Category: ANR

China, U.S. vow to step up audit oversight cooperation [Xinhua]
Officials from China and United States have pledged to increase cooperation on cross-border audit oversight, China’s securities regulator said Monday, in the wake of a string of accounting scandals of U.S.-listed Chinese companies. The two parties aimed to improve the quality of auditing and accounting information of public companies, protect the rights of investors and assist in safeguarding of financial markets in both countries, the China Securities Regulatory Commission (CSRC) said in a statement on its website.

Damon Dash Talks $3 Million Tax Debt [MTV]
The once-flamboyant Roc-A-Fella Records co-founder Damon Dash is now in debt. In July, The Detroit News reported that the music mogul and Jay-Z’s former business partner owes almost $3 million in back taxes, according to a tax lien filed June 30. On Friday, Dash visited the “Sway in the Morning” radio show on Shade 45 and spoke to host and MTV News correspondent Sway Calloway about his recent troubles with the IRS. After being asked about owing “$2 million,” Dash quickly set the record straight: “I owe way more than $2 million in taxes. That must’ve just been the IRS,” Dash said, laughing, before admitting that he was in a bad space financially. “Nah, nah, I’m f—ed up.”

Rich say wealth managers not worth as much as accountants [Citywire]
Wealth managers and advisers might be dismayed to hear that 60% of high net worth clients would expect to pay an adviser less than their accountant, and do not believe investment management is good value for money. The findings form part of management consulting firm MDRC’s 2011 UK High Net Worth Report, which is based on contributions from more than 4,000 high net worth individuals and 600 ultra high net worths. The report also found that nearly 90% of respondents would expect to pay their financial adviser less than their lawyer.

IRS shows newly married gay couples no love [MSNBC]
For all those same-sex newlyweds in New York, Lawrence S. Jacobs has a message: Enjoy the Champagne and the honeymoon, but expect no gifts from the IRS. Jacobs, a lawyer in Washington, specializes in estate planning for same-sex couples — and in delivering the bad news that their unions aren’t legal in the eyes of the IRS, a policy that will cost them time and money during tax season. Same-sex couples in Washington, which last year legalized gay marriage, must fill out a federal return to make calculations required for their D.C. joint return. But then they must set that work aside and fill out separate federal returns because the IRS doesn’t regard their union as legal, Jacobs says. “You just spent decades getting your marriage recognized, and now the feds say, ‘No, you’re not,’” says Jacobs, who as a partner in a same-sex marriage has firsthand experience of the problem.

Small firms not happy with rising accountancy fees [Fresh Business Thinking]
According to new research 15% of small businesses say that rising fees is their biggest accounting gripe. The survey of 269 businesses by Crunch.co.uk, which questioned attitudes to and experiences of accountants, was carried out in July. Other top gripes were jargon, or ‘accountant-speak’, and charging for communication such as phone calls and emails — 18% combined agreed these were pet hates.

The IRS’ Amnesty Program for Foreign Account Holders: What You Need to Know [Reuters]
In case you have missed the recent press coverage on unreported foreign bank and other financial accounts, the IRS announced a second amnesty initiative earlier this year. The good news, if you have not already disclosed your foreign financial accounts, is that under the amnesty you can avoid criminal prosecution and get back into the system at a relatively low cost.

Almost 1,500 Millionaires Do Not Pay Income Tax [ABC]
At a time when America is borrowing about 40 cents of every dollar it spends because tax revenues cannot keep up with government spending, hundreds of America’s wealthiest households are paying no income tax at all. According to a recently released IRS report, almost 1,500 of America’s 230,000 millionaires avoided paying any federal income tax in 2009.

Cantor urges GOP to resist tax hike pressure after S&P downgrade [The Hill]
House Majority Leader Eric Cantor (R-Va.) told Republican lawmakers to expect — and resist — increased pressure to raise taxes following the downgrade of the U.S. credit rating by Standard and Poor’s. “Over the next several months, there will be tremendous pressure on Congress to prove that S&P’s analysis of the inability of the political parties to bridge our differences is wrong,” Cantor wrote Monday in a memo to House Republicans. “In short, there will be pressure to compromise on tax increases. We will be told that there is no other way forward. I respectfully disagree.”

AIG sues BofA for $10 billion over “massive fraud” [Reuters]
The insurer American International Group Inc (AIG.N) is suing Bank of America Corp (BAC.N) to recover more than $10 billion of losses from a “massive fraud” on mortgage debt, deepening the morass of litigation faced by the largest U.S. bank. AIG, still largely owned by taxpayers after $182.3 billion of government bailouts, is the latest of a growing number of investors filing lawsuits seeking to hold banks responsible for losses on troubled mortgages that contributed to the financial crisis.

US and China Fail to Agree on Cross-Border Auditing Standards [Business Insider]
On July 11-12, US regulators flew to Beijing in part to address the series of financial scandals of Chinese companies listed in America, but failed to agree upon a standard set of cross-border auditing standards with their Chinese counterparts. In an alphabet soup of acronyms, a U.S. delegation from the Securities and Exchange Commission (SEC) and The Public Company Accounting Oversight Board (PCAOB) and Securities and Exchange Commission (SEC) met with Chinese counterparts at the Ministry of Finance and the China Securities Regulatory Commission (CSRC).

Exclusive: Groupon Will Dump Controversial ACSOI Accounting in Amended IPO Filing [All Things D]
According to numerous sources close to the situation and after regulatory pressure, Groupon will amend its S-1 public offering filing to remove references to an unusual accounting treatment that has attracted controversy. Sources said the new filing by the social buying company, which is helmed by CEO and co-founder Andrew Mason (pictured above), will likely occur as early as Monday.

Less than zero: How companies can end up with negative revenues [Globe and Mail]
Even savvy investors are often puzzled at how some companies arrive at the bottom lines on their income statements. Now, as a result of ever more elaborate new accounting standards and complex corporate structures, the top line can be just as bewildering.

IRS auditing Louisville high school booster club [AP via Fox19.com]
The Internal Revenue Service is auditing a high school booster club’s books to find out why it has as much as $480,000 in funds that are unaccounted for.

MetLife Says 30 Jurisdictions Are Auditing Unpaid Benefits [Bloomberg via the SF Chronicle]
MetLife Inc., the largest U.S. life insurer, said more than 30 U.S. jurisdictions are auditing its practices in a review of whether the industry is holding unclaimed funds owed to policyholders, beneficiaries or states. The audits may lead to more payments to beneficiaries, administrative penalties or changes in procedures, New York- based MetLife said today in its quarterly filing with the U.S. Securities and Exchange Commission.

Google App Engine now officially secure [ZDnet]
The announcement got lost in the pre-weekend shuffle, but Google has announced that both the Google Apps cloud productivity and collaboration suite and the Google App Engine application platform have received the SSAE-16 security certification. If you can get past the alphabet soup, this news could open a lot of doors for Google in the enterprise.

SEC, Rajat Gupta Drop Their Cases, for Now [WSJ]
The Securities and Exchange Commission dropped its civil administrative proceeding against former Goldman Sachs Group Inc. director Rajat Gupta, but left the door open to pursue insider-trading charges against him in a civil lawsuit. The agency “is fully committed to the case and will proceed as appropriate,” a spokesman said Thursday. Specifically, the agency said that “it is in the public interest” to dismiss the administrative case but that “dismissing these proceedings will not prevent the Commission from filing an action against Mr. Gupta in United States District Court.”

Employers hire 117,000 in July; jobless rate slips to 9.1% [Washington Post]
Hiring picked up in July, the government said Friday, offering evidence that the nation is muddling through a period of very weak growth but not falling back into recession. Employers added 117,000 jobs last month, the Labor Department said Friday, compared with a revised 46,000 in June and better than the 85,000 net new jobs that forecasters had expected. The unemployment rate ticked down to 9.1 percent, from 9.2 percent in June.

FASB Meetings to Address Private Company Accounting Issues [Journal of Accountancy]
FASB said it is hosting two public round-table meetings in October to discuss issues relating to existing private company accounting and reporting standards. The meetings, scheduled for Oct. 11 and Oct. 17, will discuss issues including accounting and disclosure requirements relating to variable-interest entities, interest rate swaps and level 3 fair value measurements.

The auditing profession in Bangladesh: Turning the tide? [The Financial Express]
There were times when the auditing profession in Bangladesh used to draw a lot of criticism from the company directors, researchers, and popular press for their perceived failure to do their job as auditors properly; the quality of audited financial statements were questioned, and the role of the Institute of Chartered Accountants of Bangladesh (ICAB) in disciplining its members was challenged.

California taxes from businesses decline [The Orange County Register]
California businesses paid $85.4 billion in state and local taxes in the 2010 fiscal year, according to a new report from the Council on State Taxation and Ernst & Young LLP. California’s corporate income tax revenue declined 18% from July 1, 2007 through June 30, 2010, and its property tax revenue plunged 27%, reflecting the state’s real estate woes.

Does Connecticut Really Have Nation’s Lowest Business Taxes? [The Hartford Courant]
Connecticut businesses have the lightest tax burden in the nation, according to a new study that is being hailed by some as proof that companies are overly coddled by the state, and slammed by others as misleading and dangerous. The study done by Ernst & Young for the Council on State Taxation (COST) adds up the total amount of state and local taxes paid by business in each state — which was $6.9 billion in Connecticut in 2010. Each state’s total is then divided by that state’s total private-sector economic output, for a percentage.

E&Y beefs up its insurance team [The Royal Gazette]
Accountants Ernst & Young (EY) has announced three new appointments to its London and Bermuda insurance team. Paul Cooper, Simon Burtwell and Ben Reid have all been appointed to senior roles due to increased demand from its clients.

Audit of Alameda County assistance program reveals gross mismanagement [The Oakland Tribune]
An Alameda County audit of a now-defunct countywide assistance program shows hundreds of thousands of dollars in mismanaged grant money and questionable expenses — including money spent on alcohol, massages and dubious travel.
The audit of the Associated Community Action Program, commonly called ACAP, also confirms what former employees had asserted — a complete lack of oversight by the program’s governing board. That board was made up of one county supervisor and one elected official from every city in the county, excluding Berkeley and Oakland.

Should Internal Audit ‘Do SOX’? [Norman Marks via Sustainable Business Forum]
There is a sharp divide among internal audit professionals as to whether the internal audit function should play a significant role in the SOX program. In the first few years of SOX, management more often than not looked to internal audit as internal control experts to lead the development and implementation of the SOX program.

Rothstein Kass Appoints Three New Principals [PR Newswire]
Leading professional services firm, Rothstein Kass (www.rkco.com), today announced that Arthur Brown, Kashif Hussain and Daniel O’Connor have been named Principals in recognition of their ongoing contributions to the company’s success.

Analysis: Decades-old auditor ties under scrutiny in U.S. [Reuters]
Goldman Sachs has stuck with the same auditing firm since 1926, Coca Cola since 1921, General Electric since 1909 and Procter & Gamble since 1890. That’s going back 85, 90, 102 has relied on a different one of what are known today as the Big Four accounting firms. And now some U.S. accounting reformers are thinking that perhaps enough is enough: the time has come to rotate auditing firms.

IASB Chairman: IFRS Adoption Is in “Economic Interest of U.S.” [Journal of Accountancy]
Adopting IFRS would benefit the United States’ economy, the new chairman of the International Accounting Standards Board (IASB) said July 29 during his first official visit to China. Speaking to a gathering of the Ministry of Finance’s Accounting Regulatory Department in Beijing, Hans Hoogervorst said, “U.S. investors invest globally, and U.S. companies seek international capital, and it is in the economic interest of the U.S. to adopt IFRSs,” according to a copy of the speech posted on the IASB website. “IFRSs support economic growth and establish a high-quality level playing field for globalized markets.”

Audit reveals ‘very significant’ accounting woes in Granger [Yakima Herald-Republic]
Granger’s accounting problems are so serious that if not corrected, the city could miss out on future federal grants, according to the state Auditor’s Office. A state audit showed the city didn’t report $500,000 in federal grants and failed to provide complete and accurate financial reports.

Mergis Group Accounting & Finance Employee Confidence Index Dips [Sacramento Bee]
The Accounting and Finance Employee Confidence Index, a measure of overall confidence among U.S. accounting and finance workers, slipped 2.1 points to 50.0 in the second quarter of 2011, according to a recent survey of 3,833 U.S. adults among which 183 are employed in Accounting and Finance commissioned by The Mergis Group®, the professional placement division of SFN Group, Inc. The survey, conducted online by Harris Interactive®, reveals that fewer workers are confident in the strength of the economy and in the future of their current employer.

China’s Mutant Turtles [FT]
Our research shows that the poor quality of accounting in China is an extension of a poor governance environment, with its origins in China’s cultural, political, economic and legal systems. After decades of communist rule the state is still trying to establish its legal authority and is unable to enforce the law impartially. The result is that people resort to personal connections and private information to protect their business dealings.

Restoring trust and saving the U.S. credit rating [Chicago Tribune]
Our elected officials don’t follow the rules to enforce honesty that they require of the private sector, such as the standards of Generally Accepted Accounting Practices. If voters really understood this, they might remove them from office and put some of them in jail. Washington’s ways have evolved with a veneer of legal legitimacy, when in fact those ways increasingly resemble the corruption we deplore in lesser-developed countries.

Wanted: Missionaries with accounting skills [Baptist Press]
Accountants may not be the first image that pops into people’s heads when talking about missionaries, but that’s exactly how Grece, a Nebraska native, answered his call to missions. He uses his financial skills in the office while also focusing on ministering to those around him — whether it’s frazzled missionaries or local villagers.

Moody’s: IASB, FASB Accounting Standards Proposals Hitting Delays [PropertyCasuality360]
Proposed changes to insurance-contract accounting standards are running into delays amid vocal opposition, but whatever final conclusions ultimately emerge, they are unlikely to have a broad impact on credit ratings since new rules, by themselves, do not alter the economic position of an entity, according to Moody’s.

Official Washington’s Crackhead Accounting [The American Spectator]
There is no evidence that this bizarre deal of questionablee.g. the “Super Congress”) will actually lead to any real cuts. Nor is there any evidence that it will prevent the U.S. government from losing its long held triple-A credit rating. There is a promise of spending cuts, but overall federal spending will continue on its upward trajectory because Official Washington operates in the make-believe world of “baseline budgeting.” According to this crackhead accounting, both a cut and an increase may count as cuts.

State faults Binghamton’s accounting system [Sun-Bulletin]
The City of Binghamton’s accounting system lacks adequate controls to provide an accurate picture of city finances, an audit by the state comptroller’s office found. The 33-page report, released Monday, said the municipality has, among other things, overstated its general fund balance, has a city comptroller that hasn’t properly monitored certain accounts and has more than $13,000 in unaccounted funds from its parking operations.

Barclays to cut 3,000 jobs as profit drops [Reuters]
Barclays is set to cut about 3,000 jobs this year to reduce costs after a drop in bond trading and an insurance mis-selling charge cut first half profits by a third.

Money Funds Have Biggest Redemptions This Year Amid Debt Talks [Bloomberg]
Investors last week pulled more money from money-market mutual funds than any week this year as U.S. lawmakers failed to resolve the impasse over raising the debt ceiling. Withdrawals reached $37.5 billion, with about 70 percent of the redemptions coming from institutional funds that invest in U.S. government securities, according to data from the Investment Company Institute, a Washington-based trade group.

Accounting Departments Drive Demand for Electronic Document Management Solutions to Improve Bottom Line, According to IntelliChief [Benzinga]
IntelliChief LLC, the leading provider of document management and imaging solutions for the IBM i (System i, iSeries, AS/400), reports accounting department personnel are often both primary drivers and first adopters of paperless solutions in their companies. “Because of the cost savings to be gained by going paperless in accounting, and the bottom-line responsibilities that are top-of-mind with financial professionals, it makes sense that the demand for paperless solutions most often originates from within the accounting department,” says Brian Smith, IntelliChief Marketing Director.

No Day in Court for Bank Clients [WSJ]
Some small and regional U.S. banks are prohibiting unhappy customers from taking their complaints to court or joining class-action lawsuits, instead requiring them to resolve disputes through arbitration.

Preparing for New ‘Bottom Line’ on Leases [Memphis Daily News]
Obviously, the more significant a company’s leasehold interests are, the greater the impact of the new guidelines; for example, airlines, manufacturers and retailers. Additionally, regulatory rules will likely be impacted for banks and insurance companies. And, because the new guidelines deal with the accounting for leases on the balance sheet, the greatest impact will be on companies issuing audited financial statements.

Gone Fishing [Going Concern]
After two years of being chained to my desk and staring at my laptop, I’m taking a few days off (seven to be precise) starting Monday. I know, I know. Unacceptable. But after some arm twisting, TPTB figure that some vacation would give me a chance to relax and it offers them some reprieve from my kvetching about EVERYTHING. Plus when the country defaults on Tuesday I thought it might be safer to be in a Paris bistro while the rest of you fight over scraps in the streets.

Debt-Limit Deal to Get Congress Vote Today [SF Chronicle]
Many Californians ignore the “use tax” – the equivalent of sales tax but remitted by state residents for products bought from out-of-state retailers that did not collect sales tax. The state estimates that $1.1 billion in use tax goes uncollected every year. Cash-strapped California is eager to corral that big chunk of change, most notably through the “Amazon tax” bill that took effect in late June. The new law requires Amazon and other online sellers to collect sales tax, but is being fiercely fought by the e-commerce giant and its brethren.

HSBC to Cut 30,000 Jobs [DealBook]
HSBC, the biggest European bank, said on Monday that it was cutting 30,000 jobs as part of a wide-ranging cost cutting program to improve profitability. The job cuts, which would represent about 10 percent of HSBC’s work force, are part of a strategy to reduce expenses by $2.5 billion to $3.5 billion over the next two years.

Debt Ceiling, Spending Cuts to Rise But No Word on Higher Taxes [taxgirl via Forbes]
The agreement also allows for President Obama to raise the debt ceiling immediately up to $400 billion, heading off the “certain” Armageddon that pundits have been warning about (insert a lot of coughing here). An additional $500 billion in debt ceiling headroom has also been authorized although, as part of the deal, Congress specifically reserves the right to vote against that at a later date so that they can dutifully wag their fingers at the President. And the President has reserved the right to veto that vote so that he can wag a finger at Congress (you can pick the finger). Future increases have also been authorized, with limitations.

2011 AAA Annual Meeting [The Summa]
More than 3,000 accounting professors will be packing up this week, and heading for Denver. The American Accounting Association (AAA), the professional association for accounting professors, is holding its annual meeting, August 6-10.

XBRL: What’s It Good For? [CFO]
On July 12, XBRL US, a nonprofit consortium for XBRL (extensible business reporting language) standards, announced a contest with a $20,000 grand prize to be awarded to whoever submits the “most inventive and useful application leveraging XBRL-formatted data from the U.S. Securities and Exchange Commission (SEC) EDGAR database” for business benefit.

Companies Altering Compensation Plans Over Say-on-Pay [Compliance Week]
Many companies are making changes to their compensation plans, especially those that garnered lukewarm support or lower from shareholders and those that saw proxy advisory firms recommend that shareholders vote against their plans.

Accountants Moving From Hourly Rates To Fixed Fees [PR]
Over half of local accounting practitioners surveyed cite fixed fees as their primary means of pricing services, more than double hourly rate pricing.

House Postpones Vote on Boehner Debt Plan [WSJ]
The House postponed a Thursday night vote on Speaker John Boehner’s plan to raise the federal borrowing limit after he failed to stem a revolt by conservative GOP members. The delay leaves the credit status of the U.S. government in jeopardy with five days remaining before it begins running out of money to pay all its bills. The development came after a two-hour debate on the bill was abruptly ended earlier in the evening. Mr. Boehner, knowing that a rejection could undermine his speakership, then joined other House GOP leaders in trying to pressure party members to rsition.

Lehman Case Hints at Need to Stiffen Audit Rules [NYT]
The ruling ought to raise a few eyebrows at the Public Company Accounting Oversight Board, which sets auditing standards and regulates auditing firms. If the Lehman audit was in compliance with the auditing rules, it is time to review the rules.

Warren Buffett Is Wrong On Taxes [WSJ]
During Monday night’s national address, President Obama recited the Buffet line that millionaires and billionaires pay lower tax rates than their secretaries. Democrats in Congress routinely cite Mr. Buffett’s tax confessions as irrefutable evidence that tax rates on the very rich are too low and the system is unfair. And the system would be unfair, if Mr. Buffett’s tax facts were the whole truth. But they aren’t.

Yelp hires new CFO from publicly traded Move Inc. [BBW]
Online reviews site Yelp has hired the chief financial officer of publicly traded real estate website operator Move Inc. as its new CFO — an appointment that may hint it is inching closer to its own initial public offering. Yelp said Thursday that Rob Krolik will replace Vlado Herman, who has worked for Yelp since late 2006 and has been its CFO since mid-2007. Krolik starts immediately. Herman will transition out of the company over the next several months, Yelp spokeswoman Stephanie Ichinose said. The company had been searching for a new CFO for several months.

Madoff Trustee Pulls In Another Billion [WSJ]
The court-appointed trustee recovering money for investors swindled by Bernard Madoff reached a settlement of more than $1 billion with Tremont Group Holdings Inc., one of the largest funds that allegedly channeled money into his Ponzi scheme. The settlement, filed in U.S. Bankruptcy Court in Manhattan, is one of the biggest reached since the multi-billion dollar fraud came to light nearly three years ago. It brings to about $11 billion the amount that a court-appointed bankruptcy trustee, Irving Picard will ultimately be able to return those cheated by Mr. Madoff, who is serving a 150-year prison sentence.

LinkedIn for Accounting and Business Students [The Summa]
Unless you’re Jack Donaghy, you should probably consider it.

IRS to Build Database of Regulated Tax Preparers for Public Use [Bloomberg]
Taxpayers will be able to examine the qualifications of paid tax-return preparers in a database being built by the Internal Revenue Service that may be available as soon as 2013, according to congressional testimony by an IRS official. The database is part of the phased-in regulation of tax preparers that began in 2010 with a requirement that they register with the IRS and obtain an identification number.

ICAEW: ‘Big Bang’ IFRS adoption best for US [Accountancy Age]
Dr Nigel Sleigh-Johnson, head of the institute’s Financial Reporting Faculty, claimed switching in one fell swoop is evidentially better, as gradual transitions like those of private UK companies “can result in a rather incoherent and complex accounting framework”.

Woman faces trial for fake testicles [MSNBC]
“This is certainly not a staple of my ticket writing in Bonneau,” the police chief told Reuters on Wednesday.

With G.O.P. Unity at Risk, Boehner Tries Tougher Style [NYT]
“I didn’t put my neck on the line and go toe to toe with Obama to not have an army behind me,” Mr. Boehner declared at a private party meeting, according to some House members. He demanded the fealty of conservatives who were threatening to sink his budget proposal and deny him the chance to confront the Senate with a take-it-or-leave offer on a debt ceiling increase. Mr. Boehner really had no choice but to go all out. A defeat of that plan — which seemed likely Tuesday night before its prospects improved Wednesday — would have been a disastrous repudiation, in effect a stinging vote of no US groups hit as tax keeps cash overseas [FT]
As much as half US companies’ record $1,240bn in cash balances is being held overseas, according to Moody’s research, with groups wary of incurring a 35 per cent repatriation tax. The foreign holdings are limiting corporate flexibility in managing balance sheets and adding to pressure from the business community for wide-ranging tax reforms.

Treasury to Weigh Which Bills to Pay [NYT]
The outlines of the answer, however, already are clear. Officials have said repeatedly that Treasury does not have the legal authority to pay bills based on political, moral or economic considerations. It cannot, for instance, set aside invoices from weapons companies to preserve money for children’s programs. The implication is that the government will need to pay bills in the order that they come due. President Obama has warned as a result that the government “cannot guarantee” payments of Social Security benefits or other popular programs. Officials also have disputed the assertion of some Republicans that the government could prioritize interest payments.

Groupon’s Accounting Lingo Gets Scrutiny [WSJ]
Groupon Inc. has attracted scrutiny from regulators over a newfangled accounting metric it is using to market itself to investors ahead of its initial public offering, said a person familiar with the situation. The Securities and Exchange Commission has asked Groupon to answer questions about the unusual measure it invented, which paints a more robust picture of performance by excluding marketing and other expenses, this person said.

The Influence Industry: Challenging the IRS on rules that keep donors secret [WaPo]
Two advocacy groups have filed a petition with the Internal Revenue Service challenging regulations that allow political organizations such as the conservative Crossroads GPS and the liberal Priorities USA to form as nonprofits under the tax code. The issue comes down to disclosure of donors: Groups that form as nonprofits are not required to reveal them. By contrast, political groups registered with the Federal Election Commission must list all of their contributors.

Ford CFO: No More Mr. No [CFOJ]
“We’re in an expensive period,” Booth acknowledged during a conference call with analysts Tuesday, but added, “You’ll not see us backing away from world class products and world class revenues; we’ve tried doing it the other way and it doesn’t work.”

Going, Gone: Too Many “Going Concern” Warnings May Be As Bad As Too Few [Forbes]
It’s a “Goldilocks Effect.”

IRS Realigns International Tax Operations [AT]
The realignment will result in a new “Advance Pricing and Mutual Agreement program” under the direction of a single executive. The IRS also plans to increase the staff available to the two program areas. The IRS said the combined office would allow the agency to reduce the time it needs to complete advance pricing agreements and to resolve transfer pricing disputes with treaty partners in other countries. The Office of Chief Counsel will continue to help analyze and resolve the legal issues.

What’s Your Fraud IQ? [JofA]
Or maybe a “Criminal Quotient.”

Vote on Boehner Plan Delayed Amid Opposition [NYT]
House Republican leaders were forced on Tuesday night to delay a vote scheduled on their plan to raise the nation’s debt ceiling, as conservative lawmakers expressed skepticism and Congressional budget officials said the plan did not deliver the promised savings.

What’s Wrong With America’s Job Engine? [WSJ]
Between the end of 2007 (when American employment peaked) and the end of 2009 (when it touched bottom), the U.S. economy’s output of goods and services fenumber of workers fell by a much sharper 8.3%. Today’s puzzle: How and why employers managed to boost productivity, or output per hour of work, like never before during the worst recession in decades?

Americans ‘Disgusted’ as Politicians Fail to Compromise on Debt [Bloomberg]
“They’re not in touch with reality,” said Cheryl Carroll, 51, who lives in Tinton Falls, New Jersey, with her two daughters. She has been applying for jobs in retail and subsisting off her family’s investments since her husband died last year. “They should really get an average American in Congress who knows how to balance their checkbook,” Carroll said. “It would be fixed in a week.”

Obama’s ‘70 million checks’ per month: Actually, it’s even more than that. [WaPo]
The mind-boggling number challenges a common critique of the federal government as a creaky apparatus where tax dollars are lost in the bureaucratic cracks. From the vantage point of the 70 million or 80 million checks, the government is a finely tuned machine that brings in revenue and disperses it back out across the country.

IRS is investigating Bell finances [LAT]
The Internal Revenue Service has opened an investigation into the handling of bonds and employee compensation packages in the financially struggling city of Bell, according to sources familiar with the ongoing probe. At least two IRS agents have been assigned to the investigation and have been in and out of Bell’s red-brick city hall since February, one source said. “They’re sifting and combing through everything,” the source said. The sources requested anonymity because they were not authorized to talk about the investigation.

CPA: Can’t Prepare Anymore [Tax Update]
Definitely not “Current Power of Attorney.”

Employees Can’t Use IRS Computers for Craigslist, eHarmony, Facebook, Foursquare, Gmail, TaxProf, Twitter, Yelp [TaxProf]
Or simply, “Any use that reduces productivity or interferes with the performance of official duties.”

Next Accounting Standard Project: Dairy Cows? [CFOJ]
Bovines at fair value?

ICAEW helps US focus on global standards [Accountancy Age]
International financial reporting standards are in focus at the ICAEW, which is to chair an American Accounting Association debate on the future of the global standards in the US. The panel will include former chairman of US regulator the FASB, Robert Herz, and forms part of the AAA’s annual conference from 6 – 10 August.

Cops: Calif. man tries to fix hernia with butter knife [MSNBC]
The man’s wife called police to say her husband was sick and tired of waiting to get surgery for his rupture and decided to take matters into his own hands on Sunday evening, Glendale Police Sgt. Tom Lorenz told msnbc.com. When officers arrived at the couple’s apartment, they discovered the man, naked and sprawled out on a lawnchair, with a butter knife protruding from his abdomen, Lorenz said. The man was cooperative and even pulled out the knife when asked, he said.

Obama Warns of Default Risk [WSJ]
With Congress deadlocked a week before the government runs out of cash to pay its bills, President Barack Obama warned Monday in his starkest terms yet that the U.S. is on the brink of a default that could trigger an economic upheaval. Mr. Obama made his comments in a prime-time national address followed immediately by a response from House Speaker John Boehner (R., Ohio), who dismissed not only the president’s approach, but virtually his entire record in office. Both men spoke just hours after the top Republican and Democratic leaders in Congress unveiled competing debt plans. Thely faced opposition that could make it hard to pass their respective chambers.

More U.S. lawsuits target Chinese reverse mergers [Reuters]
Accounting debacles at U.S.-listed Chinese companies have prompted a surge of securities fraud lawsuits, but investors might have trouble recouping their losses even if they win. More than one-fourth of the 94 U.S. securities fraud lawsuits seeking class-action status and filed from January to June related to so-called Chinese reverse mergers, according to a study released on Tuesday by the Stanford Law School Securities Class Action Clearinghouse and Cornerstone Research in Boston.

News Corp. Board Challenged [WSJ]
The Journal [!] reports that the audit committee is even less independent than we thought.

IRS Change Helps ‘Innocent Spouse’ [WSJ]
The Internal Revenue Service is giving some relief to “innocent spouses” who otherwise may have been liable for a partner’s tax debt. Effective immediately, the agency has eliminated a rule that disqualifies taxpayers from innocent-spouse status if they fail to file for relief within two years—a provision that snagged people who otherwise qualified, including abused women.

UK company auditors told to stand up to banks [Reuters]
“We find too many audits that require significant improvement. Scepticism is a key factor in those audits that do need an improvement,” said Paul George, director of auditing at the Professional Oversight Board (POB). The POB’s annual survey of audits found that the UK operations of the “Big Four” — KPMG, PwC, Deloitte and Ernst & Young — along with two smaller firms Grant Thornton and BDO, all failed to be sceptical enough. PwC was told to pay more attention to how impairment of goodwill is calculated, while Ernst & Young should make sure there is enough evidence to back growth rates. Grant Thornton, KPMG, BDO and Deloitte were told to apply appropriate challenges to company bosses.

Bad Food? Tax It, and Subsidize Vegetables [NYT]
Simply put: taxes would reduce consumption of unhealthful foods and generate billions of dollars annually. That money could be used to subsidize the purchase of staple foods like seasonal greens, vegetables, whole grains, dried legumes and fruit.

Men use ‘sniff test’ to tell clothes’ cleanliness, survey shows [MSNBC]
For some reason, this required a survey.

Auditors’ Somewhat Raised Confidence [CFO]
First the good news: fewer companies are carrying around the burden of a going-concern qualification. […] Now the bad news: the numbers are still high. And the drop in qualifications has more to do with companies dropping out of the public-company sector, getting acquired, or — confirming their auditors’ predictions — going bankrupt.

Doubts emerge over U.S. move to global accounting [Reuters]
Once thought inevitable, a decisive move by the United States to one-world accounting is now in serious doubt. Blame delays, shifting timelines, or huge debt and high unemployment problems in the United States’ own back yard, but the idea of a massive change in companies’ accounting framework is not the crowd-pleaser it once was. “If there was a compelling value proposition that said, ‘as a policy, this is the right thing to do,’ it would be going faster than it’s going,” said Steven Nielsen, chief executive officer of Dycom Industries.

Gridlock for Debt Talks [WSJ]
Republicans and Democrats on Capitol Hill moved along separate tracks Sunday toward a deal to increase the U.S. government’s borrowing authority, setting America’s gridlocked political system on a collision course with jittery financial markets around the world. The two camps remained split over how much to increase the debt limit—enough to get past the 2012 election or not—and how much to cut spending. A break in the impasse is needed to ensure the government won’t run out of cash to pay its bills after Aug. 2.

Owling: The new planking? [WaPo]
“Because planking is so two months ago.”

More red flags for Carlyle’s China portfolio [Reuters]
More Chinese companies in the Carlyle Group’s Asia portfolio have had questions raised about potential weaknesses in their accounting practices or financial controls, bringing further scrutiny to the private equity firm’s investments across the country. Carlyle, invested in more companies in China than any other private equity firm, is not alone in having to sort out parts of its portfolio. Several other major foreign players there have been caught up in various accounting issues that surfaced in the last few months.

Green Mountain Coffee: A Bad Cup of Java [Grumpy Old Accountants]
With lawsuits recently filed against it for securities violations, we can no longer ignore the financial reporting indiscretions of Green Mountain Coffee Roasters (GMCR). This is not just a case about bad financial reporting, and likely financial reporting fraud. GMCR offers absolute proof that compliance with generally accepted accounting standards does not necessarily yield transparency in financial reporting.

PwC Hedges Bet Between Bank of America And Federal Home Loan Banks [Forbes]
Safe money is still on PwC towing to BofA.

Detecting internal control overrides [Fraud Files Blog]
News you can use.

To Plank or Not to Plank [The Summa]
There is no question.

Moody’s downgrades Greece [FT]
The second bail-out of Greece will weaken the credit ratings of Europe’s strongest countries as well as resulting in a default for Athens, Moody’s said on Monday. The US rating agency downgraded Greece by three notches to Ca, Athens’ lowest rating and one that implies the country is already in default.

KPMG Chairman-Elect Michael Andrew Announces Appointments to Global Leadership Team [KPMG]
Among them is Mark Goodburn, currently head of Advisory in the U.S., to Global Head of Advisory.

Read My Lips: No New Taxes [NYT]
Grover Norquist gets a spot on The New York Times Op-Ed page.

Obama and Boehner Advance Toward Deal to Cut Deficit [WSJ]
Until now, Republicans have shot down every proposal that involved higher taxes. But Democrats could be the major obstacle to this package because they worry that upfront spending cuts would be ironclad while any tax increases would be subject to later agreement. With prospects of a government default looming in early August, leaders on both sides denied Thursdaose. But the White House provided an outline of the deal to Democratic congressional leaders, aides said.

Democrats Recall Reagan’s Tax Increases [Bloomberg]
Reagan, renowned by Republicans as a tax-cutter, also increased revenue about a dozen times when confronted with surging deficits. The Treasury Department has estimated those measures would be the equivalent of $300 billion annually today — more than what many Democrats are now seeking as part of a deal to raise the U.S. debt ceiling. That often-forgotten history has some lawmakers trading places, with Democrats hailing the former Republican president as an example for today’s budget negotiators.

Four More Credit Suisse Bankers Charged in Tax Case [WSJ]
U.S. prosecutors on Thursday charged Credit Suisse Group’s former top offshore banking executive in North America and three other senior bankers with defrauding the U.S. government, increasing pressure on the Swiss bank over U.S. customers’ secret accounts that the officials say were used to evade taxes. The charges add senior-level executives to an indictment filed in February against lower-level bankers who were charged with conspiring to defraud the U.S. by opening and maintaining thousands of offshore accounts for wealthy Americans with as much as $3 billion in hidden assets.

Congress Plans Oversight Hearing on IRS Tax Preparer Regulation [AT]
The House Ways and Means Oversight Subcommittee plans to hold a hearing next Thursday on the Internal Revenue Service’s recent efforts to step up regulation of tax return preparers. “This hearing is a continuation of the Subcommittee’s oversight of the IRS and the alarming rates of tax noncompliance,” Charles W. Boustany Jr., R-La., who chairs the subcommittee, said in announcing the hearing Thursday. “With so many Americans relying on paid professionals to prepare their returns, it is critical that we better understand what the IRS is doing and what impact the new regulations will have on taxpayers, paid tax return preparers, and tax compliance.”

PKF and BDO in hot water over China fraud [Reuters]
The fourth time was the charm for shareholders suing the auditors of Shenzhen-based China Expert Technology. China Expert shareholders have been trying unsuccessfully to sue the company’s accounting firms for failing to detect an alleged $132 million fraud. U.S. District Judge Alvin Hellerstein in New York has previously dismissed the suit three times, saying the shareholders’ claims were inadequate.

Florida Rep. Rivera faces federal probe over casino contract [MH]
Agents with the FBI and the Internal Revenue Service have begun interviewing witnesses knowledgeable about a $1 million consulting contract between Flagler Dog Track — now known as Magic City Casino — and Millennium Marketing, a company co-owned by Rivera’s 70-year-old mother and her business partner, according to sources familiar with the investigation.

Ex-NASA agent pleads guilty in church theft case [AP]
A former NASA special agent pleaded guilty Thursday to failing to report nearly $300,000 he stole from his Southern California church on his tax forms. Alvin Danielle Allen, 42, of Lancaster admitted before U.S. District Judge George H. King that he filed fraudulent tax returns from 2004 to 2008. He faces up to three years in federal prison when he is sentenced Nov. 7.

Accounting Cops Delay New Rule on Leases [WSJ]
The Financial Accounting Standards Board and the International Accounting Standards Board said they will reintroduce a revised lease-accounting proposal for public comment later this year, with changes from their original proposal last year.

‘Nerdy’ accountant ready to lead healthcare merger [Reuters]
For a self-described nerdy accountant who shuns attention, Express Scripts Inc (ESRX.O) chief George Paz just thrust himself into the limelight. With his $29.1 billion planned purchase of rival Medco Health Solutions Inc (MHS.N), Paz would run the clear leader in managing prescription drug benefits for millions of Americans.

IRS Whistleblower Office Issues Annual Report [TaxProf]
It was a banner year!