Category: ANR

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!

Obama Backs Latest Bargain [WSJ]
President Barack Obama, in a last-ditch bid for a bipartisan “grand bargain” on the budget, threw his weight Tuesday behind a $3.7 trillion deficit-reduction plan unveiled by six Republican and Democratic senators. The plan, which would span a decade, has scant chance of passing intact as the solution to the current debate over raising the government’s borrowing limit. Some Republicans were wary of the plan’s changes in tax rules. Democrats said it would be near impossible to draft legislative language and pass it quickly.

Political Advocacy Groups Denied Tax-Exempt StatusNYT]
Copies of the letters informing the groups of the decisions were heavily redacted by the I.R.S. when it released them last week, so it was impossible to know the names of the organizations involved, or which political party they might have worked with. “You are not operated primarily to promote social welfare because your activities are primarily for the benefit of a political party and a private group of individuals, rather than the community as a whole,” the I.R.S. wrote in the letters. “Accordingly, you do not qualify for exemption.”

Is Facebook Worth $100 Billion? [WSJ]
The Palo Alto, Calif.-based social network was valued at $15 billion in October 2007 when Microsoft Corp. invested in the company. By this January, Facebook commanded a $50 billion price tag when Goldman Sachs Group Inc. led a $1.5 billion funding round in the company. Today, transactions of Facebook stock on private marketplaces value it at about $84 billion. Some people believe that if Facebook goes public next year, it will trade at a $100 billion valuation, more than the market capitalizations of Hewlett-Packard Co. (currently at $74 billion) and Amazon.com Inc. (at $9g>US board changes swaps accounting for local govts [Reuters]
The board that sets accounting standards for state and local governments on Wednesday changed some financial reporting requirements for swaps and other hedging instruments the governments use. The Governmental Accounting Standards Board said that “deferred outflows” and “deferred inflows” of resources should be reported separately from assets and liabilities on financial statements.

Raters Put U.S. on Notice [WSJ]
Moody’s Investors Service said it was reviewing the government’s top Aaa bond rating for a possible downgrade, citing the “rising possibility” that the government’s $14.29 trillion borrowing limit won’t be raised soon enough to prevent the U.S. from running out of money to pay its bills. In addition, ratings agency Standard & Poor’s privately has told lawmakers and top business groups it might cut the U.S. credit rating if the government fails to make any of its expected payments—including Social Security checks—even if it makes all its debt payments, people familiar with the matter said.

Fan Who Returned Ball Is Reaping Rewards [WSJ]
On Wednesday, the 23-year-old from Highland Mills, N.Y., was guaranteed at least a $50,000 donation, given a 2009 World Series ring, and got an offer to have his taxes covered should the IRS not consider the items Lopez received Saturday gifts. In case there are still some contrarians who believe Lopez didn’t make the right decision, Topps announced Lopez will also have his own baseball card. “It’s an incredible feeling,” Lopez said yesterday at Modell’s Sporting Goods in Times Square, his newfound public relations team not far from his side. “Never ever would I have expected this, so it’s a cool thing.”

ConocoPhillips to Split Into Two Businesses [DealBook]
ConocoPhillips said on Thursday that it would break itself into two companies, spinning off its refining business to shareholders by the first half of next year. ConocoPhillips would hold onto its higher-margin exploration operations, and would seek acquisitions to expand that business.

Small Firms Defend LIFO [In Charge/WSJ]
Known as last-in, first-out – or LIFO – the strategy is used by businesses of all sizes to reduce taxable income by deducting the most recent cost of goods from sales. Since newer goods added to inventories tend to be more costly than older ones, the result gives the appearance of lower earnings, especially during periods of high inflation. In practice, most businesses prefer to sell older inventory items first, before they lose their value or become obsolete. Rolling back the strategy, which has been used for decades, would raise more than $60 billion in tax revenue over 10 years by increasing the tax liability of manufacturers, wholesalers and retailers nationwide, according to the administration. It has proposed repealing LIFO from the tax code since 2009.

White House threatens veto for bill defunding Wall Street reform [The Hill]
The Office of Management and Budget (OMB) issued a statement Wednesday saying senior advisers would recommend the president veto an appropriations package for financial services and general government if it made it to the president’s desk. The legislation was approved down a party-line vote by the House Appropriations Committee. Among a litany of problems it identified with the package, OMB warned that the $19.9 billion package does not provide sufficient funding to the Internal Revenue Service (IRS), Securities and Exchange Commission (SEC), or the new Consumer Financial Protection Bureau (CFPB).

EU’s Barnier says won’t budge on accounting rule [Reuters]
The European Union won’t give the green light yet to a new accounting rule that could ease fallout from the euro zone’s sovereign debt crisis on banks, a top EU official said on Wednesday. “I do not believe this will be the first solution to the problems we face in Europe at the moment,” EU Internal Market Commissioner Michel Barnier told a webcast meeting in New York. The International Accounting Standards Board (IASB), under pressure from policymakers at the height of the financial crisis, has eased its “fair value” or mark-to-market rule that was known as IAS 39.

Cat Owners Hiss at Licensing Proposal [NBC SD]
“So now you have Animal Control being your tax collector,” says Sandee Gilbert, the owner of a 1-year-old Cornish Rex male named Nike. “And as a tax collector, you’re going to accrue a tremendous amount of cost trying to find the owner of that cat.”

Debt Talk Mired, Leader for G.O.P. Proposes Option [NYT]
From the White House and Congress to financial centers, pessimism spread on Tuesday about the prospects of a debt-limit deal between President Obama and Republicans, prompting the Senate Republican leader to propose a “last-choice option” that piqued the administration’s interest but angered conservatives in his own party. The leader, Senator Mitch McConnell of Kentucky, said a bipartisan budget-cutting deal is probably out of reach, making it unlikely that Republicans would approve an increase in the government’s debt limit by Aug. 2. To prevent default, he proposed that Congress in effect empowe the government’s borrowing limit without its prior approval of offsetting cuts in spending.

News Corp pays 20% tax in US [FT]
News Corp’s political influence, which has ruptured dramatically in the UK in the past week, has not come as a result of its contributions to government coffers. Its latest 10-K statement showed that although the corporate tax rate in the US is 35 per cent, News Corp’s effective tax rate last year was 20 per cent. The company earned $2.5bn in profits and still managed to receive a tax benefit.

Senate Bill Seeks to Raise Revenue by Closing Tax Havens [NYT]
A bill introduced by Carl Levin of Michigan and Kent Conrad of North Dakota would tighten rules that allow hedge funds and corporations in the United States to skirt federal taxes by opening shell companies overseas. The measure would also change the I.R.S. regulations that allow traders of credit-default swaps to avoid paying federal taxes on many transactions that begin in the United States. And to help tax collectors track down hidden assets overseas, the proposal would empower the Treasury Department to ban any foreign bank that refused to cooperate with the I.R.S. By closing the loopholes, the plan could bring the Treasury as much as $100 billion a year, according to various estimates cited by Mr. Levin.

CFOs Having Second Thoughts on Capital Investments [CFOJ]
More than 40% of the 78 CFOs polled in the last two weeks of May said they would rather keep their cash and stay liquid than invest it. Respondents projected that capital spending would increase by 10.7% over the next year, less than the 11.8% forecast they gave in the previous quarter.

China frauds: In (partial) defense of the auditors [Bronte Capital]
I’m guessing audit firms will gladly take a partial defense from someone who isn’t a law firm that represents them.

PwC Will Answer For Centro But Judge Slams Directors First [Forbes]
PwC’s latest problems are down under.

FASB Tackling Private Company Accounting [CFOJ]
The Financial Accounting Standards Board took a step forward in developing modified GAAP for private companies on Monday, a move a main advocate of the standards found encouraging. The accounting standard setter announced that it had completed an initial assessment of the differences in the way private company financial statements are used by lenders, investors and others. In its announcement, FASB said that it would continue working towards creating a framework for private-company GAAP, and is seeking additional input on the issue.

Watchdog Proposes Dodd-Frank Standards for Broker-Dealer Audits [Bloomberg]
Accounting firms would have to consider how much risk their clients take when auditing brokerage firms under rules proposed by the industry’s new watchdog. The proposal from the Public Company Accounting Oversight Board comes a month after the nonprofit corporation established an inspection program for auditors of broker-dealers under terms of the 2010 Dodd-Frank financial reform act. “It would require auditors to use judgment to identify and focus on matters that are most important to the customer- protection objectives,” said PCAOB Chairman James R. Doty, in a statement.

Rush to Defend Tax Rule on Inventory and Profits [NYT]
One of the biggest revenue-raisers proposed by President Obama in negotiations with Congress is what he describes as an arcane change in the tax treatment of business inventories — things like steel, groceries and oil. But however complex the details, the effect of the change would be substantial, and in pushing for it Mr. Obama has kicked a hornet’s nest. Lobbyists from companies of all sizes are swarming around Congress to kill the proposal, which would prohibit the use of an accounting technique known as last in, first out, or LIFO. The technique is used to determine the cost of goods sold, and therefore the income earned, by a company.