Category: ANR

Accounting News Roundup: Investigation of E&Y Over Lehman Begins in UK; Study: Mortgage Interest Deduction Doesn’t Increase Home Ownership; PwC Announces Revenue Numbers | 10.04.10

E&Y auditors investigated over Lehman Brothers [Accountancy Age]
“The Accountancy and Actuarial Discipline Board (AADB) has begun an investigation of E&Y in its role in reporting to the FSA on audit client Lehman Brothers International Europe’s compliance with the authority’s client asset rules, which govern the protection of client money.”

And since they were on a roll, the AADB is also investigating PwC for its role in J.P. Morgan’s misuse of client assets.

Study Finds the Mortgage Interest Deduction to be Ineffective at Increasing Owneref=”http://www.taxfoundation.org/blog/show/26762.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+TaxPolicyBlog+(Tax+Foundation+-+Tax+Foundation’s+%22Tax+Policy+Blog%22)”>Tax Foundation]
“Proponents for the MID often offer the justification that it increases homeownership rates, which they say has positive benefits for society. But most economists seriously question the benefits of MID and many believe homeownership is greatly over-subsidized.”

Visa, MasterCard Antitrust Decision by U.S. Said to Be Near [Bloomberg]
“The U.S. Justice Department may decide as early as this week how to resolve its two-year antitrust probe of merchant restrictions imposed by Visa Inc., MasterCard Inc. and American Express Co., three people briefed on the matter said.

The department still hasn’t decided whether it can reach a deal with the three biggest U.S. payment networks or challenge their policies in court, one of the people said. The department likely will file a lawsuit, and MasterCard and Visa are expected to settle, people familiar with the matter said.

The talks focus on rules that bar merchants from charging extra to customers who use credit cards and steering them to competing cards, and require retailers to accept every type of card banks issue, said the people, who requested anonymity because the discussions are private. The department is leaning toward allowing the companies to maintain prohibitions against surcharging, two of the people said.”

Will KPMG Ever Wake Up and Finally Learn Its Lesson after Being Duped into Completing Crazy Eddie’s Audits Too Early Twenty Three Years Ago? [White Collar Fraud]
Today’s lesson in duping auditors – Sam Antar explains exactly how he fooled KPMG (then Peat Markwick Main) into signing off on incomplete audits back in the 80s.

PwC takes $26.6bn in global revenues [Accountancy Age]
Thanks to the miracle of rounding, $26.6 billion puts P. Dubs in a tie with Deloitte for largest firm in terms of revenues, who reported the same number last month. This obviously will not stand and we will investigate the matter further to the appropriate number of significant digits to determine who the top dog is.


Citi says CEO, CFO “rebutted” Mayo’s criticisms in meeting [Reuters]
On Friday, banking analyst Mike Mayo met with Citi execs including CEO Vikram Pandit and CFO John Gerspach and they discussed, among other things, why Citi hasn’t been writing down their DTAs. Citi says that successfully rebutted the Mayo Man who is issuing a report today with his thoughts on the sit-down.

Accountant gets year-and-a-day in Petters scam [Minneapolis Star-Tribune]
“Harold Katz, the hedge fund accountant who doctored financial statements to hide the Petters Ponzi scheme from investors, was sentenced Friday to 366 days in prison after apologizing to family, friends and investors.

Katz, 43, will be eligible for parole in about 10 1/2 months. He was sentenced for conspiracy to commit mail fraud.

‘I made a colossal error in judgment,’ Katz told U.S. District Judge Richard Kyle. ‘I hope I can use this horrific experience to help others not make the same mistakes as I have.’

Katz created false financial statements at the behest of Gregory Bell, manager of Lancelot Investment Management, a Chicago-area hedge fund, to mislead investors about the stability of Petters Co. Inc., which was defaulting on various promissory notes as its decadelong Ponzi scheme unraveled in 2008. Katz also assisted Bell in making phony banking transactions with Petters Co. Inc. to make it appear the Petters Co. was paying off notes it owed to Lancelot.”

Accounting News Roundup: SEC at “Bottom of the Barrel” When it Comes to Diversity; More on Competition (or Lack Thereof) in the Audit Market; Define “Rich” | 10.01.10

SEC Plans to Hire More Women and Minorities Amidst Poor Rankings [FINS]
“At a recent panel discussion and networking event at the agency, Commissioner Luis Aguilar spoke about the need to hire ‘the best and brightest,’ while acknowledging that in the past it hasn’t done a good job of recruiting women and minorities.

In his speech, Aguilar said that as of FY 2009, 89% of the SEC’s senior officers were white, 4% African-American, 3% Hispanic and 2% Asian. Along gender lines, 67% of the officers were male and 33% were female.

Moreover, in a recent survey published by the Partnership for Public Service, the SEC fell from 11th to 24th place on a list of the ‘Best Places to Work’ rankings. With regard to diversity, the SEC ranked 24th out of 28 agencies when it came to diversity. In other words, the bottom of the barrel.”

PCAOB Fires Shot on Audit Issues, Calls for Enforcement [Compliance Week]
“The Public Company Accounting Oversight Board has published a report summarizing its observations after inspecting audits performed while credit market seized and the economy plunged into depression. The report says auditors generally didn’t adhere adequately to PCAOB standards when it came to some of the toughest areas in financial reporting through the credit crisis – namely fair value measurements, goodwill impairments, indefinite-lived intangible assets and other long-lived assets, allowances for loan losses, off-balance-sheet structures, revenue recognition, inventory and income taxes.”

Viacom Names New CFO [WSJ]
Controller James Barge succeeds Tom Dooley who jumped over to the COO seat.

Accounting niches [AccMan]
Are accountants doing enough to leverage their professional expertise?

Investors unhappy with lack of competition in audit market [Accountancy Age]
“The Association Of British Insurers (ABI), whose members account for almost 15 per cent of investments in the London stock market, is worried about the audit structure and said it has made its views known in a submission to a House of Lords inquiry into audit competition.”


H&R Block sees 5-cent hit from IRS policy change [AP]
Fewer rapid refunds doesn’t seem like a bad thing.

KPMG’s Fuzzy Math on Atlantic Yards [NYO]
The completion of the Atlantic Yards project remains on a timetable that runs parallel to the adoption of IFRS in the United States.

Tax the rich, whoever they are [Don’t Mess with Taxes]
Come out with your hands up!

Accounting News Roundup: AIG Rolls Out Repayment Plan; Wal-Mart Names New CFO; IRS Files Lien Against Sharpton | 09.30.10

AIG to Convert Preferred Shares Into Common to Repay U.S. [Bloomberg]
“American International Group Inc. agreed with U.S. regulators to repay its bailout by converting the government’s holdings into common shares for sale, a step toward independence for the insurer whose near collapse two years ago threatened the global economy.

The U.S. Treasury Department will convert its preferred stake of about $49.1 billion for 1.66 billion shares of common stock and then sell the holdings in the open market, AIG said today in a statement. Common shareholders, who hold about 20 percent of the company, will have their stake dilutent, the insurer said. Those investors will receive as many as 75 million warrants with a strike price of $45.”

Spain loses AAA status, stands firm on austerity [Reuters]
“Spain lost its final top-line debt rating on Thursday as the government sought backing from lawmakers for a budget it hopes will be austere enough to convince markets it can slash the deficit at a time of economic weakness.

Moody’s become the third and last rating agency to cut Spain out of the highest AAA category which has helped it finance its debt relatively cheaply. The one-notch cut had been expected and the agency said it hoped not to have to cut again soon, bolstering Spanish debt markets.

But the agency also said a poor growth outlook meant Madrid would have to take further steps to meet its deficit targets in years to come. The Bank of Spain said a sluggish recovery would slow further in the third quarter.”

IASB head knows all about cross-channel frictions [FT]
“In a decade spent overseeing international accounting standards, Sir David Tweedie has become an amateur student of French psychology.

The Scot has locked horns with France several times as head of the International Accounting Standards Board, the body that sets the International Financial Reporting Standards rules followed in the European Union and other countries.

His fascination for his adversary is such that he recently thrust into my hands an academic paper entitled “France and the ‘Anglo-Saxon’ Model: Contemporary and Historical Perspectives”. The article explores the hostility often felt in France towards the British and American way of doing business.”

McDonald’s May Drop Health Plan [WSJ]
“While many restaurants don’t offer health coverage, McDonald’s provides mini-med plans for workers at 10,500 U.S. locations, most of them franchised. A single worker can pay $14 a week for a plan that caps annual benefits at $2,000, or about $32 a week to get coverage up to $10,000 a year.

Last week, a senior McDonald’s official informed the Department of Health and Human Services that the restaurant chain’s insurer won’t meet a 2011 requirement to spend at least 80% to 85% of its premium revenue on medical care.”


Wal-Mart picks successor to longtime CFO [Reuters]
“Wal-Mart Stores Inc (WMT.N) named Charles Holley to succeed Chief Financial Officer Tom Schoewe, who will retire on November 30.

The world’s biggest retailer said on Wednesday that Schoewe, 57, will stay at Wal-Mart until January 31 to help with the transition.

Holley, 54, joined Wal-Mart in 1994 and is treasurer and executive vice president of finance.

Those credentials should make him a capable CFO, said Wall Street Strategies analyst Brian Sozzi, though Wall Street could view the transition negatively since it adds uncertainty.”

All We Are Saying Is Give Dick Fuld a Chance [Jonathan Weil/Bloomberg]
Names being floated to replace Larry Summers as the National Economic Council include Citigroup Chairman Dick Parsons and Xerox CEO Anne Mulcahy. Jonathan Weil sees where Obama is going with this:

“There’s much we can learn about the kind of person the president is looking for by studying these two contenders’ credentials. In addition to CEO chops, it seems Obama is seeking someone who also has served on the board of directors of at least one company that either had a massive accounting scandal, blew up so spectacularly that it threatened to take down the global financial system, or both.”

…and doesn’t think he’s aiming high enough. He has some of his own suggestions.

Memo to Media Departments: Here Are Three Ways to Make My Job Easier – rebuttal [AccMan]
Dennis Howlett’s rebuttal to Adrienne’s plea to PR types.

Sharpton faced with fresh tax woe [Tax Watchdog]
The Rev. owes around $538k to the IRS for 2009. His lawyer is a tad confused by the whole thing and says everything will paid up by Oct. 15th.

Accounting News Roundup: Grant Thornton Calls for ‘Regulatory Intervention’ in the UK Audit Market; FASB Member Betting on ‘Hyrbid’ Mark-to-Market Model; SAP Acquiring Sage? | 09.29.10

GT seeks limit on Big Four market share [Accountancy Age]
“Grant Thornton is calling for direct regulatory intervention in the audit market that would limit the number audits a firm could hold among public companies.

The call comes in a submission to the House of Lords economic affairs committee which is conducting an inquiry into the dominance of the Big Four firms and constitutes the most emphatic public demand yet for regulators to directly intervene in the market.

Among the other proposals made by Grant Thornton are a code of conduct for investors urging them to promote the use of auditors outside the Big Four. Grant Thornton also wants to see so called restrictive covenants – clauses placed by banks in credit agreements insisting that only Big Four firms be used on an audit.”

How Not to Create New Jobs [TaxVox]
“I suppose the Senate’s debate today may serve some useful purpose as a show vote. Endangered Democrats can go home and argue that while they care deeply about American jobs, Republicans–who voted en masse to kill the bill–do not. But partisan politics aside, this is a classic example why Congress should not be allowed anywhere near tax policy during election season.”

Mark-to-market plan could be modified: FASB member [Reuters]
“Strong opposition to a controversial proposal to expand fair value accounting could sway rulemakers to modify the plan, a member of the U.S. accounting rule-making board said on Tuesday.

The proposal by the Financial Accounting Standards Board calls for loans and other financial assets to be valued based on what they would fetch in the market, known as mark-to-market, or fair value. That change is intended to give investors a clearer picture of assets held on banks’ books.”

The banking industry has opposed the measure, saying it does not make sense to assign market prices to loans that will never be sold.

‘Thus far, I think the count is up to about 1,500 or so comment letters,’ said Lawrence Smith, a board member of FASB, which sets U.S. accounting rules. ‘I think I’ve read one that supports what we propose.’

Smith added that board members will probably be influenced by the opposition. ‘If I were a betting person, I would bet on some type of hybrid model being adopted,’ he said.”

BP to Create New Safety Division in Wake of Spill [NYT]
Now here’s an idea! ” BP will set up a new global safety division and make other changes to the way it operates as it seeks to absorb some lessons from the explosion of a oil rig in the Gulf of Mexico earlier this year, the soon-to-be chief executive Robert Dudley said Wednesday.

BP said the new division would aim to improve risk management and safety, and also review how the company manages agreements with contractors. The plans were announced as Mr. Dudley prepares to take over as chief executive on Friday.”

Investors, Regulators Laid Path to ‘Flash Crash’ [WSJ]
“A report by the SEC and the Commodity Futures Trading Commission on that day’s steep decline, which saw the Dow Jones Industrial Average collapse 700 points in minutes before rebounding, is expected as soon as this week. SEC Chairman Mary Schapiro has called the day’s events “clearly a market failure.”

Staff from both agencies, which provided an initial joint-account in May, continued Tuesday to negotiate how certain events would be described in the report, according to people briefed on the discussions.

One area of discussion, one person said, concerns the so-called “E-mini” futures contract, which mimics movements in the Standard & Poor’s 500 index and was a source of heavy trading that day when liquidity dried up. Part of the discussion concerns whether to disclose the number of contracts exchanged in the E-mini contract, which could show the size and impact of the trades.”


SAP to buy Sage? [AccMan]
Dennis Howlett mulls over the latest SAP/Sage rumors.

Voting on Bush Tax Cuts Divides Democrats in Congress Before Election Day [Bloomberg]
We realize it might be tough to get your head around this, “Democrats worried about defending congressional majorities are divided over voting on income taxes before Election Day. Party strategists warn they are missing an opportunity to define themselves against Republicans.

After Senate Democrats postponed action on President Barack Obama’s proposal to extend middle-class tax cuts until after the Nov. 2 election, House Speaker Nancy Pelosi suggested members still may vote this week before leaving Washington to campaign. Two days later, House Majority Leader Steny Hoyer said that would be a ‘specious act’ without the chance of a Senate vote.”

College Graduates’ Top Employers [BusinessWeek]
The latest from Universum: 1) Google 2) KPMG 3) E&Y 4) PwC 5) Deloitte. It’s really not fair if you let the cool company jump in the mix.

Accounting News Roundup: ‘Won’t Somebody Think of the Small Businesses?!?’; Facebook’s New Arbitrary IPO Date; Debunking The ‘Failure’ of Bush Tax Cuts | 09.28.10

Analyzing the Small-Business Tax Hysteria [You’re the Boss/NYT]
“The rhetoric on this subject has become counterproductive. It can’t be helping consumer confidence, and it’s certainly not creating any jobs. In what used to be a running joke on ‘The Simpsons,’ whenever trouble arose, Reverend Lovejoy’s wife would shriek, ‘Won’t somebody please think of the children?!!!’ The emerging counterpart to that cry in our real-life politics seems to be, ‘Won’t somebody please think of the small businesses!’ “

AOL in Talks to Buy TechCrunch [WSJ]
“A deal would mark a high-profile marriage between the Internet giant and one of Silicon Valley’s most high-profile blogs, which has often been discussed as a possible acquisition target.

It would also be the latest in a series of alliances between content and Internet companies, which are seeking to draw more users and advertisers by pumping out inexpensive articles on popular topics like fashion, news and sports.”

Facebook IPO likely after late 2012: board member [Reuters]
“Facebook, the world’s largest online social network, is likely to go public sometime after late 2012, a board member said, satisfying investors’ appetite for a slice of one of the Internet’s biggest growth stories.

A stock market debut by a company valued in the tens of billions of dollars would be one of the most highly anticipated initial public offerings of the decade.

But Facebook board member, venture capitalist and PayPal co-founder Peter Thiel stressed on Monday that will not happen until after late 2012, and would depend on the company hitting certain revenue targets and how its business model develops.”

Auditors Aren’t Forcing Full Repurchase Risk Exposure Disclosure [Re:The Auditors]
Auditors looking the other way for their banking clients. Again.

BlackBerry Maker RIM Enters Tablet Scrum [WSJ]
“RIM Co-Chief Executive Mike Lazaridis on Monday showed the device, dubbed the PlayBook, at a conference for BlackBerry developers in San Francisco. The PlayBook has a seven-inch touch screen and high-definition cameras on the front and back sides, but the device won’t connect directly to cellular networks.

RIM said its tablet won’t go on sale until early next year in the U.S. and the second quarter elsewhere in the world, meaning it will miss the key holiday season. The timing also puts RIM behind iPad competitors from Samsung Electronics Co., Dell Inc. and others.”


IRS won’t be mailing tax forms next year [AP]
They’re saving $10 million a year, presumably on stamps and envelopes.

News Corp. SVP Kevin Halpin named Dow Jones CFO [AP]
Kevin Halpin is taking the reins from Stephen Daintith.

Correlation Proves Causation, David Cay Johnston Edition [Tax Foundation]
“I agree with Johnston that tax cuts are not the correct response to every economic situation, and I do not believe that letting the Bush tax cuts expire would cause an economic armageddon. If the federal government’s proclivity for deficit spending can’t be curbed by reducing tax revenue – the ‘starve-the-beast’ approach – then permanently extending the Bush tax cuts for any and all taxpayers is a worse policy than letting the cuts expire because the country will drive off the fiscal cliff even sooner.”

Accounting News Roundup: Southwest Loves AirTran; PCAOB Starts Negotiations with European Counterparts; Debunking the ObamaCare Tax on Home Sales | 09.27.10

Southwest Airlines to Buy AirTran [WSJ]
“Southwest Airlines agreed to acquire AirTran Holdings Inc. for $1.4 billion in cash and stock, the first major merger among healthy U.S. discount carriers.

The proposed deal follows Southwest’s failed effort to acquire Denver-based Frontier Airlines earlier this year and would revive its stalled efforts to launch international services by accessing AirTran’s network to the Caribbean.”

Troubling Trades Found Ahead of Flash Crash [DealBook]
“The Chicago data firmed strange patterns — dubbed “crop circles” — in stock market data around the flash crash on May 6 has put together a new analysis that it says backs the theory that one or more trading firms was intentionally trying to flood exchanges with orders.

The firm, Nanex, hopes the Securities and Exchange Commission and the Commodity Futures Trading Commission will be able to address its analysis in their long-awaited report on the flash crash due to be published before the end of this month.”

Treasury Said to Prepare AIG Exit, Repayment Plan [Bloomberg]
“The U.S. Treasury Department may announce plans as early as this week to return American International Group Inc. to independence and recoup taxpayer money from the insurer’s bailout, according to three people with knowledge of the talks.

The biggest part of that strategy is for Treasury to begin converting its $49 billion preferred stake into common stock for sales by the first half of next year, said the people, who declined to be identified because the negotiations are private. The timing of an announcement depends on the pace of talks between regulators and the New York-based insurer, and discussions may extend beyond this week, the people said.”

PCAOB Begins Negotiations With European Regulators [Compliance Week]
“Now that Congress and the European Union have removed a big obstacle to international audit inspections, the Public Company Accounting Oversight Board is trying to forge some new relationships with its counterparts overseas to get back on track.

PCAOB spokesman Colleen Brennan said the board is beginning to negotiate with various audit regulators in Europe to see how it can proceed in each country inspecting audit firms that audit financial statements in U.S. capital markets. The board is hopeful it can reach bilateral agreements with individual regulators to perhaps gain access to work papers that will enable the board to fulfill its inspection mandate under the Sarbanes-Oxley Act.”

IRS Offers Olive Branch to Business [CFO]
“The Internal Revenue Service has taken taxpayers’ comments to heart and revised its proposal on uncertain tax positions, in a way that is much more favorable to corporations. The final Form 1120, called Schedule UTP, and its instructions eliminate two draft requirements that companies argued were particularly onerous: the calculation and inclusion of a maximum tax adjustment for each position, and disclosures around positions that are not subject to an accounting reserve.

IRS Commissioner Douglas Shulman announced the release of Schedule UTP on Friday, in a speech delivered to the American Bar Association in Toronto. The agency has instituted a five-year phase-in period for filing the schedule, said Shulman.”


Job Interview Is Where Most Mistakes Are Made, According to Survey [FINS]
If you make a faux pas during an interview, rather than faint consider five suggestions that FINS has to keep your hopes alive.

PwC names industry leaders and academics as non-execs [Accountancy Age]
“Dame Karen Dunnell; Sir Ian Gibson; Professor Andrew Hamilton; Sir Richard Lapthorne; and Paul Skinner and come from the fields of business, academia and the public and professional services sectors.

They will sit on a newly-formed public interest body where they will be joined by partners fo [sic] the firm but have a majority.”

Cloud Computing: What Accountants Need to Know [JofA]
A crash course.

Finding Surprises in the Small-Business Jobs Bill [You’re The Boss/NYT]
“Most of the controversy surrounding the small-business jobs bill that cleared the House of Representatives on Thursday — after nearly a year of discussion — concerned a $30 billion small-business lending fund to be established by the Treasury Department.

But like most of the legislation, the lending fund is a temporary fix. It will make investments in banks for just one year. The tax breaks in the bill, worth about $12 billion, are mostly good for a year or two.”

Dodd-Frank Lets Small-Company Auditors Off the Internal Controls Hook: Putting a Partial Lid on the Sarbox [Re:Balance]
Jim Peterson reflects on Dodd-Frank’s ‘get out of jail free’ for small company filers.

Would “ObamaCare” (Health Care Reform) Tax the Sale of Your Home? Probably Not. [Tax Foundation]
“There has been a story and an e-mail floating around for some time claiming that the recent health care reform bill (PPACA) would impose a 3.8 percent “sales” tax on the sale of every home. The e-mail has been rightfully debunked by the usuals (Factcheck.org and Snopes), but here is what the bill would actually do regarding taxation of the sales of homes.”

Pastors Defy IRS On ‘Pulpit Freedom Sunday’ [ABC News]
“The pastors, along with the Scottsdale, Ariz.-based nonprofit Alliance Defense Fund, planned today’s event as a reaction to a law stating that churches are not allowed to support politicians from the pulpit, according to the ADF.

The growing trend is a challenge to the IRS from the churches, and may jeopardize their all-important tax-exempt status. But some pastors and church leaders said they are willing to defy the law to defend their right to freedom of speech.”

Accounting News Roundup: Doubt Over Taxes Reaching Fever Pitch; E&Y to Hire 6k Off Campus in FY11; Honest Answers on Tax Policy in an Election Year | 09.24.10

‘Consumers Are Paralyzed’ Over Tax Doubt [WSJ]
“Congress halted plans to pass a major tax bill before the November elections, leaving taxpayers and financial advisers unsure of how to plan for the future.

One of three scenarios face Congress when it returns from the election recess: It will extend all of the Bush tax cuts of 2001, which expire this year; it will hammer out a new law, perhaps using some of President Barack Obama’s budget proposals; or lawmakers will let the cuts expire, which would mean higher rates for all taxpayers.

Meantime, ‘consumers are paralyzed,’ said Dean Barber, a planner who heads the Barber Financial Group near Kansas City. ‘They have money to spend but they aren’t going to until they know where the tax burden will lie next year.’

The problem extends to business as well. ‘There are 29 million private businesses in this country, and they interact with our members,’ said Barry Melancon, head of the American Institute of Certified Public Accountants. ‘Universally we are hearing that businesses are paralyzed by lack of capital and uncertainty over taxes.’ “

SEC Hiring for Multiple Offices [FINS]
“The SEC is hiring qualified talent for both its Division of Enforcement and its Office of Compliance Inspections and Examinations (OCIE). The agency is looking for candidates with experience in risk management, operations and accounting and other specialties.

In testimony given yesterday at a Senate Banking Committee hearing, Robert Khuzami, director of the Division of Enforcement and Carlo di Florio, director of OCIE, spoke to their respective units’ hiring needs.”

Ernst & Young Previews New Campus Recruitment and Social Media Strategies [PR Newswire]
E&Y is hiring 6,000 campus recruits – both interns and new associates – this fiscal year. That’s an increase over last year’s numbers (although the press release doesn’t say by how much). The firm also states that 60% of its workforce will be Gen Y by the end of 2011.


Tax Policy in an Election Year [Tax Updated Blog]
Joe Kristan answers questions that politicians won’t.

Comtech Telecommunications Does the Right Thing by Fixing Errors in Latest Report [White Collar Fraud]
Sam is sending an autographed “WANTED” poster of his cousin “Crazy” Eddie as an “attaboy” for Comtech CEO Fred Kornberg for “[taking] the high road and corrected its errors without attacking a critic.” That “critic” being Sam, who reported on Comtech’s erroneous EBITDA calculation last July.

Whether this type of nostalgic temptation works for the other company execs that are on Sam’s radar remains to be seen.

Pastors to challenge IRS by endorsing candidates [AP]
One hundred men and women of the cloth will be endorsing political candidates from their pulpits this Sunday. If the IRS is doing its job, agents should be kicking down doors at many of God’s homes on Monday.

Accounting News Roundup: How Secure is SaaS?; Highest Marginal Tax Rates by State Under Dem, GOP Plans; Familiar Rich People | 09.23.10

Blockbuster Files for Bankruptcy After Online Rivals Gain [Bloomberg]
“Blockbuster Inc., the world’s biggest movie-rental company, filed for bankruptcy after failing to adapt its storefront model to online technology pioneered by rivals such as Netflix Inc.

The company listed assets of $1.02 billion against debt of $1.46 billion on a Chapter 11 petition filed today in U.S. Bankruptcy Court in New York. The company said it reached a deal with a group of bondholders on a plan of reorganization and secured a $125 million loan to finance operations.”

SaaS security: McAfee’s response [AccMan]
“One question that gets raised time and again: Is SaaS secure? The answer depends on with whom you speak. My take is that any vendor that cannot answer a set of well defined questions is probably not going to meet the minimum requirements for me to recommend a service.

Earlier today I attended a Salesforce.com presentation and among the speakers were Dell, Wells Fargo and McAfee. Both companies are deploying Salesforce and in particular its Chatter service to thousands of users. I put the question to Marc Benioff, CEO Salesforce: ‘How do you demonstrate to users that services such as yours are secure without going down technical rat holes?’ “

Friended for $100 Million [WSJ]
“Mark Zuckerberg, the 26-year-old founder and chief executive of Facebook Inc., plans to announce a donation of up to $100 million to the Newark schools this week, in a bold bid to improve one of the country’s worst performing public school systems.”

Senate Holds Hearing Today on Lessons from the Tax Reform Act of 1986 [TaxProf Blog]
“Senate Finance Committee Chairman Max Baucus (D-Mont.) will convene a hearing [today] to examine the lessons from the Tax Reform Act of 1986 and look at ideas for tax reform that will make the code simpler and fairer, while helping American businesses compete in the global economy.”


Top Marginal Effective Tax Rates by State under Rival Tax Plans from Congressional Democrats and Republicans [Tax Foundation]
The big winner is Hawaii with California taking first runner-up.

The Richest People in America [Forbes]
The usual: Gates, Buffett, Ellison, a lot of Sam Walton offspring, a pair of Kochs and Hizzoner.

Accounting News Roundup: The End of Summers; KPMG Adds More Restructuring Talent; Back to Basics | 09.22.10

Summers exit lets Obama retool team and message [Reuters]
“The departure of economic adviser Larry Summers opens the way for President Barack Obama to shake up leadership of his economic team and show he is taking seriously growing public frustration over the sluggish economic recovery.

Whoever replaces Summers ions constrained by a record $1.47 trillion budget deficit and the possible Democratic loss of control of the House of Representatives in November 2 congressional elections.”

The Obama Tax Plan: Who’s in the Crosshairs? [TaxVox]
“President Obama’s plan to raise taxes on the nation’s highest income households may not quite mean what you think. A closer look suggests that fewer people may get whacked than either Obama or his Republican critics suggest. And for many of the victims, the club won’t be the president’s plan to raise rates to 36 percent and 39.6 percent. Those rate hikes may be getting most of the attention, but the real cudgel would be higher taxes on capital gains and dividends going to high-earners.”

H&R Block Announces New Chief Financial Officer [MarketWatch]
“H&R Block (HRB 12.82, -0.08, -0.62%) announced today the appointment of Jeff Brown as chief financial officer. Brown has been the company’s interim CFO for the past five months. As an eight-year veteran of H&R Block, Brown has played an important role in a variety of financial functions.

‘I am very pleased with the leadership Jeff has provided me and the organization in his interim role,; said Alan Bennett, H&R Block’s president and chief executive officer. ‘Jeff has all the talent and personal characteristics needed to be highly successful as the permanent CFO. He has earned my full confidence, as well as that of the board of directors.’

Most recently, Brown served as H&R Block’s corporate controller. Prior to that, he was the corporate controller and vice president of finance (Americas) at Bacou-Dalloz, now Sperian Protection, and served in key positions at KPMG. Brown has a business administration degree from the University of Nebraska and is a certified public accountant.”


Sentencing of Petters’ accountant is postponed [Minneapolis Star-Tribune]
“Tuesday’s scheduled sentencing of James Wehmhoff, the accountant who helped Tom Petters file false tax returns, has been postponed until sometime in October. The postponement was ordered by U.S. District Judge Richard Kyle at his own behest.

Wehmhoff faces a prison sentence of between 70 and 80 months on tax charges, but federal prosecutors have asked Kyle to consider Wehmhoff’s cooperation in the Petters investigation and his previously “unblemished” career before he hooked up with Petters Group Worldwide. The government also noted that Wehmhoff was not part of the $3.65 billion Ponzi scheme that Petters and others orchestrated for more than 10 years.”

KPMG Continues to Add Restructuring Talent With Appointments of Tony Murphy, Tom Bibby [PR Newswire]
The House of Klynveld must be counting on more companies falling prey to their massive debt loads with the appointment of Tony and Tommy who both have “proven track records” as restructuring professionals.

Accounting Basics: A Guest Post From Robert B. Walker [Re:The Auditors]
“[New Zealand] follows an American model in which people who are to become accountants are ‘educated’ in Universities. There is minimal emphasis on double entry. Most of the courses are dedicated to theory, bullshit sociology, complex management accounting, auditing and so on. None of this makes any sense to a student if they first do not know the basics of accounting and that can only be gained by actually practicing the discipline.”

Comparing the Ethics Codes: AICPA and IFAC [JofA]
“Sharp increases in the number of multinational audits being performed by U.S. accounting firms means that more CPAs are performing services under the International Federation of Accountants (IFAC) audit and attest standards. Although auditors must comply with the specific standards adopted in each jurisdiction, familiarity with IFAC’s International Ethics Standards Board for Accountants (IESBA) Code of Ethics for Professional Accountants (IESBA Code) in addition to the AICPA Code of Professional Conduct (AICPA Code) is a critical first step. When specifications differ, members should comply with the more restrictive of the applicable standards.”

Accounting News Roundup: Deloitte Makes London Its Legal Home; Estate Tax ‘Dithering’; Koss’s Comp Jumped Last Year | 09.21.10

Deloitte Touche Tohmatsu quits Swiss system to make UK its new legal home [The Guardian]
“With zero fanfare, Britain has gained a multinational. The global accountancouche Tohmatsu has quietly shifted its legal registration from Switzerland to London, flying in the face of threats by other City firms to flee the Square Mile.

The firm, which has 169,000 staff around the world and is vying with PricewaterhouseCoopers for the title of the world’s biggest professional services group, is thought to have moved because of legal controversy surrounding its previous status as an obscure Swiss entity known as a verein – a membership structure originally intended for sports clubs, voluntary organisations and unions.

The change – which became effective over the summer but was not announced publicly by Deloitte – has little tax implication for the Treasury because Deloitte’s decentralised structure means taxes are paid by its member firms on a country-by-country basis. But it amounts to a vote of confidence in English corporate law over Switzerland’s regime.”

H.P. Settles Lawsuit Against Hurd [NYT]
“A fierce and public feud between Oracle and Hewlett-Packard, two of the world’s largest technology companies, has ended after all of two weeks.

On Monday, the companies announced a settlement to a dispute that centered on Oracle’s hiring of Mark V. Hurd, the former chief executive of H.P., as a president. H.P. sued Mr. Hurd this month, claiming he would violate agreements to protect H.P.’s secrets by taking on such a high-level role at Oracle. The parties declined to reveal details about the settlement but said Mr. Hurd would protect H.P.’s confidential information.

However, in a filing with the Securities and Exchange Commission on Monday, H.P. said it had modified its separation agreement with Mr. Hurd. He effectively waived about half the compensation owed him. Mr. Hurd agreed to give up his rights to the 330,177 performance-based restricted stock units granted to him on Jan. 17, 2008, and to the 15,853 time-based restricted stock units granted on Dec. 11, 2009.”

FinancialForce gets jiggy with iPad [AccMan]
FinancialForce snags Life Champions from Sage with the lure of the iPad: “Field agents will be equipped with iPads and will record new opportunities directly in Salesforce CRM. Credit card payments can be processed on the spot and transactions seamlessly created in FinancialForce Accounting.”

Tax Preparer Who Threatened Prosecutor Is Sentenced to 3 to 6 Years [New York Law Journal]
“A tax preparer who sent threatening letters to a Manhattan assistant district attorney who had twice prosecuted him was sentenced Friday to three to six years behind bars.

Prosecutors arrested Jack Chang, 55, last summer after Gilda Mariani, the chief of the money laundering and tax crime unit in the district attorney’s office, received two ominous letters. One was addressed to her husband at her home and contained a white powder that turned out to be cornstarch. The other was delivered through interoffice mail.

Both depicted a tombstone with Mariani’s name and contained virtually the same message: ‘I finally got my 9 mil gun and I am insane, you are responsible for my insanity and I will make sure that you get at least one for each and every year I spent incarcerated.’ “


Caron: The Costs of Estate Tax Dithering [TaxProf Blog]
“President Obama was widely criticized for ‘dithering’ over the decision of whether to add more troops in the Afghanistan War. Yet Presidents and Congresses over the past decade escaped similar opprobrium for ‘dithering’ in the face of the long-scheduled one-year repeal of the estate tax beginning January 1, 2010, to be followed by the reinstatement of the tax on January 1, 2011. Although the “smart money” agreed after the passage of the Bush tax cuts in 2001 that the Administration and Congress would never allow the repeal-reinstatement scenario to play out, that is precisely where we now find ourselves.”

Hiring of town accountant upsets group [Seacoastonline]
They’re mad as hell and they’re not going to take it any more.

Pay package increases for Koss CEO [Milwaukee Journal-Sentinel]
“Michael Koss, the top executive at Koss Corp., received a 41.6% boost in his pay package last year, the same fiscal year that an embezzlement of about $34 million was discovered at the company, new documents filed with regulators disclosed.”

Accounting News Roundup: McConnell’s “Small Business” Definition Includes Obama; Oprah Picking Up Taxes on Aussie Trip Giveaway; Deloitte’s Holiday Outlook | 09.20.10

Obama Among `Small Businesses’ Bearing Share of Tax on Wealthy [Bloomberg]
“Senate Republican leader Mitch McConnell says President Barack Obama wants to subject half of all small-business income to a tax increase, a move that he says would strike a blow at the U.S. job-creation engine.

McConnell’s numbers only add up if you consider people like billionaire investor George Soros, most movie stars and Obama himself small-business owners, tax experts say.

That’s because the lawmaker is basing his figure on a broad definition of the term that experts say includes authors, actors and athletes who employ few if any workers. It also encompasses businesses that many people wouldn’t consider small, such as Soros’s hedge-fund firm and major law partnerships.”

What Should We Do With the Estate Tax? [WSJ]
“any believe Congress will tackle the estate-tax question in the weeks before it adjourns, along with a slew of other tax matters. What’s likely to happen? Many think lawmakers will return the estate tax to its 2009 level—a $3.5 million exemption per individual and a top rate of 45%—and possibly raise the exemption. Heirs of those who die in 2010 may also get the choice of using 2009 rules. If lawmakers don’t step in, the tax will return in 2011 with a $1 million exemption per individual and top rate of 55%.”

Oprah — I’ll Pay the Taxes for My Aussie Giveaway [TMZ]
Locking up sainthood: “TMZ spoke with Larry Edema from Michigan — who was selected to be in the audience on Monday for Oprah’s big giveaway — and dude tells us Winfrey had a certified public accountant on hand to address the tax issue right after the taping.

Edema says the CPA informed the group that all taxes associated with the trip would be “handled by the Oprah show,” so the trip would truly be 100% free.”

BP oil spill well effectively dead, says US [FT]
“The US authorities pronounced BP’s blown-out Macondo well in the Gulf of Mexico ‘effectively dead’ on Sunday, 152 days after the explosion on the Deepwater Horizon drilling rig that caused the world’s largest accidental offshore oil spill.

The announcement ends the 5m barrel leak, which sparked fury among the US public and politicians, but may eventually be seen to have had only a marginal effect on the global energy industry.”


Your Coming Tax Cut (or Not) [NYT]
The Times breaks things down, in gray lady fashion, if all of the tax cuts are extended.

Deloitte Forecasts a 2 Percent Increase in Holiday Sales [PR Newswire]
Deloitte Downer.

Feds charge man shot by IRS agent in San Francisco [AP]
“Investigators say the IRS agent, 36-year-old Dena Crowe, was putting things into her car outside her home in the Bayview-Hunters Point neighborhood when she was confronted by a teen demanding money and Higginbotham pointing a shotgun at her.

Authorities say Crowe identified herself as an agent and fired her .40-caliber semiautomatic handgun at the suspects, who then fled on foot.”

Accounting News Roundup: More on PwC Re-Branding and the Firm’s Bet on China; What Would Mitch McConnell’s Government Look Like? | 09.17.10

Warren vows end to “tricks” with consumer agency [Reuters]
“Wall Street critic Elizabeth Warren said on Friday she accepted the job of setting up a consumer financial protection agency for U.S. President Barack Obama and declared that the time for financial ‘tricks and traps’ was over.

Obama was expected to announce his appointment of Warren, a Harvard University professor and hero to liberal activists, at 1:30 pm EDT, taking a step forward in enacting the financial reform that is a signature achievement of his presidency.”

Final Seal Set for BP Well [Re-Branding at PricewaterhouseCoopers — OMG, It’s Like Totally Awesome! [Re:Balance]
Jim Peterson’s analysis on PwC’s new look takes a bit of a different angle, “When the accounting profession’s very survival rests on the ability to sell a basic core product – assurance on financial information – the essence of that delivery is the maintenance of confidence among issuers and users in consistent, solid and predictable quality service.

That has been more than challenge enough, in difficult times for the profession. But its messages can and should be pretty stolid. A slightly boring orthodoxy is not a bad thing, when the profession is the only one that requires two terms to describe itself and its core offerings: accountant and auditor – contrasted with, for example, doctor, lawyer, priest or engineer.”

When Job-Interview Questions Become Too Personal [The Juggle/WSJ]
Things you shouldn’t have to answer: 1) “Do you plan to have a family any time soon?” 2) “I love your accent; where are you from?” 3) “Are you currently using birth control?”


PwC: To Invest Around $100 Mln On China In 3-5 Years [Dow Jones]
“PricewaterhouseCoopers plans to invest an estimated US$100 million in China over the next three to five years on overall operations including recruiting and training staff to meet the country’s growing appetite for more sophisticated financial services, said a senior executive of the global accounting firm.

‘We see great opportunities in China. The world is coming out of recession and emerging markets like China and India have done so much better than mature markets,’ Nora Wu, lead partner of PwC’s Shanghai office, told Dow Jones Newswires Tuesday on the sidelines of the World Economic Forum in Tianjin.”

Mitch McConnell, the Bush Tax Cuts, and the Future of Government [TaxVox]
“Senate Republican Leader Mitch McConnell (R-KY) wants to permanently extend all of the Bush-era tax cuts. He’s also rejected even modest efforts by President Obama to restrain the growth of Medicare. He is opposed to efforts by Defense Secretary Robert Gates to control future Pentagon spending. And he favors a constitutional amendment that would require a balanced budget. It all got me wondering: What would such a McConnell government look like?”