Category: News

When Congressman Dave Camp Says He ‘Doesn’t Want to Rule Anything Out’ He Means Raising Taxes Is Ruled Out

You should know this.

“I don’t want to rule anything in or out,” Rep. Dave Camp (R-Mich.) said, according to Reuters. “I am willing to discuss all issues that might help us reduce our short and long-term debt and grow our economy.”

“Everything is on the table until we as a group rule it out,” added Camp, who is chairman of the tax-writing Ways and Means Committee.

A spokesman for the Ways and Means Committee said Camp’s opposition to raising taxes remains firm.

“Despite a misleading and inaccurate headline that attempts to tell a story when there isn’t one to tell, Chairman Camp’s position on taxes has not changed,” the spokesman said. “When discussing the concept that all potential solutions ought to ‘be on the table’ or that he ‘won’t rule anything in our out,’ he has always emphasized that any potential solution must be looked at through the prism of jobs and whether those proposed solutions would strengthen the economy. Obviously, tax increases wouldn’t make that list.”

Harbin Electric’s Ability to Timely File Financial Statements with the SEC Falls on One Lonely CPA

Today in odd things found in SEC filings, we were pointed to this 10-Q from Harbin Electric, Inc., “a Nevada Corporation, incorporated on July 9, 2003.” However, this gives you a little better idea about what Harbin’s business is:

Through its subsidiaries, the Company designs, develops, engineers, manufactures, sells and services a wide array of electric motors including linear motors, specialty micro-motors, and industrial rotary motors, with focus on innovation, creativity, and value-added products. Products are sold in China and to certain international markets.

There it is! Another reverse merger company operation. Of course, this could be a completely legitimate business that is making money hand over fist but if Roddy Boyd is writing about you, that could be a bad sign. But that’s neither here nor there. One interesting thing we found in the company’s Q is just how much the company depends on their SEC Reporting Manager (I’ve added some italics for emphasis):

We rely on the services of our SEC reporting manager to assist us in researching and resolving certain US GAAP accounting issues and preparing our consolidated financial statements.

We employ an SEC Reporting Manager who is a Certified Public Accountant in the United States to assist our internal accounting and finance personnel in resolving complex US GAAP accounting issues. From time to time we rely on her to conduct research on complex accounting issues relating to US GAAP and to provide advice to the Company as to how to comply with US GAAP. Although our SEC Reporting Manager is not involved in our day to day operations or the management of our accounting functions, she also assists us in our consolidation process and in preparing our consolidated financial statements and footnotes. If we were to lose the services of our SEC Reporting Manager, we would attempt to hire another similarly qualified person to replace her. The loss of the services of our SEC Reporting Manager, in the absence of a qualified replacement, could adversely impact our ability to accurately prepare our consolidated financial statements on a timely basis.

There’s really no way to know who this poor, lonely SEC Reporting Manager is but based on the disclosure, it seems pretty clear that if she were to meet with an unfortunate accident, Harbin would be up shit creek without a paddle (and there’s probably a hole in the boat).

Why, exactly, isn’t there an intern, temp, custodian, someone, ANYONE that serves as the backup QB? This is not immediately known. Perhaps the company broke the piggy bank paying for the reverse merger but it seems prudent that they at least throw in Ms. SEC Reporting Manager’s best girlfriend from high school or something.

Of course if you’re job hunting and have a decent résumé, you could always ring them up.

DeVry Responds To the Keller Guy With “Useless Degree”

I have to give them credit here for monitoring the conversation about their “product” and reacting accordingly by emailing me. DeVry representatives did not demand I remove (especially “Big 4 Veteran”‘s) negative comments about Keller degrees, instead they told me about a program they’ve launched with CareerBuilder to help their graduates find jobs. As far as marketing tactics go, I have to say that’s the adult way to do it.

We’d like to see Hopelessly Frustrated get in touch with them, see what they can offer and then turn around to give us a detailed report of his experience and, more importantly, tell us if he actually gets a job.

Here’s what they had to say:

In March 2011, DeVry University and its Keller Graduate School of Management took competitive job searching to the next level and launched a first-of-its-kind, personalized career services program for its students in conjunction with CareerBuilder, the global leader in human capital solutions. Through the Keller Career Services program, eligible Keller students have access to a dedicated team of career experts – strategists, writers and coaches – for a high-level, personalized approach to career development. This underscores our mission of helping students unlock their full potential and reach their career and life goals.

Eligible Keller students are individually assigned a Career Strategist to mentor them through an intense 90-day career search that encompasses assisting with establishing goals and expectations to customizing a personalized job search strategy. Participating Keller students have access to a Certified Career Coach for live mentorship on various topics such as interviewing techniques, career path planning, networking and workplace etiquette. Additionally, a CareerBuilder professional writer assists these students in the creation of career-related materials, such as keyword-rich resumes and cover letters to help them stand out among job applicants. The new Keller Career Services program also offers eligible Keller students access to a comprehensive online portal with relevant articles, resources and webinars.

I hope we are able to get “Hopelessly Frustrated” signed up for the personalized CareerBuilder coaching. It’s a unique program that we believe will help put our students on the path of career success.

Read more about their career services here.

Muslim Man Sues PwC for Discrimination, Destroying His Life

Maybe PwC should consider pulling up the stakes in Tampa:

A Muslim who was a PricewaterhouseCoopers senior manager was interviewed for an article about diversity in a company newsletter and then fired when he criticized his employer, his federal lawsuit says.

Issam Azziz, 37, wpany’s Tampa office, filed suit on Tuesday in U.S. District Court, alleging the company, now called PwC, discriminated against him because of his faith and race.

“What happened to me should not happen to any other person,” Azziz said in a news conference outside federal court. “They’ve gone out of their way to destroy my life.”

PwC has responded that “this lawsuit is without merit” (which I think is taught on the first day of Corporate Communications 101) and wouldn’t tell me much else but you get the feeling that this whole story is a bit of a dog and pony show. First of all, the press conference held by Mr. Azziz included appearances from his lawyer, Peter Helwig, the Tampa Chapter of Council on American-Islamic Relations and Ahmed Bedier, “a civil rights activist” which seems to indicate that this was a well oiled PR offensive. Secondly, this press conference occurred less than a week after PwC told Tampa and the State of Florida to shove their subsidies. You don’t have to be too clever to put that one together.

Anyway, you can watch clips of the conference here and here (no embed code, sorry). If you watch the video, Mr. Azziz alleges (through the words of Mr. Bedier) that the company’s “fraternity mentality” that includes “overnight partying, binge drinking and gambling” feels a little hyperbolic but whatever. I spoke to Hassan Shibly, the CAIR representative that appeared with Mr. Azziz but he declined to go on the record. Peter Helwig has not yet returned my call.

The other little twist is that you get from the story is that Azziz claims that after he found another job, PwC got wind of it and were the ones behind his dismissal from that firm:

The lawsuit claims the company orchestrated his firing from a second firm that later hired him and has effectively blackballed him from getting any other job in his profession.

The company “retaliated against (Azziz) in reprisal for his opposition to (PwC’s) racial discrimination against persons who are Muslim or of Arab ethnicity,” the suit says.

Maybe I’m just not as paranoid as I used to be but a firm like PwC going out of its way to blackball one person seems like a stretch. I understand that this is Florida and I’m not a Muslim (i.e. they aren’t exactly popular with some people) but COME ON. PwC is far more interested in ruining the lives of its current employees – it’s called client service.

Suit accuses PricewaterhouseCoopers of discrimination against Arab-American [SPT]
PricewaterhouseCoopers discriminates, suit states [TBO]
Earlier:
PwC Decides It Doesn’t Want $1.1 Million in Free Money From Tampa After All
There Appears to Be Some Fuss About PwC Tapping $2 million in Subsidies Once They Spend $78 million and Hire 200 People

Help the NJ Society of CPAs Win $10,000 For Its Scholarship Fund

Contrary to what some might claim, we actually enjoy helping when we can, especially if it means money not out of our own pockets for future capital market servants. Therefore, we’re asking you to take two seconds out of your day to help the NJSCPA win a contest.

From NJSCPA Director of Communications Don Meyer:

In our never-ending effort to convince the world that CPAs aren’t dull, and hopefully to win $10,000, the NJSCPA entered a photo in the “Great Event Photo Contest” on Facebook – http://bit.ly/rkJPdE.

If our photo (a Society member salsa dancing at the 2011 NJSCPA Convention & Expo in Atlantic City) gets enough votes we could win $10,000 for the NJSCPA Scholarship Fund, which provides scholarships to high school and college students.

We’ll be encouraging (or nagging if you prefer) our members to vote for us by promoting the contest on Facebook, Twitter, NJSCPA Connect (www.njscpa.org/Connect), through email and by whatever other means we can think of.

We’re up against some big competition so we’re looking for whatever exposure we can get (hint, hint). Thanks.

Who says CPAs are dull?

You have until August 22nd to vote and can vote once a day using your Facebook profile.

Get on it!

Royal Caribbean Sued Over “False and Misleading Statements”

Last month, Royal Caribbean revealed a pretty significant accounting error related to its amortization of some financing fees (interest expense) that forced it to revise its earlier financial statements. This drove second quarter EPS of 47 cents to 43 cents. As a result, Royal Caribbean shares fell 13% on the day it made the “boo boo” announcement to below $31 a share on high volume of over 11.32 million shares.

As a result, Royal Caribbean and certain of its officers and directors are charged with making a series of materially false and misleading statements related to the Company’s business and operations in violation of the Securities Exchange Act of 1934.

RC Chairman Richard Fain said last week he was “embarrassed” by the error, which was made  in 2009 and discovered by the company’s internal accounting team. The company said though it revised its past financial statements, it did not restate its prior earnings, and claimed the statements could still be relied upon. Uh huh.

Law firm Kahn Swick & Foti, LLC has filed the class action suit against Royal Caribbean on behalf of purchasers of the securities of Royal Caribbean between January 27, 2011 and July 28, 2011 in a Miami court as of last week.

Young, Soon-To-Be CPA (Or HR Spy) Wants To Know What Your Recruiting Events Are Like

Call me crazy but this feels more like an email from a curious recruiter researching the competition than a junior trying to find out what other firms are up to. But hey, that’s just paranoid ole me.

If you have a question for our crack team of snark distributors, feel free to get in touch.

Hi GC,

I’m a young, aspiring CPA entering my junior year of undergrad. As a new target age group of recruiting, I recently attended a leadership conference with one of the Big 4. Sadly, I only applied for one such event, only to meet other students my age attending multiple events held by different firms. In an effort to always compare firms, I was wondering if you could open this up for discussion. Who had the lamest activities? Who had the most people? Which company threw it together at the last minute and had no clue what they were doing?

Thanks so much,

Bi(g 4) curious

Just wondering, did you try to talk to any of these “students your age” about the multiple events they were heading to? What did they have to say?

Why do you care? If you are interested in a particular firm, have you tried searching their tag on this website to see who gets the most “hoo-rah!” staff on here telling other firms’ employees how much they suck? I’m not 100% sure what it is you’re trying to glean from hearing about the recruiting events that you didn’t sign up for but let me save you a whole bunch of research: all recruiting events are pretty much the same. A bunch of awkward people stand around telling bad stories, sometimes crappy snacks are served, every now and then there are cocktails and at the end of it, some people come out of it with a job. End. These events have been going on for thousands of years (well, OK, maybe only the last several decades) and they’ve all pretty much ended the same.

But hey, let’s just say you are for real and just curious how other events went down… have you considered senior year? You have plenty of time to figure out what everyone else is doing.

That said, if anyone has some great stories to share (I’m talking drunk recruiters, moron accounting students making fools of themselves, hot chicks getting hit on by sleazy managers… whatever you kids got), by all means, please let us know.

Groupon Will File a New S-1 to Pretend Like ACSOI Never Existed

All Things D has reported that Groupon will amend its S-1 public offering filing to remove references to its controversial ACSOI accounting treatment, which we discussed previously here.

In a June 2, 2011 SEC filing, Groupon admitted the metric was creative to say the least. “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,” they said. Some of the die-hard tin foil hat anti-IFRS brigade (I count myself as one of them) might feel the same way about other “alternative,” non-GAAP accounting methods but I digress.

ACSOI did wonders for Groupon’s numbers. It turned a 2010 operating loss of $420,344,000 into a positive $60,553,000, turning Groupon’s luck in its favor to the tune of $481 million. All well and good if investors can actually rely on those statements but didn’t the very idea of ACSOI self-proclaim that it was not to be relied upon? So how the hell did it end up in Groupon’s S-1?

All Things D elaborates on Groupon’s trouble since introducing the idea of ACSOI:

Hence, a furious debate — along with much internal tension — within Groupon about what to do. At first, in another S-1 amendment, the company backed away from using ACSOI as a “valuation metric.”

But that was apparently not enough for the SEC or anyone else, so Groupon’s top managers finally thought it best to rid itself of the term entirely. That will happen next week, sources said.

And, in coming weeks, sources added, the company will be filing additional financial information about both its growth and costs, which will undoubtedly also be put under a microscope by the media, investors and regulators.

Probably good for everyone involved. Things are complicated enough using metrics we all pretty much agree upon, no reason to start pulling accounting tricks out of our hats.

China Calls For a New International Reserve Currency That Isn’t the Dollar (Again)

Dean Baker of the Center for Economic and Policy Research writes via Business Insider:

The NYT told readers that:

“Beijing has few options other than to continue to purchase United States Treasury bonds, Chinese officials are clearly concerned that China’s substantial holdings of American debt, worth at least $1.1 trillion, is being devalued.”

Both parts of this statement are wrong. Beijing has the option to stop buying dollars from its exporters. The reason that the government accumulates dollars and other foreign currencies is that it buys the currency from the companies who are exporting to the United States and other countries.

If Chinese officials were that concerned about it, they wouldn’t keep selling us their useless crap, thereby continuing the vicious cycle of being forced to “cash out” in Treasurys on the difference. If we as Americans were that concerned about it, we’d stop buying the useless crap. Like the “Presidents of the United States” mugs I bought this weekend, which happened to have “Made in China” stickers slapped on the bottom.

On Saturday, after S&P downgraded the U.S. credit rating to AA+ (pretty sure you guys heard about that), Chinese officials said Washington needed to “cure its addiction to debts” and “live within its means,” harsh words considering our living beyond our means has been the main driver of China’s explosive growth in the last decade. ““The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone,” read the statement, released by state-run Xinhua news.

“China, the largest creditor of the world’s sole superpower, has every right now to demand the United States address its structural debt problems and ensure the safety of China’s dollar assets,” it said.

Wrong. The Federal Reserve is the largest creditor of the world’s former superpower (that’s us), and according to them, we can’t inflate fast enough.

“International supervision over the issue of U.S. dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country,” Xinhua said.

Notice a pattern here yet? GAAP isn’t good enough, we need the IASB to tell us how to recognize leases. Now the dollar isn’t good enough. Not that it ever was, at least not in my lifetime or yours.

Better learn Chinese, people.

Smart Guy With Useless Masters Wants to Know How to Break Into Public

This is a good one. A really good one. If you have a good question for us (none of this crap we’ve answered before nonsense), please get in touch.

The lesson we learn here is that: A) not all Masters degrees are created equal and B) appreciate those networking and recruiting events you get at school because not everyone is so fortunate.

Hi GC,

Just need some advice and suggestions on how I should approach my accounting future. I finished my MBA – Accounting from Keller (Graduate division of Devry) about 2 years ago. I have a really good GPA (3.72), and I have some years of experience of accounting in private industries under my belt (3 years of being staff act a job recently as an Senior Accountant in a non profit organization. However, my true goal has been to get into public accounting, and I have tried and tried to breakthrough with no avail. Even before my recent job, I have applied to many entry level positions at any and every accounting firms (small, big 4, and in between) and no response. NONE… Networking and job assistance at Keller/DeVry is a joke… I sometimes regret going there…

As for the CPA exam, I am working on them right now. None passed so far, but I am really aiming for finishing it by the end of this year.

Something that piqued my interest recently is that CSUN is offering a Master’s in Accounting program this fall. I have already applied, and I have a good chance of getting in. However, I don’t know if its a worthwhile endeavor.

My question is, should I go back and get another master’s for the whole chance of getting networking and interning opportunities? It feels like it might be a waste of $20000 just for that… but then again, I spent about $50000 at Keller/DeVry for hopes of getting into public accounting with no result… and just because I’ll be attending an MSA program doesn’t mean that it’s a lock in getting into public accounting either…

Another thing that interested me is a MST program, possibly from Cal State Fullerton, or again, CSUN. However, time is an issue for me. I’m in my early 30’s already, and waiting another year seems like a death knell to my already slim window of opportunity in getting into public accounting.
Does anyone have advice on how I can get my foot in the door into public accounting?

Any feedback will be appreciated!

Thanks!

Sincerely,

Hopelessly Frustrated

Dear Hopelessly Frustrated,

If I spent $50,000 on a degree that won’t help me get a job, I’d be Incredibly Pissed Off so congrats on taking this so well. Your frustration is warranted, however, I have seen that Keller complaint before – did you do your due diligence before you forked over that kind of cash or was this a case of you getting suckered into their Masters/CPA review package without reading the fine print? Either way, I am really not going to tell you to go get another Masters just to bump into a few recruiters on campus, that’s a dumb idea and you don’t seem like a dumb guy. I mean if you’d do that just to get a Big 4 job, why not just bring a suitcase stuffed with $100 bills to your nearest Big 4 office and tell them you’ll work for free in exchange for work experience?

You’re right that at 30-something your chances of breaking into public are slipping by the day, old man. My thought on this is that at 30, you have pretty much formulated your opinions on the world, lost the idealism of your youth and settled into who you are pretty comfortably. Of course, the Big 4 don’t like hiring people with solid opinions about how the world works, it’s much easier to take on an army of starry-eyed 22-year-olds eager to be told how they feel and what they think.

That being said, sounds like you have a lot to offer, especially if you knock out the CPA exam. I have difficulty believing you cannot get in with any firm; when you say you’ve been trying, what exactly have you been trying? Lingering outside of recruiting events pretending that you attend that school? Waiting outside in the parking lot to pounce on HR people?

If you haven’t already, I would get your ass on the good old Internets and start networking like a motherfucker. There are tons of recruiters lurking on Twitter and LinkedIn, and the better your professional presence on these sites, the higher your chances of bumping into one. It can’t hurt.

Firms do troll the schools you mentioned (both CSUN and Cal State Fullerton have – believe it or not – decent accounting programs, at least by California standards) but do you really want to be elbowing 25-year-olds out of the way at awkward recruiting events? Instead, I would advise getting active with CalCPA and hitting any other professional networking events (like AICPA conferences) you can afford. It’s all about who you know, and if you know enough people, eventually one of them is going to know where you can get in and be so impressed with your decent GPA, previous experience and communication skills that they will put in a good word for you. It can’t hurt. Another $20,000 on a second degree, however, sounds pretty painful.

Good luck!

AICPA Has Chosen Its 2011 Leadership Academy, You Probably Aren’t On It

We’re not saying that pillars of the profession don’t frequent this site (we know Tom Hood shows up from time to time) but chances are, if you’re reading this at noon on a Friday with absolutely no intention to even pretend like you’re working for the rest of the day, you’re not among the AICPA’s new Leadership Academy choices.

The diverse group of 34 young CPAs will attend courses, lectures and mentoring sessions to develop the skills necessary to become the next generation of leaders in business, industry, government and the accounting profession.

“The AICPA takes its commitment to diversity and the development of young leaders within the accounting profession very seriously,” said Paul Stahlin, CPA, AICPA chair. “Within the last three years, we’ve happily witnessed a surge in the amount of highly qualified young people choosing to become CPAs. The young CPAs selected to participate in this year’s Leadership Academy have demonstrated their commitment to the profession, to their communities and their potential to become future leaders.”

This year’s participants represent a cross section of the profession’s role in the American capital market system, meaning they come from different backgrounds, specialties and even ethnicities. Some work in public accounting and others in business, industry, government or academia. The 2011 class has twice the number of business, industry and government participants as the classes of 2009 and 2010. The tax and audit split is 50 / 50 and 11 states have first time candidates. On an ethnic, gender and geographic basis, this year’s Leadership Academy is as diverse as America. They are equally divided between men and women and include CPAs of Asian, African American, Caucasian, Hispanic / Latino, Native American and Pacific Islander descent from all over the United States.

“The Leadership Academy is a great example of how the AICPA works to achieve its vitally important mission to develop young CPAs to lead the accounting profession and help meet its obligation to serve the public interest,” said Barry Melancon, CPA, AICPA president and CEO, who will address the Leadership Academy. “These ambitious, talented professionals are the future of the accounting profession. And through the AICPA’s Leadership Academy, the future begins now.”

The Institute selected the participants from a large pool of candidates sponsored by either their employers and/or state CPA societies. Candidates, who must be under 35 years of age, were selected on the basis of their work history, licensure information, professional volunteer activities, community service and awards and honors. In addition, each candidate supplied a statement explaining why participating in the academy would be important personally. AICPA senior leadership reviewed and evaluated each submission and a selection committee recommended the participants. All finalists were personally approved by both the AICPA Chair and CEO.

What this means is that it isn’t too late for a lot of you, but, you know, you better stop spending so much time complaining about work and start kissing up to your state society folks.

In all seriousness, this is an excellent opportunity for these young CPAs, and if any of them do somehow read this, we’d love to hear from you and talk about how you feel about being chosen.

Former BDO Partner Gets Probation For Cheating on His Taxes

Poor BDO, they never get in the news. But hey, they do today!

Former BDO partner George Mark got off easy this week when U.S. District Judge Nora Barry Fischer said he didn’t deserve to go to jail thanks to his “extraordinary” charitable efforts and remorse for his actions. Mark’s tax evasion was uncovered during an investigation into Pennsylvania beverage company Le-Nature’s, who apparently specialized in nepotism, ass water and fraud.

Mark will instead serve two years of probation and pay a fine of $30,000.

A federal jury recently found Le-Nature’s former president Robert B. Lynn guilty of 10 counts of bank fraud, wire fraud and conspiracy. The jury found him not guilty on 10 additional fraud counts and deadlocked on five others, which left Senior U.S. District Judge Alan Bloch Jr. no other choice than to declare a mistrial on the remaining charges. The company’s CEO Gregory Podlucky and other company officers are facing prison for their part of a $37 million fraud.

While investigating Le-Nature’s ugly mess, the IRS found out that Mark declared fake travel expenses on his 2004, 2005 and 2006 tax returns for about $90,000. The IRS determined that Mark was living the gangsta lifestyle out in the Philly ‘burbs, rented an apartment in NYC, traveled a lot and owned a few luxury cars.

The U.S. attorney’s office had hoped the judge would come down with jail time in order to convince would-be tax cheats that this is serious business but the judge felt Mark’s volunteer efforts for Hope International and other charities was sufficient proof that he wasn’t all that bad of a guy, perhaps just a little misguided.

Back in 2008, 74 investors alleged fraud and negligent misrepresentation against Wachovia Capital Markets, Wachovia Securities and two accounting firms, Ernst & Young and BDO Seidman for their respective parts in the Le-Nature’s scam, in which company officers (mostly CEO Podlucky and his kin) would secure loans for business equipment only to turn around and use that money for things like, oh, sapphires and overpriced watches.

E&Y audited Le-Nature’s until BDO took over. “E&Y was aware that Podlucky could single-handedly influence or manipulate the company’s financial results …” charged the lawsuit. The company basically made up $240 million in revenue and BDO auditors declared the company’s financials were free of material misstatements. FAIL.

Anyway, congratulations to the former partner for, uh, being such a model human being. Or something.