Category: ANR

Accounting News Roundup: Short-term Compromise on Estate Tax Possible; Where Do Big 4 Political Contributions Go?; Shrinks for CFOs | 11.08.10

Battles Loom Over Tax Breaks, Spending Cuts [WSJ]
House GOP Whip Eric Cantor and other lawmakers suggested that Republicans in the coming lame-duck session would press for a long-term extension of current tax levels for all earners, despite Democratic opposition. The Bush-era tax cuts expire Jan. 1 unless Congress acts before then.

“I am not for sending any signal to small businesses in this country that they’re going to have their tax rates go up,” Mr. Cantor said on “Fox News Sunday.” Republicans say raising tax rates on higher earners would hit about half of all small-business income. Democrats say that figure is inflasinesses that are structured as small businesses.

Can a Republican House Stop Farm Subsidy Nonsense? Yeah Right [JDA]
Archer Daniels Midland. Have we mentioned how they’re part of the problem? Adrienne reminds us.

Put Your Money Where Your Money Is: The Auditors and the US Midterm Elections [Re: The Auditors]
Francine McKenna goes with the hockey metaphor, “The audit firms put their money more often where the puck is rather than where it’s going and hardly ever chase the puck for strictly ideological reasons.”

Is Internal Audit Meeting the Challenge? Perhaps Not! [Marks on Governance/IIA]
Or, perhaps yes?

Business Groups Back Quick Compromise On Estate Tax [Dow Jones]
Business groups that oppose the federal estate tax say they are willing to back a short-term compromise with congressional Democrats, in order to avoid the tax returning to its highest level in 10 years.

However, Republicans in Congress aren’t ready to back down from their demands for an estate tax rate of 35%, setting up one of the more unpredictable tax battles in Congress’s lame-duck session.

Bloomberg to America: Lay Off The Chinese [Metropolis/WSJ]
“If you look at the U.S., you look at who we’re electing to Congress, to the Senate—they can’t read,” [Hizzoner] said. “I’ll bet you a bunch of these people don’t have passports. We’re about to start a trade war with China if we’re not careful here,” he warned, “only because nobody knows where China is. Nobody knows what China is.”


How Would CFOs Fare on the Couch? [CFO]
“The upside of people who are CFOs is that they’re generally effective communicators, deliberate, prudent. They weigh alternatives, they’re stabilizing, objective, rational, analytical,” says [Dr. Barrie Sanford] Greiff. “But for every upside, when you turn up the intensity, you can find these descriptions, too: overcautious, overanalytic, very controlling, and lacking in a certain degree of flexibility.”

UGA accounting school receives $1 million [AJC]
Thanks, Ernst & Young.

The World’s Most Powerful People [Forbes]
Behind every powerful person is an accountant that is sick of putting up with his/her shit.

‘Tax Lady’ Roni Lynn Deutch unfazed by state fraud suit [Sacramento Bee]
And now that Jerry Brown is going to Governor (again), he actually has bigger problems.

Accounting News Roundup: Feel Lucky to Have a Job?; Size Matters at Deloitte; Patrick Byrne MIA from Overstock Earnings Call | 11.04.10

Do Employees Still Feel Lucky to Have Jobs? [You’re the Boss/NYT]
“Though the economists say the recession was over months ago, the small-business owners I talk to have not seen sales rebound to where they were. Some businesses haven’t rebounded at all. I have been in business for more than 30 years, and I have never seen anything like this. It’s like a normal recession but with an extra year or two thrown in. Yes, things have stabilized, and in some cases they have gotten better. On the human side, things are precarious.”

Just Say No [TaxVox]
Kim Rueben writes, “There were about a hundred ballot initiatives affecting state budgets, some increasing states’ abilities to raise revenues or determine spending levels and others curtailing them. For better or worse, in most cases the voters said no and the status quo remained.”

Deloitte Ranked Largest Forensics and Dispute Advisory Practice [PR Newswire]
“Deloitte’s performance validates the depth, breadth and quality of forensic and dispute services that we offer our clients,” said Greg Swinehart, partner and leader of the forensic and dispute services practice of Deloitte Financial Advisory Services LLP. “The combination of deep technical experience, proprietary leading-edge technology and analytical tools, and access to the global network of DTTL member firms and their affiliates, allows us to quickly deploy experienced teams virtually anywhere around the world to help address our clients’ complex needs.”

Qantas Grounds Airbus A380 Fleet After Emergency Landing [Bloomberg]
An engine exploded. Nothing major.

NetSuite to buy Sage? [AccMan]
Just kicking some ideas around.

The Big Four Accounting Firms Are Down to Critical Mass: Says the Financial Times – So It Must Be Official [Re:Balance]
Jim Peterson reacts to the recent Financial Times article on the Big 4 stranglehold.


TIGTA Releases FY 2011 Audit Plan [TaxProf Blog]
An approximate outline of the IRS nagging schedule.

Accounting Day, 2010 [The Summa]
Next Wednesday. Mark your calendars.

Patrick Byrne Absent From Third Quarter Earnings Call [White Collar Fraud]
Sam speculates as to the cause of PB being MIA: “Back in the Crazy Eddie days, it was known as ‘SEC induced sudden illness syndrome’ or by the short acronym SIS. Common symptoms include panic attacks, headaches, nausea, cold sweats, trembling, stomach pains, vomiting, and worst of all, diarrhea. At least the weight loss isn’t so bad. However, the SEC commonly refers to anyone suffering from SIS as a SISsy.”

Accounting News Roundup: GOP Has Marching Orders from Big Business; State Tax Initiative Results; GM Looking at Huge Tax Break | 11.03.10

Business Looks to Republicans to Block Rules, Taxes [Bloomberg]
The Republican gains in Congress mean U.S. companies from Goldman Sachs Group Inc. to Wellpoint Inc. may be able to weaken or block what they consider President Barack Obama’s anti-business policies on health care, the environment, taxes and financial reform.

Republicans will use their perch as the new majority in the House of Representatives to try to eliminate funding for parts of Obama’s health care bill opposed by business as well as curb regulations and government spending, Jay Timmons, senior vice president of the National Association of Manufacturerd lobbying group, said in an interview before the election.

PwC Completes Acquisition of Diamond Management & Technology Consultants, Inc. [PR Newswire]
wC US has completed its acquisition of Diamond Management & Technology Consultants, Inc. following approval today from Diamond’s shareholders. Per the terms of the agreement, all outstanding shares of Diamond were acquired for $12.50 per share in cash.

The Complete Idiot’s Guide to Why Democrats Lost [HuffPo]
For the less-politically inclined.

With Recent Change, GAAP, IFRS Differ on How to Treat Debt [A&A Update/Compliance Week]
The International Accounting Standards Board recently finalized a change in International Financial Reporting Standards that tells companies to measure most liabilities at amortized cost, or the historical cost written down over time based on a schedule. Where a company might exercise an option to measure a liability at fair value, any changes in value would flow to equity via the “other comprehensive income” section of the income statement rather than profit and loss.

Major State Tax-Related Election Results [Tax Foundation]
Among them, Prop 19 (aka legalizing pot and taxing the hell out of it) failed.

Election 2010: What the Democratic Debacle Means for Fiscal Policy [TaxVox]
Washington is divided into two camps—those who believe divided government will open the door to compromise on tough fiscal issues, and those who don’t. Put me squarely in the second camp. We are already hearing conflicting messages from both President Obama and House Speaker-to-be John Boehner (R-OH). They give lip service to “working together” and the need for deficit reduction, but will do little of either. Here are five reasons why:

Frank reelected to 16th term [On the Money/The Hill]
But will lose the HFSC Chairmanship. Bob Herz might be enjoying this more than anyone.


GM Could Be Free of Taxes for Years [WSJ]
General Motors Co. will drive away from its U.S.-government-financed restructuring with a final gift in its trunk: a tax break that could be worth as much as $45 billion.

Knicks Postpone Home Game Before Tests Reveal No Threat From Absestos [Bloomberg]
All clear!

Accounting News Roundup: Skilling Wants Conviction Overturned; Deloitte Survey: Half of Internal Auditors Lack Adequate Staff; Addressing Fair Tax Hype | 11.02.10

Skilling Pursues Case to Overturn His Conviction [DealBook]
On Monday, Mr. Skilling’s lawyers traveled to Houston to argue before a three-judge panel of a federal appeals court that his conviction should be overturned as a result of the Supreme Court’s ruling. The argument took place in the same courthouse where Mr. Skilling and his colleague Kenneth L. Lay were convicted more than four years ago. Mr. Skilling’s wife and brother (the popular Chicago weatherman Tom Skilling) attended the hearing, according to Bloomberg News.

Terror Trade Tax []
The Terror Trade Tax, as I would name the required additional spending on cargo inspection, will, on the margin, raise costs and therefore discourage trade. It might also raise costs more for exports from countries deemed most suspect, but recall that this package, if not found, might have blown up a plane flying from London to the United States. Had it exploded over the Atlantic, it might have been impossible to know where the package originated.

Officer breaks ‘little’ accountant’s arm, but no charges laid [Toronto Star]
Accountant abuse in Toronto.

Employee-Benefit Costs Concern CFOs Most [Real Time Economics/WSJ]
A new survey of 508 U.S. chief financial officers and senior comptrollers find far more of them (84%) worried about rising employee benefit costs than worried about rising raw material (27%) or energy costs (21%).

The survey found 30% are planning on reducing health-care benefits in the coming year, 23% are planning on reducing bonuses and 18% are planning on reducing stock options or equity based compensation. The survey was conducted by Grant Thornton LLP during the first half of October.

Shortage of internal auditors to fight fraud [Accountancy Age]
A little more than half of internal auditors say they have too few staff to deal with fraud. The research in Deloitte’s first Fraud Survey also concludes that a fifth of those polled said their companies had no formal fraud policy. More than 60% said their vulnerability to fraud had increased in the past 18 months.


Poll: CEO pay needs reform [On the Money/The Hill]
“The corporate governance provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act focused on policies such as ‘say on pay’ and ‘clawbacks,'” said PwC partner Catherine Bromilow in prepared remarks. “Our survey uncovered other areas that may go further to address CEO pay. As compensation issues continue to be a concern, boards will be well-served by closely examining their compensation policies and how their rewards link to company performance.”

Fair Tax Isn’t Just a Bad Tactic; It’s a Bad Idea [Tax Update Blog]
Joe Kristan sheds light on the fair tax hype.

The Tax Increase No One’s Talking About [TaxVox]
The stimulus bill (the American Recovery and Reinvestment Tax Act of 2009) provided $287 billion in tax cuts for 2009 and 2010 but most provisions expire at the end of this year. (Congress extended some of the business tax cuts during the summer.) The big kahuna is the Making Work Pay credit—nearly $60 billion a year going to most workers—but partial exemption of unemployment compensation, expansion of EITC and education credits, and greater refundability of the child credit deliver nearly $20 billion more. Taxes will jump for more than 95 percent of Americans when those cuts evaporate come January.

Accounting News Roundup: Looming Estate Tax Has Some Weighing Their Options; BDO to Question Forensic Accountant in Bankest Retrial; Continuing Troubles at Overstock | 11.01.10

US rep.: Estate tax rise has some planning death [AP]
U.S. Rep. Cynthia Lummis says some of her Wyoming constituents are so worried about the reinstatement of federal estate taxes that they plan to discontinue dialysis and other life-extending medical treatments so they can die before Dec. 31.

Did Obama Really Cut Small-Business Taxes 16 Times? [You’re the Boss/NYT]
A little fact checking of the President’s tax cut rhetoric.

BDO to question Freeman about fraud in E.S. Bankest retrf=”http://www.bizjournals.com/southflorida/print-edition/2010/10/29/bdo-to-question-freeman-about-fraud-in.html”>SFBJ]
Former court-appointed receiver and convicted fraudster Lewis B. Freeman can be questioned under oath about how his crimes may have influenced his testimony in a 2007 court case against Miami-based accounting firm BDO Seidman.

First congressional face-off of new year could be over tax cuts [On the Money/The Hill]
A day before the midterm elections and two weeks before lawmakers return to Washington for a lame-duck session, two leading theories have emerged on what will happen on tax cuts — either all of them will be extended for at least a year, or nothing will happen.

Finance hiring heads into the black for first time since 2009 [SJBJ]
The increase in demand for accounting jobs could be a sign that the job market there may be improving.

Bosses Overestimate Their Managing Skills [WSJ]
A new survey of 1,100 front-line managers suggests many are over-estimating their skills, with surprisingly little self-doubt. Seventy-two percent said they never questioned their ability to lead others in their first year as a manager.


More Trouble for Overstock.com and Patrick Byrne after Dismal Third Quarter Report [White Collar Fraud]
Not to mention a lawsuit related to the bankruptcy related to Petters Company, Inc.

‘Alcohol most dangerous drug to society’ – Prof Nutt [BBC]
FYI

Accounting News Roundup: Tweedie Warns of Global Accounting Rules ‘Last Chance’; Security Tops Misconceptions About Cloud; Clifton Gunderson Acquires Fifth Firm Since May | 10.29.10

Accounting chief says last chance for global system [Reuters]
Efforts to create a single global accounting system will be set back a generation if they do not succeed within 12 to 15 months, the chairman of a global accounting rule-setting board said on Thursday.

“This is our last chance really,” said Sir David Tweedie, chairman of the International Accounting Standards Board, which sets accounting rules used in over 100 countries.

“The next year is critical, this is it,” he told a New York Society of Security Analysts conference. “We can’t kick this tin down the road much longer.”

Cloud misconceptions: security tops the list [AccMan]
This is an important finding because it lends credence to the notion that once adopters have tasted what the cloud offers, then many of the issues raised by naysayers start to evaporate.

As accounting industry shifts, Reznick Group beefs up staff [Baltimore Business Journal]
Twelve positions in the Baltimore area now available.

Time for a New Set of Return Deadlines? [Tax Update Blog]
Joe Kristan thinks moving the partnership deadline up to 3/15 makes sense.


Clifton Gunderson acquires Rockford, Ill., accounting firm [MJS]
Farrell & Associates becomes the latest to join the CG stable.

Verizon to pay $25 million settlement for overcharging [Reuters]
The top U.S. mobile service, Verizon Wireless, has agreed to pay the U.S. Treasury $25 million on top of more than $52 million in refunds to consumers for overcharging them, the U.S. regulator said.

The venture of Verizon Communications Inc and Vodafone Group Plc said earlier this month it would pay refunds to 15 million cellphone customers erroneously charged for mobile Internet use.

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