Category: ANR

Accounting News Roundup: Post-Election Deals on Tax Cuts in the Works; Is IFRS in Our Best Interest?; IRS Commish Predicts Relaxed Testing, Education for Nonsigning CPAs | 10.28.10

Foes Plan Post-Vote Deals [WSJ]
Democrats are engaged in a sharp internal debate over how—or whether—the president and congressional leaders should work with the GOP, which is favored to take control of the House of Representatives and maybe the Senate. White House officials, who declined to comment, haven’t given allies clear signals about their approach, partly because their calculation depends on Tuesday’s outcome.

Strategists in both parties see two options for President Barack Obama. He could seek deals on issues including trade, taxes and spending, following the model of President Bill Clinton, who after losing Coromised with the GOP to overhaul welfare.

Morningstar Selects KPMG as Independent Registered Public Accounting Firm [PR Newswire]
Auditor Swap: E&Y for KPMG.

Preventing Election-Season Clashes in the Workplace [Bloomberg BusinessWeek]
With less than a week to go, some of you may have already broken the “don’t send racist/sexist email” rule but at least you’ll be ready for 2012.

Jailed Stanford accuses ex-lawyer of incompetence [AP]
Stan is on his 5th round of attorneys after accusing Bob Bennett of “incompetence, unethical behavior, deceit and only caring ‘about dipping his fingers in the money pot.’ “

Billionaire Julian Robertson Notches Tax Win For New York City Non-Residents [Janet Novack/Forbes]
And saves $27 million. Hoo-rah!

IFRS Adoption by the US: Definitely Not in the “Public Interest” [Accounting Onion]
Besides the many accounting related objections to IFRS, there are two broadly “legal” objections. These involve the role and authority of the SEC as determined by Congress. The concern is that IFRS adoption would involve a “loss of sovereignty” for the SEC and a departure from its mission of acting “in the public interest.”


IRS Commissioner Predicts Relief From Testing and Continuing Education for CPA-Supervised Nonsigning Preparers [JofA]
In his keynote speech at the AICPA’s National Tax Conference in Washington, Shulman acknowledged the Institute’s concerns about the IRS’ new regulatory regime for all paid tax return preparers.

“I am very sympathetic to the argument that the rules should be flexible for people who have met a higher professional standard,” Shulman said. “Therefore it is highly likely that as we implement the new rules and procedures there will be some relief for testing and continuing education requirements” for such nonsigning preparers supervised by a CPA, enrolled agent or attorney.

Smith & Wesson Holding Corporation CFO Resigns to Pursue Business Opportunity [PR Newswire]
William F. Spengler is over guns and is moving on to the…phytochemical and natural products industry.

IRS Auditors Begin Accepting QuickBooks and Peachtree Records [WebCPA]
Business owners and tax professionals have been advocating that the IRS begin accepting taxpayer records in electronic format instead of continuing to use traditional paper books and records for audits, the IRS noted. The IRS Small Business/Self-Employed Examination Division is responding to those wishes expressed in tax practitioner focus group interviews conducted at the 2008 Nationwide Tax Forums and from other stakeholders

Accounting News Roundup: FASB, IASB Delay Financial Statement Presentation; Young Buck Auction – CANCELLED!; IRS Silent on 1099 Rule Guidance | 10.27.10

Fed Gears Up for Stimulus [WSJ]
The central bank is likely to unveil a program of U.S. Treasury bond purchases worth a few hundred billion dollars over seured approach in contrast to purchases of nearly $2 trillion it unveiled during the financial crisis. The announcement is expected to be made at the conclusion of a two-day meeting of its policy-making committee next Wednesday.

FASB, IASB Pull Up on Financial Statement Presentation [A&A Update/Compliance Week]
The Financial Accounting Standards Board and the International Accounting Standards Board met in a joint session last week to make progress on a number of major initiatives to revise both U.S. Generally Accepted Accounting Principles and International Financial Reporting Standards. They agreed they’ve stretched their respective staffs to capacity and can’t proceed any further on a long-running effort to revise the overall presentation of financial statements, nor with a project to better define how to treat financial instruments that look and feel a lot like equity.

Clifton Gunderson hiring more than 40 in Timonium [Baltimore Business Journal]
CG is looking to hire 40 professionals – both audit and tax pros – by January 1st.

CIT Profit Beats Estimates Amid Accounting Revisions [Bloomberg]
Third-quarter results were boosted by $265.9 million in “fresh-start accounting,” or FSA, adjustments related to changes the company made to balance-sheet values when it exited bankruptcy protection, according to the statement. Earnings aren’t comparable with the year-ago quarter before CIT’s bankruptcy.

IRS cancels auction of rapper Young Buck’s property [Tennessean]
No Ms. Pac Man. No Scarface poster. And sure as hell, no LV holster. YB’s lawyer filed suit to stop the auction and he’s selling $600k+ in real estate to settle up. Hmm. Selling real estate to keep jewels, 2Pac posters et al. Yeah, that actually seems about right.


Accounting Firm M&As: A Market Update [JofA]
Abruptly in the fall of 2008, organic growth stopped. Since many growth-oriented firms require ongoing expansion as a key part of their culture, they started looking at M&As again as a way to grow the top line. This has led to more flexible criteria for M&A candidates in many cases and a significant increase in M&A activity in many markets.

Lobbyists Court Potential Stars Of House Panels [NYT]
Ernst & Young, the global accounting firm, hosted a fund-raising breakfast late last month for Representative Dave Camp that drew so many donors the firm’s lobbyists had to pull extra chairs into their largest conference room.

IRS continues to dodge questions on 1099 rule [On the Money/The Hill]
Despite repeated requests from House Small Business Committee ranking member Sam Graves (R-Mo.) for how the IRS intends to implement the 1099 reporting rule, IRS Commissioner Douglas Shulman continues to decline to provide him the information.

“I am extremely disappointed by the IRS’s ongoing refusal to help employers understand the impact of this hefty requirement,” Graves said in prepared remarks. “The questions and confusion surrounding the 1099 reporting rule have stalled small business growth in America.”

IRS examines Build America Bonds, compliance [Reuters]
The Internal Revenue Service is reviewing several taxable Build America Bonds issued in 2009 and 2010 to make sure they complied with tax law, according to a notice on the agency’s website.

The IRS is also seeking to understand “practices in the relatively new market for BABs,” the notice said.

Build America Bonds were created in last year’s economic stimulus plan to spur investment in infrastructure. The bonds have become popular with cities and local governments because they pay a federal rebate equal to 35 percent of interest costs.

Accounting News Roundup: GOP Targeting IRS Funding to Stall Healthcare; Grant Thornton, BDO Merge in South Africa; What Your Recruiter Isn’t Telling You | 10.26.10

IRS Funding A Target In Health-Care Implementation Battle [Dow Jones]
Funding for the Internal Revenue Service could become a battleground in the next Congress as Republicans seek to halt implementation of the new health-care law.

GOP candidates are running on a pledge to repeal that law. But some repeal advocates say a strategy of choking off funding to the IRS and federal health agencies is more politically viable.

“Repeal is not within the set of possible outcomes while President Obama holds his veto pen. However, a defunding strategy could throw sand in the gear bring it to a near standstill,” said Michael Cannon, director of health policy studies at the libertarian Cato Institute.

Stephen Lukens Named Grant Thornton LLP Advisory Services Leader [Business Wire]
Another Stephen! Mr Lukens came on board from IBM Global Business Services and was with PwC Consulting prior to Big Blue’s purchase of the practice.

Accountant describes ‘totally’ different transaction between GM and Delphi [Crain’s]
A forensic accountant testifying at former Delphi Corp. CEO J.T. Battenberg’s civil fraud trial in a federal courtroom in Detroit today said that the auto supplier recorded on its books a payment to its largest customer, General Motors, “totally differently from” the actual transaction conducted by the supplier and its former parent company.

Merger will create new accounting giant [Business Day]
THE merger between Grant Thornton and BDO Cape, which will become effective next Monday, will create the biggest accounting firm in SA’s mid-tier market , followed by Mazars.

The deal positions the merged firm to obtain more work, particularly from privately held businesses and listed companies. Previously the two firms obtained most of their work from privately held businesses.

The firm, which will be led by Grant Thornton national chairman Leonard Brehm, will have a staff compliment of 900 and 97 partners and directors, with combined revenue of R400m.

In Finance Team Building, Xerox Copied No One [CFO]
[M]ajor groundwork was laid through a finance reorganization and team-building effort that Lawrence Zimmerman began eight years ago after ending his retirement from IBM to become Xerox vice chairman and CFO.

“The big change Larry brought was to make the accounting unit independent of all other organizations,” says Gary Kabureck, who stayed on as chief accounting officer after Zimmerman joined Xerox. “That was a huge, very positive change.” The independent model, says Kabureck, replaced a Xerox structure that had tied accounting to business units. Now, accounting is used for “measuring operational results, which may which may [sic] not be what the local operation manager wants them to be, but it’s what the CFO wants them to be.”

Grassley: Three years before unemployment’s back to normal [The Hill]
2013 doesn’t sound that bad.


PayPal Names Patrick Dupuis as Chief Financial Officer [Business Wire]
Pat got his chops at the likes of Sitel, BJC Healthcare and GE Healthcare.

Should you upgrade QuickBooks? [AccMan]
SaaS/cloud upgrade issues are NOT the customer’s problem. They lie with the developers. Contrast this with the advice being given for a QuickBooks upgrade. There is plenty to think about. The same broad principles will apply to any on-premise solution. That’s a fundamental difference SaaS/cloud vendors should emphasize a lot more than they do. SaaS/cloud upgrades are usually seamless to the end customer while bug fixes are often more or less invisible to the user.

10 Things Employment Recruiters Won’t Say [SmartMoney]
You mean this person may not be completely honest with you? GET OUT.

Accounting News Roundup: Brits Investigating Services KPMG Provided BAE Systems; How Many Times Did Harry Reid Vote to Increase Taxes?; PwC Scoffs at ‘Big 5’ Idea | 10.25.10

BofA Finds Foreclosure Document Errors [WSJ]
The Charlotte, N.C., lender discovered errors in 10 to 25 out of the first several hundred foreclosure cases it examined starting last Monday. The problems included improper paperwork, lack of signatures and missing files, said people familiar with the results. In certain cases, information about the property and payment history didn’t match.

KPMG investigated over BAE audit [Accountancy Age]
The investigation by the Accountancy and Actuarial Discipline Board (AADB) focusBritish Aerospace/BAE Systems between 1997 and 2007, looking at commissions paid by BAE to subsidiaries, agents or other companies.

Any professional advice, consultancy or tax work provided to BAE by KPMG during that period will also come under the microscope in relation to commission payments. The investigation will focus on commissions connected to three legal entities: Red Diamond Trading; Poseidon Trading Investments; and Novelmight.

Key Tax Breaks at Risk as Panel Looks at Cuts [WSJ]
The tax benefits are hugely popular with the public but they have drawn the panel’s focus, in part because the White House has said these and other breaks cost the government about $1 trillion a year.

At stake, in addition to the mortgage-interest deductions, are child tax credits and the ability of employees to pay their portion of their health-insurance tab with pretax dollars. Commission officials are expected to look at preserving these breaks but at a lower level, according to people familiar with the matter.

Harry Reid Voted to Raise Taxes ‘Only’ 51 Times [TaxProf Blog]
Apparently there was some talk that it was actually in the ballpark of 300.


Reflections on the Basel Committee Principles for Enhancing Corporate Governance [Marks on Governance/IIA]
News you can use.

Business leaders press administration for repeat on tax break [On the Money/The Hill]
The National Association of Manufacturers and other groups argue allowing companies to “repatriate” money earned abroad to the U.S. at a lower tax rate could spur the economy by providing businesses with a burst of cash they could invest in their companies.

“The business community is looking at ways to jumpstart the economic recovery and here is one you could do without increasing the deficit,” Dorothy Coleman, vice president of tax and domestic economic policy for the manufacturers.

PwC slates FRC idea to create Big Five [Accountancy Age]
Paul Woolston, head of public sector assurance at PwC, criticised the Financial Reporting Council’s suggestion the Audit Commission be used to create a fifth player in the audit industry, currently dominated by the Big Four – PwC, Ernst & Young, Deloitte and KPMG.

“It is at least ironic that the FRC has said what it has, in that the Audit Commission itself has operated with a large monopoly,” he said.

“It is odd that the FRC is concerned about any one organisation having the market share.”

SEC Aims to Streamline Complaint Process [WSJ]
The launch is a step in the agency’s efforts to avoid bottlenecks and duplication in the handling of complaints, which traditionally have been fielded by individual SEC offices and filed there. Complicating matters is the variety of forms in which such complaints come—mail, phone calls, emails and interviews.

“This process is going to ensure that it’s all transferred into a structured format so that it can be more easily searched and analyzed,” Robert Khuzami, director of enforcement, said in an interview.

“We will have all of it in one place, searchable, which will do a lot for us in the long run,” he said.

Thus Far under Obama, the Only Individuals Paying Higher Taxes Are Smokers and Tanners, But They May Have Company Soon [Tax Foundation]
Jersey Shore quips go here.

Accounting News Roundup: Debunking the Audit Industry Green Paper; Theories Behind the Tax Cut That Nobody Noticed; AIG Is Doing a Happy Dance | 10.22.10

The EC’s Green Paper, “Audit Policy: Lessons from the Crisis”: The Bureaucrats Blow Another Chance [Re:Balance]
Jim Peterson dissects the European Commission’s Green Paper on the audit industry and isn’t impressed with what is inside.

Interesting Issues in Timing of Green Mountain Insider Stock Sales and Disclosure of SEC Inquiry [White Collar Fraud]
Sam Antar is curious about GMCR executive Michelle Stacy’s sudden exercising of stock options. You see, GMCR was notified of the SEC investigation into their revenue recognition on September 20th. Ms. Stacy exercised and sold her options on the 21st. The company announced the SEC investigation on the 28th.

Regardless of what analysts think about Vermont hippies and their knowledge of revenue recognition, the timing will certainly get the attention of someone (who finds porn disgusting) at the SEC.

Why Nobody Noticed Obama’s Tax Cuts [TaxVox]
According to Tax Policy Center estimates, 96.9 percent of households enjoyed a tax cut that averaged almost $1,200. Just one measure—Obama’s Making Work Pay tax credit—put more than $116 billion into people’s pockets in 2009 and 2010.

Yet, a Times poll found that fewer than 10 percent of those surveyed had any clue. Remarkably, fully one-third thought their taxes went up—even though the actual number was about zero.

Poll: Financial crisis will force states to raise taxes [On the Money]
78% say it’s gonna happen.

Office Depot, execs settle SEC disclosure charges [Reuters]
The SEC had accused the company, its CEO Stephen Odland and former chief financial officer Patricia McKay of conveying to analysts and big investors that the company would not meet analysts’ earning estimates for the second quarter of 2007.

New Faces Enter Fray in Accounting [NYT]
Floyd Norris remembers the old cast at the FASB, IASB and introduces the new ones.


AIG Raises $17.8 Billion in Record AIA Hong Kong IPO [Bloomberg]
American International Group Inc. raised a record HK$138.3 billion ($17.8 billion) from the Hong Kong initial public offering of its main Asian unit, putting what was once the world’s largest insurer on course to repay its 2008 bailout.

AIG sold 7.03 billion shares, or a 58 percent stake, at HK$19.68 each, the top end of a marketing range, Hong Kong-based AIA said an e-mailed statement. It used an option to expand the sale offered from 5.86 billion, or a 49 percent stake.

Comment: EU audit proposals full of contradictions [Accountancy Age]
More debunking of the EC Green Paper.

Aetna CFO duties to expand under new CEO [Reuters]
Aetna Inc [AET.N] will expand the responsibilities of Chief Financial Officer Joseph Zubretsky to include leadership of the health insurer’s strategic diversification plans under the incoming chief executive officer.

Accounting News Roundup: Tax Cut Political Football Goes Flat; Google’s Remarkable Tax Planning; Yes, IRS Agents Are Strapped | 10.21.10

Tax Cuts Slide To Back Burner On Campaign Trail [WSJ]
It’s a sign that a decision by Democratic leaders, to put off a vote on extending the tax cuts until after the Nov. 2 elections, may be paying off politically.

“It’s harder to write an ad portraying a vote that hasn’t happened yet,” said Brian Gaston, a former senior aide to House GOP leaders and now a lobbyist at the Glover Park Group.

Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes [Bloomberg]
Google y $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda.

Google’s income shifting — involving strategies known to lawyers as the “Double Irish” and the “Dutch Sandwich” — helped reduce its overseas tax rate to 2.4 percent, the lowest of the top five U.S. technology companies by market capitalization, according to regulatory filings in six countries.

TUI Travel CFO Quits After Accounting Error [Dow Jones]
In an embarrassing admission, the company said an ongoing audit for the fiscal year ended September 2010 had highlighted the accounting error in the integration of IT systems in its U.K. mainstream business that had accrued over a period of four to five years and which increased its total write-off for 2009 from GBP29 million to GBP117 million.

Chief Executive Peter Long told Dow Jones Newswires that the issue had been identified when it reported its third-quarter results but continued to investigate the matter and “only last night were we able to determine the scale of the problem.”

Banks Clueless on Foreclosure Mess Severity [Jonathan Weil/Bloomberg]
The biggest U.S. mortgage lenders and servicers say they’re putting the foreclosure mess behind them, and that it never was a major problem. The reality is these companies are so big and unmanageable, the people in charge of running them have no way to know if that is true.

One thing that remains unknowable is how many flawed home- mortgage records and foreclosure proceedings are out there waiting to be unearthed. Dozens of federal and state agencies are investigating. It’s anyone’s guess what they might turn up.


NJ man cashes $158G check IRS mistakenly sent him [Asbury Park Press]
He figured no one would notice.

For ‘B-to-B’ Companies, Finding Facebook ‘Friends’ Can Be a Struggle [WSJ]
These days, even small “business-to-business” concerns like Bill.com are experimenting with social media, perceiving the popular online hangouts as low-cost, easy-to-use venues for attracting new customers and retaining existing ones. But unlike their consumer-focused counterparts—retailers that sell smartphones, jeans, games and other personal products—so-called B-to-B businesses seem to be having a harder time connecting with their target audience.

Some IRS agents carry guns, too, agents tell UAB accounting student group [Birmingham News]
“My first day on the job, I thought, ‘Why are they carrying guns?'” said Donald Smith, a UAB graduate and special agent with the IRS-Criminal Investigation unit.

Korea wants G20 to delay accounting standard consolidation [Korea Times]
Apparently they have a say in the matter

Accounting News Roundup: America’s Fiscal Conundrum; FASB Attempting to Price Convergence; Rent and Healthcare Are Both Too Damn High | 10.20.10

Pledging Our Way to Fiscal Disaster [Tax Vox]
Three-quarters of Americans believe that entitlement programs such as Medicare and Social Security “will create major economic problems” over the next 25 years. But two-thirds are opposed to addressing these challenges by reducing benefits, and 56 percent are against raising taxes.

And congressional candidates, who read the polls, are scrambling to pander to the free-lunch beliefs of their respective bases. As a result, they are locking themselves into opposing both reductions in future benefits and tax increases.

NFIB calls for action on Bush tax cuts [On the Money]
“Increasing the individual rates will mean that business owners have less money for business investment and job creation,” the NFIB stated. “One study found that a 5 percent increase in individual tax rates decreases business investment by 10 percent.”

Democratic leaders have repeatedly promised that rate cuts for all but the top two brackets will be extended into next year, allowing most businesses to avoid a tax increase. The NFIB states their plan will still hit small businesses.

FASB Seeking Input on the Costs of Convergence [JofA]
FASB issued a discussion paper to gather input from stakeholders about the time and effort that will be involved in adapting to several anticipated new accounting and reporting standards and when those standards, which are part of the FASB and International Accounting Standards Board (IASB) convergence projects, should be effective. The board said it will use the input it receives to develop an implementation plan that helps companies and other stakeholders manage both the pace and cost of change.

“We issued this discussion paper to gather the information we need to create a realistic, cost-effective plan for transitioning to the new standards,” Acting FASB Chairman Leslie F. Seidman said in a press release.

Paul V. Stahlin Elected Chairman of the AICPA [PR Newswire]
Stahlin said the United States is emerging from a period of economic turmoil that has “driven demand for new business practices, new regulations, new oversight and new solutions,” in his inaugural speech, titled “Seize the Future.” He said CPAs have been finding solutions for more than 100 years.

“We as CPAs have the unique ability to make sense of a constantly changing complex world,” Stahlin said. “Employers, our clients and our country turn to us to make sense of the most complex developments in business and regulation. We best understand how a business ticks.”

Bob Evans Financial Chief To Depart At Year’s End [Dow Jones]
Tod Spornhauer wants to do something different.


Yahoo 3Q profit doubles, revenue still lackluster [AP]
Bartz and CFO Tim Morse are still in process of turning this thing around.

J&J CFO: Healthcare Spending Growth Is Decelerating [Dow Jones]
Certain medical expenses are simply too damn high.

Jimmy McMillan: Rent is Too Damn High! [CBS]
Speaking of, in case you missed it yesterday (or Monday night):

Accounting News Roundup: The Tax Cut No One Noticed; Accountants Are Dissatisfied?!?; BDO Partner: Big 4 ‘Unhealthy’ | 10.19.10

From Obama, the Tax Cut Nobody Heard Of [NYT]
In a New York Times/CBS News Poll last month, fewer than one in 10 respondents knew that the Obama administration had lowered taxes for most Americans. Half of those polled said they thought that their taxes had stayed the same, a third thought that their taxes had gone up, and about a tenth said they did not know. As Thom Tillis, a Republican state representative, put it as the dinner wound down here, “This was the tax cut that fell in the woods — nobody heard it.”

AICPA Survey Shows U.S. CPAs See Pivotal Time Ahead in Development of International Financial Reporting StandardsPR Newswire]
Certified Public Accountants see the U.S. at a pivotal time in the development of uniform, high-quality global accounting standards as the U.S. Securities and Exchange Commission evaluates a transition to International Financial Reporting Standards and the U.S. Financial Accounting Standards Board and the International Accounting Standards Board work jointly to merge U.S. and global standards.

“Our latest tracking survey shows CPAs in the U.S. are increasingly aware of International Financial Reporting Standards but significant numbers are waiting to invest more resources in international standards until they see a clear signal from the Securities and Exchange Commission about future U.S. adoption,” said Arleen Thomas, AICPA senior vice president for member competency and development. “CPAs are also watching the FASB-IASB convergence progress very closely, according to our focus groups.”

For accountants, the latest industry pressures add anxiety, subtract fun from the job [Crain’s]
Ernst & Young LLP this year decreed a Summer of Fun: Accountants got to wear jeans on Fridays and take several days off for community service projects. One afternoon, the Chicago office attended a Cubs game en masse. The firm bought 900 tickets, and the Cubs did their part by winning.

Though tame by some standards, the fun and games were a nod to the funk pervading the accounting industry. Revenues are down, margins are squeezed and many employees are unhappy, particularly at the Big Four firms like Ernst & Young that dominate the profession.

“I’d say the dissatisfaction index would probably be at a 10-year high, in the high 60s or low 70s,” says Buzz Patterson, an executive recruiter who specializes in accounting clients for Donahue/Patterson Associates Inc. in Chicago.

Borders Names Former Casino Executive as CFO [ABC News]
Scott Henry is going from blackjack to books effective immediately.


The accountant who sees EU rules as a chance to transform his firm [City AM]
“Having four big players is unhealthy,” says Mathias, taking off his jacket and hanging it on the back of a chair in a bright first-floor meeting room in BDO’s Baker Street headquarters. “In other areas of business, having four dominant companies is not too much of a problem. But in our industry, because of the conflicts of interest that often arise out of the range of work professional service firms perform, clients may only be faced with a choice of two or just one firm to choose from. Now, I would say this, because its in my interest, but there are others in the market who say this also.”

Apple iPad sales fail to hit forecasts [FT]
What are you waiting for?

Accounting News Roundup: Political Nonprofits Pushing the Limits with Ads; Familiar “Outrage” Over Big 4 Audit Industry Dominance; Obama Attacks GOP Tax Policy in Weekly Address | 10.18.10

Groups Push Legal Limits in Advertising [NYT]
“The basic rule of thumb for nonprofit groups organized under Section 501(c) of the tax code is that more than 50 percent of their annual activities cannot be political. Although it is a matter of debate how spending on traditional issue ads would be categorized by the Internal Revenue Service, it is indisputable that spending on express advocacy would be classified as political.”

Lords to hear top six firms on audit reform [Accountancy Age]
“A showdown has been planned for the UK’s top six acevidence is heard at a House of Lord’s inquiry into audit reform.

The House of Lords Economic Affairs Committee will take evidence from the heads of the Big Four – PwC, Deloitte, KPMG and Ernst & Young – followed by their mid-tier rivals – BDO and Grant Thornton – during its inquiry into audit competition.”

Accounting industry sees ray of light on the horizon [Crain’s]
“Demand for accountants is forcing large CPA firms to bump salaries by as much as 3.8% next year, the steepest jump since 2008. U.S. companies with more than 20 employees plan to increase hiring of full-time accountants and finance personnel this quarter for the first time since early 2009, says Michael Shapow, a senior vice-president at Menlo Park, Calif.-based staffing firm Robert Half International Inc.

During the dot-com era, bachelor’s degrees in accounting fell from 53,000 in the mid-1990s to 35,000 in 2002, according to the American Institute of Certified Public Accountants in Washington, D.C. The figure has boom-eranged, rising to 49,000 in 2008, creating a new problem: not enough professors.”

Systemic Risk! Dominance! Momentum! Auditors In Crisis. Again. [Re: The Auditors]
The “outrage” and “risk” over the dominance by the Big 4 in the audit industry is so played.

Obama Attacks Republicans on Tax Policy [TaxProf Blog]


AICPA to SEC: Companies Will Need as Much as Five Years to Ready for IFRS Adoption [JofA]
“In the portion of its letter regarding the impact of IFRS conversion on contractual arrangements, the AICPA voices support for a requirement for companies adopting IFRS to file one year of comparative financial statements rather than two. ‘Our research indicates that companies will need five years preparation time to adopt IFRS if the SEC requires two years of historical comparative financial statements. If only one year of comparative financial statements is required, a four-year transition period would be needed to adopt IFRS.’ The SEC has not said what the requirement would be.”

Accounting News Roundup: PwC Rakes in Fees on Lehman; Grant Thornton: Opening the Audit Market Wouldn’t Hurt Big 4; One in Three IRS Employees Are Eligible for Retirement | 10.15.10

Bernanke Signals Intent to Further Spur Economy [NYT]
“The Federal Reserve chairman, Ben S. Bernanke, indicated on Friday that the central bank was poised to take additional steps to try to fight persistently low inflation and high unemployment.

‘Given the committee’s objectives, there would appear — all else being equal — to be a case for further action,’ he said in a detailed speech at a gathering of top economists [in Boston].

Mr. Bernanke noted that ‘unconventional policies have costs and limitations that must be taken into account in judging whether and how aggressively they should be used.” But he suggested that the Fed was prepared to manage the riske most powerful tool remaining in the Fed’s arsenal of weapons to stimulate the economy: vast new purchases of government debt to lower long-term interest rates.’ “

Lehman Brothers’s U.K. Administrators Billed $420 Million Since Collapse [Bloomberg]
“Lehman Brothers Holdings Inc.’s European administrators have billed 262 million pounds ($420 million) for work since the bank sought bankruptcy protection in September 2008.

The administrators have recovered 11.9 billion pounds in cash in the 24 months since the bank’s collapse and more than 350 trading counterparties have settled what they owed according to a report today on the PricewaterhouseCoopers LLP website.

‘We have achieved exceptional progress in the administration, dealing with some 29 billion pounds of securities and cash, having now returned almost 12 billion pounds of this to clients,’ Tony Lomas, the PwC partner on the Lehman administration, said in a statement. ‘Whilst there are still numerous major challenges to address, our actions to date have generated significant realizations for creditors which will be paid to them in due course.’ “

Y U Luv Texts, H8 Calls [WSJ]
“For anyone who doubts that the texting revolution is upon us, consider this: The average 13- to 17-year-old sends and receives 3,339 texts a month—more than 100 per day, according to the Nielsen Co., the media research firm. Adults are catching up. People from ages 45 to 54 sent and received 323 texts a month in the second quarter of 2010, up 75% from a year ago, Nielsen says.”

Big Four can take losing a chunk of the audit market [Accountancy Age]
“Opening up a fifth of the FTSE-250 audit market would only hit the revenues of the Big Four by an average of £6m, according to Grant Thornton.

Welcoming the EC’s green paper on audit reform, which has made a raft of radical measures including mandatory rotation of audits, the firm said opening up the audit market would not hurt the Big Four.”

Mozilo and SEC in Deal Discussions [WSJ]
“Confidential talks begun in recent weeks appear to be moving toward a settlement in the Securities and Exchange Commission’s high-profile civil fraud case against former Countrywide Financial Corp. Chief Executive Angelo Mozilo and two other former executives, people familiar with the matter said.

Late Thursday, a status conference on the case was ordered for Friday, a move that could signal a new development in the suit. If no agreement is reached, a jury trial is scheduled to begin Tuesday in federal court here before Judge John Walter.

It is also possible, people familiar with the matter said, that only one or two of the defendants would reach a settlement before the trial. Attorneys for both sides are preparing for trial in the event it goes forward, said people familiar with the matter.”


33% of IRS’s 106,000 Employees Are Eligible for Retirement [TaxProf Blog]
Do they simply love their jobs that much?

A little perspective on those 18,000 XBRL errors [CPA Success]
“It’s not that bad.”

Accounting News Roundup: Pols Line Up Against the Estate Tax; PCAOB Threatens to Stonewall Foreign Audit Firms; RubinBrown Forms LifeSciences Practice | 10.14.10

Estate-Tax Rises Again as Issue on Trail [WSJ]
“More than 250 current congressional candidates, mostly Republicans, have signed a pledge this year to support elimination of the tax, according to the advocacy group sponsoring the effort. The signers include 53 incumbents and more than half of Republicans running for House and Senate. During the 2008 elections, when the group first began seeking supporters, only 30 candidates signed up.

The estate tax has become a particularly hot issue in the West, including in Washington state’s Senate contest, and some rural House districts where Democratic incumbents appear vulnerable. a hotter issue in rural areas because it raises particular concerns among farmers and landowners.”

Religious group took alleged terrorist money [WaPo]
“A group of Ohio ministers has asked the Internal Revenue Service to investigate the organization that sponsors the National Prayer Breakfast because it received money six years ago from an alleged Islamic terrorist organization trying to finance illicit lobbying.

ClergyVoice, the activist group that wrote to the IRS commissioner Wednesday, complained that the Fellowship Foundation violated its obligation as a tax-exempt organization not to deal with such entities.

The foundation, an Arlington-based religious enterprise associated with a house at 133 C St. SE where several members of the House and Senate have rented rooms, acknowledged Wednesday that it had received two $25,000 checks, in May and June 2004, from the Missouri-based Islamic American Relief Agency.

The charity was included on a Senate Finance Committee list of terrorist financiers in January of that year.”

Dell’s Settlement of SEC Accounting-Fraud Claims Approved by U.S. Judge [Bloomberg]
“Dell Inc., the world’s third-biggest maker of personal computers, won a judge’s permission to pay $100 million to settle accounting-fraud claims brought by the U.S. Securities and Exchange Commission.

The accord reached in July allows founder Michael Dell to remain chief executive officer after paying a $4 million fine. U.S. District Judge Richard Leon approved the settlement today at a hearing in Washington.

Dell, 45, and the personal-computer maker failed to tell investors about “exclusivity payments” received from Intel Corp. in exchange for shunning products made by rival chipmaker Advanced Micro Devices Inc., the SEC said in a complaint filed in July. The payments allegedly helped Dell reach earnings targets from 2001 to 2006.”

US regulator threatens ban on Euro-firms [Accountancy Age]
“The US audit watchdog, the Public Company Accounting Oversight Board (PCAOB), is considering de-registering non-US audit firms based in countries where it has no power to conduct inspections, including Europe.

Rhonda Schnare, international affairs director at the PCAOB, said de-registering firms was one option on the table if nations did not co-operate with US audit inspectors.

‘Bringing enforcement proceedings against non-US audit firms is one option and the board is evaluating all of its options… The issue is one of the [PCAOB’s] highest priorities,’ she said.

‘The board cannot de-register firms without going through an extensive process that would involve bringing individual disciplinary hearings against the firms, and that is certainly one of the options the board has.’ “


President Obama Proposes More Tax Credits for Higher Education [Tax Foundation]
“Even ignoring the possible issue of economic incidence and whether or not this credit would mostly lead to higher tuition instead of lowering the net price faced by students, one of the problems with this credit is the downside of tax credits known as “buying out the base.” The credit will indeed entice some additional amount of people at the margin to go to college. However, it will mostly give a huge windfall to those who were going to go to college in the first place. If more people in college is truly what you want, there are likely better ways to do it than via a refundable tax credit that doesn’t target those at the margin.”

Accounting firm RubinBrown forms team for life sciences [KCBJ]
“RubinBrown LLP, which is based in St. Louis and has offices in Kansas City and Denver, created the Life Sciences Services Group earlier this month.

The firm has identified about 15 existing team members to serve on the life sciences group, about five of whom are in Kansas City, said Todd Pleimann, managing partner of the firm’s Kansas City branch.

However, he said, the firm probably will add more to the team in the future, possibly hiring from outside.

‘We really feel that the life sciences, and particularly animal health, is really key for the Kansas City metropolitan area,” Pleimann said. “We know there is going to be a lot of growth in this area.’ “

Does Overstock.com CEO Patrick Byrne Know When to Shut Up, Especially While the SEC Investigates his Company? [White Collar Fraud]
Apparently not.

Accounting News Roundup: Hans Has His Work Cut Out; Paladino Trickster Owes Back Taxes; Rand Paul Wants IRS Abolished | 10.13.10

EC proposes mandatory rotation of auditors [Accountancy Age]
“The European Commission is proposing a radical restructure of the audit industry including a multinational regulator, mandatory rotation and caps on advisory fees.

Some proposals, audit to draw up living wills or a detailed “long form report” for regulators or hive off their audit arms, under the measures raised in a new green paper”

18,000 Tagging Errors in XBRL Filings So Far [CFO]
“Companies that have filed data-tagged quarterly and annual reports appear to be handling the task fairly well, even as the overall number of errors continues to pile up.

About 500 of the largest companies were required to use XBRL, or eXtensible Business Reporting Language, to tag data in their financial statements for periods ending on or after June 15, 2009. As of June 15 of this year, approximately 900 more companies had to do so, and the first group of filers additionally had to tag all amounts and tables in their financial-statement footnotes.”

IASB a tightrope walk for Hans Hoogervorst [FT]
“The appointment of Hans Hoogervorst, 54, as chairman of the International Accounting Standards Board raises two big questions

First, does it matter that he is not an accountant? Second, will his elevation lessen the likelihood that the US will adopt the IASB’s IFRS accounting rules in place of its own?

The lack of professional qualifications were not a concern for Michael Izza, chief executive of the Institute of Chartered Accountants in England and Wales.

‘I don’t think that it is an issue,’ he said on Tuesday, citing the simultaneous appointment of Ian Mackintosh – a veteran accounting standards-setter with enviable professional credentials – in a supporting role as IASB vice-chairman.”

Some IRS servers down during crucial filing week [AP]
Move along, nothing to see here.

Team Paladino’s Roger a ‘dodger’ [NYP]
“Roger Stone, a key adviser to Republican gubernatorial candidate Carl Paladino, owes Uncle Sam more than $400,000 in unpaid taxes, The Post has found.

The Internal Revenue Service filed a $405,035 lien for unpaid income taxes against the consultant — one of politics’ most notorious dirty tricksters — and his wife, Nydia, last fall in Dade County Circuit Court in Florida, records show.

The debt makes Stone the second high-profile Paladino adviser to run afoul of the taxman. Paladino’s campaign manager, Stone protégé Michael Caputo, recently admitted to a federal tax debt topping $52,000, although he says he’s paid back all but $9,302.”


Rand Paul supports replacing income tax with higher sales tax, eliminating IRS [LCJ]
“Republican U.S. Senate candidate Rand Paul said Tuesday the federal tax code is a ‘disaster,’ and he wants to replace the income tax with a 23 percent sales tax on goods and services.

Paul said he supports changing the federal tax code to get rid of the Internal Revenue Service and would vote to repeal the 16th Amendment that created the federal income tax.

‘The federal tax code is a disaster no one would come up with if we were starting from scratch,’ Paul said in a written statement distributed by an anti-tax group and verified by Paul’s campaign. ‘I support making taxes flatter and simpler. I would vote for the FairTax to get rid of the 16th Amendment, the IRS and a lot of the control the federal government exerts over us.’

Paul refused to answer questions on the issue during a campaign stop in Louisville Tuesday afternoon. At a previous stop in La Grange, he told reporters he’d also like to see the U.S. Department of Education eliminated.”

The Year of Magical Thinking [TaxVox]
“California is just always in a budget mess. Indeed, the state has faced operating shortfalls – or gaps between inflows and outflows – in every year since 2002.

But this year, it would seem that state lawmakers and outgoing Governor Arnold Schwarzenegger have really outdone themselves. They busted through last year’s tardiness record by enacting a budget 100 days into the new fiscal year. Like last year, they balanced the books – but with a combination of spit and polish and pixie dust. “