Category: ANR

Accounting News Roundup: Liz Warren to Be Geithner’s Sidekick; Chicago Accountant Gets 23-Year Sentence for Ponzi Du Jour; Gibbs, Boehner Tweet Over Tax Cuts | 09.16.10

White House Taps Consumer Adviser [WSJ]
“President Barack Obama this week will appoint Elizabeth Warren to a lead role setting up the new Bureau of Consumer Financial Protection, two Democratic officials said, a move that will allow the White House to avoid a messy Senate fight over her role.

Ms. Warren, currently a professor at Harvard Law School, will be named an assistant to the president and special advisor to Treasury Secretary Timothy Geithner in charge of launching the new agency and setting its mission. She was a candidate to be the agency’s first director, a position that remains unfilled, but would likely have confirmation because of opposition in the Senate.”

What is Accounting? [White Collar Fraud]
It’s sort of like arithmetic but not really. Former Sam Antar nemesis, Howard Sirota, explains in a video over at WCF.

Chicago-Area Man Is Sentenced to 23 Years for Running 22-Year Ponzi Scheme [Bloomberg]
“Frank Castaldi, who ran a Chicago- area Ponzi scheme for 22 years that cost victims $31.6 million, was sentenced to 23 years in prison today in federal court.

For 22 years, Castaldi, 57, of suburban Prospect Heights preyed upon elderly Italian immigrants, U.S. District Judge John Darrah said today before handing down the sentence.

‘This is an offense of huge magnitude,’ the judge said after hearing from victims of the scheme in a packed courtroom. ‘It involved hundreds of victims. It involved millions of dollars.’

In an August 2009 plea agreement, Castaldi said he had raised more than $77 million from 473 groups and individuals. First charged in January of last year, he admitted to mail fraud and to trying to thwart a U.S. Internal Revenue Service probe.”

Regulators to Target ‘Window Dressing’ [WSJ]
“Federal regulators are poised to propose new disclosure rules targeting “window dressing,” a practice undertaken by some large banks to temporarily lower their debt levels before reporting finances to the public.

The Securities and Exchange Commission is scheduled to take up the matter at a meeting Friday and is expected to issue proposals for public comment. The action follows a Wall Street Journal investigation into the practice, which isn’t illegal but masks banks’ true levels of borrowing and risk-taking.”


Banks take over record number of homes in August [Reuters]
“A record number of homeowners lost houses to their banks in August as lenders worked through the backlog of distressed mortgages, real estate data company RealtyTrac said on Thursday.

New default notices decreased at the same time, suggesting that lenders managed the flow of troubled loans and foreclosed properties hitting the market to limit price declines, the company said.

Root problems of high unemployment, wage cuts, negative home equity and restrictive lending practices persist, however, pointing to lingering housing market pain.”

Jon Stewart: Robert Gibbs and John Boehner on the Bush Tax Cuts [TaxProf Blog]

The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
Faces of Debt
www.thedailyshow.com
Daily Show Full Episodes Political Humor Tea Party

Accounting News Roundup: Rangel Routs Opponent in Primary; Deloitte Still Making the Rounds, Crying “Help Wanted”; 1099 Debate Continues | 09.15.10

Despite ethics cloud, Rangel easily wins primary [WaPo]
“Facing ethics charges in Washington and upstart challengers at home, Rep. Charles B. Rangel (D-N.Y.) won a resounding victory Tuesday to keep the Harlem-based House seat that he has easily controlled for 40 years.

Rangel, the ousted Ways and Means Committee chairman who has been charged with 13 counts of violating House rules, ran an aggressive campaign for the Democratic nomination, betting that the people who have known him longest – voters in the 15th Congressional District – would send him back to Capitol Hill with a political victory before the House ethics committee tries him laternext year.”

Deloitte Will Hire 250,000 over Five Years: Across All Regions, Businesses and Levels of Experience [FINS]
Jim Quigley is still making the rounds since Deloitte announced their revenues for FY 2010 on Monday but more surprisingly, the 250k jobs over the next five years number hasn’t been corrected. Call us party poopers but adding the entire city of Lexington, Kentucky to your workforce in half a decade seems a tad ambitious but whatevs.

Anyway, FINS ran Quigs down and Julie Steinberg informs us “Deloitte is looking to hire in all regions, but it expects growth in priority markets like China and India,” which means you might think about picking up some Rosetta Stone. JQ is also quoted saying those that are “internationally-oriented, diverse in background and skill sets, and have strong teamwork skills,” will make the best candidates.

Obviously Chris Dodd Didn’t Realize He Was Referring To Himself At The Time [JDA]
“Apparently Chris Dodd is a little butthurt about the idea of an Elizabeth Warren-led consumer protection bureau, as he well should be. Who exactly do you think she would be there to protect the consumer from? Scandalous pricks like Dodd who think backdoor deals are notches in the belt of a good political career. What scares him? Warren doing more than terrorizing small financial institutions like a good little consumer protection bitch would? Surely he’s smart enough to wipe his own bloody footprints off the floor before slinking off, why is he so afraid of this suggestion and why wasn’t he smart enough to write his fucking bill so it couldn’t?”


ICAEW chief says audit quality remains strong [Accountancy Age]
The Brits are pretty pleased with how the auditing is going, despite what the Audit Inspection Unit’s report says. So much so, ICAEW Chief Michael Izza blogged about it, “The most important message to be taken from the work of the AIU is that there are no systemic problems with the quality of audit of UK listed companies, nor in the processes followed by the firms who carry out these audits.”

Wallace book about IRS office coming out April 15 [AP]
The next novel, “The Pale King,” from late David Foster Wallace will bet set in an IRS office and will be released April 15, 2010.

Why Congress Shouldn’t Tax 1099s [The Atlantic via Tax Update Blog]
“[N]o one is suggesting that this law will do much of anything to close America’s ‘tax gap’ (the gap between what the IRS thinks taxpayers should pay, and what they actually do). The tax gap is almost $300 billion; the new law would reduce that by perhaps a half a percent. “

Accounting News Roundup: GOP Senators Not Caving on Tax Cuts; NY Court of Appeals Hears In Pari Delicto Cases; Convicted Ex-PwC Employee Loses Case to Get MBA Back | 09.14.10

~ Good morning capital market servants. It’s Dan Braddock’s favorite day of the week. Just another reminder that we’ll be on a lighter posting schedule today as TPTB continue to interrogate us about our lack of influence. We’ll pop in from time to time today to make sure everyone is playing nice and be back to a full schedule tomorrow.

A Career in Accounting [WSJ]
“[W]hile jobs dried up during the economic crisis, hiring in accounting wasn’t hit as hard, and cutbacks have created a need for more hiring as the econmy Thompson, the U.S. campus recruiting leader at PricewaterhouseCoopers. She’ll be hiring 3,000 people this year, up from 2,600 last year.”

Does Anyone Really Want to Be an Accountant? A Tailgate Survey [Re:Balance]
Jim Peterson articulates two time-honored traditions: college football and accounting. The former’s popularity is never in question but Jim talked to some young tailgaters that might make you doubt the substantive popularity of the latter.

Senate Republicans firm on tax cuts for rich [Reuters]
“Republicans in the U.S. Senate poured cold water on Monday on hopes for a compromise with President Barack Obama that would have allowed Bush-era tax cuts for the wealthiest Americans to expire.

Taxes have become a flashpoint going into a November 2 election in which Republicans are seeking to wrest control of Congress from the president’s fellow Democrats. Obama says the cost of keeping the tax cuts for the rich is too high as the United States emerges from recession with a massive budget deficit.”

AIG Plots End to U.S. Aid [WSJ]
“American International Group Inc. and its government overseers are in talks to speed up an exit plan designed to repay U.S. taxpayers in full while enabling the giant insurer to regain independence, according to people familiar with the matter.

Under the plan, which could commence as early as the first half of 2011, the Treasury Department is likely to convert $49 billion in AIG preferred shares it holds into common shares, a move that could bring the government’s ownership stake in AIG to above 90%, from 79.8% currently, the people familiar said. The common shares would then be gradually sold off to private investors, a move that would reduce U.S. ownership and potentially earn the government a profit if the shares rise in value.”

Auditors Anticipate NY Ruling on Malpractice Exposure [Compliance Week]
“A group of investors in the reinsurance firm American International Group are suing the company’s audit firm, PricewaterhouseCoopers, for failing to detect a long-running bid-rigging and accounting fraud scheme at AIG. PwC won a dismissal of the suit contending AIG shared blame because it was AIG employees who carried out the fraud that PwC failed to identify, a common defense for audit firms against shareholder claims.

The investor group, led by the Teachers Retirement System of Louisiana and the City of New Orleans Employees’ Retirement System, appealed the dismissal and will have their day in the New York Court of Appeals this week. A Delaware appeals court handed the case over to the New York Appeals court, saying ‘a resolution of this appeal depends on significant and unsettled questions of New York law.’ “


Seeking An Equitable Outcome: NY State Court of Appeals Hears In Pari Delicto Cases [RTA]
Francine McKenna’s take on the case above.

Verizon Finance Chief Joh Killian Announces Plan to Retire After 31 Years [Bloomberg]
Get your résumé in now.

So Then I Guess Accounting Is Mostly Influenced By Middle-Aged White Dudes? [JDA]
“I’m on a roll with offending people lately so let’s just take this all the way and pull the diversity card, specifically when it comes to Accounting Today’s recent list of 100 Most Influential in accounting.

OK so some faces were predictable and totally warranted; soon-to-be-former FASB Chairman Bob Herz (we’re talking about influence in the profession, not sexiest), GASB Chairman Robert Attmore, PwC Chairman Dennis Nally, IRS Commissioner Doug Shulman… you get the idea. No, I mean you really get the idea, as the rest of the list is comprised of middle-aged white guys too except for 13 women and 3 1/2 black men (Barack Obama counts as .5 if we’re looking at this in a strictly statistical way). Yeah, we noticed.”

Convicted Accountant Loses Legal Bid for MBA Degree [BusinessWeek]
“A certified public accountant who hid his conviction for insider trading from his teachers at New York University’s graduate business school wasn’t entitled to the MBA degree that he thought he earned, a judge ruled.

In February 2007, three months after completing his course work at NYU’s Stern School of Business, Ayal Rosenthal pleaded guilty to charges that he leaked to his brother secret tips that he learned at his job at PricewaterhouseCoopers LLP. Rosenthal never told the school about the investigation of him or his guilty plea, even while serving as a teaching assistant in a professional responsibility course, according to a court ruling.”

Accounting News Roundup: Deloitte Looking at Five-Year Hiring Spree; Boehner Finding Common Ground on Tax Cuts?; Public Companies Who Can’t Calc EBITDA | 09.13.10

~ Ed. note: Posting may be a little light over the next couple of days as TPTB have taxied me to some meetings in an undisclosed location. I’ll break free when I can to help you stave off the madness and be back to a full slate on Wednesday.

Deloitte Touche plans hiring spree [FT]
“Deloitte employs 170,000 people worldwide and said on Monday that it expects to add 250,000 new workers during the next five years as it looks to expand its services and geographic reach.

Regionally, Deloitte had the strongest growth in Asia, where revenues were up by 8.5 per cent to $3.6bn. Revenues were up by nearly 4 per cent to $13bn in the Americas, thanks to increased demand in Brazil, but dipped in Europe, the Middle East and Africa.”

Tax Cuts May Prove Better for Politicians Than for Economy [NYT]
“[E]conomic research suggests that tax cuts, though difficult for politicians to resist in election season, have limited ability to bolster the flagging economy because they are essentially a supply-side remedy for a problem caused by lack of demand.

The nonpartisan Congressional Budget Office this year analyzed the short-term effects of 11 policy options and found that extending the tax cuts would be the least effective way to spur the economy and reduce unemployment. The report added that tax cuts for high earners would have the smallest “bang for the buck,” because wealthy Americans were more likely to save their money than spend it.”

Boehner Opens Door in Tax Talks [WSJ]
“Rep. John Boehner (R., Ohio), speaking on CBS’s “Face the Nation,” reiterated that he preferred extending the Bush-era tax cuts for all earners. But he said he would vote for a bill limited to middle-income Americans if all other options failed.

‘I want to do something for all Americans who pay taxes,’ Mr. Boehner said, adding that extending rates for all income brackets would help the economy grow and create jobs. ‘If the only option I have is to vote for some of those tax reductions, I’ll vote for it.’ “

Chamber of Commerce Accused of Tax Fraud [NYT]
“At issue in the complaint against the Chamber of Commerce is whether the group mixed funds for charitable and noncharitable political purposes in violation of tax codes.

The chamber, often using expensive mass-market radio and TV spots, has weighed in on many major public policy debates in recent months, including the Obama administration’s health care policy, business regulations, campaign finance laws and Internet rules, as well as job creation and the threat of tax hikes. On many issues, it has pushed for less government regulation in favor of free-market incentives.

Now the chamber’s political arm is turning to the November elections, and it expects to spend $50 million or more to push pro-business candidates, usually Republicans. As part of a wave of new commercials broadcast this week, the chamber’s California affiliate attacked Senator Barbara Boxer — a Democrat running for re-election against Carly Fiorina, the former chief executive of Hewlett-Packard — and accused Ms. Boxer of ‘destroying jobs’ by voting against business.”

The curious amici curiae brief on behalf of PwC [AccMan]
The AICPA and New York State Society of CPAs filed an amicus brief on behalf of PwC in the case of Teachers’ Retirement System of Louisiana and City of New Orleans Employees’ Retirement System v. the firm et al. which Dennis Howlett calls “an alarm bell.”

“From the get go what we are seeing is a trade body coming to the defense of one of its own, not in the interests of the shareholders the auditors should have been serving but in the interests of one of its own. In doing so it invokes inflammatory language designed to deflect away from the underlying problems. In an act of opening gambit cynicism, the brief seeks to confirm a position that auditors apparently enjoy to the exclusion of all other business: ‘costs of which may be passed on to clients in the form of higher fees.’ Whatever happened to the notion of risk and reward?”

Pay freeze blow for FTSE 350 directors [FT]
“More than half of FTSE 350 companies have not increased their executive directors’ salaries over the past year, meaning a two-year freeze for many executives, according to new research.

Two-thirds did not receive a rise the previous year either, says the report by Deloitte, the business advisory firm. Bonuses, however, have become more volatile, with pay-outs rising slightly in the FTSE 100 but falling in the FTSE 250.”

Five More Public Companies Who Need to Learn How to Properly Calculate EBITDA under SEC Rules [White Collar Fraud]
Sam Antar has had it up to here (somewhere between his cigar and non-existent hairline) with amateur EBITDA calculations:

“It’s pathetic that so many public companies miscalculate EBITDA (earnings before interest, taxes, depreciation, and amortization) and violate Regulation G governing the calculation of non-GAAP measures such as EBITDA. It seems that too many CFOs, Audit Committees, and auditors don’t take the time to thoroughly review compliance with all appropriate SEC financial reporting rules.”

After busting Overstock.com for their bogus EBITDA calculations, Sam names a few names over at WCF.

Accounting News Roundup: Lehman Investigation Narrows, SEC to Bring Charges Someday; Dubai World’s Debt Deal; Trump Makes Offer to Park51 Investor | 09.10.10

SEC Homes In on Lehman, ‘Funds of Funds’ [WSJ]
“The Securities and Exchange Commission’s investigation into the collapse of Lehman Brothers Holdings Inc. is zeroing in on an accounting maneuver used to give the appearance that the companyt levels, according to people familiar with the situation.

Agency officials also are probing whether former Lehman executives failed to adequately mark down the value of the huge real-estate portfolio acquired in the securities firm’s takeover of apartment developer Archstone-Smith Trust or to disclose the resulting losses to investors, these people said.

The narrowing probe could move the SEC closer to bringing civil charges related to Lehman’s collapse in September 2008, though a decision doesn’t appear imminent.”

Study Says Directors Favor Themselves, Not Shareholders [FINS]
“A new study found that directors who field whistleblowing claims are likely to discount charges that could threaten their board seats and will assign fewer resources into investigating such claims.

In weighing hypothetical charges, 83 veteran directors at large U.S. corporations said they would allocate 42% fewer resources on average to fraud tips that might ultimately cost them their board seats.”

Dubai World reaches $24.9 billion debt deal [Reuters]
“State-owned conglomerate Dubai World DBWLD.UL on Friday reached a formal deal to restructure around $24.9 billion of liabilities, partly easing recently heightened concerns over the Gulf emirate’s debt woes.

While Dubai World’s agreement with most of its creditors is seen as a positive step for Dubai, the announcement comes just days after a unit of Dubai Holding, the conglomerate owned by Dubai’s ruler, said it will delay repayment on a $555 million loan, the second time it has failed to meet a repayment deadline.”

Huguette Clark’s multi-million-dollar fortune remains in hands of her financial managers [NYDN]
“Millionaire recluse Huguette Clark’s $500 million fortune will remain in the hands of financial managers who are under investigation, a Manhattan judge decided Thursday.

Judge Laura Visitacion-Lewis tossed a request by Clark’s relatives to appoint an independent guardian to oversee her finances and property, including Fifth Avenue’s biggest co-op apartment.

The judge called the family’s concerns about Clark’s health and state of mind “speculative” and “insufficient” to merit wresting control from her lawyer, Wallace Bock, and accountant, Irving Kamsler.”

Control Freak Q&A With Caleb Newquist [Control Freak]
Approva’s Control Freak blog asked me what I liked about being “control freaky.” Check out this post for the answer and more bits of wisdom from Adrienne’s favorite blogger.


Trump Offers to Buy Out Islamic Center Investor [WSJ]
“Mr. El-Gamal, founder of SoHo Properties, is one of eight investors who paid $4.8 million for a building two blocks from the site of the Sept. 11 terrorist attacks.

The statement came following reports that real estate mogul Donald Trump was offering to buy one investor’s stake in the property.

In a letter to Hisham Elzanaty, an Egyptian-born Long Island businessman and a major investor in the project, Mr. Trump offered to buy his stake for 25% more than Mr. Elzanaty paid for it.”

Former GE Unit Executive Says He Was Pushed Out for Questioning Accounting [Bloomberg]
“General Electric Capital Services was sued by a former executive who claims he was forced out for questioning the company’s treatment of an asset.

Edward Gormbley, who worked for GE Capital from 2000 until he quit in September 2009, filed his suit today in state court in Stamford, Connecticut. The complaint also names parent General Electric Co. and its chief executive officer, Jeffrey Immelt.

Gormbley said he was punished for challenging the valuation of silicon-maker Momentive Performance Materials, an investment asset. GE Capital overstated Momentive’s value in December 2008 to improve its own balance sheet, he said. Valuing the asset correctly would have reduced ‘GE Capital’s earnings 100 percent,’ in the fourth quarter that year, according to the complaint.”

Accounting News Roundup: GM’s Magic Goodwill; IRAs Under Attack By IRS; Grant Thornton Names Non-exec Directors in UK | 09.09.10

Home Buyer Tax Credit Price Tag: $22 Billion [WSJ]
“The total estimated cost of the home buyer tax credits is about $22 billion, according to a report released by the Government Accountability Office last week. The report looked at all three of the tax credits, which were in effect from April 2008 through June 30, 2010.

As we’ve written, the credits did a lot to juice sales. But many have argued that the government incentives basically pulled folks who were already planningto the market earlier. And certainly, we’ve been seeing the post-credit hangover: Home resales dropped to record lows in July. Talk of a housing double-dip is in the air.”

How GM Made $30 Billion Appear From Thin Air [Jonathan Weil/Bloomberg]
General Motors somehow ended up with $30 billion in goodwill on their balance sheet that was on their recent registration statement. Funny thing – the company only has equity of $23.9 billion. Another funny thing – the company said that the goodwill number would have been less if they were a better credit risk.

But don’t worry, apparently this is all in accordance with fresh-start accounting.

Bringing the US on board [Accountancy Age]
“Sir David is a realist – the two accounting codes will never match. ‘There’s absolutely no way [international standards] can converge with US GAAP – you can’t converge two and a half thousand pages with seventeen and a half thousand. There are going to be differences,’ he said.”

The New Threat To Your IRA: An IRS Crackdown [Forbes]
“After years of haphazard enforcement, the Internal Revenue Service is starting to systematically search out violations of the convoluted rules governing individual retirement accounts. There’s a lot at stake. Americans hold $4.3 trillion in IRAS, and the cost of even innocent mistakes can be steep; if you miss taking a required payout from your IRA, Uncle Sam will demand half of the amount you forgot to take as a penalty.

The IRS was prodded to act by the Treasury Inspector General for Tax Administration. In a report earlier this year it concluded that IRA violations have been growing and estimated that more than half a million taxpayers either missed required payouts or contributed more than allowed to IRAS during 2006 and 2007.”


Grant Thornton responds to non-executive code [FT]
“Grant Thornton has become the first major UK auditor to respond to new governance rules by announcing the appointment of independent non-executive directors to help oversee its business.

The accountant’s UK arm said on Wednesday that it had recruited Richard Eyre, a media industry veteran, Caroline Goodall, a lawyer, and Ed Warner, the head of the governing body for UK athletics, to fill the posts.”

Thomson Reuters Releases First iPhone(R) App for Tax and Accounting Professionals [PR Newswire]
“The Tax & Accounting business of Thomson Reuters is pleased to announce the release of Mobile CS, a first-of-its-kind iPhone app for tax and accounting professionals. Using advanced mobile application technology, this comprehensive practice management tool extends the reach of Practice CS(R) from desktop to iPhone, giving more than 60,000 Practice CS users the ability to access key firm, staff, and client data anytime, anywhere.”

Glaxo Taps Goldman Deal Maker as Finance Chief [WSJ]
“GlaxoSmithKline PLC Wednesday chose Simon Dingemans, a Goldman Sachs Group Inc. deal maker, to be its next chief financial officer but said the choice won’t change its cautious approach to mergers and acquisitions.

Mr. Dingemans, 47 years old, will succeed Julian Heslop, who will retire from the post at the end of March. Mr. Dingemans has advised Glaxo on an ad-hoc basis over the years and is currently managing director and partner with Goldman Sachs in London. He joins the U.K.’s biggest drug maker as chief financial officer designate and executive director from Jan. 4, 2011. He most recently worked with Glaxo to establish ViiV Healthcare, GlaxoSmithKline and Pfizer Inc.’s joint venture for AIDS drugs.”

Gun-slinging accountant loses Chapter 7 battle [South Florida Business Journal]
“Jay Levin, a Boca Raton accountant who shot and killed a teenager in 2003, has lost his battle to erase a $750,000 judgment related to the shooting.

Levin shot Mark Drewes, his 16-year-old neighbor, in the back after the teen rang Levin’s doorbell in a “ding-dong-ditch” prank one night, according to motions in Levin’s Chapter 7 bankruptcy case.

Levin had filed the bankruptcy in February, alleging he couldn’t pay the $750,000 judgment from a 2007 civil lawsuit Drewes’ parents had filed against him. Levin paid $102,260 of the judgment, but still owes the remainder”

Accounting News Roundup: Obama Opposes Deal on Tax Cuts for Wealthy; Former Advatech CFO Sentenced; Citrin Cooperman One of Inc. Magazine’s Fastest-Growing | 09.08.10

Obama Against a Compromise on Extension of Bush Tax Cuts [NYT]
“President Obama on Wednesday will make clear that he opposes any compromise that would extend the Bush-era tax cuts for the wealthy beyond this year, officials said, adding a populist twist to an election-season economic package that is otherwise designed to entice support from big businesses and their Republican allies.

Mr. Obama’s opposition to allowing the high-end tax cuts to remain in place for even another year or two would be the signal many Congressional Democrats have been awaiting as they prepare for a showdown with Republicans on the issue and ends speculation that thee open to an extension. Democrats say only the president can rally wavering lawmakers who, amid the party’s weakened poll numbers, feel increasingly vulnerable to Republican attacks if they let the top rates lapse at the end of this year as scheduled.”

Oracle CEO Rails Against H-P For Mark Hurd Lawsuit [Dow Jones]
Were the HP board membersnot aware that Larry Ellison does what he wants? Oh and that’s he’s filthy rich and will buy all of their homes and their families’ homes and burn them to the ground if you dare cross him?

“Oracle Corp. (ORCL) Chief Executive Larry Ellison issued on Tuesday a strongly worded criticism of Hewlett-Packard Co. (HPQ) and its lawsuit against H-P’s former Chief Executive Mark Hurd, suggesting that Oracle might discontinue its 25-year partnership with H-P.

‘Oracle has long viewed H-P as an important partner,’ said Oracle CEO Larry Ellison in a statement. ‘The H-P board is acting with utter disregard for that partnership, our joint customers, and their own shareholders and employees. The H-P Board is making it virtually impossible for Oracle and H-P to continue to cooperate and work together in the IT marketplace.’ “

Six Flags Entertainment Corporation Announces John Duffey to Join Company as Chief Financial Officer and Lance Balk to Serve as General Counsel [PR Newswire]
Despite rumors that Duffey is scared to death of roller coasters, he assumes the big chair.

Former Advatech CFO Sentenced To 51 Months In Prison [Dow Jones]
“Richard Margulies, 59, was convicted of a June 2008 scheme that involved hiring two individuals to make “manipulative” purchases in the company’s stock in exchange for illegal kickbacks. He provided the two with shareholder lists, confidential information and non-public press releases to help slowly drive up the share price.

Soon after, Margulies was investigated by the Securities and Exchange Commission. He was indicted in December 2008 on charges that included conspiracy and securities fraud. Margulies pleaded guilty.

The court found he intended to cause $2.5 million to $7 million in losses as a result of his actions.”


Deloitte Becomes a Thomson Reuters Certified Implementer [PR Newswire]
Apparently this is BFD.

BP Takes Some Blame in Gulf Disaster [WSJ]
“The report finds BP facing a tricky balancing act. The British company risks exposing itself to greater legal liability if it assumes a large part of the blame for the disaster, but if it doesn’t do this it likely would be accused of evading responsibility. Meanwhile, parceling out blame to other companies involved in the well risks drawing blowback from them. BP officials and legal analysts say the company is trying to be careful to avoid letting the findings devolve into more mud-slinging.”

Citrin Cooperman Ranked Among Inc. Magazine’s Fastest-growing Private Companies [PR Log]
“According to Inc., Citrin Cooperman was the 148th fastest growing firm in the magazine’s broad “financial services” category, which includes accounting firms, brokerages, lending services and technology firms serving the financial industry.”

Accounting News Roundup: Obama to Propose Tax Break to Encourage Investment; PwC Entanglement in Yukos Continues; The Big 4 and Subprime Auditing | 09.07.10

Obama to Push Tax Break [WSJ]
“President Barack Obama, in one of his most dramatic gestures to business, will propose that companies be allowed to more quickly write off 100% of their new investment in plants and equipment through 2011.

The proposal, to be laid out Wednesday in a speech in Cleveland, tops a raft of announcements, from a proposed expansion of the research and experimentation tax credit to $50 billion in additional spending on roads, railways and runways.

Companies can now deduct new investment expenses, but over a longer period of time—three to 20 years. The proposed change, which would let companies ks meant to give companies who may be hesitant to invest an incentive to expand, acting as a spur to the overall economy.”

Oil Tycoon Says PWC Caved to Pressure [WSJ]
“Defense lawyers for jailed Russian oil tycoon Mikhail Khodorkovsky are turning their legal guns on one of their client’s former allies: auditor PricewaterhouseCoopers.

The attorneys for Mr. Khodorkovsky—once the main shareholder and chief executive of petroleum producer OAO Yukos and now on trial for allegedly embezzling tens of billions of dollars from the company—say PWC acted improperly when it withdrew its seal of approval from ten years of Yukos’s financial statements.

Mr. Khodorkovsky’s legal team contends that PWC, which served as Yukos’s auditor and adviser for years, withdrew its audit opinions in order to protect its own business interests in Russia and to shield its partners from possible jail time—not because of any real questions about the reliability of Yukos’s books.”

The Five Best and Worst Things About Telecommuting: The Finance Edition [FINS]
Being able to slob around in your sweats all day isn’t really conducive to a positive day.

PwC boss Ian Powell’s salary up to £3.6m despite partner profits slump [Accountancy Age]
“PwC partners voted to increase Ian Powell’s wages have increased to £3.6m despite partners’ average profits falling to £759,000.

Powell earned £3.3m last year.

Asked whether he believed he had earned his wages, Powell stressed that it was the senior PwC executives who set his remuneration.

‘It’s the partners that decide what I earn and I’m exteremely grateful to them for that.’ “


Barclays Names Diamond CEO, Pledges to Retain Universal Model [Bloomberg]
“Robert Diamond, the architect of Barclays Plc’s investment banking expansion, was appointed chief executive officer and pledged to boost the bank’s consumer unit.

Diamond, 59, will become deputy CEO next month before John Varley, 54, steps down at the end of March, the lender said in a statement today. He will move to London from New York and receive as much as 11.48 million pounds ($18 million) in salary and bonuses as CEO.

Chairman Marcus Agius today defended the bank’s universal model, where it acts as both a consumer and an investment bank, as a U.K. government commission considers forcing lenders to separate the businesses. Barclays, the U.K.’s third-biggest bank, is trying to cut the proportion of pretax profit generated by its investment bank to a third, down from two-thirds in the first half of this year.”

PwC opens Mongolian office [Accountancy Age]
“PwC has set up shop in Mongolia where it hopes to take advantage of a burgeoning natural resources market, the Big Four auditor said in a statement today.

The new audit office, in the capital Ulaanbaatar, will provide assurance, advisory and tax services to companies operating in the country which is credited as the first nation to use paper money.”

Guest Post: Subprime Auditing – The Fox In The Chicken Coop [Re: The Auditors]
“We all remember the story of The Three Little Pigs. This story is about the 4 Big Pigs, more commonly referred to as the Big 4. These are the four gigantic international accounting firms that have a virtual monopoly of the auditing industry – PricewaterhouseCoopers, KPMG, Deloitte, and Ernst & Young. They rule the roost and conduct themselves in a manner that ignores their responsibility to the citizens of our great country.”

Accounting News Roundup: Golden a Leading Candidate to Become Next FASB Chair; Europe Gives PCAOB the Go-Ahead for Inspections; Accountant Busted for Scalping U.S. Open Tickets | 09.03.10

Numbers Cop: FASB Staffer a Leading Candidate for Board [WSJ]
“The foundation that oversees the Financial Accounting Standards Board is considering Russell Golden, the board’s technical director, for the board post, these people said, although they cautioned that no final decision has been made. The chairman’s position would remain unfilled, they said, noting that the search process for a new chairman is at an early stage.

A spokesman for FASB declined to comment. Mr. Golden couldn’t be reached to comment.

The foundation has leaned toward an internal candidate because it would allow FASB to largely continue its work uninterruptedts at the end of the month. Mr. Golden already is involved with the board’s many projects.”

U.S. Companies Added 67,000 Jobs in August [Bloomberg]
“Companies in the U.S. added more jobs than forecast in August, easing concern the economy was falling back into recession.

Private payrolls that exclude government agencies climbed 67,000, after a revised 107,000 increase in July that was more than initially estimated, Labor Department figures in Washington showed today. The median estimate of economists surveyed by Bloomberg News called for a gain of 40,000. Overall employment fell 54,000 for a second month and the unemployment rate rose to 9.6 percent as more people entered the labor force.”

Tax-fraud conviction voided because judge didn’t stop trial to let defendant go to son’s deathbed [Los Angeles Times]
“A federal judge’s refusal to halt a businessman’s tax-fraud trial so he could be at his son’s deathbed was cause to overturn the businessman’s conviction, an appeals court has ruled.

U.S. District Judge Dale S. Fischer also prejudiced the case against Garth Kloehn by failing to inform the jury that he was absent for the final day of trial because his son had died, the appeals panel said. Fischer told the jury that Kloehn “has a right not to be here,” possibly leaving jurors with the impression he was showing a lack of respect for the court, the judges said.

Kloehn was the sole defense witness in his 2005 trial in downtown Los Angeles on charges of failing to report $1.2 million in income. He left the courtroom after testifying to catch a flight to Las Vegas to see his cancer-stricken son, leaving no one to rebut the prosecution’s final testimony. Kloehn arrived at the Las Vegas hospital one hour before 45-year-old Kevin Kloehn died.”

Transparency and the I.R.S. [NYT]
Someone – namely Christopher Bergin, the publisher of Tax Analysts – isn’t convinced that the IRS is serious about transparency. So much so, he wrote the Times and they seemed impressed so they published his letter.

Europe greenlights US audit inspections [Accountancy Age]
“S audit regulators will be able to inspect European firms after the European Commission cleared the way for access to confidential papers, in a move which could allow Lehman Brothers investigators to follow up leads in London.

The European Commission said it will now share internal working documents with audit watchdogs in the US and Australia. The move breaks an impasse which had emerged between US and EU authorities over the sharing of confidential internal audit inspection papers, retained by regulators when they inspect audit firms.”


Better accounting for small businesses [WaPo]
Another letter to the editor, this time pointing out that small businesses shouldn’t be complaining about issuing 1099s to vendors if they have any semblance of an accounting system.

Accountant arrested for scalping U.S. Open tickets had 339 spots to sell worth $10,000: Prosecutors [NYDN]
For some reason, Marvin Schaffer had 28 parking permits for Jets games.

Tom Boniface Joins PricewaterhouseCoopers LLP in New York as Co-Leader of Indirect Tax Practice [PR Newswire]
“PricewaterhouseCoopers (PwC) announced today that Tom Boniface has joined the firm as co-leader of PwC’s Indirect Tax practice, focusing on value added taxes (VAT) and based in the New York office.

Boniface is well versed in the various indirect tax regimes around the world, such as European VAT, Canadian and Australian GST, Brazilian ICMS and Japanese consumption tax. He brings over 15 years of experience serving U.S.-headquartered Fortune 100 and middle-market companies.

Boniface, who most recently led the consumption practice at another major accounting firm, has a B.S. in Accounting from the State University of New York at Oswego. He is a Certified Public Accountant in New York State.”

Tax Profs for the Ground Zero Mosque [TaxProf Blog]
“While the First Amendment is directed at government interference with speech, press and religion, it exists to guard against the danger that an angry and fearful majority will undermine those cherished rights. Thus even in the absence of government interference, it is incumbent upon us to stand with those seeking to exercise those rights in the face of heated public opposition. Unfortunately, with the notable exception of Mayor Michael Bloomberg, there have been few profiles in courage on this issue”

Accounting News Roundup: Young, Single Women Make More Than Male Counterparts; A Burger King Buyout; Heiress Getting Visits From Accountant | 09.02.10

Young Women’s Pay Exceeds Male Peers’ [WSJ]
“The earning power of young single women has surpassed that of their male peers in metropolitan areas around the U.S., a shift that is being driven by the growing ranks of women who attend college and move on to high-earning jobs.

In 2008, single, childless women between ages 22 and 30 were earning more than their male counterparts in most U.S. cities, with incomes that were 8% greater on average, according to an analysis of Census Bureau data released Wednesday by Reach Advisors, a consumer-research firm in Slingerlands, N.Y.

The trend was first identified several years ago in the country’s biggest cities, but has broadened out to smaller locales and across more industries. Beyond major cities such as San Francisco and New York, the income imbalance is pronounced in blue-collar hubs and the fast-growing metro areas that have large immigrant populations.”

Burger King to be bought out at $24/share – CNBC [MarketWatch]
Whopperland’s stock is up 20% on the news that private equity shop 3G will shell out $24 a share.

KB Home says SEC investigation over [Los Angeles Times]
“Shares of Los Angeles-based KB Home soared on Wednesday after the home builder said an investigation by the Securities and Exchange Commission into the company’s accounting and disclosure procedures had concluded and no enforcement action would be taken.

The company said in a statement Wednesday that it had received a letter from the commission closing the investigation, which began in October. Details of the inquiry weren’t disclosed. KB Home closed at $11.45, up $1.14, or 11%.

‘We are glad to share with our investors and employees that the matter is now behind us, as we continue to focus on restoring the sustained profitability of our home building operations and generating future growth’ KB Home Chief Executive Jeffrey Mezger said.”


Heiress’ shady visitor [NYP]
“An accountant being investigated for his handling of 104-year-old Huguette Clark’s vast fortune has visited the hospitalized heiress in the past several days trying to get her to sign legal documents, The Post has learned.

Sources said they did not know if the accountant — convicted sex offender Irving Kamsler — obtained Clark’s signature on the documents after going to see her at Beth Israel Medical Center, but speculated that those files include a last will for the copper heiress.”

Bloomberg Stands By “Cowboy” Remark in State Cigarette Tax Dispute with Seneca Tribe [Tax Foundation]
Hizzoner isn’t apologizing to the Seneca Tribe after suggesting Governor David Paterson get a ‘cowboy hat and a shotgun’ to enforce New York’s cigarette tax. The Seneca Tribe wants an apology. Bloomy says it isn’t happening.

Accounting News Roundup: More Tax Cuts for Small Business?; Scenes from a SaaS Meltdown; SEC Files Charges Against Sachdeva | 09.01.10

No Charges for Moody’s in Ratings Violation [NYT]
“The Securities and Exchange Commission said Tuesday that it had declined to charge Moody’s Investors Service for violating securities laws by failing to comply with its own procedures for rating complex derivative sece decision followed an S.E.C. investigation, and the commission used the opportunity to warn all of the national credit rating agencies that it would use new powers under the Dodd-Frank banking law to take action against similar conduct, even if it occurred outside the United States, as the Moody’s case did.

The S.E.C. said it had declined to pursue a fraud enforcement action in the case because of jurisdictional issues. The securities in question originated in and were rated and sold in Europe, the S.E.C. said.”

Tax Cuts Weighed to Spur Economy [WSJ]
“The Obama administration is considering a range of new measures to boost economic growth, including tax cuts and a new nationwide infrastructure program, according to people familiar with the discussions.

The president’s economic team has met frequently in recent days to list ways to bolster the struggling recovery, according to government officials.

On the list of possible actions: additional tax cuts for small businesses beyond those included in a $30 billion small-business lending bill before the Senate. It’s not clear what those tax breaks would target or how much they might cost in lost revenue to the government.

Also in the mix: a possible payroll tax cut for businesses and individuals, as well as other business tax breaks, according to people familiar with the discussions. Currently, income taxes are scheduled to rise with the expiration of Bush-era tax cuts at the end of this year.”

Lessons from ClearBooks failure [AccMan]
What happens when a SaaS provider has a blow-up? Well, it depends.


“Non-Combat” Troops Remaining in Iraq Will Still Receive “Combat Zone” Tax Treatment [Tax Foundation]
The troops that remain in Iraq will still receive combat zone treatment (i.e. ‘designated hostile fire or imminent danger pay areas’).

Brainiest Cities [The Daily Beast]
Boulder #1; DC #3; Boston #4. Austin comes in at a paltry #16 behind Ames, IA. What’s up with that?

Former Rothstein CFO Stay Gives Up Boat [SFBJ]
Convicted Ponzi Schemer Scott Rothstein’s CFO had to give up her 28-foot 2008 Southport boat in order to settle a claim against her for the $154k loan she received from the firm to buy said boat.

SEC Charges Two Accounting Professionals at Milwaukee-Based Company with Fraud [SEC]
The SEC got around to filing civil charges against Sue Sachdeva. The Commission also charged Senior Accountant Julie Mulvaney with helping S-square conceal the fraud through bogus journal entries.

Accounting News Roundup: Genzyme Wants Bigger Offer from Sanofi; IRS Says Ex-NFL Star Romanowski Owes $6 Mil; Convicted Tax Evader Traficant Running for Congress Again | 08.31.10

Genzyme Rejects Sanofi’s Overture [WSJ]
“Genzyme Corp.’s board again rejected an $18.5 billion takeover proposal from Sanofi-Aventis SA, although Genzyme suggested it would be open to future talks if there were a higher starting price.

Genzyme’s suggestion contrasts with accusations from Sanofi Chief Executive Chris Viehbacher that he “encountered a brick wall” in trying to begin merger talks. And with the French drug maker stressing its discipline in pursuing the Cambridge, Mass., biotech, the rhetoric from both sides hints that any deal could take some time.”

No horsing around, IRS tells ex-NFL star [Forbes]
“The Internal Revenue Service says ex-football star linebacker Bill Romanowski owes more than $6 million, primarily for claiming losses from a thoroughbred horse-breeding investment whose promoters have admitted was a fraudulent tax shelter.

Romanowski, 44, and his wife, Julie, filed a lawsuit last month in U.S. Tax Court disputing an IRS bill for $5 million in taxes, $1 million in penalties and an unspecified amount of interest. According to his complaint, for the years 1998 to 2004, the Romanowskis said their total taxable income was a negative $11 million. The IRS said it really was $14 million. The difference is a cool $25 million.”

Higher Taxes May Not Push Firms To Cut Dividends [WSJ]
“The expiration of a tax cut on dividend income wouldn’t likely spur firms to significantly cut their dividend payouts, say some scholars who study the relationship between tax rates and corporate behavior.

One big reason is that a growing share of U.S. equities are held by retirement funds and foreign investors that aren’t swayed by U.S. individual income-tax rates.

‘If there is an effect, it will be modest,’ University of North Carolina professor Douglas Shackelford said of the pending higher tax rates. ‘Pension funds, 401(k)’s, foreigners and corporations–all of these don’t care’ about the individual tax rate, he said.”

Alabama county mulling whether to keep, jettison SAP [Reuters]
Jefferson County, Alabama is the latest to have trouble with their SAP system. Unfortunately for JeffCo, they don’t have a huge consulting operation to sue, only an unnamed “third-party consulting firm.”


Guess Who’s Coming to Dinner! [Taxable Talk]
James Traficant, that’s who. Traficant was indicted in ’02 (while serving in Congress) on federal corruption charges and ultimately found guilty on ten counts that included bribery and tax evasion. Despite that track record, he has managed to get the necessary amount of signatures to run as an independent in Ohio’s 17th Congressional District.

Accounting firm raided over alleged drug network [ABC Australia]
Don’t think it can’t happen to you!