When accounting goes unaccounted for
“That is quite a risk to put at the end of the list.”
~ Peter Henning isn’t so sure that General Motors is taking the whole “disclosure controls and procedures and our internal control over financial reporting are currently not effective” serious enough.
But next Monday, Wednesday or post-Labor Day, it could be a completely different story!
We’re waiting on the video from our friends over at FBN but for now here’s what the Fox Business News Breaking specialist has for us:
On who from Lehman Brothers will be charged by the SEC:
“There is a lot of speculation as to who will be charged in the SEC’s investigation of Lehman Brothers. As of right now at least, it will not be the former CFO Erin Callan.”On how we know Callan is not being charged:
“Attorney for Callan Robert Cleary tells FBN she has not received a Wells Notice. As of right now she is not going to get charged. It could still come.”On when the charges will be filed:
“This is an interesting development because the end game on this is clearly happening. And it’s the two year anniversary of Lehman’s bankruptcy Callan was one of the people putting out the positive image of the firm as it was imploding that’s what they are investigating.”
So there you have it! Things are day-to-day for Ms Callan (i.e. kicking it in the Hamptons, dating a fire fighter). The situation remains fluid.
Joking, joking, joking. Actually it’s the American Accounting Association Robert M. Trueblood Seminars for Professors and it sounds as though it’s a pretty important little get-together.
Launched in 1966 and sponsored by the AAA, the Trueblood Seminars is a two and one-half day session where attendees share and examine complex accounting and auditing case studies. The program’s objective is to offer professors some perspective on present day accounting issues from the viewpoint of the auditors and preparers of financial statements. Each seminar features multiple case discussions led by Deloitte & Touche LLP partners, an open forum discussion on professional issues and developments in practice, as well as an update on the standard-setting activities of the Financial Accounting Standards Board (FASB). More than 2,000 professors have attended the Seminars since the program’s inception.
As long as Barry Salzberg isn’t having a free-wheeling discussion about diversity, then we’re all for it.
Deloitte Foundation Renews $500,000 Commitment to Continuing Education for Accounting Professors [CSR Newswire]
Recent data suggests that Wall Street types are still doing drugs with unsurprisingly regularity but their tastes have changed with the seriousness of the times.
That is, they’ve traded in the hard-charging llelo fueled days of ’06 – ’07 with a more reserved and apathetic ganja attitude of ’09 – ’10. Trading coke for pot. Blow fo e all know that accountants follow/chase the money so we can safely assume that their proclivities for drug usage have followed suit.
However, you rarely hear about drug abuse problems at accounting firms. So where is all this drug use happening? Apparently, it’s going down at REITs:
The highest levels of abuse seem to be at real estate investment trust companies, a sector that, incidentally, does more random testing than others.
But the test results generally capture drug use among new hires, candidates who knew that they would likely be tested. Random drug testing is rare, according to a spokesman for a bulge-bracket bank who asked to remain unnamed.
Among existing employees, psychologists and counselors say that drug abuse has not slackened. Some even say it is peaking, exacerbated by the credit crisis and the volatile and tenuous recovery that has ensued.
As the article states, random drug testing is already rare but where it happens the least isn’t mentioned.
But like we said, you rarely hear about the drug use that goes on at accounting firms. Which makes us wonder if it’s because it’s not happening period. To our knowledge – accounting firms don’t give employees drug tests as a condition of employment and simply defer to clients who require them (a certain Swiss Bank with proximity to shroom burgers comes to mind).
We’re not suggesting that every Big 4 office is like Bernie Madoff’s north pole but there’s enough of it happening that there is a presence within the firms.
It’s no surprise. You Big 4 types (and anyone at a CPA firm for that matter) go through your personal hell on a seasonal (or maybe a constant) basis so there’s probably a direct correlation with your usage and the time of year. For example – that tax manager that manages to work night after night after night with amazing focus as the final 2010 deadlines draw near? You think they just plug themselves in when they finally go home to recharge for the next day?
Plus, as you’re acutely aware, it’s not just the illegal drugs that are popular, “[T]he rage these days is a Pez dispenser with the head of a red devil. Inside? Pills of Oxycodone or Percocet.” And don’t forget the people that have been popping Adderall since college so they can study for 12 straight hours. That has simply carried over into the 14-15 hour days for X amount of consecutive days during busy season.
And don’t get us started on people who get addicted to fast food (a drug in its own right) in order to save time and eat at their desks. The chemicals in the food from [pick your chain] are just as addictive as any drug off the street or from the pharmacy and cause just as much damage to our bodies.
But as you’ve no doubt heard over and over in the peanut gallery, getting your work done is ultimately what matters. Come hell or high water. Come dependancy, insane weight loss or insane weight gain. And lots of people do whatever it takes to cope with that reality.
So? What’s the scoop these days inside your firm? Are drug tests just a section of your offer letter that you agree to, only to be never reminded of it again? Anyone every been tested? We understand that no one is operating heavy machinery out there but bad things can still happen, quite possibly in the name of client service.
The Beckhams were concerned that “ordinary people were tightening their belts,” so what did they do? They fired a bunch of ordinary people! All it took was a shrewd accountant to tell them, “You’re pouring money down the drain.”
The fun-killing accountant is then quoted by a source in The Sun that employing 50 people around the word isn’t necessary, ” ‘You CAN afford to employ all of these people. But why the hell DO you?’ “
Vic took it to heart, so she cut 14 people off the payroll. This included a housekeeper that worked for them for eight years who was replaced by “two ‘cost efficient’ foreign staff,” so things aren’t completely falling apart.
As for the gardening, they’re down to one and now that poor bastard has to double as a chauffeur. Can you imagine the hell that must be having that guy track muddy shoes into the car? The horror.
GM filing warns on reporting [Detroit Free Press]
This may come as a shock but General Motors, despite filing paperwork for its IPO, admits that they still don’t have effective internal controls.
“[I]n regulatory filings about its upcoming initial public offering, GM warned potential investors that ‘our internal controls of financial reporting are currently not effective.’
Experts are divided on whether the warning — one of about 30 risk factors identified by GM in a document describing a planned sale of shares — is just an obscure accounting matter or a red flag that taints GM’s financial reporting
The 10 Highest State Income Tax Rates For 2010 [Forbes]
If you’re single and make $200k or $400k and married in Hawaii, you get dinged for 11%, the highest ranking state on the list. Dark horse Iowa comes in at #5 gets 8.98% of taxable income over $64,261. That’s above New Jersey and New York tied at #6.
Transocean accuses BP of withholding data on Deepwater Horizon and oil spill [WaPo]
Just when you thought the ugliness was slowing down (at least in the media coverage), ” Even as they work together to kill the Macondo well in the Gulf of Mexico, the oil giant BP and the deep-water drilling rig company Transocean are in an increasingly bitter battle over what went wrong on April 20 to trigger America’s worst oil spill.
The conflict flared Thursday when Transocean fired off a scathing letter accusing BP of hoarding information and test results related to the Deepwater Horizon blowout that killed 11 people, including nine Transocean employees. Signed by Transocean’s acting co-general counsel, Steven L. Roberts, the letter says that Transocean’s internal investigation of what went wrong has been hampered by BP’s refusal to deliver ‘even the most basic information’ about the event.
‘[I]t appears that BP is withholding evidence in an attempt to prevent any entity other than BP from investigating the cause of the April 20th incident and the resulting spill,’ the letter states, and it demands a long list of technical documents and lab tests.”
How to tell when your boss is lying [The Economist]
Apparently cursing is a good sign.
Koss reports smaller quarterly loss on 14% sales decline [Milwaukee Journal Sentinel]
The company lost $423,450 for the six months ended June 30th. They spent $1.12 million on legal fees related to Suzy Sachdeva.
“We are grateful to the courageous taxpayer who came forward to notify the United States attorney’s office of a corrupt public servant.”
~ U.S. Attorney Todd Jones is really just referring to that IRS agent who needed $9,700.
From Big 4 Blog:
Ernst & Young China is announcing the grand opening of its new office in China’s tallest building and premier location – Shanghai World Financial Center (SWFC) in the Pudong District of Shanghai. All of Ernst & Young’s 2,500 Shanghai people (of the 9,000 total China employees) will be one single location to help provide better services to clients and laying the groundwork for our further expansion in the China market. Prior to this, E&Y was in three different Shanghai locations.
Jim Turley managed to ignore the issue entirely saying, “Our confidence in the long term prospects in China is demonstrated in the investment in our business and our people. We currently have over 9,000 people in China, and will further grow our manpower with the business.”
Last week we touched on the shockingly sensitive subject of charging time while traveling. You see, apparently it was (at one time) a-okay in some KPMG offices (Southeast) while in others, the mere idea of charging time while traveling was utter nonsense.
So that got one reader to thinking – what the hell else is being cut out these days?
Please consider a post related to fringe benefits. I’m curious in knowing whether the larger firms are allowing their employees to keep points for dollars spent on company credit cards. But there are other points programs (i.e., frequent flyer miles) and fringe benefits (i.e., gym memberships, cell phones, etc.) that may be declining on top of all of the poor raises.
Big 4 firms have been quite generous with the fringe benefits (e.g. elderly parent care, subsidizing public transit passes, etc.) and they make a point to remind you of it from the day you interview with the firm to the day you leave. However, since we’re living in unprecedented times, nothing is unheard of.
If your firm has recently gotten stingy on fringe benefits, from the vastly important (401k match) to the less crucial (discounts at Brooks Brothers) discuss or shoot us the details.
As the State Controller of California, John Chiang arguably has one of the worst jobs on Earth. Public service is a fine calling and working for the Terminator probably has its moments of awesomeness but he still presides over one of largest fiscal nightmares you could possibly imagine.
For starters, it doesn’t help when you overshoot tax revenues for the month of April by $3 billion. Plus, you’re dealing with a state legislature that is probably incapable of agreeing on what ocean serves as the border of their state.
So take that and a bunch of other stuff that’s not really worth rehashing, you get this, “[W]ithout a new spending plan that closes a $19 billion shortfall, the state would run out of money by late October. ‘We will run out of money if everything remains the same,’ [Chiang] said in an interview.”
Of course the state Assembly’s Republican leader, Martin Garrick, finds this to be a load of crap since what it comes down really is your political party “[He] didn’t represent the fact that it is his party’s own lack of leadership that have led to these delays.”
Look, we’ve all accepted the fact that California is the brokest-ass state of the union and is completely inept when it comes to doing anything about it. Sure New York is a pathetic loser that manages to embarrass itself on a regular basis and most of the rest of the states out there leave a helluva a lot to be desired but Cali really outdoes everyone on a regular basis. This will make two years straight of issuing IOUs at the expense of citizens and yet the diaper-wearing California reps do nothing.
If Whitman gets in there, her first act as Guv could be to auction them off one by one (or just list them all as “Buy It Now” for $1). Of course the take wouldn’t be nearly enough to fix the budget but at this point a symbolic gesture will do.
We’re getting used to this.
Chances of a speedy resolution to l’affaire Satyam receded on Wednesday with the Andhra Pradesh high court granting bail to the company’s founder and former chairman, B. Ramalinga Raju, freeing, albeit temporarily, the last of the accused in a corporate fraud that came to light in early 2009 with Raju’s confession and whose magnitude has since doubled to a claimed `14,000 crore.
Raju’s release is a setback for India’s federal investigating agency, the Central Bureau of Investigation (CBI), which is yet to produce him in court in person. Arrested on 9 January 2009, Raju has been undergoing treatment for Hepatitis C at Nizam’s Institute of Medical Sciences, Hyderabad.
On 16 August, he retracted his confession in the trial court by responding in the negative to questions posed by the court about the fraud. The burden of proof for Raju’s fraud now rests with CBI. And now, he is out on bail—for two sureties of `20 lakh each.
India’s minister for corporate affairs Salman Khursheed insisted that Raju’s release would not “hamper the ongoing investigation”.
Satyam case weakens with Raju’s release [Live Mint]
Former E&Y partner James Gansman could finally be done paying for all his bad decisions. Web CPA reports that Gansman has settled with the SEC over his insider-trading-for-sex activities. You may recall that Jimbo received (and is currently serving) a one year and a day prison sentence back in February for his efforts.
This settlement with the SEC will set him back $250k but his mistress – who admittedly cheated on him and then testified against him – seems to have gotten a better deal.
The final judgment to which [Donna] Murdoch consented further orders that she is liable for disgorgement of $339,110 together with $64,943.52 in prejudgment interest, but, based on her demonstrated inability to pay, waives payment of disgorgement and prejudgment interest and does not impose a civil penalty.
Murdoch will probably still see some jail time but this just has to burn the Gansman up. Unless he’s found Jesus or something.
Former E&Y Partner Settles Insider Trading Charges for $250,000 [Web CPA]