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December 8, 2022

ANR

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

Obama Attacks Republicans on Tax Policy [TaxProf Blog]


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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

Accounting News Roundup: Dutch Minister Replacing Tweedie as IASB Chair; REMINDER: Nonprofit Deadline Is Friday; Panel Recommends Separate Board for “Little GAAP” | 10.12.10

Former Dutch minister picked as IASB chairman [FT]
“The head of the Dutch financial markets regulator has been given the pojob of running the body that sets the accounting rules followed in the European Union and an increasing number of other countries.

Hans Hoogervorst, a former Dutch finance minister, was on Tuesday named chairman of the London-based International Accounting Standards Board, which sets the IFRS accounting norms.

He will take on the job at the end of June 2011, succeeding Sir David Tweedie, the Scot who has occupied the post for a decade.

Mr Hoogervorst, chairman of the executive board of the Netherlands Authority for the Financial Markets, is not an accountant.”

I Can Afford Higher Taxes. But They’ll Make Me Work Less. [NYT]
Wherein we discover one more example of how tax cuts (or lack thereof) will affect someone.

Gap scraps new logo after online outcry [Reuters]
“GAP Inc scrapped a new logo on Monday just a week after launching it following an “outpouring of comments” online and from customers in support of the original blue box design it’s had for more than 20 years.

Gap rolled out an updated version of the logo last Monday on its website and planned to include it in its holiday marketing, a spokeswoman said.

But the company saw more than 2,000 comments on its Facebook page on the issue, with many people railing against the new logo and calling for a return to the old.”

Friday Is the Drop-Dead Date for Small Charities Wanting to Stay Tax-Exempt [Tax Update Blog]
You’ve been warned.


One Step Closer to Little GAAP [CFO]
“A blue-ribbon panel has recommended that a new set of accounting standards be drawn up for private companies based on U.S. generally accepted accounting principles. The panel also recommended that a private-company rulemaking board be established, separate from the Financial Accounting Standards Board, which currently writes and revises U.S. GAAP.

The details of how the rules will be developed — and how FASB and its parent organization, the Financial Accounting Foundation (FAF), will be involved in the process — will be outlined in a report issued in December, said panel chair Rick Anderson, chairman and CEO of accounting firm Moss Adams, during the panel’s fourth and final public meeting on Friday. The final product, often dubbed “little GAAP,” will be a pared-down version of the full set of rules, requiring fewer disclosures and less-detailed measurements of some assets and liabilities.”

Wal-Mart Lands Agreement to Sell iPad [WSJ]
“Wal-Mart Stores Inc. said it will start selling Apple Inc.’s iPad on Friday at hundreds of stores throughout the U.S.

Wal-Mart landed the tablet computer a little later than two of its largest retail rivals: Best Buy Co., which has been selling the iPad since its launch in April, and Target Corp., which began carrying it this month.

The Bentonville, Ark., retail giant said that what it lacked in timeliness it will make up for in sales heft. It vowed to slowly ramp up the number of U.S. stores carrying the iPad to more than 2,300 by the height of the holiday season in mid-November.

There will also be no Wal-Mart “rollback” price cut on the iPad: The tablets will sell for Apple’s suggested retail price, which starts at $499 for the cheapest version with 16 gigabytes of storage and wireless internet access but no 3G mobile connection.”

Accounting News Roundup: Chris Columbus Edition | 10.11.10

Ed. note: In observance of a day that reminds Italian-Americans and Native Americans that they are sworn enemies, we’ll be posting on a lighter schedule today. Let us know if anything exciting happens (shouting matches, faux-holiday layoffs, etc.) and we’ll manage to get something up. Back with a full slate tomorrow.

PwC clients asked to reveal information on internal accounting judgments [Accountancy Age]
“PwC auditors will ask audit chairmen to reveal more detail about internal accounting judgments on a voluntary basis. Andrew Ratcliffe, senior audit partner with PwC, said he was unsure how the audit chairs would react, but hopes to have more sensitive information in the public domain by February.

‘We will ask what are the key judgments and assumptions that the auditor discusses with the audit committee when he completed his audit,’ he said.”

Deloitte’s Phoenix partner moving to Los Angeles post [Phoenix Business Journal]
Michelle Kerrick makes a break for the L.A. OMP gig.

The Tragic Decline of Business Casual [Bloomberg BusinessWeek]
The bosses have had it up HERE with your liberal interpretation of the business casual dress code.

The Future of Fraud Investigations: A Guest Post From Tracy Coenen [Re: The Auditors]
Tracy Coenen drops in at RTA for a guest post.

Deloitte & Touche settles Kentucky Central suit for $23 million [Business First of Louisville]
“The Kentucky Department of Insurance has reached a $23 million settlement with Deloitte & Touche LLP, ending a lawsuit the state brought against the accounting firm for its dealings with the now-defunct Kentucky Central Life Insurance Co.”

Tax Masters [TaxProf Blog]


Is Obama Raising Taxes on the Middle Class? According to Joe Biden, Yes [Tax Foundation]
The Veep escaped and managed to say some things that aren’t so helpful with the President’s tax rhetoric.

Accounting News Roundup: Big Names Oppose Proposed Washington Tax; American Apparel Names Acting President; Oregon Gubernatorial Candidate Donates Home and Gets Burned | 10.08.10


SEC Accuses CHiPs Actor, Others Of Securities Fraud [Dow Jones]
“In complaints made public on Thursday, the SEC alleges that the actor, Larry Wilcox, and more than a dozen other penny stock promoters engaged in a series of kickback schemevolume and price of microcap stocks and illegally generate stock sales.

Wilcox, who starred as Officer Jon Baker on the long-running television show “CHiPs”, lives in West Hills, Calif., and is president and chief executive of The UC Hub Group, according to an SEC complaint filed in U.S. District Court for the Southern District of Florida.”

Microsoft, Boeing, Amazon Line Up Against New Washington Tax [Janet Novack/Forbes]
“The Washington State fight over whether to impose a new income tax on well-to-do residents heated up Wednesday, as the group opposing the tax released a list of employers that have joined the anti-tax cause. Companies on the list include Microsoft, Boeing, Amazon, Weyerhaeuser and Safeco Insurance.

The tax, which will appear as Initiative 1098 on the state’s November ballot, would impose a 5% tax on income of more than $400,000 per couple and a 9% levy on income exceeding $1 million per couple.”

Rep. Levin: Fate of Bush tax cuts unknown [On the Money/The Hill]
This does not sound good: “The Senate is expected to move first on the issue, but Levin said even that was not certain.

‘It’s preferable that the Senate act first because we’ve seen that if they can’t act first they won’t act second because the Republicans block it and don’t provide the 60 votes,; he said, adding, ‘I think we’ll have to wait and see.’ ”

American Apparel names Tom Casey as acting president [Reuters]
Tom Casey just left the terminal case known as Blockbuster in August.

SBA Loans Jump, Despite Unsteady Year [WSJ]
“Small-business lending still hasn’t bounced back to pre-recession levels. But despite a rocky year, the number of loans backed by the Small Business Administration jumped about 30% in 2010.

The agency, which ended its fiscal year Sept. 30, says it approved $16.84 billion, or 54,826 small business loans, in the past 12 months. That’s up from fiscal 2009, when the SBA backed about $13.03 billion during the depths of the credit crunch. In 2007, the agency backed about $20.61 billion.”


Oregon Gubernatorial Race Roiled by Candidate’s Charitable Deduction for Donation of Home to Fire Department [TaxProf Blog]
You try and do something nice…

FASB Advances EITF Proposals on Goodwill, M&A [A&A Update/Compliance Week]
“The Financial Accounting Standards Board is proposing new updates to the Accounting Standards Codification around goodwill write-downs, business combinations, and revenue recognition for health care entities based on recommendations from its Emerging Issues Task Force.

In the proposal titled Intangibles – Goodwill and Other (Topic 350): How the Carrying Amount of a Reporting Unit Should Be Calculated When Performing Step 1 of the Goodwill Impairment Test, FASB and the EITF want to settle on one starting point for all companies to follow in deciding if goodwill needs to be written down.”

U.A.E. Drops Threat to Suspend BlackBerry [NYT]
Your vacation is back on.

Accounting News Roundup: Congress Delay on Taxes Could Hit January Paychecks; KPMG Settles with Hollinger; PwC Asking Clients to Share Internal Info | 10.07.10

Republicans See a Political Motive in I.R.S. Audits [NYT]
“Leading Republicans are suggesting that a senior official in the Obama administration may have improperly accessed the tax records of Koch Industries, an oil company whose owners are major conservative donors.

And the Republicans are also upset about an I.R.S. review requested by Senator Max Baucus, the Montana Democrat who leads the Finance Committee, into the political activities of tax-exempt groups. Such a review threatens to “chill the legitimate exercise of First Amendment rights,” wrote two Republican senators, Orrin G. Hatch of Utah and Jon Kyl of Arizona, in a letter sent to the I.R.S. on Wednesday.
ick to point out that the I.R.S. was put under tight restrictions about access to Americans’ tax returns as a result of political shenanigans by the Nixon administration involving tax audits.”

AIG’s Real Numbers Still Shrouded in Secrecy [Jonathan Weil/Bloomberg]
“Two years ago when the government seized control of AIG, the Treasury in effect took a 79.9 percent ownership stake in the company, through preferred shares and warrants it received as part of AIG’s $182 billion bailout package. By keeping its stake below 80 percent, the government ensured that a financial-reporting method known as push-down accounting wouldn’t be permitted under U.S. accounting rules.

The reason that was so important? Had AIG chosen to implement push-down accounting, it would have had to undergo a complete re-assessment of all its assets and liabilities. And, with a few possible exceptions, the company would have been required to begin showing them on its balance sheet at their fair market values, which may have left AIG’s books looking a lot worse.”

Delays to Tax Tables May Dent Paychecks [WSJ]
“Lack of congressional action on 2011 income taxes may force the Treasury Department to make unprecedented moves to prevent U.S. workers from seeing large tax increases in their January paychecks.

The issue: 2011 tax-withholding tables. Treasury officials usually release the tables, which determine the take-home pay of millions of wage-earners, by mid-November because it takes payroll processors weeks to adjust their systems before Jan. 1.”

Steven Bandolik Joins Deloitte’s Distressed Debt & Asset Practice [PR Newswire]
“Deloitte announced today that Steven Bandolik has joined its distressed debt and asset practice. Bandolik’s hire marks the latest in a series of strategic growth initiatives executed over the last 18 months to expand Deloitte’s distressed debt and asset practice.

‘Challenges need to become opportunities in order for borrowers, lenders and investors to move forward, and get back to their core business of making positive returns on investments. Despite lower interest rates, obtaining new financing regardless of loan performance continues to be an issue unless properties and financial positions are extremely strong,’ said Bandolik. ‘In this environment, clients require intellectual capital to re-structure transactions, and design sensible underwriting, due diligence and risk management procedures. Their debt may need to be structured more conservatively, requiring higher equity levels that could withstand future stress, with a focus on deleveraging over the holding period.’ ”

Hollinger Inc.: Settlement of Claims Against KPMG LLP [Marketwire]
“The Litigation Trustee of Hollinger Inc. (“Hollinger”) announced today that he has entered into a settlement agreement with KPMG LLP to resolve all claims against Hollinger’s former advisor advanced by the Litigation Trustee on behalf of Hollinger. The settlement entails no admission of liability on the part of KPMG LLP. The terms of the settlement include releases in favour of KPMG LLP from Hollinger and its subsidiaries, as well as from third parties involved in related Hollinger litigation. The settlement and the releases are subject to court approval, which will be sought on notice to other affected parties. The rest of the terms of the settlement agreement are confidential.”


CAQ Reports on Fraud Best Practices, Launches New Effort [Compliance Week]
“The CAQ conducted five roundtables and 20 in-depth interviews to develop consensus on how companies can best create a financial reporting environment where fraud has little potential to seed or take root. The CAQ published the findings as a cornerstone to further collaborative efforts with other professional groups to share ideas and best practices on how to derail fraudulent financial reporting.”

PwC audit clients asked to give up internal information [Accountancy Age]
“Ian Powell, chairman of PwC told an audience of 300 business professionals, the audit model needed reform, and believed some internal discussions, now privately held between an auditor and company, needed to be made public.

‘It may well be that by making more of those discussions public, the value of an audit can be collectively improved,’ he said.

‘I have asked our lead audit partners to discuss this idea with audit committee chairs of PwC clients to see if we can work together on a voluntary basis to improve the disclosure of such matters over the next reporting cycle.’

The comments come as the European Commission prepares to release a green paper on audit competition, due later this month, and the House of Lords prepares to hear evidence on the issue, next week.”

Greenspan: Financial overhaul to have ‘significant impact’ on economic growth [On the Money/The Hill]
Some people are still listening to this man.

Madoff clan denies fraud role, seek suit dismissal [Reuters]
A consistent message may actually convince someone, some day.

Accounting News Roundup: Ernst & Young Reports Sluggish Revenues; Obama Shifting Tax Rhetoric; Wipfli Makes Another Acquisition | 10.06.10

Ernst & Young revenues fall slightly to $21.3 bln [Reuters]
“For the full fiscal year ended June 30, revenues were down 0.9 percent to $21.3 billion from $21.4 billion in fiscal year 2009, Ernst & Young said.

Revenues from advisory services grew by 2 percent, but other areas of the firm, including tax and audit services, posted declines.”

Goldman Sachs Says U.S. Economy May Be `Fairly Bad’ [Bloomberg]
Or ‘very bad.’ Either way, it’s there’s no good to be found.

Deloitte 2010 Annual Review: Reaching new heights, As One [Deloitte]
In coordination with the “We are the champions” announcement, D rolled out its annual glossy detailing what a bang-up year it was.

Obama’s Tax Pitch: Income Gap That Millionaires Should Fill [Bloomberg]
“President Barack Obama has shifted his central argument against the Bush-era tax cuts to make the income gap as much a voter concern as the budget gap.

Since Sept. 3, Obama has chided Republicans for wanting to extend tax cuts for “millionaires and billionaires” — a line he repeated in a morning television interview, a weekly radio address, backyard chats in Des Moines and Albuquerque, and three times during one speech at a community college in Cuyahoga County, Ohio. Before then, administration economists cast taxing the wealthy largely as a matter of fiscal prudence — a way to free up $700 billion from the deficit over the next 10 years.”


Wipfli acquires Illinois firm [The Business Journal of Milwaukee]
“Wipfli LLP, a CPA firm headquartered in Milwaukee, said that officers and associates of Rockford, Ill.-based Lindgren Callihan Van Osdol & Co. Ltd have joined Wipfli through an acquisition.

The transaction was effective Oct. 1 but was announced late Tuesday. Terms of the deal were not disclosed.

Lindgren Callihan Van Osdol, which was founded in 1963, specializes in audit, accounting and consulting services to businesses and to individuals. The acquisition is one of the largest in Wipfli’s history, said managing partner Rick Dreher.”

Karl Rove group, other tax-exempt orgs under fire for alleged political activities [Don’t Mess with Taxes]
Hard to believe that Karl Rove would be involved in anything shady.

Sun Chips Bag to Lose Its Crunch [WSJ]
YOUR LUNCH WILL BE QUIETER SOON.

Accounting News Roundup: KPMG’s Hiring Spree in Europe; Herz Gets Nostalgic; Stalemate on Estate Tax Could Benefit States | 10.05.10

KPMG joins Big Four hiring spree [FT]
The FT gives us the scoop on the Radio Station hiring bonanza in Europe (if you’re experienced go here), “KPMG is hiring 8,000 new staff across Europe over the next three years, signalling a recovery in the corporate services industry.

The hiring includes 3,000 staff in Britain, even though the UK government has pledged to cut its consultancy bill amid growing public unease over the billions of pounds spent on professional fees in the past decade.

The recruitment drive will take KPMG’s workforce from 30,0Europe, excluding France and Italy, and from 11,000 to 14,000 in the UK. KPMG also has ambitious hiring plans in France and Italy.

The corporate services industry had been hit by the global downturn, with the Big Four accountancy firms – KPMG, Ernst & Young, PwC and Deloitte – criticised for their role in signing off financial statements stuffed with assets that plummeted in value during the crisis.”

After Eight Years at FASB, Herz Looks Back [CFO]
Q&A with the man himself. Can you guess which accounting pronouncement he’s a big fan of?

Two Accounting Firms To Pay $1.7 Million To Settle CFTC Charges [Dow Jones]
“The charges stemmed from audits of Sentinel that were conducted between 2004 and 2006. The firms, McGladrey & Pullen LLP and Altschuler, Melvoin & Glasser LLP, agreed to pay $400,000 and $800,000, respectively, in restitution to Sentinel’s customers who suffered losses as a result of the Illinois-based futures commission merchant’s bankruptcy.

They were also required to pay civil monetary penalties of $150,000 and $350, 000, respectively, according to an order that was filed Monday. McGladrey & Pullen acquired assets related to Altschuler, Melvoin & Glasser’s audit practice in 2006.”

Ex-SocGen Trader Kerviel Convicted of Trading Fraud [WSJ]
” Paris court sentenced former Société Générale trader Jérôme Kerviel to three years in prison for his role in one of the biggest trading scandals in history, ordering him to repay a whopping €4.9 billion ($6.69 billion) loss suffered by the French bank.”

Investor Feedback Summary May Foretell FASB Retreat [Compliance Week]
“The Financial Accounting Standards Board may be sending up a smoke signal with an unusual missive describing how investors aren’t entirely in love with the board’s proposed new rules on financial instruments.

The board published a nine-page description of its interaction with investors regarding the FASB’s controversial proposal to call for more fair value in accounting for financial instruments. It opens with a reminder that FASB writes accounting rules to assure that financial statements produce information useful to investors, then explains how investors are reacting to the proposal when the board conducts face-to-face meetings with investors.”


State Estate Taxes: Windfall Gold in Expiring Tax Cuts [TaxVox]
States make out pret-tay well if Congress bumbles the estate tax.

U.S. hits AmEx with antitrust suit [WaPo]
“The Justice Department announced Tuesday that it had filed an antitrust suit against American Express for preventing retailers from offering customers discounts for using rival credit cards with lower processing fees.

Federal officials added that they had reached a proposed agreement with Visa and MasterCard over the matter.

The issue of ‘swipe fees’ has long been a thorn in the side of the retailing industry, which complained that it has little power to inform customers of the differences in card costs. In its complaint, the Justice Department estimated that the fees cost merchants $35 billion each year – resulting in higher prices for shoppers.”

LinkedIn and PwC Launch Breakthrough Career Mapping Tool for College Students [PR Newswire]
“LinkedIn, the world’s largest professional network with more than 80 million members globally, today launches Career Explorer in collaboration with PwC US, one of the largest employers of college graduates in the United States. The new LinkedIn Career Explorer tool provides current college students with unique, data-driven insights to help them build their careers.”

A Shift at the Top of Twitter [DealBook]
“Evan Williams, the co-founder and chief executive of Twitter, is stepping down to lead product strategy at the company, Twitter announced on Monday. Dick Costolo, the chief operating officer, will succeed Mr. Williams.”

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?”

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!

Accounting News Roundup: Ex-Dell Accountants Sued by SEC; Mosque Organizer Owes Back Taxes; Tax Reform Panel Disappoints | 08.30.10

SEC sues ex-Dell accountants over fraud [Reuters]
“The U.S. Securities and Exchanges Commission on Friday sued two former top accountants of Dell Inc for manipulating financial statements to meet Wall Street earnings targets between 2001 to 2003.

The regulator said in its suit, filed at the U.S. District Court of the District of Columbia, that former Chief Accounting Officer Robert Davis, and former Assistant Controller Randall Imhoff had maintained a number of ‘cookie jar’ reserves — an improper accounting method in a bid to cover shortfalls in Dell’s operating results.

The SEC said the improper accounting led to Dell having to restate all its financial statements from 20g>Mosque big owes 224G tax [NYP]
“Sharif El-Gamal, the leading organizer behind the mosque and community center near Ground Zero, owes $224,270.77 in back property tax on the site, city records show.

El-Gamal’s company, 45 Park Place Partners, failed to pay its half-yearly bills in January and July, according to the city Finance Department.

The delinquency is a possible violation of El-Gamal’s lease with Con Edison, which owns half of the proposed building site on Park Place. El-Gamal owns the other half but must pay taxes on the entire parcel.”

States See Pickup in Tax Revenue [WSJ]
“Overall tax revenue increased 2.2% in 47 states that have reported their receipts for the three months ended June 30, compared with the same period a year ago, according to a report to be released Monday by the Nelson A. Rockefeller Institute of Government at the State University of New York.

This marks the second quarter in a row of recovering tax collections—and follows five quarters of declines in revenue that hammered local-government budgets. The latest figures are still a mixed bag: Some states continue to see declining revenue, but those were offset by states that saw increases.”

KPMG Accounting Malpractice Verdict Affirmed but $38 Million Damage Award Vacated [Law.com]
Is this what you call a lose/win?

Relax! Iowa Is Funding Hollywood Again [Tax Update Blog]
That is a relief. But Joe Kristan reminds us how things went the first time around, “The film program collapsed in scandal last fall, and the film office director and two filmmakers face criminal charges. Iowa is on the hook for $200 million for credits already committed — about $66 per Iowan. ”


An S.B.A. Loan Program Goes Quietly [You’re the Boss/NYT]
The Small Business Administration’s America’s Recovery Capital Loan program (“ARC”) is being shut down just after a year in operation. At the outset, the 10,000 that were going to made available was thought to be too small. As of August 20th, the program had made less than 8,300 loans and it will be lucky if it reaches 9,000 by the time it expires next month.

Starting a new school year [Accounting Professor]
Fans of Professor David Albrecht has started a new blog; this is the first post.

Obama’s Tax Reform Panel: A Missed Opportunity [TaxVox]
“The paper, approved by the panel this afternoon, is filled with lots of useful information about our flawed tax system but leads nowhere. There are no recommendations. No revenue estimates. And no ownership by President Obama, even though he picked the panel’s members and staffed it with White House aides.

As a result, this report is a huge missed opportunity. Obama might have used this exercise to jump-start a debate over fundamental tax reform. Instead, the report does nothing to fill the policy vacuum that is being filled by an argument over what to do about the decade-old Bush tax cuts.”

Accounting News Roundup: Deloitte Poised to Be the Biggest of the Big 4; A Guide to Avoiding Layoffs; Forensic Accountant Testifies That Stanford Skimmed Funds | 08.26.10

~ Sorry about the downtime yesterday. Our best people are on it like ConEd.

Deloitte to be world’s biggest accountant as partners sweep up £590m [Telegraph]
“According to Mr Connolly, when Deloitte publishes its global results in October the firm is set to reveal it has overtaken PriceWaterhouseCoopers to become the biggest of the “Big Four” accountancy houses globally.

However, Mr Connolly, who is set to retire in 2011, predicted the current financial year could prove even more successful despite describing future growth in the wider economy as ‘low and slow.’ ‘We have alrin the first quarter of this year, so I expect we shall return to double-digit growth. The M&A market has started to get much busier and our tax business is growing well again. Changes in regulation also mean good business for us.’ ”

Investors Gain New Clout [WSJ]
“In a decision years in the making, the SEC voted 3-2 in favor of the “proxy access” rule, which requires companies to include the names of all board nominees, even those not backed by the company, directly on the standard corporate ballots distributed before shareholder annual meetings. To win the right to nominate, an investor or group of investors must own at least 3% of a company’s stock and have held the shares for a minimum of three years.

Currently, shareholders who want to oust board members must foot the bill for mailing separate ballots, as well as wage a separate campaign to woo shareholder support. Both are too costly and time-consuming for most. Now, the targeted companies will essentially be footing the bill for the dissidents, including them in the official proxy materials. The new rule will be in place in time for the 2011 annual meeting season next spring.”

Celgene names new chief financial officer [Reuters]
Jacqualyn Fouse will replace David Gryska effective Sept. 27

Herz Resigns As FASB Chair [The Summa]
Professor David Albrecht’s take on Roberto Herz’s decision to step down.

3Par Accepts Dell’s Increased Takeover Offer [Bloomberg]
“Dell Inc. said 3Par Inc. has accepted its increased offer of $24.30 per share in cash, or about $1.6 billion, net of 3Par’s cash.”


Dodging the Ax: How to Avoid Layoffs [FINS]
“As professionals working in financial-services witness the ax drop around their companies, many are living in fear that they could be included in the next round of layoffs. However, there are measures you can take right away to help safeguard your position and make you seem indispensable to management.”

Stanford Used Skimmed $1.6 Billion For Loans To Start-Ups, Witness Says [Bloomberg]
“The $1.6 billion that indicted financier R. Allen Stanford is accused of skimming from the funds of his investors was actually loaned by his Antiguan bank to start-up entities and other businesses he controlled, a fraud examiner testified.

Forensic accountant Alan Westheimer testified before a U.S. judge in Houston today that Stanford Financial Group Cos. comptroller Mark Kuhrt and chief accountant Gilbert Lopez told him they believed the borrowing should have been publicly disclosed.

‘The funds were being passed through as inter-company loans to the entities that were the recipients of the shareholder loans,’ Westheimer said. ‘Within a short period, usually six months, Mr. Stanford would assume those loans and the recipient companies transferred those balances to their underlying capital.’ ”

Accounting News Roundup: Herz Departure Is a Gift for Banks; American Apparel Blames Deloitte for Late Filings; Your Commute Isn’t That Bad | 08.25.10

Herz Leaving Marks Boon for Banks [WSJ]
“A new front has opened up in the war over mark-to-market accounting. Suddenly banks find themselves with an unexpected advantage in the fight over how they should value their vast holdings of financial instruments.

Trprise announcement Tuesday of the departure of Robert Herz as chairman of the Financial Accounting Standards Board. This will give banks an opportunity to push for a successor who is more friendly to their views on the mark-to-market question, as well as the overall idea that accounting should be for more than just investors.”

Former Chief Accounting Officer for Beazer Homes USA, Inc. Indicted on 11 Criminal Counts [FBI]
Michael Rand didn’t have a very good day yesterday.

Block ramped up federal lobbying efforts in second quarter, report says [AP]
H&RB lobbied their asses off from April to June spending $500k talking the ears off at the IRS, Treasury and SEC.

American Apparel Works To File Late 10-Q Before Nov 15 [Dow Jones]
The NYSE has put Dov & Co. on notice that they best get their act together if they don’t want to be sent slumming with the pink sheets. The company is promising to pull things together and if it weren’t for Deloitte quitting, everything would be a-okay.

Fact Checking Minority Leader Boehner’s Claims on “Small Business” and the “Bush” Tax Cuts [Tax Foundation]
In case you didn’t hear, John Boehner suggested that the President fire his entire economic team. Boehner is of the opinion that letting the tax cuts expire will hurt small businesses, citing the Joint Tax Committee. Tax Foundation takes exception with this, saying that the Ohio Congressman and House Minority Leader is misrepresenting the findings of the JTC:

“First off, the businesses that JCT is referring to are not necessarily ‘small.’ Saying the word ‘small business’ sounds good to the electorate because it brings up an image of a mom and pop store on Main Street America. But plenty of large businesses, as defined by net income or gross receipts, file their taxes under the individual income tax as opposed to the corporate income tax. Merely because a business is paying individual income taxes as opposed to corporate taxes does not mean it is ‘small.’ ”


Statement From Chairman Schapiro on Financial Accounting Foundation Developments [SEC]
“I commend the Financial Accounting Foundation for its ongoing efforts to evaluate and improve the effectiveness and efficiency of the structure and operation of the Financial Accounting Standards Board by increasing the size of the Board. The Foundation has determined that this revised structure will facilitate the continuing efforts of the FASB to work with the International Accounting Standards Board on their important convergence work plan. In addition, this should enhance the ability of the FASB to address issues facing the U.S. capital markets and the needs of investors.

“I also would like to commend FASB Chairman Robert Herz for his more than eight years of service. During his tenure, Chairman Herz has served as an effective investor advocate to improve the quality of financial reporting standards around the world. I welcome the appointment of Leslie Seidman as Acting Chairman. During this interim period, I look forward to working with Acting Chairman Leslie Seidman and the FASB as they continue their important work.”

Twenty something day-trader nailed with $172M bill in back taxes, asks ‘What’s the IRS?’ [NYDN]
How does a barely surviving Spaniard end up owing over $170 million to the IRS? For starters, he really doesn’t owe the Service the money. The problem arose because he didn’t file a tax return for one year that he spent day trading. The Service concluded that he made $500 million.

China Traffic Jam Could Last Weeks [WSJ]
Today, be thankful for your commute. No matter how bad it was, at least the drive/ride ended.

Accounting News Roundup: Wells Fargo Comes Out Against FASB Fair Value Proposal; PwC Buying Diamond Management; MLB Teams Financials Leaked | 08.24.10

Wells Fargo “Strongly” Opposes Accounting Board’s New Rules on Loan Value [Bloomberg]
“Wells Fargo & Co., the largest home lender in the U.S., said it disagrees with an accounting board’s plan that would require banks to report the fair value of loans on their books.

‘We strongly oppose the expansion of fair value as the primary balance-sheet measurement attribute for virtually all financial instruments,’ Wells Fargo Controller Richard Levy wrote in the Aug. 19 letter. ‘It will only serve to cement a short-term focus on fair-value measures.’

Wells Fargo is the first of the largest U.S. banks to publish its p writers who named an affiliation, according to the Financial Accounting Standards Board website. The letter was written to officials at the board, which said in May that it may require banks to report the fair value and amortized cost of loans and some other financial instruments on their balance sheets.”

PricewaterhouseCoopers to Buy Consulting Firm Diamond Management [WSJ]
PwC is paying $378 million for Diamond Management & Technology Consultants, “[share]holders will get $12.50 a share, a 31% premium to Monday’s closing price. The stock, up 29% in 2010 through Monday, was last at the bid level three years ago.

‘This is an attractive all cash opportunity for our stockholders, creates exciting prospects for our people, and will provide us new and enhanced capabilities to bring to our clients,’ said Diamond President and Chief Executive Adam Gutstein. ‘There’s a clear strategic fit between PwC’s assets and aspirations and Diamond’s positioning.’ ”

Return prudence to accounting [FT]
“What a pity that ultra-theoretical standard-setters around the world have chosen to jettison prudence, a generally accepted accounting convention derived from more than 100 years of experience. This high-risk approach has led to absurdly lengthy and unrealistic annual reports that are now virtually incomprehensible.”

Sex Harassment at Work Gets Weirder, Scarier [Bloomberg]
“Not that I think it’s weird that a brokerage firm chief executive would pin a female clerk on the floor by putting his shoe on her breast (the right one, if you must know), or that some insurance company guy in Fullerton, California, would put a sample of his semen in a female colleague’s water bottle. Twice.

But it did get my attention when I started leafing through this year’s press releases from the U.S. Equal Employment Opportunity Commission and found a case where a supervisor allegedly said that women should outfit themselves in Vaseline, and nothing else; one where a manager in human resources (yes, in human resources) allegedly inquired as to the color of an assistant’s panties; and a case against a company president who the EEOC says pulled a subordinate’s pants down in front of her coworkers.”


Borders CFO resigns for new job [Reuters]
Mark Bierley is moving on after 12 years for a new gig.

Businesses Add iPads to Their Briefcases [WSJ]
“Apple, which said it sold more than three million iPads through the end of June, attributes some of the device’s success to businesses. The Cupertino, Calif., company’s Chief Operating Officer Tim Cook said in July that ‘very surprisingly’ half of the Fortune 100 are testing or deploying iPads.

More than 500 of the 11,000-plus applications built specifically for the iPad are in the business category. A free app from Citrix Systems Inc., which allows people to access internal corporate programs from the iPad, has been downloaded more than 145,000 times.

‘Everyone in IT is jumping on this one,’ said Ted Schadler, an analyst at Forrester Research. ‘Rather than wait for people to start complaining they’re saying why don’t we get a few of them in and see what they are good for.’ ”

MLB Confidential: The Financial Documents Baseball Doesn’t Want You To See, Part 1 [Deadspin]
Deadspin got their hands on financial statements for several Major League Baseball teams and even the lowliest of clubs – namely the Pittsburgh Pirates – make truckloads for their owners: $20.4 million in partner distributions for fiscal year ’08.

The sports rag also has financial statements for the Tampa Bay Devil Rays, Florida Marlins and L.A. Angels. And as you might expect, people (MLB and the clubs’ people) are not happy.

Accounting News Roundup: The Problem with American Apparel’s non-CPA CFO; Diversity Still Lags in Accounting; Patrick Byrne Denies Insider Trading Accusations | 08.23.10

Potash says in talks for superior deals [Reuters]
“Potash Corp’s board urged shareholders to reject BHP Billiton’s hostile $39 billion offer and said it was in talks with a number of potential suitors for a superior deal.

Potash Corp, the world’s largest producer of potash based in the Canadian province of Saskatchewan, said superior offers or other alternatives are expected to emerge.

Discussions are on with several of these third parties in order to generate superior offers, the company said in a statement.”

How to Shine in a Skype Interview [FINSying across the country for a second round of meetings, you may be asked to interview for a job from the comfort of your living room.

While it might sound less stressful to some than an in-person meeting, such an interview can be filled with landmines for job candidates.”

The Problem With a Non-CPA CFO [FEI Financial Reporting Blog]
Francine McKenna guest-posts over at FEI for the second time, this time discussing the American Apparel situation and noting that 31 year-old CFO might be in over his head.

Goldfarb Branham LLP Investigating Shareholder Claims Against American Apparel, Inc. [Business Wire]
Speaking of APP, investigations are starting, “Goldfarb Branham LLP is investigating American Apparel, Inc. (APP 0.75, 0.00, -0.09%) due to allegations that the company may have issued materially inaccurate statements to investors concerning its 2009 financial results and the circumstances surrounding the replacement of American Apparel’s auditor.”

Movement afoot to increase diversity in accounting industry [Pittsburgh Business Times]
“Sam Stephenson, a partner at ParenteBeard LLC, a Downtown-based certified public accounting firm, brings an interesting perspective to the equation as a black man who has worked in the profession for nearly four decades. During his long tenure, he has seen improvements in efforts to recruit and promote women in the profession, but ethnic diversity still lags behind.

‘We need to bring this issue to the attention of individuals who run local and regional firms because they may not be aware that this is a problem,’ said Stephenson, who serves as a member of the Pennsylvania State Board of Accountancy, which enforces the licensing rules for CPAs. ‘A lack of diversity often means missed opportunities to attract talent and clients.’ ”


Preparer Costs Will Increase Some; Taxpayer Costs Will Increase More [Tax Update Blog]
Joe Kristan responds to fellow practitioner/blogger Robert Flach’s question of how the new tax preparer registration will affect costs for consumers more so than tax preparers.

Gays See Complex, Changing Tax Picture [Dow Jones Adviser]
“Gay couples are taking one step forward, one step back when it comes to their tax rights. Not to mention sideways.

The shifting landscape of new rules and initiatives makes it a big challenge to provide same-sex partners with good tax advice.

In Massachusetts, a successful challenge to a federal law denying gays tax breaks that heterosexual couples get could mean progress, but only if it stands up to an expected government appeal.”

Patrick Byrne Refutes Insider Trading Claims [Forbes]

Accounting News Roundup: GM Still Lacks Effective Internal Control System; The Ten Highest State Income Tax Rates; How to Know When Your Boss Is Lying | 08.20.10

GM filing warns on reporting [Detroit Free Press]
This may come as a shock but General Motors, despite filing paperwork for its IPO, admits that they still don’t have effective internal controls.

“[I]n regulatory filings about its upcoming initial public offering, GM warned potential investors that ‘our internal controls of financial reporting are currently not effective.’

Experts are divided on whether the warning — one of about 30 risk factors identified by GM in a document describing a planned sale of shares — is just an obscure accounting matter or a red flag that taints GM’s financial reporting

The 10 Highest State Income Tax Rates For 2010 [Forbes]
If you’re single and make $200k or $400k and married in Hawaii, you get dinged for 11%, the highest ranking state on the list. Dark horse Iowa comes in at #5 gets 8.98% of taxable income over $64,261. That’s above New Jersey and New York tied at #6.

Transocean accuses BP of withholding data on Deepwater Horizon and oil spill [WaPo]
Just when you thought the ugliness was slowing down (at least in the media coverage), ” Even as they work together to kill the Macondo well in the Gulf of Mexico, the oil giant BP and the deep-water drilling rig company Transocean are in an increasingly bitter battle over what went wrong on April 20 to trigger America’s worst oil spill.

The conflict flared Thursday when Transocean fired off a scathing letter accusing BP of hoarding information and test results related to the Deepwater Horizon blowout that killed 11 people, including nine Transocean employees. Signed by Transocean’s acting co-general counsel, Steven L. Roberts, the letter says that Transocean’s internal investigation of what went wrong has been hampered by BP’s refusal to deliver ‘even the most basic information’ about the event.

‘[I]t appears that BP is withholding evidence in an attempt to prevent any entity other than BP from investigating the cause of the April 20th incident and the resulting spill,’ the letter states, and it demands a long list of technical documents and lab tests.”


How to tell when your boss is lying [The Economist]
Apparently cursing is a good sign.

Koss reports smaller quarterly loss on 14% sales decline [Milwaukee Journal Sentinel]
The company lost $423,450 for the six months ended June 30th. They spent $1.12 million on legal fees related to Suzy Sachdeva.

Accounting News Roundup: EisnerAmper Partner: GM Balance Sheet ‘Stronger’ Ahead of IPO; KPMG Moves on From New Century, Countrywide; No Bookie Needed for Betting on Grades | 08.19.10

GM’s balance sheet draws praise ahead of IPO [MarketWatch]
“Peter Bible, partner-in-charge at accounting firm EisnerAmper LLP, said General Motors is now carrying a much stronger balance sheet than its predecessor, based on the company’s initial public offering filed late Wednesday. ‘Their debt-to-equity ratio looks handsome,’ Bible said in an interview. ‘This thing has gotten restructured quite a bit. GM’s health care liabilities have fallen significantly. As I look at the balance sheet, it is much healthier.’ ”

Move to converge just exported crisis [Re: The Auditors]
KPMG has put two major lawsuits behind them – Countrywide and New Century. One major difference between these two cases was that New Century had a bankruptcy examiner’s report while Countrywide did not.


Judge Denies Online Religious Group’s Bid for Church Status [WSJ]
A virtual “church” gets denied the whole “church” thing.

For the rich, ’tis better to give than wait [Reuters]
“With U.S. taxes almost guaranteed to rise next year, the rich have a rare opportunity to distribute some wealth and preserve their fortunes.

A weak economy has led to razor-thin interest rates and beaten-down valuations, which make giving less costly for and potentially more rewarding to heirs. Moreover, the U.S. government is widely expected to rein in a popular tax-avoidance scheme.

‘This is a golden era for shifting estates and giving assets away,’ said Bill Fleming, a financial planner for PricewaterhouseCoopers in Hartford, Connecticut. ‘If you have an estate plan, keep going: Uncle Sam soon will be back in your pocket.’ ”

Wager 101: Students Bet on Their Grades [WSJ]
“The website attracted wagers by 600 students from two colleges last year, said Mr. Gelbart and co-founder Steven Wolf, graduates of Queens College. This month, the site expanded to let students on 36 campuses—including Harvard, Stanford and Brigham Young University—place bets. More than 1,000 new bettors have signed on.

Lisa Lapin, a Stanford University spokeswoman, said school officials were ‘appalled’ when they learned Stanford students could place bets on their grades, adding, ‘the concept of betting on academic performance is contrary to academic development.’

Lance Miller, a finance major at the University of Pennsylvania, says the criticism misses the mark. Mr. Miller, with a GPA of 3.6, won about $80 on two $40 bets that he would earn A’s in business courses.

‘We’re acing classes to make money—isn’t that what they call a win-win?’ said Mr. Miller, 20.”

Facebook’s Places Feature Lets Users Share Their Whereabouts With Friends [Bloomberg]
“Services that help Web users share their whereabouts and find nearby friends could generate as much as $4.1 billion in annual ad sales by 2015, according to Borrell Associates. The features can help marketers more easily target customers — say, by reaching shoppers when they’re close to making a purchase.”

Accounting News Roundup: Ernst & Young Is All Over the Emmys; PwC’s Diversity Plea; Switching SaaS Providers Should be Simple | 08.18.10

FASB’s Tort Bar Gift [WSJ]
“In the eternal war between the plaintiffs bar and corporations, the lawsuit pack already owns the Senate andNow it seems the nation’s accountants want to give the lawyers another edge.

The Financial Accounting Standards Board (FASB) will soon begin considering whether to require companies to account for the potential cost of ongoing litigation. Supporters insist this is merely about disclosure, but the proposal would hurt investors by offering roadmaps for new litigation and bigger settlements. We first wrote about this in 2008, and FASB retreated amid a business backlash. But FASB’s revised proposal, issued last month, isn’t much better.

Take the provision requiring companies to disclose their liability insurance coverage. Lawyers would be able to target their damage requests to the coverage maximum, or launch new lawsuits in the knowledge that more insurance dollars remain. This is why judges typically insist that coverage only be divulged under a secrecy order.”

Emmy votes are in and now it’s time to start counting [Los Angeles Times]
“With the Emmy Awards just a week and a half away, Ernst & Young LLP, the accounting firm in charge of counting the thousands of votes, will now kick into high gear figuring out who will be going home with a trophy come Aug. 29.

The deadline to get ballots in was 5 p.m. Tuesday. The last vote, as always, was turned in by veteran actress Jody Carter, who actually comes down to the firm’s downtown offices to fill out her ballot in person and turn it in to Andy Sales, the Ernst & Young lead partner for the prime-time Emmy Awards.”

Judge Denounces a Barclays Settlement [Reuters]
“The judge, Emmet G. Sullivan of Federal District Court, said at a hearing Tuesday that he was concerned about the proposed deal in which the bank had agreed to pay $298 million to resolve the charges over its dealings with Cuba, Iran, Libya, Sudan and Myanmar.

“This is a sweetheart deal,” Judge Sullivan said, adding that the average American citizen who gets caught robbing a bank does not get a deferred prosecution agreement, as Barclays did.


PricewaterhouseCoopers Calls on Organizations to Manage Diversity with their ‘Heads, Hearts and Wallets’ [PR Newswire]
“Organizations that leverage diverse talent and manage diversity with their ‘heads, hearts and wallets’ will gain long-term competitive advantages, noted Greg Garrison, Partner and Vice Chairman, PricewaterhouseCoopers LLP (PwC), in a keynote speech at the 2010 Ascend Annual Gala. Ascend is a 5,000-member professional leadership organization dedicated to leveraging the potential of pan-Asians.

Though organizations typically approach diversity from three perspectives — the head, which looks at diversity academically; the heart, which view it in moral terms; and the wallet, which ties diversity efforts directly to the bottom line — unsuccessful diversity commitments often occur because organizations approach the effort from just one of those mindsets.

‘Successful leaders approach diversity using all three lenses,’ stressed Garrison. ‘Looking through these lenses, leaders must act upon what they see and anticipate what is to come to successfully shape the talent that will drive business performance.’ ”

Office-Leasing Rebound Could Be Deceiving [WSJ]
“In New York, accounting giant Deloitte recently asked the city for $11 million in tax breaks that would support a consolidation of its New York offices at 4 World Financial Center in downtown Manhattan. Under the lease deal, which isn’t final, Deloitte—which now occupies some 934,000 square feet of office space in the city—would eventually move those operations into just 390,000 square feet at 4 World Financial Center, with options to expand to 630,000 square feet.

Deloitte would spend more than $90 million on building and fitting out the space with a new, more efficient design, according to its application for the tax breaks.”

IRS Probes Apple Employee for Kickbacks [Debits & Credits]
“A grand jury charged Apple’s global supply manager, Paul Shin Devine, who was responsible for selecting suppliers of enclosure materials for headsets for the iPhone and iPod. According to Justice Department prosecutors, who carried out a joint investigation with the IRS’s Criminal Investigation division and the FBI, Devine allegedly transmitted confidential internal Apple information to suppliers in China, Singapore, South Korea, and Taiwan. In return, the suppliers agreed to pay him kickbacks, including payments based on a percentage of the business they did with Apple.”

SaaS switching – should we care? [AccMan]
“In theory at least, a SaaS/cloud approach makes it very easy to switch and the cost is relatively low, provided there isn’t a huge amount of data that needs unpicking and reforming. There is no throwing away of capital investments so no need to justify the decision in the same way you would if you’d installed an on-premise solution. Service providers that offer a freemium approach or a limited try-before-you-buy arrangement may appear attractive but even then it is only as you start to iron out the wrinkles that you find where the weaknesses lay.”

Accounting News Roundup: Big 4 Firms Looking to Cash in on Climate Change; GM Is Back from the Dead; The End of Fan and Fred? | 08.17.10

Barclays in Sanctions Bust [WSJ]
“Barclays PLC agreed to pay $298 million to settle charges by U.S. and New York prosecutors that the U.K. bank altered financial records for more than a decade to hide hundreds of millions of dollars into the U.S. from Cuba, Libya, Iran and other sanctioned countries.

Monday’s settlement agreement of criminal charges is an embarrassment for Barclays, which became a major player on Wall Street by snapping up the collapsed U.S. operations of Lehman Brothers Holdings Inc. in 2008 and has been trying to burnish the U.K. bank’s reputation on both sides of the Atlantic Ocean as a good corporate citizen.”

Cashing in on cleantech [The Guardian]
“While E&Y claims to be the first to set up a practice specifically for cleantech, in recent years PricewaterhouseCoopers (PwC), Deloitte Touche Tohmatsu, KPMG and E&Y have all launched dedicated practices for sustainability and climate change.

Steven Lang, who leads the cleantech division in the UK and Ireland, recently explained the attraction to Business Green: ‘We’ve seen major amounts of capital flowing into clean energy and clean technology and governments increasingly want to use the sector as a driver for international competitiveness.

‘The drivers are there for this to be a major growth area over the next five years.’ ”

GM IPO filing expected Tuesday [Reuters]
It’s like you never left, GM. “General Motors Co has completed the paperwork for an initial public offering, and timing of its filing with the U.S. securities regulators rests with the board of the top U.S. automaker, sources familiar with the process said on Monday.

The initial prospectus, expected to be for $100 million, is likely to be filed with the U.S. Securities and Exchange Commission on Tuesday, two people said, asking not to be named because the preparations for the IPO are private.”


IASB details recruitment process for Tweedie replacement [Accountancy Age]
“In a newly created section of the IASB website, the body has outlined the process it has followed since September 2009, as it searches to replace chairman Sir David Tweedie, who steps down in June 2011.

Among the documents is a letter sent to the European Commissioner’s office on 3 December, 2009, from Sir Bryan Nicholson, who has led the IASB’s recruitment process.”

Woman due in court for pie attack on US Sen. Levin [CT]
“A woman accused of hitting U.S. Sen. Carl Levin in the face with an apple pie during the Armed Services Committee chairman’s constituent meeting in northern Michigan is due in court.

Twenty-two-year-old Ahlam M. Mohsen of Coldwater will be arraigned Tuesday. She is being held without bond after being arrested Monday on a felony charge of stalking, and misdemeanor counts of assault and disorderly conduct”

Apple?

Facebook Partnership Is Proven by $3,000 Check, Lawyer Says [Bloomberg]
“The western New York man suing over claims he owns 84 percent of Facebook Inc. has a copy of a $3,000 cashier’s check his lawyer says is proof of a contract with Chief Executive Officer Mark Zuckerberg.

The purported 2003 check is made out to Zuckerberg and dated three days before Paul Ceglia claims the two men signed a contract, according to the attorney. That agreement, Ceglia said in court papers, entitles him to control of the world’s biggest social networking website.”

Conference To Debate Future Of Fannie, Freddie [NPR]
Euthanasia seems like a good option here.

Accounting News Roundup: Tweedie’s Final Months; Lease Accounting Proposal Coming Soon; UCF Accounting Student’s Body Found | 08.16.10

Goldman CFO Viniar Gets $4.5 Million Options Windfall [Dow Jones]
“Goldman Sachs Group (GS) Chief Financial Officer David Viniar received $4.5 million by exercising more than 67,000 options as part of the investment bank’s disclosure Friday with the Securities and Exchange Commission.

According to the filing, Viniar was among six top executives who have converted sing stock options into a windfall of $24 million, cashing in on benefits they received years before the government’s 2008 rescue of the nation’s biggest financial firms.”

Tweedie faces greatest challenge in last days [FT]
“Sir David Tweedie says his staff are concerned about what he might do in his last months as head of the International Accounting Standards Board, the powerful global rule setter that he has chaired for a decade.

‘I think people are quite worried about how I might do in my last six months here, with all my vendettas and all these grudges I’ve been storing up . . . I think they are worried that I might let them go,’ he says with a laugh.”

Rulemakers Plan Global Overhaul of Lease Accounting [Reuters]
“U.S. and international accounting rule makers are planning to propose an overhaul of lease accounting as soon as Tuesday, in a move expected to affect some $1.2 trillion in leased assets.

Traditionally, accounting rules have given companies a lot of leeway in how they record leases for assets ranging from store locations and restaurant equipment to airplanes and machinery. As a result, only certain types of leases appear on the balance sheet, while a majority of a company’s leases can often be kept off the balance sheet and hidden from an investors’ view.

But the Financial Accounting Standards Board, which sets U.S. accounting rules, and the London-based International Accounting Standards Board, which writes accounting rules for more than 100 countries, will aim to change all that this week by proposing to bring many of these assets onto corporate balance sheets.

‘It’s something that needs to be done,’ said John Hepp, a partner in accounting firm Grant Thornton’s professional standards group. ‘Lease accounting is broken.’ ”

Hunt for IASB head hits hurdle [FT]
“The search for a successor to Sir David Tweedie, chairman of the International Accounting Standards Board, which sets accounting rules for most of the world outside the US, has hit difficulty in the face of opposition in Europe to how the process has been conducted.

Sir David has presided over deteriorating relations since the financial crisis, with some senior European officials raising concerns about the transparency of his decision-making amid criticism that he has prioritised an effort to get the US to adopt international rules at the expense of European interests.”


PricewaterhouseCoopers taps Kevin Kelly to head Birmingham office [Birmingham News]
Kevin Kelly is new the managing partner for PwC’s Birmingham office. He replaces David Pickett who is the new OMP in Nashville.

UCF accounting student killed [Central Florida Future]
“Orange County Sheriff’s officials have released the names of the two people who died Saturday in an apparent murder-suicide, after a woman was found dead in an apartment about five miles south of UCF, and a man was found dead at a local shooting range.

Jennifer Lynn Roqueta, an accounting major at UCF who had just turned 21 in May and a server at Buffalo Wild Wings in Waterford Lakes, was identified as the victim on Sunday.

The suspect, who was identified as Ryan Ray Scurlock, 24, was found at the Shooting Gallery gun range located at 2911 39th St. in Orlando.

The investigation stems from Saturday’s incident in which the OCSO received several calls from Scurlock’s acquaintances requesting they check on his well-being because they had received alarming text messages from him that indicated he was distraught.”

Former Fed official joins KPMG [WaPo]
Jon Greenlee is joining the Tyson’s Corner office as a managing director in KPMG’s financial services regulatory practice. He previously worked as an associate director of risk management in the Fed’s division of banking supervision and regulation.

Satyam auditors to face Sebi probe [Hindustan Times]
“Accounting firm PricewaterhouseCoopers (PwC) will have to face an inquiry by the Securities and Exchange Board of India (Sebi). The Bombay High Court on Friday dismissed PwC’s petition challenging Sebi’s show-cause notice dated June 30, 2009 seeking to prohibit PWC from auditing accounts of listed companies.”

That’s not a tax bill, THIS is a tax bill: Crocodile Dundee star Paul Hogan hit with £8m in charges [Daily Mail]
“But in a American TV interview last year, Hogan, 70, vowed that the taxman would not get a penny more of his money and added: ‘Come and get me, you miserable b******s.’ ”

Eide Bailly merges with R T Higgins [Denver Business Journal]
Top 25 firm Eide Bailly’s merger with RT Higgins brings the the firm’s total staff to over 1,200 in nine states.

Accounting News Roundup: JetBlue CFO Isn’t as Good at Gathering Trash as He Is with Spreadsheets; Dealing with a New Boss; IRS: Regs Won’t ‘Weed Out’ Preparers | 08.13.10

JetBlue CFO Flies Cross-Country, Collects Garbage [NYM]
JetBlue CFO Ed Barnes and VP Robin Hayes reportedly did their best to show up Steven Slater on a recent flight from New York to Long Beach. Apparently it is not uncommon for JetBlue execs to help out during the flight, however passengers can spot an amateur/numbers person when they see one:

“Barnes took one of the most challenging of the flight attendant’s duties upon himself: He gathered trash. ‘He never served anything, but he was the trash guy. He must have gone by eight times,’ our source said. ‘And he was kind of bad at it. He was really tall. There’s an art to reaching over people’s heads and h and not spilling it.’ Apparently both men were very nice, especially considering that the CFO was ‘clearly a guy who is used to doing spreadsheets and is now gathering trash.’ ”

Leverage FASB Tools to Catch Up on New Accounting [Compliance Week]
“Although the FASB is a on a fast track to issue a host of major new accounting standards as part of its effort with the IASB to converge U.S. and international rules, the board has coupled that with an effort to get resources out that can help key stakeholders grasp the new era of accounting that is just dawning. In addition to the usual discussion papers and exposure documents laying out the full technical detail of its plans, the board also is publishing user-friendly summaries and producing podcasts and webinars that explain the major new initiatives as they are proposed.”

How to Deal With Your New Boss [FINS]
“You will have to prove yourself all over again. The work culture of the past will change, and the expectations will be intensified, at least in the beginning. Experts agree there are specific ways to respond that will maximize your chances of surviving, and even thriving. For finance professionals, managing a new boss comes with some added stressors that professionals in other fields may not experience.”


H-P Board Sued on Hurd Exit [WSJ]
“Hewlett-Packard Co.’s directors got slapped with a lawsuit over the departure of Mark Hurd—the same chief executive who handpicked most of the board’s members—even as they face the task of finding a replacement for the former CEO.

A Connecticut-based law firm filed a shareholder derivative suit in Santa Clara County Superior Court in California on Tuesday against H-P’s board, alleging directors violated their fiduciary duties in connection with the events surrounding the resignation on Friday of Mr. Hurd.”

FDIC opens its doors to carry out financial reform [Reuters]
“Bank regulators on Thursday pledged an ‘open door’ policy for carrying out financial reform, also saying they will inform the public of meetings between senior officials and private sector individuals.

The Federal Deposit Insurance Corp said it will release every two weeks the names and affiliations of people outside of the government who meet with agency officials to discuss implementing the Dodd-Frank law. The subjects that are discussed will also be made public.”

IRS Prepares Preparers for Preparer Requirements [Web CPA]
“An IRS official repeatedly reassured an audience of tax preparers that the agency isn’t aiming to take away their livelihoods or weed out people when its new registration, testing, education and e-file requirements take effect next tax season.”

Accounting News Roundup: Deloitte Names Van Arsdell as New Chair, CEO of AERS; Maryland Might Be Figuring Out This Fiscal Responsibility Thing; Frank Navigates the Waters | 08.12.10

Stephen C. Van Arsdell Named Chairman and CEO of Deloitte LLP’s Audit and Enterprise Risk Services Subsidiary [PRNewswire]
Thtte vet Steve Van Arsdell replaces Nick Tommasino as the head of Deloitte’s AERS.

As is the wont of these particular announcements, SVA seems pretty flippin’ stoked about the new gig, “I am excited to take the helm of Deloitte & Touche during such dynamic times. We know that to succeed we must always be a leader in quality. This is a shared commitment from all within our organization. The goals we set for ourselves will raise the bar for quality throughout the profession.”

Barry Salzberg got in a few words too, “I am fully confident in Steve’s ability to lead Deloitte & Touche through the myriad challenges and opportunities presented by the economic recovery and regulatory environment changes. His extraordinary talent, experience and leadership style will help further the practice’s primary mission to conduct the highest quality audits. As a continuing and integral member of our senior leadership team, I know his contributions will be considerable. Nick Tommasino has demonstrated a deep sense of partnership and commitment to our organization, and we thank him for his leadership. We’re delighted to bring his client service skills back to the marketplace.”

So, Stevey. Time to get down to brass tacks – everyone’s wondering about those raises.

Microloans Helps Some Small Businesses Survive [WSJ]
“When President Barack Obama signed the American Recovery and Reinvestment Act into law in February 2009 to create jobs and promote spending, the law included $56.1 million for microloans for small businesses, to be doled out through the Small Business Administration through September.

While some critics complain about the government’s economic stimulus efforts, some lenders and borrowers say the stimulus spending that focused on helping small businesses is working.

Targeted toward start-up, newly-established, or growing small businesses, the microloans are short-term loans up to $35,000 each for working capital or inventory and equipment purchases. The intermediary lenders who distribute the loans can choose to lend more than that limit.”

China’s Rich Have $1.1 Trillion in Hidden Income, Study Finds [Bloomberg]
“China’s households hide as much as 9.3 trillion yuan ($1.4 trillion) of income that is not reported in official figures, with 80 percent accrued by the wealthiest people, a study showed.

The money, much of it likely “illegal or quasi-illegal,” equates to about 30 percent of China’s gross domestic product, the study, conducted for Credit Suisse AG and published last week by the China Reform Foundation, found. The average urban disposable household income in China is 32,154 yuan, or 90 percent more than official figures, according to the report.”

It’s Time to Give Up Spreadsheets for Tracking Carbon Emissions [Green Biz via AccMan]
Give up on spreadsheets? The horror. “CFOs, CIOs and sustainability teams at large companies have used spreadsheets for years to track corporate carbon emissions.

We are now, however, at a tipping point where the benefits of carbon management software, also known as enterprise carbon accounting (ECA) software, outweigh the benefits of spreadsheets.

With many large companies recently completing their Corporate Social Responsibility (CSR) reports and Carbon Disclosure Project (CDP) questionnaires, and entering budget planning in the fall, it is time to move away from spreadsheets to reduce risk, save money, increase productivity, and establish an enterprise-class source of record for carbon emission data.”


Budget surplus in Maryland? Believe it. [CPA Success]
California, New York – Pay attention.

Do I Owe My Employees a Career Path? [You’re the Boss/NYT]
“Being responsible for your workers’ jobs is hard. Being responsible for their careers is harder.”

TrueBlue Named to Top of Forbes’ “Most Trustworthy Companies” List [Business Wire]
“TrueBlue, Inc. ranked at the top of the list of companies with the ‘most transparent and conservative accounting practices and most prudent management,’ according to a new ‘Most Trustworthy Companies’ list compiled for Forbes by Audit Integrity, an independent financial analytics company.

Audit Integrity’s Accounting & Governance Risk rating, or AGR, rates companies’ accounting and management practices from 0 (very aggressive) to 100 (conservative); companies with a lower rating have been more likely to suffer equity loss, issue financial restatements and face class action suits, Forbes.com says.”

Maxine Waters Whacked, Barney Frank Untouched [Jonathan Weil/Bloomberg]
JW on the Maxine Waters’ ethics violations and how Barney Frank managet to be smart enough (or just politically savvy enough) to keep himself clean-ish.

Accounting News Roundup: Hurd Surprised HP with PR Move; Whistleblowers Should Avoid…; Rangel Won’t Have This Resignation Talk | 08.11.10

H-P Board Surprised Hurd Didn’t Go Quietly [WSJ]
H-P’s directors ‘hoped he would move on,’ said one person familiar with the situation, adding that the board prefers to focus on ‘protecting the brand and taking the higher ground.’

Mr. Hurd resigned Friday over ethics violations related to his relationship with a former H-P marketing contractor, Jodie Fisher. His exit was immediately followed by hard-hitting comments from H-P executives and a board member. Mr. Hurd left with a separation agreement that included a $12.2 million cash payment and a promise not to disparage the company or ‘induce others’ to do so.

In the days bn, according to a person familiar with the matter, Mr. Hurd hired Sitrick & Co., a Los Angeles-based firm known for handling crisis communications for high-profile individuals, including former H-P chairman Patricia Dunn and celebrity Paris Hilton.”

What Not to Do When Blowing the Whistle [FINS]
Sure you can get paid the big bucks to sing like a canary these days but are some things you might want to consider first.

Black Accountants Group Names New Leader [Afro American]
“Calvin Harris Jr., was recently elected the 24th national president and CEO of the National Association of Black Accountants (NABA). NABA, a 501 c(3) nonprofit, is the leading association for African Americans and minorities in the accounting, audit, finance, information technology, tax, and other business related fields. Harris’s two-year term began July 1.”

Wipfli LLP: Washington state-based Michael R. Bell & Company, PLLC, joins Wipfli LLP [WisBusiness]
“Effective August 1, the partners and associates of Washington state-based Michael R. Bell & Company, PLLC, joined Wipfli LLP, an international CPA firm headquartered in Milwaukee, Wisconsin. Michael R. Bell & Company specializes in providing audit, accounting and consulting services to a variety of health care organizations and will become part of Wipfli’s full-service health care industry practice.”


Salesforce Customers Want Better Link to Accounting [Web CPA]
“A new survey of Salesforce.com customers found that the majority of them want to link more closely between their customer relationship management software and accounting software.

The survey, by Salesforce.com partner FinancialForce.com, found that 67 percent of those using competing packages cited a lack of integration of their current accounting software with customer relationship management software as their biggest headache.”

Rangel Says He Won’t Resign, Requests Ethics Hearing [Bloomberg]
Rangs gave a 30 minute speech yesterday to let everyone know that he’s far too old to just rollover for 13 alleged ethics violations.

Plum Benefit to Cultural Post: Tax-Free Housing [NYT]
Being a director of some of the best known museums in the world is not only lucrative (multi-million dollar salary), you can also get a pretty sweet pad – tax free!

Mickelson Has Arthritic Condition That Made Him Question His Golf Future [Bloomberg]
Rest easy T Fly, Phil says he’s back to 90% just in time for the PGA that starts tomorrow.

Accounting News Roundup: How Is Deloitte Like HP?; Moss Adams’ Bunting Appointed to IIRC; Small Businesses Remain Pessimistic | 08.10.10

U.S., BP Near Deal on Fund [WSJ]
“The Obama administration and BP PLC are close to a deal to use future revenues from the oil giant’s Gulf of Mexico operations to guarantee its $20 billion cleanup and compensation fund, a move that would give both sides an incentive to continue production in the Gulf, scene of the U.S.’s worst-ever offshore oil spill.

The Justice Department and BP said Monday they had completed talks to establish the fund, which is designed to cover damage claims from residents and businesses hurt by the spill and clean-up efforts by state and local governments. BP paid $3 billion into the fund ahead of sch Hurd, Deloitte and Tone At The Top [Re: The Auditors]
“The auditors serve the role of independent watchdog, guardian of shareholders interests in the capital markets . Their relationship to management should be adversarial – not friendly, cozy and comfortable. They are hired and fired by the Board, also supposedly independent. Given the way auditors are compensated, directly by the companies they judge, they have a difficult job. Their regulators guard those guardians and are supposed to make sure they do it.

So how does a Vice Chairman, one of those guardians, “dupe” his fellow partners and professional colleagues more than three hundred times, as Deloitte’s lawsuit against him alleged?

Deloitte has a culture of non-compliance.”

Oracle Chief Faults H.P. Board for Forcing Hurd Out [NYT]
Meanwhile, Larry Ellison wrote an email to the Times, “The H.P. board just made the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago. That decision nearly destroyed Apple and would have if Steve hadn’t come back and saved them.”

Moss Adams Partner Bob Bunting Helps Create Reporting Standards for Corporate Sustainability [Moss Adams]
“Bob Bunting, chairman of the Moss Adams LLP International Services Group and president of the International Federation of Accountants (IFAC), has been appointed to the steering committee for the newly formed International Integrated Reporting Committee (IIRC). The Prince of Wales’s Accounting for Sustainability Project (A4S) and the Global Reporting Initiative (GRI) announced the formation of the IIRC today.

‘In addition to the annual reports publicly listed companies are required to file, an increasing number of companies are voluntarily producing corporate social responsibility or sustainability reports,’ Bunting said. ‘It’s an honor to be tapped for this role and to contribute input to developing a single standard for these reports. It’s a natural extension of the work I’ve been involved with at IFAC to help drive adoption of a single set of global standards for accounting, auditing, and professional ethics. It’s also a pleasure to be working alongside so many thought leaders in the world of standards setting and corporate sustainability.’ ”

Small business optimism sags in July [Reuters]
“Small business owners became more downbeat in July as expectations of weaker economic growth in the second half of the year reinforced a reluctance to hire, according to a survey published on Tuesday.

The National Federation of Independent Business (NFIB) said its optimism index fell 0.9 point to 88.1 in July.

‘Virtually all of the decline was due to weaker expectations for business conditions six months from now,’ said William Dunkleberg, the group’s chief economist.”


SEC Charges Seattle-Area Company and Former CFO With Phony Accounting of Infomercial Sales [SEC]
When did the SEC start putting photos up of the Regional Directors?

The SEC alleges that Karl Redekopp, the former CFO of International Commercial Television Inc. (ICTV), turned millions of dollars of quarterly losses into profits by falsely accounting for ICTV’s sales of the Derma Wand, a skin care appliance that purports to reduce wrinkles and improve skin appearance. Redekopp fraudulently recognized revenue before the Home Shopping Network had actually sold or delivered the product to viewers. He also improperly recognized revenue before a free trial period offered by the company had expired, and failed to reverse revenue from products that had been returned. Redekopp’s misconduct caused the company to falsely report millions of dollars in excess revenue in 2007 and 2008.

” ‘Redekopp violated fundamental principles of accounting to fraudulently boost ICTV’s bottom line and conceal its true financial health from investors,’ said Marc J. Fagel, Director of the SEC’s San Francisco Regional Office. ‘Unfortunately, ICTV’s auditors turned a blind eye to the company’s financial irregularities and failed to fulfill their role in investor protection.’ ”

Accounting PACs spread the wealth [Web CPA]
“Political fundraisers in the accounting profession began shifting their largesse toward congressional Democrats after they won control over both the House and the Senate four years ago.

But now with Tea Party activists screaming for the heads of incumbents and Republican candidates showing strength across the country, is the accounting profession resurrecting its overwhelming partisan support for the GOP in time for the mid-term elections?”

Flight Attendant at JFK Pulls Emergency Chute, Flies Coop [NBC New York]
Steve Slater was hit in the head by some luggage, was cursed at by the passenger who refused to apologize for it and Slater then proceeded to flip out. He cursed at all the passengers over the PA system on JetBlue Flight 1052, grabbed two beers and slid down the emergency chute after inflating it.

He was later arrested at his home in Queens, “Police sources said that when authorities found Slater he seemed to be in the midst having sexual relations.”

Accounting News Roundup: PwC Chips in $12.5 Million for J.P. Morgan’s FSA Fine; IRS Not Returning to Austin Crash Site; Senate Working on Proposal to Scale Back 1099 Requirements | 08.09.10

PwC To Provide Up To $12.5M To JPMorgan For FSA Fine [Dow Jones]
“J.P. Morgan Chase & Co. (JPM) disclosed in a regulatory filing Friday that PricewaterhouseCoopers LLP agreed to provide up to an aggregate of $12.5 million to the bank related to a fine J.P. Morgan had to pay to the U.K. Financial Services Authority.”

Late Ponzi schemer’s accountant surrenders license [Nashville Business Journal]
This accountant managed to surrender his CPA in just under four months for his role in a Ponzi scheme. Dave Friehling had to be stripped of his license nearly 9 months after pleading guilty. NY DoE should get with Tennessee and see how they do things.

IRS to stay at new Austin site after plane crash [AP]
“An Internal Revenue Service office will not return to the Texas building where a tax protester killed himself by crashing his plane into the structure.

IRS spokeswoman Lea Crusberg said Thursday that the agency has signed a two-year lease on another office space in Austin. She declined to identify the location.”


Senate Democrats Propose Scaling Back IRS Reporting Law [WSJ]
“The Nelson proposal would exempt from the reporting rules firms with fewer than 25 employees. For larger businesses, it would require information returns only in cases where payments to a single vendor exceeded $5,000 in a given year—down from $600 in the health-care law.”

Richtermeyer to Chair Management Accountants [Web CPA]
“The Institute of Management Accountants has named accounting professor Sandra Richtermeyer as the chair of its board of directors for the 2010-2011 fiscal year.

Richtermeyer, who also chairs the Department of Accountancy in the Williams College of Business at Xavier University in Cincinnati, is only the fourth woman ever to hold the position of IMA chair since the organization’s inception in 1919.”

BKD looks to grow health care practice with purchase of Grant Thornton team [Wichita Business Journal (partial subscription required)]
According to the message sent from Stephen Chipman, that we reported on at the end of July, this is the final transition that Grant Thornton will be making. What happens from here is anyone’s guess.

Accounting News Roundup: Signs That You Should Quit Your Job; District Court Issues Order in Wesley Snipes Tax Case; LarsonAllen Moves Into the Northwest | 08.06.10

BP Completes Cementing Macondo Oil Well From Top [Bloomberg]
“BP Plc completed a cement plug at the top of its Macondo well in the Gulf of Mexico, sealing off the source of millions of gallons of oil spewed into the sea after a drilling rig exploded in April.

The procedure completes the so-called t stage for BP is to finish a relief well to inject cement at the bottom and ensure there’s no leakage inside the 13,000-foot-long (3,962 meters) well bore beneath the seabed, National Incident Commander Thad Allen said yesterday.”

Ten Signs It’s Time to Leave Your Job: The Finance Edition [FINS]
Check yourself for some of these symptoms: “You’ve been holding back from voicing your grievances.”; “You have no clue where the company is headed.”; “You start to believe you can’t do better.”

And that’s just in the first five listed.

Altus completes PricewaterhouseCoopers deal [Bloomberg BusinessWeek]
PwC sells their real estate appraisal management for, what we can only assume to be, a decent chunk of change.

H&R, Jackson Hewitt shares fall on new IRS rule [Reuters]
“Shares of top two U.S. tax preparers H&R Block Inc (HRB.N) and Jackson Hewitt Tax Service Inc (JTX.N) fell Thursday on the Internal Revenue Service’s decision to eliminate debt indicator for tax-refund loans.

On Thursday, the IRS said starting with next year’s tax filing season it will no longer provide tax preparers and associated financial institutions with ‘debt indicator,’ which is used to facilitate refund anticipation loans (RALs).”


PKF Pacific Hawaii completes purchase of Grant Thornton Honolulu office [Pacific Business News]
Name goes official on Monday. Here’s our original report from back in May.

Two UHY LLP Partners Recently Named to Prominent Standard-Setting Implementation Groups [Market Wire]
“The national CPA firm of UHY LLP announced today the recent appointment of Houston-based partner Ana Denena to the International Accounting Standards Board’s (IASB) Small and Medium-sized Entities Implementation Group. In a separate appointment, the firm announced that Maryland-based partner Jennine Anderson was named to the Financial Accounting Standards Board’s (FASB) resource group on non-profit entities.”

PCAOB Adopts New Risk Assess. Stds; Issues Release on Failure to Supervise [FEI Financial Reporting Blog]
As we mentioned yesterday, the PCAOB has been busy. Francine McKenna guest-blogged over at FEI and gives the rundown.

Fannie Quarterly Loss Is Smallest Since 2007 [WSJ]
FTW? “Fannie Mae posted a $1.2 billion net loss for the second quarter, the smallest loss in three years, amid signs that the massive wave of souring loans that brought down the mortgage-finance giant may be easing. But Fannie still asked the U.S. government for an additional $1.5 billion.”

District Court Issues Order in Snipes Case [TaxProf Blog]
Just when you thought it was over.

If you’re not getting cloud computing you’re a loser [AccMan]
That is, you’ve got almost nothing to lose by going for it.

Midwest accounting firm buying LeMaster Daniels [Spokesman-Review]
LarsonAllen brings its business to the northwest by purchasing Spokane-based LeMaster Daniels.

Deloitte leadership race reduced to two hopefuls [Accountancy Age]
“he contest to replace John Connolly as leader of Deloitte in the UK will involve just two members of the firm’s board.

The contenders vieing for the top job are Martin Eadon, head of audit, and David Sproul, head of tax. Sproul joined Deloitte when the firm acquired Andersen in the UK on the back of the Enron crisis

Both candidates gave presentations at the firm’s partner conference on 6 July but no further campaigning is expected.”

Accounting News Roundup: Tax Cuts Debate Rages On; Tax Issues for A-Rod’s 600th; Wyclef’s Campaign Stumbles Out of the Blocks | 08.05.10

Geithner Pushes Tax Boost for Wealthy [WSJ]
“Treasury Secretary Timothy Geithner made the Obama administration’s economic case for letting tax cuts for high earners expire at the end of this year, saying that failure to do so would harm rather than help economic growth.

In a speech Wednesday in Washington, part of the administration’s broader strategy to overcome Republican opposition on the issue, Mr. Geithner said that keeping current tax levels even on a short-term basis “would hurt economic recovery by undermining confidence that we are prepared to make a commitment today to bring down our future deficits.” The government needs the revenue it would get from allowing tax rates for the wealthy to rise, he said.”

PCAOB Logs No Progress on International Inspections [Compliance Week]
“The Public Company Accounting Oversight Board isn’t yet making much headway in catching up on overdue international inspections, but the Dodd-Frank financial reform bill at least clears an obstacle the board has repeatedly blamed for its inability to meet its inspection mandate.”

Regulator fears auditors may abandon scepticism to meet deadlines [Accountancy Age]
“The Auditing Practices Board (APB), which sets standards for the industry, is concerned auditors might be abandoning their professional scepticism to meet contractual audit deadlines, and wants to coach them in how to be sceptical.

Audit contracts are often negotiated on the assumption few problems will be revealed, according to the APB. When a potential issue does arise timetables often have to be extended.”

A-Rod’s Home Run Ball: a Tax Headache for the Record Books? [WSJ]
The ball is reportedly worth around $100k and if the ball is technically Yankees’ property and the team were to give it to A-Rod, then he may owe tax and the Yanks would get a corresponding deduction. The team could also argue that the ball is technically A-Rod’s property and then neither would owe tax.

Of course then the question remains, what if A-Rod sells or donates the ball to a nonprofit? If he sold it, then it would depend on how long he keeps it (less than a year would be at ordinary rates, greater than a year would be at capital gain rates). While donating the ball after one year could net him a near full deduction.

TheStreet.com names Thomas Etergino finance chief [AP]
Tom starts his new gig on September 7th.


IRS Hits Wyclef With $2.1 Million In Tax Liens [The Smoking Gun]
Whether it’s the U.S. or Haiti, this is not how you want to start a Presidential campaign.

Delta Said to Plan New York JFK Hub Renovation for $1.2 Billion [Bloomberg]
Anyone that has been to Terminal 3 at JFK is aware of the problem.

Accounting News Roundup: Insurance Accounting Is IASB’s Latest Puzzle; Former Deloitte CEO Catches a Keeper; Small Businesses Using Foursquare for Cheap Marketing | 08.04.10

IASB proposals aim to demystify insurance accounting [Accountancy Age]
“The international accounting standard setter has released new proposals for insurance contracts which seek to demystify one of the most complex areas of company reporting.

The rules, announced yesterday, aim to transform current rules, said to be all but indecipherable for investors, to a model which helps to communicate the contract economics.”

‘Static Kill’ Appears to Be Working in Well, BP Says [NYT]
“BP said Wednesday it had brought pressure under control in its stricken well in ther pumping heavy drilling mud into it, calling the development a “significant milestone” in its efforts to permanently seal the well.

The company began the effort, known as a static kill, on Tuesday afternoon and stopped pumping the heavy mud after about eight hours, saying that the procedure appeared to have reached the “desired outcome” of controlling pressure in the well.”

American Accounting Association and AICPA Create Pathways Commission to Study the Future of Accounting Higher Education [PR Newswire]
“The American Accounting Association and the American Institute of Certified Public Accountants together have formed the Pathways Commission to study possible future paths of higher education for those seeking entry into the accounting profession.

‘Interest in accounting as a career is the highest it’s ever been and underscores the need to make sure the educational infrastructure remains solid and able to meet the profession’s evolving requirements,’ said Barry Melancon, CPA, AICPA president and CEO, who served on the Human Capital Subcommittee of the U.S. Treasury Advisory Committee on the Audit Profession.”

Catch of the day: ESPN sells fishing organization [Bloomberg]
Apparently a former Deloitte CEO – Jim Copeland – is involved in a group buying the BASS fishing organization.


From Playboy to Biglaw: New Orrick CFO Has A Bitchin’ Resume [ATL]
A former Playboy CFO recently joined Biglaw firm Orrick, Herrington & Sutcliffe, presumably because access to a nice grotto is a must.

Getting Customers to ‘Check In’ With Foursquare [WSJ]
“Businesses of all sizes are trying the services out, looking to tap the networks’ ever-growing fan bases—Foursquare alone has 2.4 million users globally, and is growing 30% to 40% a month—and ability to harness enthusiasm for local establishments. For a small company with a limited marketing budget, the services are attractive because they’re free or cheap, require minimal time and effort, and appeal to loyal consumers who favor local businesses over big, cookie-cutter chains.”

Another Question about Timing of NBTY Insider Stock Purchases Prior to Announcement of Carlyle Acquisition [White Collar Fraud]
Sam Antar is still a little suspicious about the timing of the two NBTY directors that purchased stock right around the time that the Carlyle Group agreed to purchase NBTY stock. According to filings, NBTY executives met with Carlyle on May 11th and the two directors in question purchased their shares on May 13th and 18th. The next regularly scheduled board meeting was on May 21st.

Soooo, Sam wonders aloud, “At what point in time did Ashner and White know anything about the discussions with Carlyle and when did they find out about the confidentiality agreement? Often, such agreements are executed after the board has been notified. In this case, the confidentiality agreement was signed before Ashner and White purchased their NBTY shares.”

At Work, a Drug Dilemma [WSJ]
Even if you are legally able to purchase pot for medicinal purposes, your employer may still prefer you to pass on grass.

Accounting News Roundup: Geithner Supports Obama Tax Policy; Reznick Group Announces Principal Promotions; What’s It Cost to Be the Boss? | 08.03.10

Geithner defends Obama policy on tax cut extension [AP]
“Treasury Secretary Timothy Geithner said Tuesday it would be ‘deeply irresponsible’ for the Obama administration to support a wholesale extension of Bush era tax cuts, including breaks for the wealthy.

Geithner said in a nationally broadcast interview that President Barack Obama strongly believes those reductions should be retained for the ’95 percent’ of taxpayers with individual incomes under $200,000 a year and families below $250,000.”

Bank of America, KPMG Settlement With Countrywide Investors Wins Approval [Bloomberg]
“Bank of America Corp. and KPMG LLP’s $624 million settlement with investors in Countrywide Financial Corp. led by New York pension funds won initial court approval.

U.S. District Judge Mariana Pfaelzer in Los Angeles ruled today on the accord. A fairness hearing will be held on final approval for the settlement, first announced in May.”

Snooki Tanning-Bed Protest Splits Sin From Taxes [Bloomberg]
“[P]eople don’t like government moralizing. If there’s one thing people dislike even more than taxes, it’s being told what to do.”

So does that mean that Alabama is imploring reverse psychology?


Reznick Group Promotes Four New Principals [Business Wire]
Reznick Group promoted Dan Fox and Renee Matthews in Bethesda, MD, Eric Jones in Sacramento and Daniel Worrall in Atlanta are the big winners.

Accounting & Consulting Group acquires Roswell’s Miller & Associates [New Mexico Business Weekly]
“With 95 employees overall, Accounting & Consulting Group is now the third-largest accounting firm in the state. Headquartered in Albuquerque, it has offices in Alamogordo, Carlsbad, Clovis, Hobbs and Roswell, and has a member firm office in Lubbock, Texas. The firm specializes in audit and financial reporting, tax compliance, business consulting and trust and estate planning.”

Becoming the Boss Can Cost Plenty [WSJ]
“When starting a business on a tight budget, a single spending gaffe can spell disaster. For this reason, experts in entrepreneurship recommend taking precautions, such as doing research to identify potential hidden fees, focusing only on necessities and setting aside emergency funds.”

SAP Business ByDesign 2.5: time to invest? [AccMan]
Dennis Howlett gives the lowdown on the “general availability of SAP Business ByDesign 2.5,” which means that it is available for any to purchase. Dennis reports that starter packs for as few as ten users are available for CRM, ERP and PSP.

Accounting News Roundup: 1099 Reporting Is the Latest Political Football; Financial Reporting Overhaul in the Works?; Zynga’s CFO Hire Spurs IPO Talk | 08.02.10

Parties Play Politics With Unpopular Tax Measure [WSJ]
The new 1099 reporting requia bit of belly aching to point of many groups asking for a repeal. Too bad the members of Congress are the ones with the power to actually make something happen:

“The House rejected a bill Friday that would have repealed the provision. The two parties disagreed on how to make up the lost revenue.

‘This foolish policy hammers our business community when we should be supporting their job growth,’ Sen. Mike Johanns of Nebraska said in the Republicans’ weekly radio and Internet address Saturday. ‘It’s only one example of how the administration’s promise to support small businesses really rings hollow.’

Democrats blamed Republicans for Friday’s failure.

‘Despite all of their rhetoric about the need to eliminate this reporting requirement, Republicans walked away from small businesses when it mattered most,’ said Rep. Sander Levin (D-Mich.), chairman of the House Ways and Means Committee.”

FASB Alumnus Trashes GAAP (and IFRS) [The Accounting Onion]
“I suspect that the folks being paid the big bucks to make the tough calls on accounting standards don’t pay a lot of attention to to the likes of Tom Whatshisname, even were I to announce that the sky is falling. But, I don’t take it personally. Over the past 40 years, any PhD not drawing a salary from the Big Four has been viewed with more suspicion than respect by the standard setting establishment.

I mention all of this now, because there is a new voice, whose credibility and qualifications cannot be so easily dismissed. That voice belongs to FASB alumnus David Mosso, who has written an 80-page monograph entitled Early Warning and Quick Response: Accounting in the Twenty-First Century). If you don’t want to believe me, take it from him: GAAP is broken.”

Group formed to overhaul financial reporting [Accountancy Age]
Meanwhile: “A project to overhaul company reporting has been launched by a high level group of accountants, businesses, regulators and market participants.

The International Integrated Reporting Committee will look at the wider concerns about financial reporting, in terms of addressing risk, and presenting a clearer and broader picture of companies’ performance, including governance and environmental issues.”


Goldman Details Its Valuations With AIG [WSJ]
“How did Goldman come up with the mortgage-securities prices it used to extract cash from AIG?”

Before There Can Be An IPO, First Comes A New CFO For Zynga [Tech Crunch]
Dave Wehner comes in from Allen & Co. taking the spot of Mark Vranesh who is becoming Chief Accounting Officer. What does all this mean? First, it gives most MSM outlets a day or two worth of stories about when Zynga will go public but mostly it means the business of Farmville, no matter how you hate it, is serious business.

Facebook Would-Be Owner Says He Owes His Claim to Arrest [Bloomberg]
“Paul Ceglia, who claims in a lawsuit that he owns 84 percent of Facebook Inc., said his case wouldn’t have been possible if state troopers hadn’t come to his house in October to arrest him for fraud.”

Forced Employee Engagement and the Overworked Employee [The Exuberant Accountant]
“In my many interactions with business owners, I have heard some speak of employees as being ‘lucky to still have a job.’ While that may be true, thinking (and acting) in such a manner is very short sighted.”

Twitter, Facebook, LinkedIn? [AccMan]
Got business model?

Accounting News Roundup: Mazars Would Like to See More Competition in the Audit Market; Citi CFO Settles with SEC; Colbert on Tax Cuts | 07.30.10

Auditors don’t know the meaning of ‘competition’ [FT]
In a letter to the Financial Times, David Herbinet, the UK Head of Public Interest Markets for Mazars, takes issue with the notion (he says ‘puzzled’) that there is robust competition in the audit market, “Figures calculated from the most authoritative research available – the Oxera report that first spurred examination of the issue – show that a FTSE 100 auditor can on average expect to remain in place for an eye-watering 48 years and their FTSE 250 counterpart for 36 years. When the research was conducted more than 70 per cent of the FTSE 100 audits had not been subject to tender for at over, 97 per cent of current FTSE 350 audits are held by just four firms. If this represents fierce competition I would not like to see a stagnant market.”

Facebook Said to Put Off IPO Until 2012 to Buy Time for Growth [Bloomberg]
“Facebook Inc. will probably put off its initial public offering until 2012, giving Chief Executive Officer Mark Zuckerberg more time to gain users and boost sales, three people familiar with the matter said.

Facebook would benefit from another year of growth absent the added scrutiny that comes with a public listing, instead of holding an IPO in 2011 as investors speculated, said the people, who asked not to be identified because Facebook doesn’t discuss share-sale plans. Still, Zuckerberg, who holds board control, could push for a stock sale at any time, they said.”

U.S. Financial System Still at Risk, Says IMF [WSJ]
Get RIGHT out of town. “The International Monetary Fund says the U.S. financial system is “slowly recovering,” but remains vulnerable to crisis, in part because Congress and the administration have failed to streamline a regulatory system marked by turf battles and overlapping responsibilities.

‘We asked many times why bolder action could not be undertaken,’ said the IMF’s Christopher Towe, who oversaw the agency’s first broad review of the U.S. financial sector.”

SEC Charges Citigroup and Two Executives for Misleading Investors About Exposure to Subprime Mortgage Assets [SEC]
That includes former CFO Gary Crittenden who agreed to pay a $100,000 fine.


Colbert on the Expiration of the Bush Tax Cuts [TaxProf]

The Colbert Report Mon – Thurs 11:30pm / 10:30c
The Word – Ownership Society
www.colbertnation.com
Colbert Report Full Episodes 2010 Election Fox News

Accounting News Roundup: Rangel Settlement May Be in the Works; IMA Launches New Website; Landing a Job with Uncle Sam | 07.29.10

Rangel Is in Talks to End Ethics Case [WSJ]
“Negotiations between lawyers for Rep. Charles Rangel (D., N.Y.) and House ethics investigators continued on the eve of a public hearing Thursday that was expected to lay out the charges aga ethics panel announced last week its plans to present a case against Mr. Rangel, his lawyers have been in private discussions about a possible settlement to avoid a hearing. A central issue is the wording of the House ethics panel’s findings about Mr. Rangel’s alleged ethics violations, according to a person familiar with the case.”

Audit reveals billions of dollars of Iraqi oil funds gone missing [Guardian]
Hard to believe that there would be trouble tracking the money over there, “The US department of defence has called in forensic accountants to help track $8.1bn (£5.2bn) of $9.1bn in Iraq’s oil revenue entrusted to it after the fall of Baghdad, following an official audit that revealed the money was missing.

The funds were to be used for spending on reconstruction during 2004-07, a period when Iraq was under weak transitional rule.

The report was issued today by the Special Inspector General for Iraq Reconstruction, which had previously criticised poor book-keeping by senior officials throughout the last seven years.”

Fannie Mae, Freddie Mac Still Too Big to Nail [Jonathan Weil/Bloomberg]
“This month Congress passed the 2,323- page Dodd-Frank Act without any clear understanding of why the financial crisis happened — and without doing a thing to address Fannie and Freddie, which were central players. Now the Obama administration says it will deliver a reform proposal to Congress by January on the nation’s housing-finance system, including Fannie and Freddie. Yet the government still hasn’t undertaken any comprehensive inquiry into why these companies blew up and who was at fault.”

Tax Consequences of the Mother of All Yard Sale Bargains ($200 Million for $45) [TaxProf Blog]
Just stumbling across some Ansel Adams negatives.

IMA Launches New Website to Support Accounting Community [Business Wire]
“IMA™, the association for accountants and financial professionals in business, unveiled [Wednesday] its new website, now making it even easier for professionals to experience IMA’s range of valuable resources and services. The website can be accessed at www.imanet.org.”


How to Get a Job in Financial Regulation [FINS]
The SEC, FDIC and CFTC are all hiring in the wake of Dodd-Frank. But landing a gig with the Feds isn’t like landing a job anywhere else. FINS breaks it down for you.

George Carlin Never Would’ve Cut It at the New Goldman Sachs [WSJ]
What’s next? They take your will to live? “The New York company is telling employees that they will no longer be able to get away with profanity in electronic messages. That means all 34,000 traders, investment bankers and other Goldman employees must restrain themselves from using a vast vocabulary of oft-used dirty words on Wall Street, including the six-letter expletive that came back to haunt the company at a Senate hearing in April.”

Alex Rodriguez Objects to Rangers Bankruptcy Plan [Bloomberg]
Chances are, A-Rod doesn’t know the particulars but he would like the $24.9 million he’s owed.

Accounting News Roundup: BP’s Tax Break Could Bring Congressional Belly Aching; Steinbrenner’s Will Postpones Decision Estate Taxes; KPMG Foundation Awards Minority Scholars | 07.28.10

BP Seeks Tax Cut on Cleanup Costs [WSJ]
“In releasing second-quarter results Tuesday, the London-based oil giant said it was taking a pretax charge of $32 billion to cover damages, business claims an the next several years.

That total will be offset against its U.S. tax bill, resulting in a $10 billion reduction in taxes, the company said. The tax reduction will cut the company’s anticipated net spill-related losses to $22 billion, the company said.

BP paid $10.4 billion in taxes world-wide last year, according to its 2009 annual report.

Tax experts said that BP’s filing reflected standard accounting practices, even if the sums involved were unusually large.”

The Boss’ will power [NYP]
“The Boss’ will stipulates that an undisclosed portion of his estimated $1.1 billion sports, shipping and racehorse-breeding fortune will go into a trust for his widow, Joan, 74.

And it assigns Steinbrenner’s lawyer, Robert Banker, to decide whether that trust pays federal estate tax for this year, or not until after Joan Steinbrenner dies.

Although there currently is no federal estate tax for 2010, that could change if Congress acts to close the loophole and enacts such a tax retroactively, putting Steinbrenner’s estate on the hook for $500 million or more.

But under the law, Banker would have nine months from Steinbrenner’s July 13 death to decide if the estate should pay estimated estate tax for a 2010 filing — or at the rate in effect whenever Joan dies. Banker can take another six months before deciding to make that move permanent.”

LinkedIn Value Tops $2 Billion After Tiger Global Investment [Bloomberg]
“Tiger Global Management LLC, a hedge fund founded by Chase Coleman, paid $20 million for a stake in LinkedIn Corp., valuing the professional-networking website at more than $2 billion, said two people familiar with the matter.

The purchase, at $21.50 a share for about a 1 percent stake, was from existing shareholders and doesn’t represent new investment, said one of the people, who declined to be identified because the sale has not been disclosed. LinkedIn, based in Mountain View, California, is closely held.”


Sexy SAP? Surely not!! [AccMan]
SAP is known for helping HUGE companies manage all of its resources including CRM, accounting, HR, etc. etc. with enterprise solutions. There’s no chance that a huge company like this with a slew of mega corp clients could have something sleek and flexible for your small business, right? Dennis Howlett would beg to differ:

“SAP has a reputation of being big, heavy, slow and expensive. Fine for the Nestlé’s and Colgate-Palmolive’s of this world but hardly a fit for an SME business. That’s simply not true. ByDesign can be used by companies as small as 10 users. 20 users would be nice but 10 is OK. If you’re moving from say Line 50 then implementation and data transfer can be handled for less than £10K. You’re going to do a good amount of work yourself in learning how this thing works but SAP has provided plenty of guided learning material to help.”

Including a video that DH has up over at AccMan today. So simple, the editor of an accounting blog can understand it. No more excuses, people.

KPMG Foundation Awards $470,000 in Scholarships to 47 Minority Accounting Doctoral Scholars [PR Newswire]
“The KPMG Foundation [on Tuesday] announced it has awarded a total of $470,000 in scholarships to 47 minority accounting doctoral students for the 2010–2011 academic year. Of the 47 scholarships, the Foundation named 12 new recipients and renewed 35 existing awards. Each scholarship is valued at $10,000 and renewable annually for up to five years.”

IRS Demands $45 Million From Billionaire McCombs [Forbes]
Clear Channel founder and former Minnesota Vikings owner, “Red” McCombs finds himself in a similar pickle with the IRS as Phil Anschutz.

Accounting News Roundup: BP’s Ugly 2nd Quarter; Bernanke Backs Extending Some Tax Cuts; Back-to-school Sales Tax Holidays | 07.27.10

BP replaces CEO and posts $17 billion quarterly loss [Reuters]
“Oil giant BP Plc launched a plan to repair its battered image in the United States on Tuesday, ditching itsxecutive and promising to slim down by trebling an asset sale target to $30 billion.

However, the company, the target of public anger over its Gulf of Mexico oil spill, tempted further ire by denying it needed cultural change and offsetting the costs of the spill, including expected fines, against its taxes.

The tax move will cost the U.S. taxpayer almost $10 billion.”

Northern Rock CFO Banned And Fined GBP320,000 Over Bad Loans [Dow Jones]
“David Jones, the former chief financial officer of Northern Rock PLC, was Tuesday fined GBP320,000 and barred from working in finance after the Financial Services Authority found he misled investors about the bank’s bad loans in the lead-up to the bank’s eventual collapse.

Jones most recently was CFO at Northern Rock Asset Management PLC, the “bad bank” of the nationalized lender after a restructuring of its operations. He left the company in April because of the FSA investigation, a week after two former colleagues were fined and banned for their roles in making the bank’s 2006 bad-loan figures appear better than they were.”

Where will those next gen clients come from? [AccMan]
And what will ask of their professional service providers? Right now, Gen X and Millenials don’t compromise much of the client base but that will change quickly when Baby Boomers start retiring en masse. What these new business owners will ask of their service providers is not quite clear. Similar to the demands currently placed on employers, service providers will have to be flexible and innovative.

Bernanke Says Tax-Cut Extension Maintains Stimulus [Bloomberg]
“Federal Reserve Chairman Ben S. Bernanke said extending at least some of the tax cuts set to expire this year would help strengthen a U.S. economy still in need of stimulus and urged offsetting the move with increased revenue or lower spending.

‘In the short term I would believe that we ought to maintain a reasonable degree of fiscal support, stimulus for the economy,’ Bernanke said yesterday under questioning from the House Financial Services Committee’s senior Republican. ‘There are many ways to do that. This is one way.’ ”


Accounting firm Kaufman Rossin & Co. settles case for $9.6M [Miami Herald]
Kaufman Rossin was the auditor of the two Palm Beach funds that invested over a billion dollars with convicted Ponzi Schemer Tom Petters.

And in case you forgot, convicted forensic accountant and suit lover Lew Freeman was the Chief Restructuring Officer for the Palm Beach funds. Quite the cesspool.

How Low Self-Esteem Can Cost You The Job [Forbes]
Are you a low talker? No one is suggesting that you don’t know what you’re talking about but the perception could be that you don’t and in turn, It could be affecting your career.

Lords to probe audit market [Accountancy Age]
“A recent report from the FRC and FSA criticised the role of auditors during the crisis saying they had failed to tackle management bias.

The Lords investigation will look at basic questions such as wether Big Four dominance increases the price of audit and whether the market needs to be opened up.”

Oracle’s Ellison: Pay King [WSJ]
$1.84 billion over the last ten years is not too shabby.

Sales tax holidays 2010 [Don’t Mess with Taxes]
Kay Bell has a rundown of the sixteen states that are having sales tax holidays right before the kids go back to school.

Accounting News Roundup: Geithner Is Ready to Let Tax Cuts Die; Hayward on His Way Out?; PwC Wants Glitnir Lawsuit Tossed | 07.26.10

No new recession, let tax cuts die: Geithner [Reuters]
“The economy is not likely to slip back into recession but letting tax cuts for tans expire is necessary to show commitment to cutting budget deficits, Treasury Secretary Timothy Geithner said on Sunday.

In appearances on several Sunday talk shows, Geithner said only 2 to 3 percent of Americans — those making $250,000 or more a year — will be affected when tax cuts enacted under former President George W. Bush end on schedule this year.”

BP Said to Prepare Dudley as CEO as Board Looks for Recovery [Bloomberg]
“BP Plc plans to name Robert Dudley to succeed Tony Hayward as chief executive officer as the board looks to recover the company’s position in the U.S., two people with knowledge of the matter said.

Dudley, the director of BP’s oil spill response unit, is ready to be announced as the company’s first American chief and to take the helm Oct. 1, one of the people said, asking not to be identified because a final decision hasn’t yet been made. The decision was reached in discussions with board members about how best to take BP forward and rebuild its U.S. position, the person said.”

Madoff Investors Brace for Lawsuits [WSJ]
“Irving Picard said he could wind up suing about half the estimated 2,000 individual investors he has called “net winners” from their dealings with Mr. Madoff. Such investors withdrew more from Mr. Madoff’s firm than the amount of principal they invested.

‘The people who made money, who got more, have made money at the expense of the people who didn’t,’ said Mr. Picard, who has the power under federal bankruptcy provisions to pursue money withdrawn from Bernard L. Madoff Investment Securities LLC before it collapsed in December 2008 and redistribute the funds fairly among victims.

Mr. Picard must file any so-called clawback lawsuits by December, the two-year anniversary of Mr. Madoff’s arrest and the filing of regulatory proceedings against him. ‘We’re not going to wait until the last minute,’ Mr. Picard said.”


Change the world or go home [AccMan]
Dennis Howlett implores you that if you want your firm or business to really stand out then it’s going to take more than a catchy slogan or a boilerplate email to get people’s attention. You best recognize an opportunity when you see one.

“I’ve lost count the number of times I’ve said but it is worth repeating. When disruption like SaaS comes along, it represents an opportunity. From a professional standpoint it should mean that firms can further commoditize what they do by using accounting dashboards that show them the status of their clients’ activity. It is a short step to seeing how this might be integrated into fees, billing, customer satisfaction measurement and the like.”

If You’re Going To San Francisco…AAA Will Be There [FEI Financial Reporting Blog]
Edith Orenstein has the lowdown on this year’s American Accounting Association’s (AAA) annual meeting. This year’s event is in AG’s backyard (she loves giving directions, btw) from July 31 to August 4th and will feature Francine McKenna and Professor Albrecht on one of the panels.

Join Me For a Nice Little CPA Exam Chat on August 3rd! [JDA]
Speaking of Adrienne, she’ll be over at CPA Exam Club to take your questions on everyone’s favorite test on August 3rd. Yes, that’s one week from tomorrow.

PwC Demands Dismissal of Glitnir Lawsuit [Iceland Review]
PwC’s lawyers argue that Glitnir and the firm agreed to do any legal wrangling in Iceland if the poo hit the fan. Late last week they requested that the lawsuit in New York be tossed.

Saltzman Hamma firm details merger with RubinBrown [Denver Business Journal]
“Saltzman Hamma Nelson Massaro LLP, a century-old Denver accounting firm, is merging with St. Louis-based RubinBrown LLP to form what’s expected to be among the 50 largest accounting firms in the United States, principals were set to announce on July 23.

The new entity, which will operate as RubinBrown, will employ 375 people in offices in Denver, St. Louis and Kansas City, Mo. The merger will be effective Aug. 1.”

District Court Denies Charitable Deduction for Donation of Home to Fire Department [TaxProf Blog]
Just donate a car next time. It’s a far worse investment than a house.

IRS Proposes PTIN Fees [JofA]
$50 for your very own preparer tax identification number! Of course there’s also a ‘reasonable fee’ on top of that from “a third-party vendor that will administer the application and renewal process,” that gets thrown in for good measure.

My Life as a White-Collar Criminal [White Collar Fraud]
Sam Antar went on Canadian TV last week to talk about how much fun it is to be a crook. Except the whole possibility of prison part.

Accounting News Roundup: Rangel Found to Have Violated Ethics Rules; Friends of “Miami’s Go-to Forensic Accountant” Ask for Leniency; A “Refreshing” Settlement | 07.23.10

Rep. Charles Rangel broke ethics rules, House panel finds [WaPo]
“A House ethics subcommittee announced Thursday that it found that Rep. Charles B. Rangel violated congressional ethics rules and that it will prrobably beginning in September. The panel is expected to make the details of his alleged violations public next Thursday.

Rangel (D-N.Y.) has been under the House ethics committee’s microscope since early 2008 after it was reported that he may have used his House position to benefit his financial interests. Two of the most serious inquiries have focused on Rangel’s failure to declare $239,000 to $831,000 in assets on his disclosure forms, and on his effort to raise money for a private center named after him at City College of New York using his congressional letterhead.”

Geithner: Taxes on Wealthiest to Rise [WSJ]
“The Obama administration will allow tax cuts for the wealthiest Americans to expire on schedule, Treasury Secretary Timothy Geithner said Thursday, setting up a clash with Republicans and a small but vocal group of Democrats who want to delay the looming tax increases.

Mr. Geithner said the White House would allow taxes on top earners to increase in 2011 as part of an effort to bring down the U.S. budget deficit. He said the White House plans to extend expiring tax cuts for middle- and lower-income Americans, and expects to undertake a broader revision of the tax code next year.

‘We believe it is appropriate to let those tax cuts that go to the most fortunate expire,’ Mr. Geithner said at a breakfast with reporters.”

FASB Requires More Disclosures Around Credit Risk [Compliance Week]
Accounting Standards Update No. 2010-20, Receivables (Topic 310) calls for more credit risk disclosures to give investors a better view of the credit risk in a company’s portfolio of receivables as well as the adequacy of its allowance for credit losses. Under the update, companies will be required to say more about aging receivables and credit quality indicators in particular.

The new disclosure requirements affect financing receivables and trade accounts receivable, including loans, trade accounts receivable that are greater than a year old, notes receivable, credit cards and receivables for certain leases. The new disclosure requirement does not affect short-term trade accounts receivable, receivables that are measured at fair value or the lower of cost or fair value, and debt securities.”


Convicted accountant Lewis Freeman’s friends urge leniency [Miami Herald]
“Miami’s go-to forensic accountant” Lewis Freeman is to be sentenced today for stealing nearly $3 million from victims of fraud who he was appointed to protect. He faces a dozen to fifteen years in prison but his friends and supporters have turned on the pity party, sending nearly 300 letters to Judge Paul Huck, asking for leniency.

“[E]very one of those letter writers also asks the judge to show mercy, emphasizing that the affable New York native should not have to languish in prison because he has done so much for institutions like his alma mater, the University of Miami, Miami Children’s Hospital and the Miami Children’s Museum, among others.”

No need for non-audit ban, regulator claims [Accountancy Age]
“Accountants will not have to give up their non-audit work for audit clients, under proposed guidelines released today, which have not recommended an outright ban, suggested by politicians in the wake of the financial crisis.

The Auditing Practices Board, of the Financial Reporting Council, which publishes guidance for auditors, does not believe an outright ban on non-audit services should be enacted and has instead proposed to tinker with present disclosure requirements.”

Could This Be a Real Deterrent? [Floyd Norris/NYT]
Despite the usual fare in the SEC’s settlement yesterday, Floyd Norris writes that the $4 million fine for Michael Dell and other executives is “refreshing.”

Accounting News Roundup: Bush Tax Cuts May Still Have Life; FASB’s ‘Religious War’ Rages; Facebook Might Do an IPO Someday | 07.22.10

Bush Tax Cuts Roil Democrats [WSJ]
“Sen. Kent Conrad (D., N.D.) said in an interview Wednesday that Congress shouldn’t allow taxes on the wealthy to rise until the economy is on a sounder footing.

Sen. Ben Nelson (D., Neb.) said through a spokesman that he also supported extending all the expiring tax cuts for now, adding that he wanted to offset the impact on federal deficits as much as possible.

They are the second and third Senate Democrats to come out publicly in recent days in favor of extending all the tax breaks for the time being. Sen. Evan Bayh (D., Ind.) made similar comments last week.”

Madoff’s Ghost Still Haunts SEC [Washington Wire/WSJ]
In testimony earlier in the week, SEC Chair Mary Schapiro told a congressional committee that many of the people that investigated Bernie Madoff – 15 of 20 enforcement attorneys and 19 of 36 examination staffers – have left the Commission. However, that isn’t good enough for Rep. Bill Posey (R – FL).

“Republican Rep. Bill Posey of Florida –- home to many Madoff victims -– said he wants to know if those SEC employees ended up at other regulatory agencies, working for companies they were supposed to regulate, or retired with government pensions.

‘There’s a necessity to know where they went,; said Posey. ‘It’s like letting a pedophile slink out the door or change neighborhoods. We’re dealing with the same type of problem here.’

Schapiro strongly disagreed. ‘These aren’t bad people. In some cases they were people who were very junior and not adequately trained or supervised.’ In other cases, she said, they were pulled from one project to another.”

Despite the proclivities of some SEC employees, we haven’t seen anything warrant that particular label.


FASB in “religious war” to bring in fair value [Accountancy Age]
Lawrence Smith believes in fair value, you might say, in a fanatical sense. The FASB Member was quoted in AA, “Some people have advised us that we shouldn’t say this, but I’ll say it – fair value, to some of us, is almost like a religious war out there and we are trying to deal with that as best we can.”

This isn’t the first time we’ve heard a FASB member drop the relidge war rhetoric. Marc Siegel used similar language last summer, so there seems to be at least a smidge of seriousness behind .

Plus, at the rate things are going, the debate will soon reach Israel/Palestinian ignorability (word?) levels later this year.

Facebook IPO “when makes sense”, Zuckerberg tells ABC [Reuters]
That is, never.

Trust, but verify [MJS]
Starting now!

Accounting News Roundup: Bankruptcy Examiner to Investigate WaMu Failure; Ex-KPMG Tax Principal Pleads Guilty; UK Inspector Says Audits Need ‘Significant Improvement’ | 07.21.10

WaMu Shareholders Win Court Investigation of Biggest U.S. Bank Failure [Bloomberg]
WaMu gets their very own Anton Valukas! Colorful claims to come? “Shareholders of Washington Mutual Inc. won court approval of a new investigation of the biggest U.S. bank failure, further delaying the company’s effort to reorganize in bankruptcy.

U.S. Bankruptcy Judge Mary F. Walrath in Wilmington, Delaware, agreed that an examiner should be appointed to review WaMu’s assets, including the value of a potential lawsuit against JPMorgan Chase & Co. and the Federal Deposit Insurance Corp. for their role in the 2008 collapse of Washington Mutual Bank.”

Ex-IRS agent pleads guilty [WaPo]
John Venuti was also with KPMG from 2002 to until this past January. WaPo reports that he was a “tax consultant and principal.”

“According to the plea agreement, Venuti did not file federal tax returns from 2001 to 2006. Each year, though, he requested and was granted a six-month extension, and made a total of $97,060 in payments along with the extension requests. Authorities said he owes more than $789,000 in back taxes.”

Reckitt to Buy Durex Maker SSL [WSJ]
“Pushing further into the lucrative over-the-counter medical market, U.K. consumer-goods firm Reckitt Benckiser PLC agreed on Wednesday to acquire health-care-product company SSL International PLC, in a deal that values the world’s biggest condom maker at £2.54 billion ($3.88 billion).”

FASB Reveals Second Attempt at Standard on Contingencies [Compliance Week]
“The standard differs from one the FASB published in June 2008, which called on companies to use some conjecture and provide estimates of possible outcomes. Corporate counsel in particular buried FASB with objections that the proposed approach would force disclosure of privileged information, especially by giving legal adversaries access to information that would compromise the outcome of disputes. The current proposal steers clear of any requirement for companies to make any predictions or estimates about possible outcomes.”


FTSE 100 audits require “significant improvement”, inspectors find [Accountancy Age]
“Auditors have also been accused of altering documents before handing them to regulators and putting cost savings ahead of quality, in the review by the Audit Inspection Unit (AIU).

The report raised a number of concerns following its inspection of 109 audits from AIM and the FTSE 350.

The report also found some cases where partners signed audit reports before the audit was complete and one instance when an auditor tried to alter an internal file after the AIU requested it. Auditors had also changed internal materiality thresholds, which effectively reduced their workload, and had also not applied enough scepticism to internal asset valuations.”

Accounting News Roundup: Liberty Tax CEO Hints at Combination with H&R Block; Former NABA President Killed in Skydiving Accident; Sam Antar Has a Question | 07.20.10

Liberty Tax CEO Floats Combining With H&R Block [AP]
John Hewitt, CEO of Liberty Tax, is hinting that maybe he’d like to merge with H&RB, “John Hewitt, founder and CEO of Liberty Tax Service, said Monday he is trying to contact departing board member Thomas Bloch to discuss the potential for combining his privately held company with Kansas City, Mo.-based H&R Block.

‘With my leadership and the name and backing of the Bloch family, we could put a great company going back in the right direction,’ said Hewitt.”

We didn’t say it was a subtle hint.

SEC May Add 800 New Positions as Part Of Reform [Reuters]
At least try to keep the porn enthusiasts out, “The top U.S. securities regulator will need to add about 800 new positions to carry out its part of the massive financial reform legislation, the head of the agency said in testimony to be delivered on Tuesday.

Mary Schapiro, chairman of the U.S. Securities and Exchange Commission, said the agency is still crunching the numbers on costs and hiring, and expects the upcoming rulewriting task to be ‘logistically challenging and extremely labor intensive.'”

Two 70-somethings, Theodore Wilson and George Flynn, killed after mid-air skydiving collision [NYDN]
Messrs Wilson and Mr Flynn were both experienced jumpers and were having textbook jumps until something went wrong with approximately 100 feet to go. Mr Wilson was born and raised in the Bronx and he was a former president of the National Association of Black Accountants.

Job Hunting Is Often One Step Forward, Two Steps Back [FINS]
A recent study from the University of Minnesota suggests that people on the hunt for a new job are their own worst enemies, “The results won’t be news to anyone who has ever returned from a jog and mauled a chocolate cake or followed up a productive hour of work with some heavy Facebooking.”

In other words, if someone has a good interview, they’re likely to return home and vedge for the rest of the day, feeling good about their prospects, when the best thing would do is to land the next interview with another prospect.


BP Weighs New Way to Kill Gulf Well [WSJ]
“Oil giant BP PLC was Monday considering yet another method to kill its ruptured Gulf of Mexico oil well amid concerns that the cap it installed last week could be allowing oil and gas to seep out the sides.

Meanwhile, a federal panel investigating the disaster heard that the Deepwater Horizon drilling rig suffered a series of power outages and seized-up computers in the months before it exploded.

BP’s new containment cap has stopped the flow of oil since Thursday, but with the well now sealed at the top, government officials are worried that oil and gas could now be escaping elsewhere.”

Facebook Claimant Must Answer `Where Have You Been?’ to Succeed [Bloomberg]
“Paul Ceglia, the western New York man who says a 2003 contract with Facebook Inc. founder Mark Zuckerberg entitles him to 84 percent of the company, will have to answer a critical question to pursue his claim, lawyers said.

‘The first thing that comes to mind is, where have you been all this time?’ asked Los Angeles litigator Bryan Freedman, who isn’t involved in the case.”

Answer: Been busy on Facebook.

Nokia Conducting Search for New CEO [WSJ]
Get your résumé in now.

I Have A Question [White Collar Fraud]
If Sam Antar is asking a question, something usually stinks. This time he’s wondering if someone had the NBTY Directors jumped the gun on some stock purchases prior the company’s purchase by the Carlyle Group, “If [CNBC’s David] Faber’s reporting is correct, does ‘early May’ mean before or after Michael Ashner and Peter White bought their NBTY shares?”

Accounting News Roundup: Sue Sachdeva to Plead Guilty for Koss Embezzlement; AIG Settles Accounting Fraud with Ohio for $725 Mil; Some PwCers Are Hanging Out the Shingle | 07.19.10

Sachdeva to plead guilty to six felonies in Koss case [Milwaukee Journal Sentinel]
Late on Friday, it was reported that Sue Sachdeva will plead guilty to six felon embezzlement case that was discovered at the end of last year.

The agreement with prosecutors brought some new things to light including that the scam began in 1997 and she issue over 500 cashiers cheques, including $10 million to American Express but also to charitable groups.

Also: “From February 2008 to December 2009, she authorized 206 wire transfers totaling $16 million from Koss accounts to American Express to cover items she bought with the credit card.

From February 2008 to December 2009, she authorized 206 wire transfers totaling $16 million from Koss accounts to American Express to cover items she bought with the credit card.

•?Koss employees worked “in concert with Sachdeva or at her direction” to make fraudulent entries to the company’s books to conceal the embezzlement. “These entries would falsely overstate assets, understate liabilities, understate sales, overstate cost of sales, and overstate expenses,” the agreement said. The agreement notes that the false entries “concealed the actual receipts and profitability of Koss,” allowing the scheme to continue.

•?To keep auditors off her track, Sachdeva did not fraudulently take money from Koss accounts at Park Bank during the month of June, because transactions during that month were reviewed by outside accountants.”

A.I.G. to Pay $725 Million in Ohio Case [NYT]
“The American International Group, once the nation’s largest insurance group before it nearly collapsed in 2008, has agreed to pay $725 million to three Ohio pension funds to settle six-year-old claims of accounting fraud, stock manipulation and bid-rigging.

Taken together with earlier settlements, A.I.G. will ladle out more than $1 billion to Ohio investors, money that will go to firefighters, teachers, librarians and other pensioners. The state’s attorney general, Richard Cordray, said Friday, that it was the 10th largest securities class-action settlement in United States history.”


Goldman’s Grand Delusions Finally Hit Reality [Jonathan Weil/Bloomberg]
“Here’s the real beauty of the SEC’s settlement agreement [last week] with Goldman Sachs. The next time Goldman Chief Executive Officer Lloyd Blankfein goes on television and is asked by some reporter if Goldman committed securities fraud, as the SEC alleged, he won’t be allowed to say no.

He won’t be able to repeat any of the factually improbable denials Goldman issued just three months ago after the SEC sued it for ripping off a hapless German bank named IKB as part of a bond deal called Abacus 2007-AC1. He’ll just have to suck it up and take the hit. It’s “the right outcome for our firm, our shareholders and our clients,” as Goldman said in a press release after the settlement was disclosed.

More incredibly, the SEC even got Goldman to admit it made “a mistake,” which might be the strangest thing ever to happen on Wall Street. Next thing you know, Blankfein will grow wings for his trip to the heavens, and Goldman will surrender its charter as a bank-holding company to become a nonprofit center for religious studies.”

IMF Pulls Out of Hungary Loan Talks [WSJ]
“Negotiators for the International Monetary Fund and European Union walked away from talks with Hungary over the weekend, saying Budapest needs to do more to shrink its budget deficit before it can get any more bailout money.

The move is likely to alarm markets already suspicious of the new populist government’s pledges to cut spending.

After nearly two weeks of meetings with senior Hungarian officials, the IMF and EU teams on Saturday called an abrupt halt to the discussions. They said Hungary couldn’t have access—for now, at least—to the remaining funds in a 20 billion euro ($25.9 billion) loan package secured in late 2008 to rescue the country from a financial meltdown.”

PricewaterhouseCoopers accountants split to form new firm [Salt Lake City Tribune]
Three PwC “accountants” (presumably partners/directors), Gil Miller, David Bateman and John Curtis have left the Salt Lake City office to form their own firm, Rock Mountain Advisory, LLC. The newly formed company will specialize in ” bankruptcy/restructuring, dispute analysis/receiverships, forensic accounting/due diligence, turnaround and business valuation.”

According to the Mr Miller, the trio formed their own business primarily because so many clients were being turned away from PwC due to “conflicts of interest.”

Accounting News Roundup: FinReg Brings Plenty of Change; Some Number Crunching of Goldman’s Fine; ATF: Sin Taxes Rose 41% | 07.16.10

Law Remakes U.S. Financial Landscape [WSJ]
The Journal asked twelves experts about the bill, many of whom are not nearly as impressed as the Deal Professor. “Congress approved a rewrite of rules touching every corner of finance, from ATM cards to Wall Street traders, in the biggest expansion of government power over banking and markets since the Depression.

The bill, to be signed into law soon by President Barack Obama, marks a potential sea change for the financial-services industry. Financial titans such as J.P. Morgan Chase &Group Inc. and Bank of America Corp. may be forced to make changes in most parts of their business, from debit cards to the ability to invest in hedge funds.”

Apple May Offer IPhone Cases, Rebates to Address Flaw [Bloomberg]
Start forming the lines again, “Apple Inc., looking to avoid a recall of the iPhone 4, may give away rubber cases or offer an in-store fix to address a design flaw in the newest version of its top-selling product, according to analysts.

The company, which is holding a news conference at 1 p.m. New York time today, doesn’t plan to announce a recall, a person familiar with the matter said yesterday. Chief Executive Officer Steve Jobs may instead offer the giveaways or refunds to dissatisfied customers, some analysts said.”

Google CFO: Old Spice Is The Future [Tech Crunch]
Written on a horse: “You know you’ve got a viral marketing hit on your hands when the CFO of Google mentions it in an earnings call. Yes, I am talking about the Old Spice YouTube Tweetathon where the bare-chested Old Spice Man addresses people on Twitter via personalized commercials on YouTube.”

Goldman’s SEC Settlement by the Numbers: We Do the Math [ProPublica]
Effectively, it will be paid for by August 1.


AIG Says It Counted as Much as $2.3 Billion of Repos as Sales [Bloomberg BusinessWeek]
Somewhere a former Lehman CFO is screaming, “See, I told you everyone was doing it!”

“American International Group Inc., the bailed-out insurer, said it classified as much as $2.3 billion of repurchase agreements and $3.8 billion of securities- lending transactions as sales in calculating quarterly results.

In late 2008, ‘certain of AIG’s counterparties demanded significantly higher levels of collateral to enter into repurchase agreements, which resulted in sales rather than collateralized-financing’ treatment under accounting guidelines, the New York-based insurer said in an April 13 letter to the Securities and Exchange Commission released today. The accounting didn’t materially affect any ratios or metrics the company publicly disclosed, AIG said in the letter.”

‘Sin Tax’ Revenue Surges [TaxProf Blog]
“The Treasury Department’s Alcohol and Tobacco Trade and Tax Bureau has released its Fiscal Year 2009 Annual Report, detailing a 41% increase (to $20.6 billion) in the amount of “sin taxes” on alcohol, tobacco, firearms, and ammunition collected by the federal government. Most of the $6 billion revenue increase resulted from the higher tobacco taxes included in the Children’s Health Insurance Reauthorization Act of 2009. Firearms and ammunition excise tax collection rose 45%, the largest annual increase in the agency’s history.”

Accounting News Roundup: Congress Still Stalling on Tax Bill; ‘Most Americans Have Not Planned Well for Their Futures’; Deloitte’s Schroeder Joining FASB | 07.15.10

As Tax Cuts’ Expiration Date Nears, Little Consensus [WSJ]
“Lawmakers are negotiating a tax bill, but appear increasingly likely to wait until after the November election to take any final action that could anger voters—either by raising taxes, or by cutting them and thereby deepening deficits. Congress ultimately could decide to extend current tax levels for just a few months, leaving the issue for the next Congress to settle. Another option is a short-term extension of a year or two, avoiding for now the huge cost to the Treasury of a permanent extension. It’s even possible Congress might fail to take any action this year.”

From Jail, Conrad Black Fights $71 Million Tax Bill [Forbes]
“Imprisoned former media baron Conrad M. Black is fighting a $71 million bill from the U.S. Internal Revenue Service, which says from 1998 to 2003 he filed no tax returns and paid absolutely nothing on $120 million in taxable income.

In a previously unreported lawsuit in U.S. Tax Court, Black, now serving a six-and-a-half-year-sentence in a Florida federal prison, is challenging the IRS’ demands and asserting the income in question wasn’t taxable in the U.S.”

Americans More Optimistic on Economy Than Their Own Finances, Survey Says [Bloomberg]
Who said Americans only think about themselves? “Americans are generally hopeful, and much of the economic news leads us to conclude that we are out of the recession and a double dip is unlikely,” said Robert Glovsky, chair of the CFP Board and director of Boston University’s program for financial planners. “With that said, most Americans have not planned well for their futures.”

Harvey Golub Resigns as AIG Chairman [WSJ]
“A weeks-long standoff between the chairman and chief executive of government-controlled American International Group Inc. ended Wednesday, when Chairman Harvey Golub resigned, saying, ‘I believe it is easier to replace a chairman than a CEO.’

Mr. Golub’s decision marks a victory for Robert Benmosche, the company’s hard-charging chief, who chafed under Mr. Golub’s oversight. Mr. Benmosche had told the board their working relationship was ‘ineffective and unsustainable,’ Mr. Golub said in his resignation letter.”

FASB hires expert to review how new rules perform [Reuters]
“Mark Schroeder, a recently retired senior partner at Deloitte & Touche [DLTE.UL], will serve as the board’s first “post-implementation review leader” and also serve a similar role for the Governmental Accounting Standards Board, FASB said.

The hiring of Schroeder is one of the big steps that FASB has taken to formalize its process for review of how new standards are performing. Banks and investors had complained during the financial crisis that FASB’s new rules on mark-to-market accounting had contributed to freezing the credit markets, but there was no formal process for reviewing the rules.”

Accounting News Roundup: Americans’ Irrational Demands on Policy; Number of Women CFOs Same as ’09; Summer Camp Tax Credits? | 07.14.10

We Can’t Always Get What We Want: Why Governing Americans is So Hard [TaxVox]
Basically it’s because as a group, we’re children. We throw tantrums until we get what we want and stomp around the living room when we don’t.

“[O]ur demands on policymakers are so inconsistent and irrational that we make governing nearly impossible. We hate big deficits, but oppose the actual tax increases or spending cuts that we need to dam the flood of the red ink. We are furious that government passed an $800 billion stimulus last year, but feel lawmakers are not doing enough to get the economy going. We want government to “do something” about the gulf oil spill but reject government interference in private business.”

Women CFOs Holding Steady [CFO]
In the Fortune 500, there are 44 woman CFOs, the same number as last year.

“What are the prospects for women breaking the 10% barrier? At least some are hopeful the numbers will climb in coming years, albeit not dramatically. ‘Anecdotally, I am seeing a next generation of female finance leaders who can and want to rise to the CFO role,’ says Lorraine Hack, executive recruiter with Heidrick and Struggles. She adds, ‘I have seen a lot of companies becoming more cognizant of diversity, or the lack thereof, and making a conscious effort to recruit, retain, and grow such talent.’ ”

U.S. Business Groups Air Policy Concerns [WSJ]
“Washington’s major business groups plan a united front Wednesday in their confrontation with the Obama administration over economic policy, calling on the White House to cut taxes and curb its regulatory agenda.

Business groups including the U.S. Chamber of Commerce, the Business Roundtable and the National Federation of Independent Businesses will air a list of concerns about government policy at a “Jobs for America Summit” at the Chamber’s offices Wednesday.”


Wall Street Fix Seen Ineffectual by Four of Five in U.S. [Bloomberg]
“Almost four out of five Americans surveyed in a Bloomberg National Poll this month say they have just a little or no confidence that the measure being championed by congressional Democrats will prevent or significantly soften a future crisis. More than three-quarters say they don’t have much or any confidence the proposal will make their savings and financial assets more secure.

A plurality — 47 percent — says the bill will do more to protect the financial industry than consumers; 38 percent say consumers would benefit more.

‘Banks and the government are making out, not the ordinary person,’ says Lenore Critzer, a 70-year-old retiree and poll participant who lives in Nelson, Ohio, about 40 miles from Cleveland. ‘We’re going to have another crisis and worse.’ ”

A tax credit for summer camp? IRS says it’s true [Kansas City Star]
Unfortunately, expenses for overnight camps do not qualify. So parents will have to squeeze the sex in during the day somehow.

Accounting News Roundup: Financial Reform Inches Closer; Small Biz Continues with Bleak Outlook; Kwame Kilpatrick Gets Tax-Funded Counsel in Tax Fraud Case | 07.13.10

Finance Bill Close to Passage in Senate [WSJ]
“Two Senate Republicans said Monday they would support the Obama administration’s financial-overhaul legislation, and Democrats now believe they have the 60 votes needed to push the sweeping bill into law by the end of the week.

Sens. Scott Brown of Massachusetts and Olympia Snowe of Maine both said they would vote for the measure when Democrats bring it to a vote, which could happen as soon as this week. Democrats and administration officials believe this gives them the necessary backing to overcome a potential filibuster after weeks of uncertainty and unexpected pitfalls.”

Abu Dhabi May Make BP Investment, Crown Prince Says [Bloomberg]
“Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al Nahyan said the emirate is considering making an investment in BP Plc.

‘We are still thinking about it,’ he said in an interview in Abu Dhabi today, when asked about potentially buying a stake in the London-based oil producer. ‘We are looking across the board. We have been partners with BP for years.’

BP Chief Executive Officer Tony Hayward said on July 7 that he had a “very good” meeting with the crown prince as analysts said the oil producer may be looking for support from Middle East investors. BP shares have gained 26 percent since the start of July as the company gets closer to containing its leaking well in the Gulf of Mexico, the worst oil spill in U.S. history.”

Small Businesses Get More Pessimistic [WSJ/Real Time Economics]
“Small businesses continue to feel highly pessimistic about the U.S. economic outlook, according to a report Tuesday that showed a monthly indicator of their sentiment turning weaker in June.

The National Federation of Independent Businesses said its Small Business Optimism Index dropped 3.2 points to 89.0 last month, more than erasing the modest 1.6-point gain it saw in May. The report, which was compiled by NFIB Chief Economist William Dunkelberg, described the decline as ‘a very disappointing outcome.’ ”


Kilpatrick expected to ask for court-appointed counsel for fraud case [WXYZ]
Kwame Kilpatrick needs taxpayers’ help in his tax fraud case, namely paying for a lawyer. Since he cannot afford one, the people of Michigan will be picking up the tab.

Man Claims Ownership of Facebook [WSJ]
Today in wild-ass lawsuits, “A New York judge has issued a temporary restraining order restricting the transfer of Facebook Inc.’s assets, following a suit by a New York man who claims to own an 84% stake in the social-networking company.

Paul D. Ceglia filed a suit in the Supreme Court of New York’s Allegany County on June 30, claiming that a 2003 contract he signed with Facebook founder and Chief Executive Mark Zuckerberg entitles him to ownership of the company and monetary damages.”

Accounting News Roundup: BP in Talks to Sell Assets, Including Alaska Ops; Koss Lawsuit Details Embezzlement ‘Spurts’; The Estate Planing Debacle | 07.12.10

BP Mulls Selling Off Billions in Assets [WSJ]
“BP PLC is in talks with U.S. independent oil and gas pron a deal worth as much as $10 billion that could include stakes in BP’s vast Alaska operations, according to people familiar with the matter.

A deal, which would go a long way to helping BP cope with the financial stress of paying for the clean-up of the Gulf oil spill, could be reached in the coming weeks, though there is no guarantee it will succeed, one of these people said.”

Bank Profits Depend on Debt-Writedown `Abomination’ [Bloomberg]
This abomination has an official name, SFAS 159, The Fair Value Option for Financial Assets and Financial Liabilities

“Bank of America Corp. and Wall Street firms that notched perfect trading records in the first quarter are now depending on an accounting benefit last used in the depths of the credit crisis to prop up their results.

Bank of America, the biggest U.S. bank by assets, may record a $1 billion second-quarter gain from writing down its debts to their market value, Citigroup Inc. analyst Keith Horowitz estimated in a June 23 report. The boost to earnings, stemming from an accounting rule that allows banks to book profits when the value of their own bonds falls, probably represented a fifth of pretax income, Horowitz wrote.”

Koss embezzlement ran in spurts, lawsuit says [Milwaukee Journal-Sentinel]
The most impressive “spurt?” $478,375 over three days in 2006. According to Koss’ lawsuit against S-squared and Grant Thornton, $145,000 also disappeared from the petty cash fund over the years, amongst other “unauthorized transactions.”


Bias At Work: To Sue or Not to Sue? [FINS]
Harassed? Discriminated against based on age, sexual orientation, race et al.? Of course suing your employer is an option. This is America after all, where the opportunity to slap someone with a lawsuit is your god-given right. But is it always the right move?

Bolt running from the taxman – Usain snub for British meeting [Daily Mail]
The fastest man in the world would prefer to keep a little money for himself, “Under present tax rules, if Bolt competes once in Britain and only five races elsewhere, the British taxman will demand one-sixth of everything he earns, whether in Britain or not. His taxable earnings would not only include his considerable appearance fees but also his hefty endorsement contracts.”

The Big Four’s UK Firms Pick Up Non-Executive Directors — And Then …? [Re:Balance]
Jim Peterson expands on his thoughts about the Big 4 non-executive directors in the UK, “Not only can good governance not be inflicted or imposed, in other words, because resistant leaders will find ways to disturb or subvert the purpose, but a virtuous culture will display its legitimacy without the need for pietistic overlays.”

Too Rich to Live? [WSJ]
The estate tax debate has gotten even more morbid than it would ordinarily be, ” ‘You don’t know whether to commit suicide or just go on living and working,’ says Eugene Sukup, an outspoken critic of the estate tax and the founder of Sukup Manufacturing, a maker of grain bins that employs 450 people in Sheffield, Iowa. Born in Nebraska during the Dust Bowl, the 81-year-old Mr. Sukup is a National Guard veteran and high school graduate who founded his firm, which now owns more than 70 patents, with $15,000 in 1963. He says his estate taxes, which would be zero this year, could be more that $15 million if he were to die next year.”

Accounting News Roundup: Grassley Not Sold on Financial Reform Bill; LeBron Was Probably Considering Tax Implications; Target: Your Spreadsheets | 07.09.10

Grassley Airs Concerns As Vote Nears on Financial Bill [WSJ]
“Iowa Republican Sen. Charles Grassley is ‘very concerned’ about a provision in the financial overhaul bill designed to pay for the leaid Thursday, potentially complicating White House efforts to build a filibuster-proof majority to back the measure.

If Mr. Grassley decides to vote against the bill, Democrats would be left with little margin for error when they bring the bill to the Senate floor, which could happen as soon as next week. Mr. Grassley was one of four Republicans to support an earlier version of the bill when it narrowly passed the Senate in May.”

Number of CEOs Stepping Down is on the Rise [FBN]
It’s hard out there for a CEO. Ask Russ Smyth.

State Jock Taxes: Is LeBron Better Off in Miami? [Tax Foundation]
Of course Florida has no income tax, so every game that LBJ plays in Florida he’ll have a tax liability of $0. What about the other 41 games outside of FLA? That’s another story, “True, if James plays in Miami, none of his neighbors will be paying state income tax, but thanks to the jock tax, LeBron will.

While most people who travel in their jobs pay state income tax only to their home state, which is zero in Florida, athletes get special attention. In the NBA, each player’s per-game salary is computed, and whenever a team is on the road, the players must pay whichever tax rate is higher, the home state’s or the away state’s.”


Facebook Often Not a Job Seeker’s Friend [FINS]
If you’re pounding the pavement for a new job out there, it’s pretty much a given that people are looking at your online activity. But just how much and where? Based on the conversation between FINS’ Kyle Stock asked Michael Fertik of ReputationDefender Inc, you’d better drop those loser friends from high school that have appeared on Cops:

Kyle Stock: Can you speak briefly on to what extent companies are checking up on candidates online?

Michael Fertik: They’re absolutely doing it. It’s somewhere around 70% to 80% of hiring managers. . . And not only are they looking online, they are also looking in really remarkable places like virtual worlds and gaming rooms.

KS: To what extent do people realize this is going on?

MF: Somewhere around 70% of employers are considering online information when evaluating a candidate and only 7% of candidates believe they are doing so. There’s a huge gulf of understanding. . . Everybody has been opted in. There’s kind of a willful ignorance about it. That’s changing, but it’s still there.

And the kinds of information being considered are growing very diverse. It’s not just the photo that you published of yourself with a beer or a bong, it’s also content like who your friends are and what they post on your page and what kinds of groups that you link to. There’s kind of an associative picture that they develop of you and then they make decisions about you based on those associations.

Russian Spies Head Home in Swap Echoing Cold War [Bloomberg]
Defendant #4 and the rest of the gang are going home, making your next conference predictably more boring. Or will it???

Internal Auditors Target Spreadsheets [CFO]
“Last month the Institute of Internal Auditors plugged a gap in its guidance for members by issuing recommendations for the auditing of ‘user-developed applications,’ which generally are spreadsheets and databases developed by end users rather than by IT personnel.

User-developed applications, or UDAs, are subject to a high level of data-integrity risk because there may not be adequate controls over validating their output or making changes to them, the IIA points out. There is also confidentiality risk, because a UDA and its data typically are easy to transmit outside the company via e-mail.”

Accounting News Roundup: Quasi-Exodus at H&R Block?; National Taxpayer Advocate Issues Report That Congress Won’t Read; SEC Might Want to Take a Closer Look at Amedisys | 07.08.10

H&R Block names Alan Bennett as CEO [AP]
This all came about since Russ Smyth resigned, made official by a two sentence 8-K filing, “On June 30, 2010, Russell P. Smyth provided H&R Block, Inc. (the “Company”) with notice of his resignation as President and Chief Executive Officer of the Company, and as a director of the Company. The effective date of Mr. Smyth’s resignation from these positions is August 29, 2010, unless the Board of Directors selects an earlier date.”

It seems like there’s a quasi-exodus in the C-Suite at HRB as General Counsned on Friday and the company is still on the hunt for a CFO after Becky Shulman left in April.

Yahoo CFO Aims to End Buy-High, Sell-Low Record on Deals [Bloomberg]
Tim Morse told Bloomberg that the company has been doing things completely bassackwards, “You’ve seen our track record on M&A with buying really high and selling pretty low,” Morse said in an interview. “We’ve got to be careful.”

Some examples of doing things exactly wrong include, “Yahoo, the second-biggest U.S. search engine, agreed to sell its HotJobs website for $225 million in February after paying about $436 million for it in 2002. In January, Yahoo sold Zimbra, an e-mail and collaboration unit, netting $100 million. Yahoo bought it in 2007 for $350 million.”

Auditors could face grillings from analysts [Accountancy Age]
“Steve Maslin, chair of the partnership oversight board at Grant Thornton, envisages an expanded audit role which may involve greater face-to-face time with stakeholders, including question and answer sessions at annual general meetings.

‘Many investors believe there is valuable information that gets discussed by the auditors with management and audit committees to which investors do not have access – and I think they are right,’ he said.”


Legg Mason CFO resigns [Baltimore Sun]
Get your resumé in now.

FEI Announces 2010 Hall of Fame Inductees [FEI Financial Reporting Blog]
Come on down! “FEI’s 2010 Hall of Fame inductees: Karl M. von der Heyden, former Vice Chairman of the Board of Directors and Chief Financial Officer of PepsiCo, Inc., and Ulyesse J. LeGrange, retired Senior Vice President and Chief Financial Officer of ExxonMobil Corporation’s U.S. Oil and Gas Operations.”

National Taxpayer Advocate Submits Mid-Year Report to Congress [IRS]
Nina Olson’s mid-year report to Congress has plenty to wade through so that means none of the members will likely read it. Fortunately the IRS narrowed the three biggies (Taxpayer Services, New Business and Tax-Exempt Organization Reporting Requirements, IRS Collection Practices) into a much more consumable version.

Open Letter to the [SEC]: Investigate Troubling Issues at Amedisys Missed by Wall Street Journal [White Collar Fraud]
In Sam Antar’s latest WTFU letter to the SEC, he details some issues at Amedisys which weren’t covered in the Journal‘s report from back in April. Since we are into the whole brevity thing, we won’t get into the number crunching here but things look fishy. Plus there’s this:

On September 3, 2009, Amedisys President and COO Larry Graham and Alice Ann Schwartz, its chief information officer, suddenly resigned from the company. Amedisys provided no reason for their resignations and simply said that the two execs “are leaving the company to pursue other interests.”

In my experience, sudden, unexpected executive departures are often a sign of problems beneath the surface. And while it could be entirely coincidental, the trends at Amedisys appear to be consistent with my experience.

But Sam doesn’t believe in coincidences.

Accounting News Roundup: IRS Probing HSBC Clients with Accounts in Asia; Saints Deny State Money Was Taxable; Pot Tax Helps Helps Another California Budget | 07.07.10

HSBC Clients With Asian Accounts Said to Face Probe [Bloomberg BusinessWeek]
“The Justice Department is conducting a criminal investigation of HSBC Holdings Plc clients who may have failed to disclose accounts in India or Singapore to the Internal Revenue Service, according to three people familiar with the matter.

‘This is a global initiative by IRS and the Department of Justice,’ said Robert McKenzie, an attorney at Arnstein & Lehr in Chicago who said he spoke to two people who got letters.

The probes show how the U.S. is expanding its crackdown on offshore tax evasion beyond Switzerland and UBS AG, the largest Swiss bank, sa tax lawyer at Greenberg Traurig LLP in New York. London-based HSBC is Europe’s biggest lender by market value.

‘It’s clear that the IRS and the Department of Justice are intending to pursue other depositors outside of Switzerland,’ Kaplan said. ‘They’ve announced it before, and they are moving forward in that regard.’ ”

A.T. Kearney, Booz Call Off Merger Talks [WSJ]
“A.T. Kearney Inc. and Booz & Co. called off discussions about a possible merger that would have given the two midsize firms greater scale in a highly competitive industry.

The two have flirted with each other multiple times over the years without completing a deal. The most recent talks occurred on and off over the past six months, says a person familiar with the matter.

The combined firm would still have been smaller than market leaders such as Deloitte LLP, McKinsey & Co. and Accenture Ltd in an industry where scale is increasingly important in wooing global business.”


Did Tax Ploy Help Saints Win Super Bowl? [Forbes]
If you feel so inclined, you could probably blame this on Reggie Bush but otherwise it’s probably due to some clever tax attorneys, “In a just-filed U.S. Tax Court lawsuit, the partnership owning the Saints acknowledges that it didn’t treat an $8.5 million annual payment from the state of Louisiana as income and therefore didn’t pay taxes on the sum. Rather, the team said the money was an addition to “working capital” and a nontaxable transaction.

The Internal Revenue Service insists the money should have been included in income by the franchise, owned for a quarter-century by auto dealer Thomas M. Benson Jr. The Tax Court case challenges that position.”

Pot Tax Helping Long Beach Plug Budget Deficit Faces Vote in California [Bloomberg]
“The city council of Long Beach, California, voted last night to pursue taxes on medical marijuana dispensaries, part of what may become a wave of communities turning to such proceeds to plug budget deficits.

The Los Angeles suburb with a population of almost 500,000 scheduled a public hearing on the drug levy for Aug. 3. If the council later approves the wording, a ballot initiative establishing a 5 percent tax on the city’s 35 dispensaries could go to voters in November, according to Lori Ann Farrell, Long Beach’s director of financial management.”

IRS Disbars CPA for Relying on Client’s Income and Expense Numbers [Tax Lawyer’s Blog]
How much due diligence should a tax preparer perform to be comfortable with their clients numbers?

Ex-Qwest Accountant Says SEC Should Be Sanctioned [CBS4]
“The SEC has said [James] Kozlowski hasn’t shown that it acted in bad faith. It has accused him of ‘theatrical conduct,’ including filing ‘numerous losing motions.’ Kozlowski’s attorneys dispute that.”

Accounting News Roundup: E&Y to Appoint Non-Exec Directors to Global Board; Accounting Remains a Hot Post-College Job; Barclays Calls New Loan Valuation Proposal ‘Potentially Misleading’ | 07.06.10

‘Big four’ auditors bring in independent directors in response to regulators [Guardian]
The Financial Reporting CouncCAEW, issued a new audit governance code back in January that recommended audit firms appoint non-executive directors to their UK firm however, Ernst & Young will go so far to appoint them to their global advisory boards.

“Although the code technically applies only to our UK business, as a globally integrated organisation, we believe it is most appropriate for us to implement the code’s provisions on a global basis also,” said Jim Turley, global chairman and chief executive of Ernst & Young. “Including individuals from outside Ernst & Young on the global advisory council will bring to the senior leadership of our global organisation the benefit of significant outside perspectives and views.”

BP Won’t Issue New Equity to Cover Spill Costs [WSJ]
But if you want to pitch in, they are happy to take you up on an offer, “BP would welcome it if any existing shareholders or new investors want to expand their holding in the company, she said. BP’s shares have lost almost half their value since the Deepwater Horizon explosion that triggered the oil spill April 20.

BP Chief Executive Tony Hayward is visiting oil-rich Azerbaijan amid speculation the company may sell assets to help pay for the clean-up of the Gulf of Mexico oil spill. The one-day visit comes a week after Mr. Hayward, who has been criticized for his handling of the devastating oil spill, traveled to Moscow to reassure Russia that the British energy company is committed to investments there.”

Looking for a post-college job? Try accounting [CNN]
Happy times continue for accounting grads, according to the latest survey on the matter, this time from the National Association of Colleges and Employers. The average salary listed for an entry-level accounting major is just over $50k and the article also notes that most accounting jobs go to…wait…accounting majors.


FASB, IASB Staff Describe Plans for New Financial Statements [Compliance Week]
As always, the two Boards are hoping that bright financial statement users will chime in with their suggestions but they’ve got the basic idea down, “The FASB and IASB are rewriting the manner in which financial information is presented to make it more cohesive, easier to comprehend, and more comparable across different entities. The proposals would establish a common structure for each of the financial statements with required sections, categories, subcategories and related subtotals. It would result in the display of related information in the same sections, categories and subcategories across all statements.”

Accounting rules “practically impossible to implement”, Barclays claims [Accountancy Age]
Barclays’ finance director, Chris Lucas isn’t too keen on these new loan valuation proposals. Besides the ‘practically impossible’ thing, he says, “The sensitivity disclosures…are highly subjective, difficult to interpret, and potentially misleading, particularly when the underlying data is itself highly subjective,” Lucas said.

“It is hard to see how sensitivity disclosures could be aggregated by a large institution to provide succinct data that avoids ‘boilerplate’ disclosure.”

Asking The Difficult Questions [Re: The Auditors]
“Audit committees too often rely on the auditors’ required disclosures without comment. They sometimes lack the independence, experience, or determination to ask the probing questions. It’s critical, however, that committees seek answers to vexing questions and not accept the response, ‘But that’s the way management has always done it.’ ”

Buffett Donates $1.6 Billion in Biggest Gift Since 2008 Crisis [Bloomberg]
WB continues his plan of giving away 99% of his fortune, “[Buffet] made his largest donation since the 2008 financial crisis after profits at his Berkshire Hathaway Inc. jumped.

The value of Buffett’s annual gift to the foundation established by Bill Gates rose 28 percent to $1.6 billion from $1.25 billion last year. The donation, made in Berkshire Class B stock, was accompanied by gifts totaling $328 million in shares to three charities run by Buffett’s children and another named for his late first wife, according to a July 2 filing.”

The case for cloud accounting [AccMan]
Dennis Howlett continues to provide evidence that switching to the cloud provides benefits that are simply too big to ignore, “This 2min 1 sec video neatly encapsulates why this is something you should be considering, especially if you are operating electronic CRM or e-commerce for front of house activities.”

Accounting News Roundup: Are “Tax-Aware” Juries the Solution to Deductible Punitive Damages?; Financial Fake Twitter Feeds; Deloitte’s Czech Problem | 07.02.10

Damages Control [NYT]
Because BP could end up paying a metric asston in punitive damages over the Deepwater Horizon whathaveyou, the Senate recently approved a repeal of punitive damages awarded in civil disputes being deductible for tax purposes.

The problem is that it probably won’t work, as Gregg Polsky and Dan Markel, two law professors at the University of North Carolina at Chapel Hill and Florida State University write in an op-ed in today’s Times:

“When plaintiffs and defendants reach a settlement before a trial, which happens in most cases, they aren’t required to specify which parts of the settlement are punitive and which are compensatory; therene number. That allows defendants to disguise the amounts that they would have paid as punitive damages as additional compensatory damages.

And because the measure maintains the deductible status of compensatory damages, nearly all punitive damages will remain, as a practical matter, deductible. This easy circumvention surely explains the meager revenue projections from the measure: $315 million over 10 years.”

The solution, according to Polsky and Markel is to make juries “tax aware” so that they may adjust their findings appropriately, “the prospect of tax-aware jurors would also raise the amounts of settlements before trial — when, again, most cases are actually resolved. This is because the amount of a settlement depends on the amount that a jury is expected to award after a trial. If tax-aware juries became the norm, plaintiffs would push for higher settlements, and thus both settling and non-settling defendants would bear the correct amount of punishment. Under the Senate’s approach, in contrast, only the very few non-settling defendants would bear that punishment.”

Five Fake Finance Twitter Feeds [FINS]
These are far better reasons to be on Twitter than Ashton Kutcher or Kim Kardashian.


Charities fail to communicate in annual reports: Deloitte [Accountancy Age]
Whatever they are communicating, it’s still more informative than a “Transparency Report.”

More cloud accounting benefits [AccMan]
“It is becoming increasingly obvious that clouding computing benefits as they apply to the accounting arena stretch way beyond the ability to save time, effort and cost. As I meet with more customers, I am discovering benefits that only customers can express.”

Apollo Said to Hire PricewaterhouseCoopers’s Donnelly as CFO [Bloomberg BusinessWeek]
“[Gene] Donnelly, who starts in his new role today after 29 years at New York-based consulting firm PricewaterhouseCoopers LLP, fills a vacancy left by the departure of Kenneth Vecchione in January, said the person, who asked not to be identified because the hiring wasn’t announced. Barry Giarraputo, the company’s chief accounting officer, had been serving as interim CFO.”

Deloitte answers fraud reports [The Prague Post]
Francine McKenna tweeted about this story yesterday, where Deloitte has been cited by one Czech newspaper as being investigated by Czech anti-corruption police.

“Deloitte has been put on the defensive since the June 28 report in the daily Lidové noviny (LN) that quoted unnamed sources alleging a slush fund used to bribe public officials and fraudulent accounting that gave clients better financial results. Deloitte says the results of an internal review highlighted ‘certain deficiencies in management reporting,’ but considers the results an internal matter and will not make any comments.”

Accounting News Roundup: Senate Will Get to Financial Overhaul Post-July 4; Google to Cover Extra Health Benefit Costs for Gay Couples; Barry Wins a Stevie | 07.01.10

House Vote Sends Finance Overhaul to Senate [WSJ]
“The House agreed Wednesday to a sweeping rewrite of the nation’s financial regulations, moving the initiative one step closer to becoming law.

Focus now shifts to the Senate, where questions linger about whether Democrats have nailed down enough support from the handful of Republicans needed to overcome a likely filibuster. The Senate won’t take up the bill until after the July 4 recess, creating an awkward pause in which the bill’s opponents will have one last chance to derail it.”

Google to Add Pay to Cover a Tax for Same-Sex Benefits [NYT]
“On Thursday, Google is going to begin covering a cost that gay and lesbian employees must pay when their partners receive domestic partner health benefits, largely to compensate them for an extra tax that heterosexual married couples do not pay. The increase will be retroactive to the beginning of the year.

‘It’s a fairly cutting edge thing to do,’ said Todd A. Solomon, a partner in the employee benefits department of McDermott Will & Emery, a law firm in Chicago, and author of ‘Domestic Partner Benefits: An Employer’s Guide.’

Google is not the first company to make up for the extra tax. At least a few large employers already do. But benefits experts say Google’s move could inspire its Silicon Valley competitors to follow suit, because they compete for the same talent.”


Senate chairman starts probe of Transocean’s taxes [AP]
Senator Max Baucus (D-MT) would like to know whether Transocean’s move offshore was an exploitation of U.S. tax law, “The chairman of the Senate Finance Committee is launching an investigation into the tax practices of Transocean Ltd., owner of the Deepwater Horizon rig that exploded in the Gulf of Mexico, leading to the massive oil spill.”

Sadly, this will lead nowhere since exploitation ≠ illegal in this case. Deplorable? Yes. Tax malfeasance? No. Political pandering? Absolutely.

Deloitte CEO Barry Salzberg Wins Executive of the Year – Services at the 8th Annual American Business Awards [PR Newswire]
It’s a Stevie award! BS beat out Jeffrey Bezos, chairman, president and CEO, Amazon.com; Dominic Barton, managing director of McKinsey & Company; and Joseph Neubauer, chairman and CEO of ARAMARK for the Stevie.

In his own words, “I am very honored by this recognition, which truly is a testament to Deloitte’s progress and the industry-leading work of our more than 40,000 people in the United States. Although we have faced challenging economic times in the past few years, Deloitte’s diverse portfolio of quality services and investment in talent continue to drive our business and differentiate us in the marketplace. We are eager to approach the opportunities that await us and our clients in the economic upturn.”

GAAP and IFRS: Six Degrees of Separation [CFO]
That is, six major differences between the two sets of rules that will have to be ironed out. Namely: error correction, LIFO, reversal of impairments, PP&E valuation, component depreciation and development costs. After that, this convergence thing will be a breeze.

Accounting News Roundup: Bank Tax Scrapped; Deloitte Cleveland Names New Managing Partner; What’s the Future of Internal Audit? | 06.30.10

Financial-Rules Redo Passes Major Hurdle [WSJ]
Who knew that lobbyists could be so effective? “Democrats initially proposed the $18 billion tax on the nation’s largest banks and hedge funds to cover the cost of expanding gof financial services, among other things. But the small number of Republicans crucial to the bill’s passage balked at the fee, which was added at the last minute to the legislation.

With more than a year’s worth of work in the balance, Democrats ditched the levy on Tuesday. Instead, they agreed to offset the bill’s costs by winding down early the $700 billion Troubled Asset Relief Program and assessing a more modest fee on banks through the Federal Deposit Insurance Corp.”

Volcker Said to Be Disappointed With Final Version of His Rule [Bloomberg]
If you go to the trouble of getting your name on the rule, with specific ideas in mind about what said rule entails, you’d be pretty upset if lobbyists hacked up to the point that it’s hardly recognizable. Plus octogenarians are probably used to getting their way.

“Volcker, the 82-year-old former Federal Reserve chairman, didn’t expect the proposal to be diluted so much, said a person with knowledge of his views. He’s content with language that bans banks from trading with their own capital, the person said.

‘The Volcker rule started out as a hard-and-fast rule on risky trades and investments,’ said Anthony Sanders, a finance professor at George Mason University School of Management in Fairfax, Virginia. ‘But through negotiations, it was weakened and ended up with many loopholes.’ ”


How Not To Look Desperate When Looking for Your Next Finance Job [FINS]
Because we know there are plenty of you out there.

Deloitte names Craig Donnan managing partner in Cleveland [Crain’s Cleveland]
Cake party? Mr Donnan takes over for Pat Mullin who has been the managing partner of the office since 1999.

The future of the internal audit profession [Marks on Governance]
“If we are to be relevant, chief audit executives (CAEs) have to refocus on providing assurance regarding how well management identifies, evaluates, responds, and manages risks – including the controls that keep risk levels within organizational tolerances.”

The Problem With Unreported Income [You’re the Boss/NYT]
The problem being that if you’re going to have one helluva time selling your business if a decent portion of its revenues are unreported.

“Legal and moral issues aside, there is only one way to view unreported income when it comes time to sell the business: forget that money ever existed. If you can only manage what you can measure in business, then the same holds true for what you can sell.”

AIG hires ex-Lehman lawyer as compliance head [Reuters]
As long as AIG doesn’t ask about arcane accounting disclosures, this should work out fine.

Accounting News Roundup: Auditors ‘Portray Worrying Lack of Skepticism’; Are Tax Strategies Patentable?; Method Man Pleads Guilty, Cuts Check for NYC Tax Evasion | 06.29.10

FSA accuse auditors of failing to question management bias [Accountancy Age]
The Financial Services Authority has decided that it was about time it called out a few people, “Auditors have become yes men who don’t adequately question management bias according to concerns raised by the UK’s chief financial regulators. The Financial Services Authority (FSA) and the Financial Reporting Council today released a scathing discussion paper into the profession following concerns raised in the wake of the financial crisis. Among its concerns is that auditors ‘portrays a worrying lack of skepticism’ when scrutinising potential management bias.”

Not onlef=”http://www.accountancyage.com/accountancyage/news/2265630/fsa-audit-report-regulator”>FSA wants new enforcement powers including the ability to ” fine, censure or disqualify audit firms.” The FSA also wants to meet with auditors several times a year, rather than just once, as well as direct access to audit committees.

Alex to Become Hurricane as Swells Reach Gulf Spill [Bloomberg]
“Tropical Storm Alex, the first named system of the Atlantic hurricane season, strengthened today, forcing the evacuation of rigs in the Gulf of Mexico and pushing swells toward the worst U.S. oil spill.

The storm, packing maximum sustained winds of 70 miles (110 kilometers) per hour, was 460 miles southeast of Brownsville, Texas, before dawn today, moving north-northwest at 8 mph, the U.S. National Hurricane Center said in an advisory. The circulating winds were near reaching hurricane status of 74 mph.”

New York state may tax out-of-state hedge fund execs [Reuters]
Desperate idea of the day from the brain trust in Albany, “Recession-hit New York could raise an extra $50 million a year by collecting income taxes from people who work for hedge funds in the state but live elsewhere, according to a legislative plan to raise revenue…A spokesman for Democratic Assembly Speaker Sheldon Silver said by telephone on Monday that it means hedge fund managers would be treated the same way as other commuters.”


Aprill: The Impact of Bilski on Tax Strategy Patents [TaxProf Blog]
In non-PCAOB SCOTUS news, the decision in Bilski v. Kappos addressing “Whether a ‘process’ must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing (‘machine-or-transformation’ test), to be eligible for patenting….” was examined by Ellen P. Aprill of Loyola-L.A. regarding the impact on tax strategy patents:

“Bilski is at best a mixed bag for those who think tax strategies should be patentable. It gives little help and does allow business method patents, albeit somewhat begrudgingly. It demonstrates that for those who believe that tax strategies should not be patented, legislation is needed.”

Method Man pleads guilty to NYC tax-evasion charge [AP]
“Hip-hop star Method Man pleaded guilty to a tax-evasion charge Monday, writing a check on the spot for the final $40,000 restitution payment after owing about $106,000.” What, no cash?

U.S. Court to Hear Janus Appeal In Securities Case [Reuters]
“The lawsuit, brought on behalf of those who bought Janus stock from mid-2000 through early September 2003, alleged that the prospectuses of several of Janus funds created the misleading impression that the company would adopt measures to curb market timing, when in fact secret arrangements with several hedge funds permitted such transactions, to the detriment of long-term investors.”

Accounting News Roundup: G-20 to ‘Stabilize’ Debt by 2016; Auditors May Be Forced into Whistleblower Role on Banks; Yes, Taxes Are Historically Low | 06.28.10

G-20 Agrees to Cut Debt [WSJ]
“The wealthiest of the Group of 20 countries said they would halve their government deficits by the year 2013 and ‘stabilize’ their debt loads by 2016, a signal to international markets and domestic political audiences they are taking seriously the need to wean themselves from stimulus spending.”

Once you catch your breath from laughing, the President also cited the tax code specifically and his threatening to put some (i.e. Congress) in a tight spot:

“They might have to make deeper cuts in deficits to comply with its pledge. A White House statement said that government debt in the fiscal year15, would be at an “acceptable level.” President Obama said that next year he would present “very difficult choices” to the country in an effort to meet deficit goals.

The president cited his disappointment with the U.S. tax code. ‘Next year, when I start presenting some very difficult choices to the country, I hope some of these folks who are hollering about deficits and debt step up, ’cause I’m calling their bluff,’ Mr. Obama said.”

Bank auditors eyed for whistleblower role [FT]
A paper from the UK’s Financial Services Authority puts forth the discussion of requiring auditors to work more closely with regulators on irregularities found during the bank’s audit engagement.

“Experts say bank executives are nervous about the prospect of increased bilateral discussions between regulators and auditors. Auditors have been fearful the paper could thrust the profession into a regulatory spotlight it has so far avoided.”

Koss Fraud: We didn’t bother to look at the endorsements on our own checks, but Grant Thornton should have! [Fraud Files Blog]
Fraud sage Tracy Coenen presents her latest view on the Koss fraud mish-mash and how Koss management has managed to make themselves “look like absolute morons.”


BP Loses $22 Billion in Legacy of Share Buybacks [Bloomberg]
“The sum represents the hole after the 52 percent plunge in BP shares since the Deepwater Horizon exploded and sank, resulting in the worst oil spill in U.S. history. BP bought back more than $37 billion of its stock in a bid to return money to investors between 2005 and 2008. Those shares are now worth $15 billion, excluding dividends.”

Martin Ginsburg, Noted Tax Lawyer and Husband of Justice Ginsburg, R.I.P. [ATL]
Mr Ginsburg was a tax law professor at Georgetown for many years and was known for his great sense of humor, as evidenced by his faculty bio, noted by our sister site, Above the Law:

Professor Ginsburg is co-author, with Jack S. Levin of Chicago, of Mergers, Acquisitions, and Buyouts, a semi-annually updated treatise which addresses tax and other aspects of this exciting subject. The portions of the treatise written by Professor Ginsburg are, he is certain, easily identified and quite superb.

Open Letter to the Securities and Exchange Commission Part 9: Overstock.com’s Excuses Simply Don’t Add Up [White Collar Fraud]
It appears Sam Antar has caught Overstock.com in another disclosure snafu but this time it isn’t really clear whether the company gave the wrong excuse, lied to the SEC or simply doesn’t know what they’re doing, “Overstock.com’s 2008 10-K report claimed that a reportable “gain contingency” existed as of November 7, 2008. However, the company contradicted itself and claimed to the SEC reviewers that reportable reportable ‘gain contingency’ did not exist on November 7, 2008.

If Overstock.com’s 10-K disclosure is true, the company’s explanation to the SEC Division of Corporation Finance can’t be true. Likewise, if Overstock.com’s explanation to the SEC Division of Corporation Finance is true, the company’s 2008 10-K disclosure can’t be true.”

Accounts bodies revise workplan [FT]
Convergence 2.0.

Today’s taxes aren’t too bad [Don’t Mess with Taxes/Kay Bell]
Kay Bell provides some perspective on tax rates over the last century. The following graphic should help clear up any confusion.


Accounting News Roundup: Financial Reform Fail; KPMG Wins Latest Round of Auditor Musical Chairs; Philly Tax Amnesty Close to Reaching Goals | 06.24.10

A Missed Opportunity on Financial Reform [WSJ]
Former SEC Chairman Arthur Levitt is none too pleased with the financial reform bill that’s likely to get approved by the Senate and he says exactly why in an op-ed in today’s Journal, “One of many bad ideas that made it into the bill: Public companies will now have a wider loophole to avoid doing internal audits investors can trust. This requirement was the most important pro-investor reform of the last decade, and it worked. Of the 522 U.S. financial restatements in 2009, 374 were at small firms not subject to auditor reviews.”

But that’s not all! Mr Levitt outlinespic failure including:

• “Chuck Schumer’s wise idea to let the Securities and Exchange Commission (SEC) become a self-funded agency will likely be killed by appropriators who are unwilling to give up the power of the purse.”

• “Barney Frank’s (D., Mass.) effort to pass a new law to overcome the legal precedent of the 2008 Supreme Court’s Stoneridge decision, which allows third-party consultants, accountants and other abettors of fraud to avoid liability. Again, another sellout of investor interests.”

• “Congress didn’t deal with the massive problems of Fannie Mae and Freddie Mac. It’s one thing to fail to see trouble before it happens. Now, there’s no excuse. The central role played by these two organizations in the financial crisis is indisputable. Congress had a chance to fully restrict these agencies from anything but the most basic market-making activities, and it didn’t.”

What does all this (and more!) mean? Oh, nothing really. Levitt says that we’ll just have to wait for the next financial apocalypse to get it right.

InfoLogix Announces the Engagement of KPMG, LLP as the Company’s Independent Registered Public Accounting Firm [PR]
McGladrey resigned on June 10th and the company’s filing stated that were no disagreements yada, yada, yada although McGladrey had identified a material weakness in the company’s internal controls and their most recent audit opinion included a going concern paragraph. It wasn’t enough to spook KPMG, who got the blessing from InfoLogix’s audit committee on Tuesday. Enjoy.

BP Relied on Faulty U.S. Data [WSJ]
“BP PLC and other big oil companies based their plans for responding to a big oil spill in the Gulf of Mexico on U.S. government projections that gave very low odds of oil hitting shore, even in the case of a spill much larger than the current one.

The government models, which oil companies are required to use but have not been updated since 2004, assumed that most of the oil would rapidly evaporate or get broken up by waves or weather. In the weeks since the Deepwater Horizon caught fire and sank, real life has proven these models, prepared by the Interior Department’s Mineral Management Service, wrong.”


Leadership changes at Wichita Grant Thornton office [Wichita Business Journal]
“Lori A. Davis is the new managing partner at the Grant Thornton office in Wichita, the company announced Wednesday.

Davis will take the place of Jarod Allerheiligen, who will become the managing partner of the Grant Thornton operations in Minneapolis. The change in responsibilities is scheduled to take place Aug. 1.”

Ex-Detroit Mayor Kwame Kilpatrick indicted by feds on 19 mail fraud, tax counts [Detroit Free Press]
“Despite Kilpatrick’s repeated claims to the contrary, the indictment says he used fund money for campaign and personal expenses, ranging from polling to yoga and golf lessons to college tuition for relatives.

Prosecutors contend he failed to report more than $640,000 in taxable income while mayor that he received in the form of cash, flights on private jets and perks paid for out of the civic fund.”

$2 million payment to Phila. tax-amnesty program [Philadelphia Inquirer]
Philly’s tax amnesty program received a $2 million payment on Tuesday, it’s biggest since the program started on May 3. Collections so far have reached $18 million, according to city officials. They also expect to reach their goal of receiving between $25 and $30 million by the end of the program on Friday.

Feinberg to quit pay czar post to focus on BP fund [Reuters]
This guy is a glutton for punishment.

Accounting News Roundup: New Rule from FASB, IASB Will Bring Leases on Balance Sheet; California’s Latest Revenue Idea; Madoff CFO Released to House Arrest | 06.23.10

New Accounting Rules Ruffle the Leasing Market [NYT]
The convergence efforts by the FASB and the IASB have managed to produce a consensus on lease accounting and it has repercussions on both sides of the balance sheet.

“The two boards have come up with a new standard, which will be completed next year and enacted in 2013, that will require companies to book leases as assets and liabilities on their balance sheets. Currently, American and foreign companies list many leases as footnotes in their financial statements. As a result of the change, public companies will have to put some $1.3 trillion in leases on their balance sheets, according to estimates by the See Commission. Because many private companies also follow GAAP accounting, the number could be closer to $2 trillion, experts said.”

Middle-Class Tax Boost Is Broached [WSJ]
Reaction to Steny Hoyer’s call in a speech for Congress to quit lying to themselves was not met with enthusiasm.

The Journal reports that the GOP has different ideas, including House Orange leader John Boehner is quoted in the Journal, “Mr. Hoyer’s speech brought a round of criticism from Republicans, who emphasize spending cuts instead, and oppose allowing any Bush tax cuts to expire. House GOP Leader John Boehner of Ohio said Mr. Hoyer was admitting ‘that he supports raising taxes on the middle class to pay for more government spending.’ ”

Rep. Oompa Loompa obviously didn’t hear the part of the speech where Hoyer addressed the “cut spending” broken record, “The eagerness of so many to blast spending in the abstract without offering solutions that come close to measuring up to the size of the problem.”


California could turn license plates into ad revenue space [Silicon Valley/San Jose Business Journal]
The latest out of the brain trust in Sacramento, “As California faces a $19 billion deficit, the Legislature is considering whether to allow license plates to become traveling ad spaces.

When the vehicle is moving the license plate would look like the ones we’re used to now, but when the vehicle stops for more than four seconds a digital ad or other message would flash. The license plate number would always be visible.”

Madoff crony sprung [NYP]
“Earlier yesterday, former Madoff CFO Frank DiPascali Jr. was released to house arrest.

A grizzled-looking DiPascali refused to answer questions about the report in Monday’s Post that Madoff told fellow jailbirds that DiPascali knows the identity of three people the Ponzi king gave money to shortly before his arrest.

A judge initially refused prosecutors’ requests that DiPascali be released so he could assist in their ongoing probe, but in February he won a $10 million bail package based on his extensive cooperation.”

BP confirms Bob Dudley in key Gulf clean-up role [AP]
Knock ’em dead!

Business Leader Slams ‘Hostile’ Policies on Jobs [WSJ]
“In comments marking one of the sharpest breaks between top executives and the Obama White House, [Verizon Communications CEO Ivan] Seidenberg used a speech at Washington’s Economic Club to unleash a list of policy grievances over taxes, trade and financial regulation.

Mr. Seidenberg’s comments are particularly notable because he heads the Business Roundtable, a group encompassing the chief executives of the nation’s largest listed companies whose members have enjoyed frequent access to the president and his top aides. Its leaders have advised the White House on topics from economic recovery to health care to clean energy.”

SEC Self-Funding Is A Mistake! [The Summa]
“In support of SEC self-funding, SEC chairs always argue in public that they lack sufficient and consistent funding to enforce securities laws and regulations. As proof, they point out that Congress occasionally cuts back on SEC funding.

What they don’t mention is that the budgetary review process provides an opportunity for Congressional oversight of the SEC. When the SEC is performing poorly, say due to the atrocious leadership of the Chairs (i.e., Cox and Schapiro), a Congressional budget cut is a natural and effective response. Of course SEC chairs want self-funding, it gives them a pass from oversight. Who wouldn’t want that?”

Accounting News Roundup: More Execs Say Benefits Sarbanes-Oxley Outweigh Costs; New Jersey Millionaire Tax Fails; Has the SEC Learned Anything? | 06.22.10

As Congress Mulls SOX Exemption, Survey Suggests Acceptance [Compliance Week]
Just when Sarbanes-Oxley compliance was about to get torpedoed by the financial reform bill, a new study comes out that shows companies are starting to see benefits from the legislation, “In its 2010 Sarbanes-Oxley compliance survey, Protiviti says 70 percent of executives in at least their fourth year of working to comply with Sarbanes-Oxley say they believe the benefits outweigh the costs. That’s a big swing from the first year the firm asked the same question and heard only 39 percenbenefits greater than the costs.”


Showdown Over Strippers [WSJ]
Some people in the Show Me State are not interested in living up to that name, “Last month, the Republican-controlled legislature passed one of the nation’s toughest state laws aimed at strip clubs and other adult-entertainment venues. It would ban nude dancing and the serving of alcohol in adult cabarets, force strip clubs to close at midnight and forbid seminude dancers to touch patrons.”

The legislation is currently awaiting sign/veto from MO Governor Jay Nixon.

Opponents argue that the state’s very economic recovery is at stake, “Club owners and dancers say that the venues rarely attract crime, and that the new rules would be so strict that hundreds of jobs and millions of dollars in state revenue could be lost at a time when Missouri’s economy is struggling to recover from the recession.”

JP Morgan Names Doug Braunstein CFO in Shake-Up [AP]
“JPMorgan Chase said Tuesday it is shuffling the positions of three executives, including naming a new chief financial officer. The shake up is part of a program JPMorgan Chase has put in place to have executives work across multiple divisions to broaden their experience. Doug Braunstein is taking over as CFO. He was previously head of the bank’s investment banking division in the Americas. Braunstein, 49, replaces Michael Cavanagh, who had served as CFO since 2004. Cavanagh was named head of the bank’s treasury and securities services business.”

Tropical Storm May Pose Threat to BP Spill Cleanup [Bloomberg]
The first storm of the Atlantic hurricane season may enter the Gulf of Mexico as soon as next week, possibly disrupting BP Plc’s efforts to clean up the worst oil spill in U.S. history.

Thunderstorms in the Caribbean may strengthen into a tropical storm this week before heading into the Gulf between Mexico and Cuba, said Jim Rouiller, a senior energy meteorologist at Planalytics Inc. in Berwyn, Pennsylvania.

“The first named tropical storm of the 2010 season appears more likely to form over the northwestern Caribbean late this week and will go on to represent a formidable threat to the Gulf, along with heightening concerns about the oil slick,” Rouiller said in an e-mail yesterday.

Forecasters are predicting this year’s Atlantic hurricane season, which runs from June 1 to Nov. 30, may be among the most active on record and hamper the U.K. oil company’s efforts to plug the leaking well. AccuWeather Inc. forecast at least three storms will move through the region affected by the spill.

New Jersey Democrats fail to extend millionaires tax [Reuters]
Garden State millionaires rejoice!

SEC Crazy Talk [Portfolio/Gary Weiss]
Sam Antar recently turned over 37,000 documents to the Securities and Exchange Commission but not because the SEC was getting nostalgic for the Crazy Eddie days.

The SEC wanted documents, emails etc. from both Antar and Fraud Discovery Institute founder Barry Minkow on companies that have been covered by both men. The information relates mostly from information obtained from short-sellers. However, Gary Weiss writes that the SEC also asked for emails that the two exchanged with two reporters and from Antar’s ex-wife.

Gary thinks that this poking around by the Commission is all too familiar, “Well, I think what we may be seeing is a repeat of the [David] Einhorn fiasco, and then some,” referring to the SEC’s investigation into Einhorn’s criticism and short-selling of companies.

Einhorn was eventually vindicated and the companies – most notably Allied Capital – outed for their shady practices. Why the SEC is digging around the very people trying to help them isn’t quite clear but then again the SEC doesn’t have the greatest track record.

Accounting News Roundup: IASC Names New Chairman; New York Tax on Smokes To Get Even Higher; Medifast’s Revenue Recognition to Get Another Look? | 06.21.10

Accounting Body Picks New Chief [WSJ]
“Former Italian Finance Minister Tommaso Padoa-Schioppa has been named to head the group that oversees international accounting rulemakers. Mr. Padoa-Schioppa will assume the chairmanship of the trustees of the International Accounting Standards Committee Foundation in July. The foundation’s monitoring board appointed him chairman for a three-year term. The IASC Foundation oversees the London-based International Accounting Standards Board, selects its members and raises funds for its operations. It also helps promulgate the move toward a single set of accounting rules used world-wide.”

New York Reaches Deal to Raise Cigarette Tax [NYT]
Smokers might want to start hoarding cartons as Governor David Paterson and legislators have reached a tentative agreement to raise the cigarette tax in New York. Taxes on cigarettes in NYS, currently $2.75 a pack, would rise an additional $1.65. Taxes in New York City would rise to $5.85 a pack, marking the first city in America with a tax of greater than $5 on cigarettes.

The proposal would raise $440 million this year, according to the Times. The state’s budget deficit is approximately $9 billion.


Open Letter to the Securities and Exchange Commission: Is Medifast Complying with Revenue Accounting Rules? [White Collar Fraud]
Sam Antar is a little skeptical about a plethora of Medifast’s financial reporting and disclosures including: revenue recognition policy, “the company is possibly recognizing revenue up to 8 business days too early”; their low allowance for doubtful accounts, “the $100,000 reported for such an allowance does not seem reasonable enough given Medifast’s volume of revenues and the dates it either ships or delivers its orders to customers after processing them.”; and lack of deferred revenue liabilities, “Medifast’s financial reports going back to 2004 disclose no deferred revenue liabilities for customer orders processed before each fiscal year ended and either shipped or delivered after those respective fiscal years.”

This trifecta has Sam concerned enough that he’s asking the SEC to poke around a little more than they did the last SEC review in 2007, when the SEC found…nothing.

BP Chief Draws Outrage for Attending Yacht Race [NYT]
Probably seemed like a nice idea at the time, “BP officials on Saturday scrambled yet again to respond to another public relations challenge when their embattled chief executive, Tony Hayward, spent the day off the coast of England watching his yacht compete in one of the world’s largest races.”

BP, Transocean tap a well of Washington lobbyists and consultants [WaPo]
The obvious solution to CEOs attending yacht races, Joe Biden-esque articulation and such is paying someone a lot – a lot – of money to rep these companies. It’s pretty much the only option they have left.

Accounting News Roundup: UBS Clients Have ‘Mere Hours’ to Come Clean; Dixon Hughes Sued for ‘Comfort Report’; “Big 4 Only” Bank Covenants – Revealed! | 06.18.10

UBS Customers May Have `Mere Hours’ to Report to IRS [Bloomberg]
Since the Swiss Parliament were finally able to give the OK on the agreement to disclose UBS client names to the U.S., it’s only a matter of time until the IRS starts kicking down doors in the middle of the night.

“For UBS account holders, they have mere hours to run to the IRS and hope they can disclose the account before the Swiss hand the data over,” said Asher Rubinstein, a partner at Rubinstein & Rubinstein LLP in New York who said he’s been “getting panicked calls all week.”

The lesson to be learned here, it appears, is that he IRS on a bluff, you are likely to be wrong, wrong, wrong. Doug Shulman doesn’t like to be take for a fool, “We will immediately follow up on the information we receive from the Swiss and we will vigorously enforce the laws against those who have attempted to evade their tax responsibilities by hiding their assets offshore.”


KPMG chief calls for audit reform [Accountancy Age]
John Griffith-Jones, who wishes everyone would get comfortable with the idea of the Big 4, does admit that the question about the purpose of audit is a legit one that should not be ignored, “What is the point, they and others ask, of doing extensive and increasingly elaborate audits of the financial accounts of our banks, when audits failed to identify the huge and systemic risks which led to the near collapse of the Global banking system in the Autumn of 2008?”

Campbell Recalls SpaghettiOs [WSJ]
UH OH…

600 Parish investors sue accounting firm [Charleston Post Courier]
Dixon Hughes is being sued by 600 investors of convicted mini-Madoff Al Parish for their “Comfort Report.” “The lawsuit alleges that the firm claimed to compile the report from brokerage statements, when it received statements generated only by Parish that ‘summarized imaginary account balances.’ ” Oops.

Oh, You Mean Like the Same Fed Audits We Already Have? Way to Go, Congress! [JDA]
“As any accountant will tell you, we perform audits each year to ensure the comparability of financial statements for the sake of investors. Since there is no comparing Fed statements and there are no investors (excluding the banks with mandated stock holdings in the Fed banks they are regulated by), basically all we’re doing is jerking off with our left hands pretending it is someone else doing the jerking.”

Firing squad execution sobering, but dramatic [AP]
And who doesn’t like drama?

Restrictive bank covenants keep the Big Four on top [Accountancy Age]
“Big 4 only covenants” in lending agreements are blackballing smaller firms according to BDO International CEO Jeremy Newman and others. Nonsense, you say? AA presented an example:

Buried in the 81-page credit agreement for US-based healthcare provider Amedisys is a 22-word stipulation that highlights a problem some fear is threatening the stability of the global economic system.

“Audited consolidated balance sheets of the group members… [must be] reported on by and accompanied by an unqualified report from a Big Four accounting firm,” the phrase reads.

There’s no telling how many loan agreements have this exact language but “Big Four” is often replaced by “reputable” so it’s not if the “Big 4 covenant” is cooked right into the template. That being said, AA reports that the Big 4 + GT and BDO admitted last month that the covenants do exist in the UK.

Strangely enough, Amedisys is currently in the cross-hairs of Crooked CFO-turned-Forensic sleuth Sam Antar.

CFOs on vacation: Fewer call office [San Francisco Business Times]
God forbid.

Accounting News Roundup: UBS Set to Release More Names as Standoff Ends; SEC Drops Cassano Inquiry; Levin, McCain Want Stock Option Gap Closed | 06.17.10

Swiss Parliament Backs UBS Pact [WSJ]
After a short standoff in Swiss parliament, Swiss lawmakers approved the agreement with the U.S. to turn over the remaining names of UBS clients, per the agreement between the two countries. The lower house dropped the referendum proposal that would have delayed the release of the names and likely caused UBS to miss the August deadline which would have resulted in new charges against the Swiss behemoth.

The Journal reports that a Swiss government is prepared to release an additional 1,200 names following the initial 500 released last year.

Lawmakers Weigh Changes tostor Protections [Bloomberg BusinessWeek]
Congress is kicking around the possibility of an office within the SEC to respond to whistleblower complaints. Brilliant!


McGladrey Mourns the Loss of Former Partner Ray Krause
Mr Krause passed away on Monday after 40 years of service to both McGladrey and the accounting profession. He served on many professional standard setting groups including AICPA’s Accounting Standards Executive Committee, the Financial Accounting Standards Board’s Emerging Issues Task Force, and on the Financial Accounting Standards Advisory Council. H was memorialized by his friend and colleague Jay Hanson, McGladrey’s National Director of Accounting:

Ray died unexpectedly yesterday. He was on vacation in Orlando with his nine-year-old grandson doing what he loved—visiting Disney World.

Before his retirement six years ago, Ray spent more than 40 years with McGladrey. He practiced in a number of locations, including a long stop in the national office as national director of accounting. He retired as partner in 2004 but continued to work for the national office part-time in Rockford, Ill.

During his long career, he served in a number of professional standard setting groups, including the AICPA’s Accounting Standards Executive Committee, the Financial Accounting Standards Board’s Emerging Issues Task Force, and on the Financial Accounting Standards Advisory Council.

Ray is best remembered for being the consummate professional and his easy-going style. He was very well respected in the accounting profession. Comments coming in from those that knew him include: “Ray was one of the true gentlemen of the accounting profession,” and “Ray was about as fine a human being as there is.”

He was a great mentor to many colleagues in the national office. His style of giving his complete attention to whomever he was talking to, providing understandable explanations for complex topics, probing deeply for all the facts, and his uncanny ability to help draw a conclusion with full understanding will be greatly missed. Ray could convey the message to someone that they were getting to the wrong conclusion with such delicacy that you didn’t even feel it, and felt good about the answer. He knew many of the “back stories” about how and why some of the most complex accounting standards came about, which is often important to understand what they mean.

Ray will be greatly missed by his daughter, son, four grandchildren and other family and friends. McGladrey and the accounting profession have also suffered a great loss.

Inquiry Ends on Cassano, Once of AIG [WSJ]
The SEC has dropped its investigation of Joseph Cassano, the former head of AIG’s Financial Products Unit, which means he won’t face civil charges in the unit’s role in financial crisis. The SEC is also declining to pursue charges against another AIGFP executive, Andrew Forster, who was also under scrutiny.

Senator sees big reporting gap in stock options [AP]
Senator Carl “Shitty Deal” Levin and new Snooki BFF John McCain “have proposed legislation that would require that the tax deduction for stock options not exceed the expense for options reported in financial statements.”

The two are a little rankled about the $52 billion gap between the amount of stock option expenses recognized for financial reporting purposes and the expense reported for tax purposes. Guess who’s getting the short end on that one?

Bank auditors were fully involved in developing report [FT]
John Hitchens, head of the Institute of Chartered Accountants of England and Wales (ICAEW) and a PwC Partner would like to dispel any notion that auditors will resist reform after taking it on the chin for the financial crisis:

As chairman of the ICAEW working group that produced the proposals, I would like to correct this impression.

Bank auditors from the six largest audit firms were fully involved in developing the report and supportive of all its recommendations, including the proposal that banks develop summary risk statements which auditors would then give comfort over.

Feel better?

U.K. Scraps FSA in Biggest Bank Overhaul Since 1997 [Bloomberg]
Chancellor of the Exchequer George Osborne will do away with the Financial Services Authority, replacing it with three new regulatory bodies and giving most of its oversight powers to the Bank of England.

Intuit Works to Restore Online Access [WSJ]
Any individuals or small businesses that use TurboTax, Quicken and QuickBooks have been in a world of hurt as online access has been down, down, down. “Some Intuit websites were beginning to come back online late Wednesday afternoon,” according to an Intuit spokesperson. The situation is fluid.

Fannie Mae, Freddie Mac to delist from NYSE [CNN]
Meant to mention this yesterday since it was the DoD but you know how it goes. Anyway, see you another life FNM and FRE.

Accounting News Roundup: UK Launches Probe of E&Y’s Final Lehman Audit; Revolving Door at SEC Scrutinized; Swiss Upper House Rejects Referendum | 06.16.10

UK watchdog launches Lehman audit probe [Reuters]
The UK’s Accountancy and Actuarial Discipline Board (AADB), investigative and disciplinary body for accountants, has started an investigation into the Ernst & Young’s final audit of Lehman Brothers’ UK operations for the year ending November 30, 2007.

E&Y, completely familiar with this drill, is sticking to their guns, “Ernst & Young’s audit opinion stated that Lehman’s financial statements for that year were fairly presented in accordance with the relevant accounting standards, and we remain of that view.”


SEC ‘Revolving Door’ Under Review [WSJ]
Currently, the SEC does not have a cooling off period for former staffers that take a position with a private firm. Former staffers (i.e. lower-level employees) need only to provide a written letter disclosing the fact that they will be representing their new employer in an investigation.

The Journal reports that Senator Charles Grassley (R-IA) announced on Tuesday that an investigation into the practice had recently been launched by the Inspector General David Kotz, “[W]e are currently conducting an investigation of allegations very recently brought to our attention that a prominent law firm’s significant ties with the SEC, specifically, the prevalence of SEC attorneys leaving the agency to join this particular law firm, led to the SEC’s failure to take appropriate actions in a matter involving the law firm,” Mr Kotz said.

The Journal reports that law firm in question “could not be determined.”

There have been several instances of quick transitions of former Commission staffers to new representing their new firms, including the most recent example of an attorney leaving the Division of Trading and Markets for the Chicago-based high frequency trading firm Getco, LLC and an accountant from the enforcement division who represented his new employer in a nonpublic investigation.

IRS hatches new assault on ‘Survivor’ [Tax Watchdog]
Thanks reality TV gods, Richard Hatch is still in our lives. He still owes $1.7 million in taxes from 2000 and 2001.

The CAE’s real challenge – ethics, courage, and complacency [IIA/Marks on Governance]
Norman Marks responds to a commenter that believes that a Chief Audit Executive need not focus on auditing and communicating those results and risks but instead “be conscious of and responsive to management expectations,” and basically substantiate that internal audit isn’t a giant waste of money.

Mr Marks questions this notion in its entirety, “It’s fine to supplement essential assurance activities with the tangible value-adding programs…But, the assurance work has to be covered or (in my opinion) internal audit is failing to do its job. When that is a conscious decision, I have to question the ethics – and the courage – of the individuals involved.”

Swiss Upper House Rejects Call for Referendum on UBS Pact [WSJ]
The upper house in Swiss Parliament would like their counterparts in the lower house to leave their popular referendum idea wherever they found it. Presumably everyone understands that super secret Swiss banking as the world knows it is over and lower house is a little slow to catch on. They’re supposedly debating the referendum circa now.

Class Action Complaint against Amedisys uses Sarbanes-Oxley Act Corporate Governance Provisions to Battle Alleged Corporate Malfeasance [White Collar Fraud]
Amedisys got caught red-handed by the Wall St. Journal abusing the Medicare system and Sam Antar hopes that this is a sign of things to come:

The SEC rules under Sarbanes-Oxley for public company codes of ethics broadly define corporate malfeasance by senior financial officers, requires such companies to promptly report any misconduct, prohibits companies from ignoring any misconduct, and makes it relatively easy for investors to sue for misconduct.

Hopefully, more lawsuits will cite code of ethics violations by public company senior financial officers in the future.

Accounting News Roundup: UBS Deal Back on Track; Allen Stanford’s Circus Causes Problems for Co-Defendants; Zynga Lands $147 Million | 06.15.10

Swiss Parliament Backs UBS Pact [WSJ]
After telling U.S. and IRS to drop dead last week, the lower House of Swiss Parliament has approved the deal to turn over 4,450 names as part of UBS’ settlement involving their assistance to taxpayers in the U.S. evade their obligations through offshore accounts.

There’s one small problem remaining – the lower house wants to put the agreement to a popular referendum while the upper house in parliament is opposed to the idea. The two have until Friday to reconcile their differences, otherwise another vote will be necessary to settle the referendum issue.

The problem with the referendum is that it could take months for happen and it could cause the Swiss to miss the August deadline that it agreed to. This could lead to fresh charges against UBS and further extending a story that pretty much everyone has grown tired of.


Stanford’s Co-Defendants Try to Flee the ‘Circus’ [DealBook]
Stanford’s Chief Investment Officer, Chief Accounting Officer and Controller are all attempting to sever themselves from Al’s proceedings because he’s an absolute drama whore.

Former CIO Laura Pendergest-Holt’s motion to have her trial severed describes RAS’ conduct as ‘egregious and circus-like conduct,’ using the term “circus” at least eight times.

So while a circus is infinitely fun for the rest of us, it doesn’t really do co-conspirators any good when they are trying to get a fair trial.

Dealing With a Toxic Resumé [FINS]
How can you move past a job with a tax company like Stanford, Countrywide, Bear Stearns et al.? You might just want to GIVE UP (and that could be advisable if you were a perp) but there are some things you can do to wash away that taint on your resumé.

For starters don’t bad mouth the old company, even though they probably deserve it. Secondly, you might attach an addendum to your resumé in order to explain the whole sitch and you can always turn the situation into a positive by explaining how you’ve learned from working at such a lousy company.

Keep your chin up, you’ll be back to being a white collar working stiff in no time.

Duke boy dodges tax hazard [Tax Watchdog]
John Schneider, aka Bo Duke, and his wife owe California about $28,000 in back taxes. Turns out his old accountant left him ‘high and dry’ so he’s working it out with Arnie.

Zynga Receives $147 Million Investment From Japan’s Softbank [Bloomberg BusinessWeek]
Memo to Farmville Haters: it’s here to stay and there will be more to come.

Accounting News Roundup: BP Weighing Options on Dividend; Will the “New Wealth Taxes” Affect You?; Medifast Keeps Things Vague | 06.14.10

BP unlikely to cancel dividend, but mulls several ideas: source [Reuters]
They may defer it, pay it in shares or “pay into a ring-fenced account until the oil spill liabilities become clearer.” All of which will please absolutely no one.

Auditors to reveal bank talks under new plans [FT]
Proposals by the ICAEW would require auditors to disclose their private discussions with bank audit committees afteshowed that “the value of bank audits had shown investors especially were dissatisfied by the audit report. The internal process involved was perceived as helping to keep bank executives in check, but investors felt the report was only a box-ticking exercise.”

The Big 4 have historically resisted these types of proposals, arguing that it will expose them to additional legal liability.

Suggestions cited include assurance on the “front half of annual reports,” as well as an audit of the banks’ summaries of risks. The ICAEW said it was aware that this would add to the auditors’ workload.


Vantis trading suspension follows difficult financial period [Accountancy Age]
The court-appointed liquidator for Allen Stanford’s bank, Vantis, has had trading of its shares suspended by the AIM after the company was unable to obtain any funds for their services related to the Stanford case, among other financial difficulties.

Ernst & Young had issued a going concern opinion for the company back in February, warning that continued lack of cash flow would have to be remediated quickly for any possibility for the continuation of the business.

How the New Wealth Taxes Will Hit You [WSJ]
Are you one of those “rich” people? That is, do you have an adjusted gross income of $200,000 or more ($250,000 for joint filers)? If so, you’ll probably want to know that two new tax levies will come your way in 2013 as a result of the new healthcare legislation – a 0.9% levy on wages and a new 3.8% tax on investment income.

The 0.9% tax is on any wages over $200k/$250k. For example, if you are single and made $300,000, your additional tax would be $900.

Similarly, the investment income tax would tax any investment income in excess of the $200k/$250k threshold and the 3.8% tax would be applied. What’s investment income you ask?

Interest, except municipal-bond interest; dividends; rents; royalties; and capital gains on the sales of financial instruments like stocks and bonds. The taxable portion of insurance annuity payouts also counts, unless it is from a company pension. So do gains from financial trading, as well as passive income from rents and businesses you don’t participate in. All are subject to the 3.8% tax on amounts above the $250,000 or $200,000 threshold, as described above.

Income that is not considered investment income include: distributions from IRAs, pensions and Social Security, annuities that are part of a retirement plan, life-insurance proceeds, muni-bond interest, veterans’ benefits, and income from a business you participate in, such as a S Corporation or partnership.

KPMG considering move to 1801 K [Washington Businsess Journal (subscription required)]
KPMG might move their Washington, DC office location to 1801 K St. NW from 2001 M St. NW according to “real estate sources.” KPMG’s spokesman said that the firm is continuing to “examine all of our options.” The situation is fluid.

Open Letter to the [SEC]: Why You Must Review Medifast’s Revenue Accounting Disclosures [White Collar Fraud]
Sam Antar would like to put the SEC on notice that Medifast seems to be less than transparent when it comes to its disclosures, “it seems that Medifast is recognizing revenue upon shipment and not delivery. As a minimum, Medifast, like Overstock.com, should be required to expand and clarify its disclosures to avoid confusing investors.”

Accounting News Roundup: Dell Looks to Settle SEC Probe; BP’s Request for Tax Docs Causes Issues for Fishing Communities; Salesforce CFO: We Need Sales People! | 06.11.10

Dell, CEO Are in Talks to Settle SEC Probe [WSJ]
The SEC’s probe, launched in 2006, into Dell had initially focused on some accounting manipulation that has now ensnared founder and CEO Michael Dell focusing on disclosure and omissions related to Intel Corp. and negligence-based fraud charges.

The Journal reports that the possible fraud charges “suggests that the SEC may suspect that Mr. Dell unintentionally made statements that he should have known were misleading.”

In anticipation of the settlement, the company will restate its most recent earnings report, reducing its net income by $100 million.


The fishermen and the tax man [Los Angeles Times]
BP is requesting tax records from people in fishing communities in order process claims of lost work related to the Deepwater Horizon spill. Those seeking payment need to submit a commercial fishing license, proof of residence and tax statements. The problem is that many of these people do not keep tax records since they are paid in cash for their work.

More than 25,000 claims have been submitted so far and payments to about 12,000 have been made, totaling $36 million, according to the LA Times.

BP, through Graham MacEwan says that there’s a plan although like most of this crisis, the company isn’t sure how it will be fixed, “BP Chief Operating Officer Doug Suttles has been telling parish council members over the past few days that if someone’s tax documents are not available, we will find other metrics. I don’t know exactly how we are going to do that yet.”

Salesforce CFO: Company Aggressively Hiring Sales Staff [Dow Jones]
Cloud trailblazer Salesforce.com is looking to add more sales personnel, having added 18,000 new customers over the last 12 months according to CFO Graham Smith.

Mr Smith also said the company is rolling out two new products in the near future including Chatter, a “a social-networking application for office collaboration” and VMforce, a collaboration with VMware, Inc. that will give Java developers a new way to deploy applications over the web.

Accounting News Roundup: Volcker Says Convergence Is Looking Like a ‘Collision’; Internal Audit Battles Relevancy Question; AIG to Remain Ward of the State | 06.10.10

Volcker upbeat on “reasonable” reform bill [Reuters]
Former Fed Chair Paul Volcker took note of the FASB and IASB’s divergence on fair value and he’s not too thrilled about it, “[Volcker]…said that U.S. and international accounting standard setters must reach an agreement on how banks value the loans on their books.”

So from Big Paul’s POV, there is no option other than to get your shit together on this even though the two boards seem to be moving in the exact opposite direction. Oh, and could you do that ASAP? Reuters quoted him “What appeared to be two organizations converging … now looks like a collision. I hope they can come together by the end of the year.”


Is Internal Audit Irrelevant? [Norman Marks on Governance, Risk Management and Internal Audit]
The question about the relevancy of the Big 4’s audit business (at least for public companies) has been questioned but now the role of internal auditors is in question. Norman Marks cites a recent presentation at the IIA’s International Conference in Atlanta:

One of his points was that internal auditors have been humiliated – because nobody has held them to blame to any degree for the collapse of the banking sector, the failures in corporate governance and risk management, and the tremendous loss in value of investors’ shareholdings all over the world.

Richard pointed out that the Walker report (in the UK) on the causes of the banking crisis didn’t even mention internal audit. We are irrelevant.

Mr Marks takes exception with this, saying that internal auditors do deserve some blame and that if the NYSE and others get around to issuing some requirements around the function of internal audit, the recognition will come with it.

U.S. Faces ‘Severe’ AIG Losses, Says Panel [WSJ]
Even though the bailout of AIG probably prevented us from bartering over food in a barren wasteland with cars on fire everywhere, taxpayers ‘remain at risk for severe losses.’ A Congressional Oversight Panel also stated that the U.S. Government will continue to be a “significant shareholder through 2012.” The Beard is more optimistic however, saying “AIG, I believe, will repay.”

Accounting News Roundup: Senate Proposal Would Double Tax on Carried Interest; Take Client Compliments with Skepticism; Agents Honored for Busting Petters | 06.09.10

Showdown on Fund Taxes [WSJ]
The U.S. Senate plan to tax private equity and hedge fund managers who earn carried interest has been rolled out and it would double the rate on this income from 15% to 30% in 2011 and 33% in 2013. Supporters of the bill argue that carried interest is “basically wages” and that the 15% is a “fundamental unfairness in the tax code.”

The industry is not amused by the Senate’s latest rich hating measures. The Journal quotes Douglas Lowenstein, president of the Private Equity Council, “[E]arning carried interest involves taking risks, making long-term investments and exposing yourself tot you’ll have to return your earnings if things don’t work out. No one who gets a paycheck has to face those consequences.”

But that’s not all! Also in the proposal is a “enterprise-value tax” provision that would tax the sale of any private equity fund, hedge fund, or real estate partnership at higher rates than of other businesses including publicly traded oil and gas partnerships.


Ex-CEO and CFO of Duane Reade Convicted in NY [AP]
No matter what Anthony Cuti and William Tennant did (“scheming to falsely inflate the income and reduce the expenses that Duane Reade reported to investors.”), if you bank with Jamie Dimon, you’re grateful for every DR.

How White-Collar Criminals Exploit Your Vanity – Beware of Compliments [White Collar Fraud]
Sam Antar has all but eliminated any possibility of ever getting a date ever again by admitting that any compliment that he gives is may have an ulterior motive, “The more likable and charming that I was as a criminal, the easier it was for me to successfully lie to my victims and deceive them. People are far less skeptical of people who they like and the white-collar criminals know it and exploit it.”

Most of you have never been paid a compliment by Sam but maybe some of you can think of a client that seems to go out of their way to stroke your ego. Or maybe it’s a combination of a compliment here or there (e.g. “you’re looking buff” or “nice ass”) from the controller and the hot junior accountant that keeps inviting you out to lunch for no discernible reason.

The lesson here is be skeptical of things being a little too good to be true for an audit. If your client doesn’t particularly like you and they look like they came from deep inside the ugly forest you might be able to rest easy. Otherwise, stay on your toes.

EBay’s Whitman Faces Brown for California Governor [Bloomberg]
A former auctioneer will face off against a failed Presidential candidate for the arguably the worst job in the country.

Four who took down Petters honored [Minneapolis Star-Tribune]
Swashbuckling industrialist-cum-Ponzi Scheme architect Tom Petters is doing 50 years for his crimes but the four investigators – FBI special agents Brian Kinney and Eileen Rice, FBI forensic accountant Josiah Lamb and Kathy Klug of the IRS’ Criminal Investigation Division – were honored yesterday for their efforts with a 2009 Law Enforcement Recognition Award by the Minnesota U.S. Attorney.

Of course, they couldn’t have done it alone (plus it’s honor just to be nominated), as they were assisted by more than 100 other agents who brought down Petters. Then someone made a Bernie Madoff joke and the fun ended right there.