall. Advertisers, who spend roughly $3 billion a year on commercials that run during NFL games, also are forging new plans and considering buying commercial time on other marquee programming should the work stoppage continue into the football season. Some advertisers already have bought commercials on Viacom Inc. television networks as a backup.

AstraZeneca settles tax dispute and saves $1bn [Guardian]
AstraZeneca has settled a long-running tax dispute in a deal which sees HM Revenue & Customs refund tax payments that will now go to America instead. The pharmaceutical company announced on Monday morning that US and UK tax authorities have reached an agreement over where it declares certain profits. The dispute over so-called “transfer pricing” dates back to 2002, and was the most significant of AstraZeneca’s ongoing arguments with tax authorities.

SEC Filing: Georgia Gulf Dismisses Deloitte & Touche; Engages Ernst & Young [CityBiz]
Georgia Gulf may not have been crazy about being told they have a material weakness.

What You Hate Most About Your Job [AOL]
“Everything” is a little too broad.

Plante & Moran Encourages Employees to Make Tax Season a Family Affair

Plante & Moran, PLLC is encouraging its accountants and staff to bring their children to work on Saturdays during tax season, a tradition the firm has practiced for almost 20 years. The certified public accounting and business advisory firm offers free Saturday daycare in 11 of its Midwest offices – including Grand Rapids – during the height of tax season. Children ages 6 months to 18 are welcome to attend the drop-in program, which offers games, crafts, snacks, activities, movies – and an opportunity to enjoy lunch with Mom or Dad. [P&M]

Future Ernst & Young Intern Wants to Know How to Land on a Prestigious Engagement

Welcome to the slightly-less-mad-Friday edition of Accounting Career Emergencies. In today’s edition, a future E&Y intern only wants to work on the sexiest tech clients that the House of Turley has to offer. How can one ensure that he/she lands only on the clients worth bragging to their peers? Let’s find out!

Caught in a busy season love-triangle (audit-cleaning crew-admin)? Not sure if your auditor is being honest with you? Upset over a rival’s shady moves? Email us at advice@goingconcern.comDear Going Concern,

I am a future 2011 Assurance Intern for EY. Do you suggest emailing my contacts in the firm regarding preferences as to industry and clients? They know from my interviews that I prefer tech clients, but is it wise to go into greater detail? I don’t want to seem entitled, but I also don’t want to get stuck on some crappy client because everyone else voiced their preferences and got spots at Apple, Google, Facebook, etc. Suggestions on how to voice such opinions would be welcome also.

– Future Staff 1


Dear FS1,

I like it when someone knows exactly what they want but I feel that you need some perspective. Let me start by answering your question directly. I don’t see anything wrong with voicing your interests in the clients you mentioned to your contacts at E&Y, especially if those contacts work on those engagements. If none of the people that you met during the recruiting process serve those clients, attempt to get in touch with someone via the contacts you did make. “The squeaky wheel gets the grease” or “the hooker won’t land the john in the Mercedes across the street if they don’t yell at him” certainly applies here.

Now for that perspective I mentioned – Apple, Google, Facebook are all sexy names and are obviously prestigious clients but let me be clear, these engagements’ allure is extremely deceiving. When I was a resident in the House of Klynveld, I worked on one of the most prestigious private equity clients the firm had. I landed a spot on this team because this is exactly what I wanted at the time, I spoke up and with some luck, I got what I asked for. It was great experience and I worked with a lot of talented people but the majority of the time, I wouldn’t say it was a pleasant experience. The hours were long, there were lots of political games and it was a GIANT rumor mill. Now if you think you can thrive in such an environment, then I say go for it but in my experience it wears on most people. I would expect the teams you mentioned would be a similar experience.

However, as an intern, I’d expect that you’ll be mostly on the fringes of most of the negative aspects of working on such a team because the firm wants you to think it’s a great place to work and managers and partners on those clients want you to think it’s a great engagement. And because you want a full-time job someday, you’re going to do your best to impress the wrinkled pants off these people. If you accomplish that feat, they will want you back on their team. The problem is that once you’re on that team, it may be very difficult to get off that team when you discover that it is Hell on Earth. Now maybe you’ll get mentored by one of those I’m-working-my-ass-off-for-very-little-gratitude-because-I-want-to-get-ahead-in-this-firm types and you’ll really like it. But if that doesn’t sound like your cup of tea, then learn as much about the team while you are an intern to determine if you want to work on it or a similar client in the future. Talk to the A2s and SA1s (sorry A1s, you’re still clueless) to get their perspective but make sure it’s the people that will level with you about what life is really like on that engagement. HINT: If you get a rah-rah speech about the “experience on such a great client” you’re not getting an honest take.

So make your client desires known to get a taste of the life on a sexy client but once you land there, be sure to take a look around to see what life (or a pathetic version of it) will be really like if you’re still there in the future. Good luck.

Going Concern March Madness Update: Reznick’s Magic is MIA; Grant Thornton, BDO on the Ropes

Look gang, since too many of you are distracted with doing billable work to email us anything half way interesting, I’m guess I’ll just update you on the progress in Round 2.


The two highest remaining seeds – Grant Thornton and BDO – are looking defeat square in the face right now to their respective opponents – Crowe Horwath and Rothstein Kass. First round comeback kid Reznick Group is currently getting worked by Moss Adams which makes should make us all wonder what happened to the teamwork we saw in the first round. Perhaps they’re a one-trick pony?

Finally, in the least talked about match-up, Mickey G’s and Dennis Rader’s favorite firm (ideas for something better are welcome) look like they’ll be taking it down to the wire. There’s just over thirteen hours left to vote, so get the word out sooner rather than later (sorry Clifton Gunderson).

GE Seems to Have Its Tax Planning Figured Out

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And by “figured out,” I’m referring to “worldwide profits of $14.2 billion, and […] $5.1 billion of the total came from its operations in the United States,” combined with a grand total $0.00 in taxes. “In fact, G.E. claimed a tax benefit of $3.2 billion,” reports the Times.


Sure the Internal Revenue Code is complex but if you’re aggressive, have a few lobbyists at your disposal and your tax department is “often referred to as the best tax law firm,” the IRC is a cakewalk.

Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm. Indeed, the company’s slogan “Imagination at Work” fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.

G.E.’s Strategies Let It Avoid Taxes Altogether [NYT]
See also:
On GE’s Pathological Aversion To Paying Taxes [ZH]

Accounting News Roundup: Do All CPAs Have CFO DNA?; KPMG’s New OMP in Birmingham; Sending Tax Docs Securely | 03.25.11

Gaddafi’s Plastic Surgery: Brazilian Surgeon Claims He Operated On Dictator [HuffPo]
It was well past midnight when the Brazilian surgeon says he was escorted deep inside a bunker in the Libyan capital. His assignment: to shave years off Moammar Gadhafi’s appearance by removing fat from his belly and injecting it into his wrinkled face. The Libyan leader also got hair plugs. “He told me that he had been in power for 25 years at that time, and that he did not want the young people of his nation to see him as an old man,” Dr. Liacyr Ribeiro recalled. “I recommended a facelift, but he refused.”

The evolution of the CPA as CFO [CPA Success]
Tom Hood explains.

Trial dates set for Fairbanks-area ‘241’ defendants [Daily Newsminer]
May trial dates have been scheduled for a Salcha couple accused of plotting to murder a federal judge and an Internal Revenue Service agent, along with two others who reportedly helped them stockpile illegal weapons. Lonnie and Karen Vernon are accused of threatening to kill U.S. District Judge Ralph Beistline and the IRS agent, along with threatening Beistline’s family.

KPMG names new managing partner for Birmingham [BBJ]
Joe Reid takes over for Matt Lusco.

How Long Has He Been President Now? [Tax Update Blog]
Joe Kristan, headline debunker.


Woman has fingertip bitten off in Walmart love triangle tiff [MSNBC]
In Florida, natch.

Auditors respond to Big Four clause investigation [Accountancy Age]
Restrictive bank clauses that force customers to use Big Four firms are to be investigated, and auditors have scrambled to respond. Martyn Jones, senior audit partner at Deloitte, professed no shock at the announcement, saying his firm welcomes the removal of restrictive agreements. “I believe in a level playing field”, he insisted, saying he had heard smaller auditors complain about the clauses, but had personally seen little evidence of them.

How Can I Securely Send Sensitive Tax Docs to My Tax Preparer? [Lifehacker]
News you can use.

Orient Paper’s Auditor Left Out That Part About Not Being Licensed

Details-shmetails.

In an 8-K regulatory filing and in a press release, Orient Paper said it was unaware of the problem until recently. Called the Davis Accounting Group, the Cedar City, Utah-based audit firm was supposed to be licensed by its home state, but its license lapsed in September 2008 and was formally revoked as of November last year. “During the time when Davis Accounting was retained by the Company, Davis Accounting represented that it was in good standing,” Orient Paper said in its press release.

Other than that, everything is kosh. Deloitte even said so. BDO Hong Kong is doing the restatements so everyone can pretend this never happened.

Orient Paper: Ex-Auditor Forces 2008 Re-Audit [TS]

Eric Cantor Prefers a Friendly Crowd When Speaking About the Mortgage Interest Deduction

Speaking to a crowd of real estate professionals in his hometown, Cantor said the tax would be considered as part of the larger tax reform discussion. But he suggested a change is probably not in the cards. “Honestly, there’s not a lot of support for getting rid of the mortgage deduction on Capitol Hill,” Cantor said to loud applause from the audience. Cantor was speaking to nearly 200 members of the Richmond Association of REALTORs. [The Hill]

BDO Is Not Impressed with KPMG’s Business Tactics in Brazil

BDO announced a new member firm in Brazil today because…well, KPMG kindasorta poached their last one. Well, BDO Global CEO Jeremy Newman has had it up to here (i.e. eye-level) and wanted to point out that A) this not uncommon:

“BDO is not the first firm to have suffered as a result of our larger competitors using their dominant financial position to buy market share and we have expressed our concerns about this in BDO’s recent submission to the European Commission’s Green Paper on the role of the audit profession,” said Newman.

B) this is some shady dealings:

“These tactics are not driven by client needs but by one firm’s wish to buy market share and presumably achieve further economies of scale. We are concerned that when one firm looks to dominate it reduces choice for clients and leaves the market worryingly dependent on just a few players.

and C) these aren’t just fightin’ words. The most interesting accounting firm in the world will be taking action:

“BDO will be lodging an objection to this deal with the Brazilian competition authorities.”

Challenge extended.

BDO lines up complaint against KPMG Brazil [Accountancy Age]

Omaha Mayor Proposes Crappy Idea to Fund Sewer Improvements

Omaha Mayor Jim Suttle was at the U.S. Conference of Mayors this week to brainstorm solutions to various problems with his fellow hizzoners. Omaha, for one, needs to make improvements to its sewer system to the tune of $1.7 billion. So it makes perfect sense for Suttle to suggest a simple way to get to the source of this problem:

Among the items on his brainstorming list: a proposal for a 10-cent federal tax on every roll of toilet paper you buy. Based on the four-pack price for Charmin double rolls Tuesday at a midtown Hy-Vee, such a tax would add more than 10 percent to the per-roll price, pushing it over a buck.

But just because Scuttle is throwing this out there doesn’t mean he’s on board with it; he’s just come up with solutions:

The idea came from a failed 2009 House measure by an Oregon congressman to help cities and the environment. “I heard about it and said, ‘Well, this is simple. Let’s put it on the table,’” said Suttle. “It doesn’t mean I endorse it.

Suttle unrolls toilet paper tax [OWH via TaxProf]

And Now…CPAs Acting Out a Scene From Casablanca

Following the ingenious reenactment of the beginning of Luke Skywalker’s father issues, the Pennsylvania Institute of CPAs has delved into the classics, bringing us a scene from Casablanca.


Personally, I’m not crazy about this one. It’s bad enough that most of you haven’t seen the film but from an artistic integrity perspective, it really should have filmed it in black and white. However, I have to admit that the overwhelming smoke and horrendous French accent were nice touches. Other commentary is welcome at this time.

More PICPA videos:
And Now…CPAs Acting Out a Scene from the Empire Strikes Back
PICPA: You Need a CPA to Get Your Breathlessly Judgmental Friend to Shut Up
Latest PICPA Video: CPAs Are Like Snuggies
Pennsylvania CPAs Insist Accountants Are Funny in New Videos. Which Are Funny