Category: News

Next Time You’re Making Up Lame CPA Exam Excuses, Consider This Lady

This woman should shame all of you into cracking open the books, knocking off the whining and doing the damn thing once and for all.

From our former brother from another mother site, Above the Law:

“A friend of mine went into labor while taking the Illinois bar exam,” a tipster told us. “She calmly finished, went to the hospital, and had her baby an hour or two later. Girl’s a real trooper.”

“A certain Northwestern Law alumna went into labor during the second day of the Illinois bar,” said a second source. “She finished the exam and had her baby, her first, at 5:58 p.m. I think that is worth noting.”

Yes, you read that correctly. She was in labor during her exam and still managed to finish. Makes the puking CPA exam candidate seem like a big fat baby (no pun intended) now, no?

Before the start of the afternoon session on day two (Wednesday) of the Illinois bar exam, the very pregnant MBE [“Mother Bar Exam”] mentioned to the proctors the possibility that she might give birth during the test. She asked if she could leave early in the event that she went into labor; they agreed.

So Mother Bar Exam sat down for the afternoon session of the Multistate Bar Exam (“MBE”). Not long after, she started going into labor — not a little discomfort, but full-on labor.

“This was something we joked about with her before the test,” a friend told us. “We didn’t think it would actually happen!”

Fortunately, MBE is as strong as they come. She continued to answer MBE questions, while in active labor, before finishing the exam early, at 4 p.m.

Wait… 9 months pregnant, in active labor and she still finished with time to spare? That woman is the ultimate bad ass.

Granted, it’s not quite fair to compare the bar to the CPA. The bar is held twice a year like the CPA exam used to be, surely this candidate (do they call them candidates?) knew her getting knocked up timeline landed her right in the lap of this possibility. You don’t just throw away that kind of prep to go to the hospital and wait out hours upon hours of labor if you have the uterine fortitude to stick it out.

That said, it’s worth pointing out that her hospital happened to be right across the street from the test.

Someone Obviously Needs More Billable Hours

Where do you draw the line between a hobby and hoarding? Probably right here, with the young UK accountant so obsessed with ice cream he bought the ice cream truck he used to patronize as a kid:

Chris Copner loves everything to do with ice creams, so much so that he has a house full of memorabilia, including bins, signs, and Matchbox vans.

Chris – who no doubt counts 99 among his favourite numbers – spent £1,400 on the 1976 Ford MKI Transit van after he saw that it was up for sale and recognised its number plate from photos of him as a child.

He has since restored it to its former beauty, complete with all the old-school favourites such as Rocket lollies and Mr Whippy ice cream, at his home in Abergavenny.

The 23-year-old said: “It all started off when I was about five and my friends and I used to wait for the ice cream van to come each day. I just remember being fascinated by it so I started buying little Matchbox cars and vans and my collection just grew and grew from there.

Copner admits to having quite the hoard, including a cabinet full of stuff at his home and boxes upon boxes in his house, as well as a bunch stashed away in the homes of his parents and grandparents. Man, why am I paying $50 a month for my storage unit?

Strangely, the young number-cruncher has no idea why he loves ice cream vans so much. “I don’t really know why I became so fascinated by ice cream vans,” he said. “I think it was the anticipation of waiting for it to come when I was a kid.” Actually reading that makes his love of waiting for something to happen all that much clearer.

Say Six Words About Work, Win an iPad (Serious)

Consulting, outsourcing and investment provider Mercer and SMITH Magazine have partnered to launch a new online contest called “Six Words About Work,” and plan to publish a book featuring the best contest submissions. By participating, you could win a fancy new toy!

The free contest, a new edition to SMITH’s Six-Word Memoir® series, is open to the general public and will be conducted in four phases beginning June 29 and ending in late August. Each two-week phase will feature one work-related submission topic for contest submissions. The contest topics include:

  • Why I do what I do
  • What inspires my very best work
  • The best boss I ever had
  • Biggest lesson I learned at work

The contest will be held in the US, UK and Canada. Participants will submit their Six-Word Memoirs via the SMITH website. Each country will have four winners, one for each phase of the contest, selected by a panel of judges. Winners will be chosen based on the submission’s creativity, quality and relevance to the topic. Winners will receive their choice of a new Apple iPad or BlackBerry® PlayBook™. Winners will be notified on or around September 1, 2011.
Complete rules are available at www.smithmag.net/sixwordsaboutwork.

You read that right: you can win an iPad (or PlayBook) by coming up with something clever. What could be easier?

The current challenge is to write six words about bosses (come on now, you guys can do this), of which “Evaluation conducted over vodka on ice.” is a definite front-runner. You have until August 13th to answer this one.

Get on it!

North Carolina Accountant Convicted of Felony Assault and Kidnapping

32-year-old Timothy David Rickman – accused of breaking into the home of ex-girlfriend Michelle Deak in January 2009, stabbing her in the head, burning her arm with a cigarette lighter and choking her, as well as hitting her 8-year-old daughter – has accepted a plea bargain in his bizarre case. Rickman will serve 60 days in jail, with 120 days of electronic monitoring after and 5 years of probation.

If Rickman violates his probation, he could serve at least four years in prison and up to six and a half years.

Rickman’s lawyer Bernard Condlin insists that accepting the plea does not translate into an admission of guilt for his client but states that Rickman takes responsibility for the charges and their consequences (er, isn’t that an admission of guilt?).

We were unable to find a record of Rickman in the North Carolina Board of Accountancy’s database, so it can be assumed he just wasn’t cut out to be a CPA. I guess that means the integrity of the profession isn’t at all dented by this little aggro freak show’s actions?

(VIDEO) FEI’s Edith Orenstein and the Singing CPA Present a Love Song to the Pozen Committee

FEI’s Edith Orenstein has dropped a track on YouTube with “The Singing CPA” Steven Zelin called “Hey There Bob Pozen” (as of the date this is posted, we haven’t been able to find a Doctor P remix of the hot track) that really doesn’t need commentary at this moment. But we’ll be back after the jump with a few things to say.

Oh, I didn’t mention it’s to the tune of “Hey There Delilah” did I? Yeah. It totally is.

Anyway, it’s a tribute to the Pozen committee, of which Edith is a huge fan, in honor of its 3rd birthday:

I am a big fan of the Pozen committee, mainly because, like other committees that have fascinated me (such as the EITF , the PCAOB SAG, and the U.S. Treasury Advisory Committee on the Auditing Profession) it has a fascinating cross-section of preparers (issuers), auditors, investors, and others. I loved watching the webcasts where you could see folks discuss things from different vantage points at the same time. I think that kind of broad-based committee has an advantage over committees made up of only one segment of the constituent community, such as preparers, auditors, or investors. I think the standard-setters and rulemakers can receive the most efficient and effective input when the various segments of constituents face off against one another (I mean that in a polite way, I should say, ‘dialogue’ with each other) on issues of mutual interest.

I assume here approximately 6 to 7 percent of you have any clue what the Pozen committee is (unless you regularly read Edith, which you should if you’re into serious financial reporting shit of which we rarely if ever cover), here’s some financial reporting porn (PDF) to groove on. The short version is that the August 2008 report recommends steps to improve the usefulness of financial information to investors.

In case you’ve forgotten, this isn’t Edith’s first venture into the world of YouTube. Surely you remember “If I Were an Auditor,” filmed completely in Second Life with the help of the MACPA and friends.

Could you imagine what would happen if we could get the Maryland Association of CPAs’ dancing flash mob to do a mashup with Edith and Steven? Someone please get on that.

LA Judge Rules Crash Producer Engaged in Creative Accounting

I don’t watch movies but coincidentally, I saw Crash and frankly it’s a miracle it made any money at all (not to mention three Academy Awards, but what do I know about movies?). That being said, L.A. Superior Court Judge Daniel Buckley has determined producer Bob Yari engaged in creative accounting, ruling that Yari did so as part of an intentional scheme to withhold money from director Paul Haggis, star Brendan Fraser and co-writer Bobby Moresco.

The plaintiffs’ suit alleged that Yari improperly withheld money owed to them for the 2005 film and while Buckley has ruled in their favor, the judge has not yet set a monetary reward for plaintiffs.

The judge was clear in his ruling (which can be read in its entirety at the Hollywood Reporter), calling out the defendants’ inability to correct blatant accounting mishaps and outright fraudulent practices:

Defendants breached the contracts with the plaintiffs by diverting funds to third parties; adopting bogus contractual interpretations; refusing to correct accounting errors in a timely manner; adopting inappropriate accounting procedures that were contrary to industry standards; and, ultimately, using all of these to avoid paying plaintiffs money due under contracts.

This isn’t the first trip to court for Yari, who was sued for $100,000 by Matt Dillon, who played a dickhead cop in the film. Dillon’s company, Matthias Productions, performed an audit in 2006 and found that executives “deliberately authorized [the production entity] to apply an incorrect formula for the calculation of [Dillon’s] contingent compensation” and therefore owed him a larger piece of the $98 million the film grossed worldwide.

Paul Haggis, Brendan Fraser Win ‘Crash’ Lawsuit Against Producer Bob Yari [THR]

Apparently Accountants are the Most Valued Professional Advisers (According to the Brits)

Keep in mind before we get into this that the Brits are a tad wonky; they use funny words (“fag,” for example, is a cigarette, not a name that’ll get you a beatdown in San Francisco’s Castro District), drive on the wrong side of the road and live in tiny little crackerbox houses. That said, small businesses over there feel their accountants have served their money best.

Well, kind of.

Professional advice website, unbiased.co.uk has today released new research which reveals accountants as the most valued professional adviser when it comes to financial advice. Of the small businesses surveyed, 21% believed that their accountant provides them with the most valuable business advice. 12% of small business owners name friends, while 10% state a member of their family has given them the best advice on their business. One in three (31%) believe their own advice is the most valuable with regards to running their company.

Of the 54% of small business owners who have sought professional advice on their accounting and book keeping needs, 48% say that their accountant has saved them money in the long-term, while 47% state that they had helped them make sense of the complex UK tax system. Over a quarter (28%) say using an accountant has meant they have more time to focus on important business decisions. One in ten (10%) say their accountant has helped them to free up time to spend with their family.

That’s very warm and cozy, isn’t it? Except that 18% more of them prefer “focusing on important business decisions” to hanging out with their family with the time an accountant saves them.

Granted, the company from which the press release comes is “sponsored” by companies like J.P. Morgan Asset Management (others include AEGON, Legal & General, Alliance Trust, Lockton, Aviva, MetLife, AXA Life, Opinium Research, Bright Grey, Prudential, Canada Life Ltd, Royal London 360°, Clerical Medical Investment, Schroders… so how unbiased can it really be?)

NASBA and AICPA Launch New Site to Take the Guesswork Out of Mobility

Practice mobility has always been a big issue for CPAs, more so in these turbulent times when qualified individuals have to pack up and go a la Tom Joad just to find paying work in a reasonable market sometimes. So it makes sense that the AICPA and NASBA have jointly released a new online tool to help CPAs do what they do best from state to state.

Until all 55 jurisdictions can truly band together and agree on a uniform requirement across the board for all CPAs (never going to happen), this is the next best option.

Here’s the scoop:

The National Association of State Boards of Accountancy and the American Institute of Certified Public Accountants today announced the launch of CPAmobility.org – an online tool designed to help Certified Public Accountants navigate the new practice privilege requirements that allow CPAs to more easily practice across state borders.

A joint project of the AICPA and NASBA, the new CPAmobility.org website provides helpful information, updated regularly, on state practice privilege requirements for CPAs, commonly referred to as “mobility” laws, for all 50 states and 5 U.S jurisdictions. In four simple clicks online, CPAs can learn whether their existing home state registration is mobile and allows them to work in other jurisdictions without additional notice, or whether further paperwork is required. In most cases, additional registration is no longer required because mobility statutes recognizing CPA licenses granted by other states and jurisdictions have been enacted in 47 of the 55 U.S. jurisdictions.

“CPAmobility.org is a valuable service that allows CPAs to take advantage of the benefits associated with state mobility laws with confidence. We are happy to offer a free tool that will assist CPAs in determining whether or not they can exercise mobility in a particular jurisdiction at the click of a button, on their laptop or mobile device,” said Ken L. Bishop, executive vice president and COO of NASBA.

“Mobility has become a reality for CPAs and accounting firms from coast-to-coast and it is now time to open the system for business,” said Barry Melancon, president and CEO of the AICPA. “We are very pleased to be able to offer this free service to CPA firms together with NASBA, which was a key partner in developing the technology and information to power the website, CPAmobility.org.”

The site works by posing three targeted questions to CPAs interested in exercising cross-border practice privileges. Those are:
Where is your principal place of business?
Where are you going to perform services (target state)?
What type of services will you perform?

Information on licensing and registration requirements is then produced allowing CPAs to move quickly to address new business opportunities. CPAmobility.org offers immediate access to the site through a mobile application, an attractive benefit for CPAs needing to confirm eligibility requirements while they are on the road or away from their offices.

NASBA and the AICPA have been longtime advocates of mobility, providing support and resources to state boards and state CPA societies seeking changes to current rules. As additional states continue to embrace mobility, the need to educate CPAs on the requirements is growing.

CPAmobility.org will feature useful links to NASBA and AICPA resources. To learn more about mobility or to research cross-border practice privilege requirements, visit www.CPAmobility.org.

At first glance, the new site features a slick interface (if you ignore the obnoxious Helvetica header) that asks you three simple questions: where do you practice normally, where do you plan to practice and what type of services will you perform? Once you answer those, it will tell you the rules for individuals and firms based on your responses.

Awesome!

Ex-Ernst & Young Partner’s Former Lover Skirts Jail Time, ‘Ashamed’ for Sleeping Around to Land Insider Trading Tips

Early last year, James Gansman, a former Transaction Services partner was sentenced to a year and a day for securities fraud. This all came about after Gansman met Donna Murdoch on ashleymadison.com which eventually evolved from run-of-the-mill extramarital activities across the tri-state area to Gansman giving Murdoch hot tips on M&A activity. She then picked up Richard Hansen on Ashley Madison, who also gave her a few more tips that were used for monetary gain. All told, it came to about $392k for Murdoch.

Unfortunately, her trading activity got some people’s attention and this particular jig was up. Accordingly, Murdoch flipped on both her boy toys and as luck would have it, that will kept her out of jail. That’s obviously great and all but Murdoch has found the whole situation quite regrettable.

Donna Murdoch, 49, buried her face in her hands and began blubbering after the judge said she wouldn’t be heading off to the pokey. “Your honor, I will carry the shame of all my wrongdoing for the rest of my life,” the heavyset blonde said as her forgiving hubby and three kids watched from the gallery in Manhattan federal court.

It’s a tough, tough situation to be sure. You know what else is a tough situation? Deciding whether or not to sell out the people you were banging for the information so you could stay out of jail:

“It’s been really painful, but I still feel like the decision to cooperate was the right one, given the situation,” Murdoch said yesterday.

Hot tips from hot lips [NYP]

What’s the Deal with Groupon’s Adjusted CSOI?

According to Bloomberg, Groupon’s operating income and other accounting trickery habits are being studied by the U.S. Securities and Exchange Commission, part of a routine review of the site’s IPO. Nothing out of the ordinary there.

But Groupon seems pretty transparent about the unreliability of their methodology. I guess this is to say “don’t rely on this information, we’re kind of making some of these numbers up” so investors can’t say they weren’t warned.

Check out this June 2, 2011 SEC filing:

Our use of Adjusted CSOI has limitations as an analytical tool, and you should not consider this measure in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

• Adjusted CSOI does not reflect the significant cash investments that we currently are making to acquire new subscribers;

• Adjusted CSOI does not reflect the potentially dilutive impact of issuing equity-based compensation to our management team and employees or in connection with acquisitions;

• Adjusted CSOI does not reflect any interest expense or the cash requirements necessary to service interest or principal payments on any indebtedness that we may incur;

• Adjusted CSOI does not reflect any foreign exchange gains and losses;

• Adjusted CSOI does not reflect any tax payments that we might make, which would represent a reduction in cash available to us;

• Adjusted CSOI does not reflect changes in, or cash requirements for, our working capital needs; and

• other companies, including companies in our industry, may calculate Adjusted CSOI differently or may use other financial measures to evaluate their profitability, which reduces the usefulness of it as a comparative measure.

Because of these limitations, Adjusted CSOI should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. When evaluating our performance, you should consider Adjusted CSOI alongside other financial performance measures, including various cash flow metrics, net loss and our other GAAP results.

Better yet, AQPQ explains the math behind ACSOI:

Groupon acknowledges that it is losing money when profits and losses are measured in accordance with Generally Accepted Accounting Principles (GAAP). The firm claims, however, that its profits and losses are more meaningfully measured by a metric they call Adjusted Consolidated Segment Operating Income (ACSOI).

How does this number differ from profits and losses that are measured in accordance with GAAP? ACSOI apparently includes all of the revenues, but only some of the expenses, that are recognized by GAAP. By excluding certain significant expenses, Groupon manages to convert its losses into profits.

So what is the SEC going to find? Accounting methods already confessed to by the perps? Big deal.

The TaxMasters Guy Has Some Sage Advice on IRS Correspondence Audits

The advice was so good he had to send out a press release:

On the heels of a record reporting year for taxes, taxpayers should be wary – or at a minimum more informed – about audits from the IRS, according to Patrick Cox, CEO of TaxMasters (TAXS), the leading tax compliance and repayment services provider in the nation. According to Cox, the IRS will send out a record number of audits which can be misleading and even wrong.

“Over the past few years the IRS has been shifting gears to use correspondence audits – notices mailed to taxpayers usually showing an alleged discrepancy in a tax filing and asking for a manageable amount of extra money that is owed,” Cox said. “From my experience, most taxpayers – who did their taxes online or had an accountant or friend do them – are scared of the IRS and don’t know enough about their tax filings to argue the audit. Instead of making sure the IRS assessment is accurate, I think most taxpayers just cut a check.”

The latest Taxpayer Advocate Report showed that of the more than 1.6 million Americans who were audited last year, 78 percent received a correspondence audit, while only 22 percent were selected for an in-person examination. A large majority of the correspondence audits are sent due to unqualified or overstated tax deductions.

“Returns claiming tax deductions are the lowest hanging fruit for the IRS in a correspondence audit,” says Cox. “Unfortunately, there are an alarming number of taxpayers that make simple mistakes on the amount of deductions and types of deductions they make and wind up being easy targets for the IRS. A few examples of typically-encountered discrepancies include unreported pension income, home mortgage interest, and cash charitable contributions.”

Conveniently, the Journal of Accountancy also covered the increase in IRS correspondence audits in its August 2011 issue and offers tips on how to manage them for CPA tax practioners.

According to a 2006 report by the Treasury Inspector General for Tax Administration (TIGTA), there has been a 170% increase in correspondence examinations for individual taxpayers with gross incomes or business receipts of at least $100,000 in fiscal years 2002 through 2005, while face-to-face examinations increased by 25%. Since that report, TIGTA has claimed improvements in this area but identifies work yet to be done.