Category: News

Cut, Cap and Balance Is Just More of the Same Glut, Crap and B&#$^*!

The plan approved by the House last night traded $2.4 trillion for both the Senate and House approving a balanced budget amendment, though I’m not quite sure how borrowing more money is going to help us get our financial house in order.

If I were a legislator, I’d suggest avoiding the “Let’s pay the Visa off with the Mastercard” tactic if at all possible but that’s just me.

David Brooks broke down the Republican theatrics into four categories: “Beltway Bandits,” the “Big Government Blowhards,” the “Show Horses,” and the “Permanent Campaigners.” FYI for Caleb’s knowledge, Grover Norquist was the one named as a Beltway Bandit, though in fairness to this town, anyone could be considered that.

“The Democratic offers were slippery, and President Obama didn’t put them in writing. But John Boehner, the House speaker, thought they were serious. The liberal activists thought they were alarmingly serious. I can tell you from my reporting that White House officials took them seriously,” Brooks wrote in the NYT.

“House Republicans are the only ones to put forward and pass a real plan that will create a better environment for private-sector job growth by stopping Washington from spending money it doesn’t have and preventing tax hikes on families and small businesses,” said John Boehner in a statement.

Really? So how is it that this includes an increase in the debt ceiling?

Meanwhile, this is what Ron Paul had to say in a statement:

I have never voted to raise the federal debt limit, and I have no doubt that we face financial collapse and ruin if we continue to grow our debt. We need to make major spending cuts now, in this budget, and we can no longer afford to allow more deficit spending based on promises of future cuts.

“The CCB act would add $2.4 trillion of new debt to our gargantuan $14.4 trillion debt. CCB would also only cut $111 billion from this year’s budget, allowing a deficit of nearly $1.5 trillion. This is far from the Pledge’s call for ‘substantial’ cuts. And, CCB locks us into current levels of overseas welfare, which will continue to endanger America’s security by forcing us to subsidize other wealthy nations.

See, that’s pretty much where I’m at with this. The debt trap is impossible to get out of, anyone who has gotten trapped in a pay day loan can tell you all about that.

That’s exactly where we are. That’s where we’ve been. And where we’ll continue to be unless we get the debt monkey off our back. I’m not as concerned about subsidizing China’s explosive growth as I am about compromising our national security by letting those assholes at the Fed run the show. We owe them more than we owe China.

So Norquist may be a tax troll and I’m fine with that but this Dog and Pony Debt Show has got to stop, it’s old and it’s not doing us any good.

Anyone got a better plan?

Let’s Meet the News Corp. Audit Committee

By now you’ve probably heard that Rupert and James Murdoch had a little Q&A with some Members of Parliament in London today. You may have also heard that things got a little interesting when a man opted to put a cream (origin unknown) pie in the elder Murdoch’s face only to have his wife, Wendi Deng, get a little medieval on the Three Stooges impersonator.

Before all the excitement, things were getting a little awkward, as Rupes came off as very unprepared and on at least one occasion, was slapping the table not unlike your own octogenarian grandfather wanting to know if someone could pass the goddamn mashed potatoes. At one point, the questioning turned to legal settlements and MP Therese Coffey asked the Murdochs if they knew “how much has been paid out in legal settlements.”

James Murdoch [said] he [did] not know total number but said its customary to try to reach out-of-court settlements in many cases. Rupert Murdoch points out News Corporation had a strong audit committee to review all these things.

Right! The audit committee, that’s who you want to talk to. Of course, that’s a pretty lame answer, as Dennis Howlett noted:

Who, exactly, are these capable audit committee members? Here’s the crew from the company’s most recent proxy:

• Sir Roderick I. Eddington, Chairman – currently the non-executive chairman for Australia and New Zealand of J.P Morgan. Also former CEO of British Airways. Director since 1999.

• Peter L. Barnes – Chairman of Ansell Limited. Director since 2004.

• Andrew S.B. Knight – Chairman of J. Rothschild Capital Management Limited. Was also the Chairman of News International (James Murdoch’s current position) from 1990 to 1995. Director since 1991.

• Thomas J. Perkins – Partner of Kleiner Perkins Caufield & Byers, a venture capital company. Director at News Corp since 1996.

I’m sure all these dudes (News Corp has one woman on their board – Natalie Bancroft) are all quite capable but it doesn’t strike me a terribly robust audit committee. Having said that, it’s been reported that News Corp’s independent directors have retained Debevoise & Plimpton to represent them. The audit committee is comprised entirely of independent directors (calling Mr. Knight “independent” seems like a stretch but whatevs) and maybe they could rattle off the laundry list of legal settlements but at least it appears they’re sorta on top of things now.

How Does Americans for Tax Reform Feel About Tom Coburn’s “Back in Black” Deficit Reduction Plan?

It’s no secret that Grover Norquist’s patience with Tom Coburn ran out long ago. This hasn’t stopped Coburn from throwing out his own deficit reduction plan – entitled “Back in Black” – in order to save us all from fighting over scraps in the street. Predictably, Americans for Tax Reform has responded in due course, only they’re calling it “A Trillion Dollar Tax Hike Plan.” Maybe that’s not as bad as it sounds? Let’s take a look at some highlights:

Okay, is this really a trillion dollar tax hike? Reports say that it will save $9 trillion.

There is no rate reduction whatsoever in this plan. It’s a set of tax hikes, plain and simple.

But clearly, taxes and tax reform are complicated. Any chance we can address that?

There is no tax reform in this plan. The plan would undermine prospects for long-term tax reform.

A 600-page proposal clearly doesn’t happen without some planning. Tom Coburn must have had a plan. What was it?

It’s now clear Senator Coburn’s plan all along was a trillion dollar tax hike. Senator Coburn pretended to care about ethanol (until he was forced to admit he supported the ethanol mandate, the cause of 98% of government-induced ethanol production). In reality, he wanted to lay the groundwork for GOP support of this trillion dollar tax hike plan.

Tom Coburn has a reputation for being a staunch conservative. Does he live up to that reputation?

The Coburn trillion dollar tax hike is far outside the mainstream of the conservative movement, as well as where Congressional Republicans are.

Is there anything good about Coburn’s proposal?

ATR has long called for a “tax me more” checkoff for limousine liberals who complain that their taxes aren’t high enough. Rather than hiking taxes on everyone, these rich liberals should be able to pay more voluntarily to assuage their left-wing guilt. The Coburn plan does have this, providing a silver lining to an otherwise cloudy forecast for taxpayers.

And you probably thought ATR couldn’t say anything nice about the plan.

Senator Tom Coburn Proposes Trillion Dollar Tax Hike Plan [ATR]

(UPDATE 2) Bucknell Accounting Student Accused of Being Serial Flasher

Earlier today I was tipped to this story about a man accused of being a serial flasher in central Pennsylvania. Last week WHTM reported that Jay Patrick Knaub, a “straight-A student at Bucknell University” was accused of “20 counts including unlawful contact with minors, indecent exposure, and open lewdness.”

Right. So you can use your imaginations about what “lewd act” actually is but personally, “jerking off” or “spit-shining the ol’ water pump” comes immediately to mind. Maybe you have other ideas.

ANYWAY, Our tipster informed us that “this gentlemen may, in fact, be a [Big 4 firm] summer intern out of the Philadelphia office.” Right now I cannot confirm the firm in question but did find that a Jay Patrick Knaub who is a junior at Bucknell with a major in accounting. And yes, I also found a Jay Patrick Knaub on the prison list at Dauphin County Prison.

All this dong exposure started a few of weeks ago and fairly crude police sketch was put together before Knaub was arrested. Apparently, Knaub was getting pretty confident in his skills as the third incident allegedly occurred one block from the police department. Knaub was arrested on July 1 thanks to tips, “especially the description of Knaub as a ‘computer geek,'” as the Fox43 anchor put it.

I called Dauphin County Prison to see what I could find out more about the possible internship but the very nice woman who helped said that Mr. Knaub wasn’t interested in speaking with me. I also left a message with his attorney, Mr. Boyle, but have not heard back as of yet. Of course if you’re familiar with Mr. Knaub or worked with him, please get in touch. Updates to come.

UPDATE:
Some have noted in the comments that Jay Knaub hasn’t been found in their respective directories. This is because he isn’t in any directory. From our tipster:

I know that he was an audit intern, and was working on some of our Harrisburg area clients. From what I’ve been able to gather, he was fired a few weeks ago, but nobody was really told why. One of the other interns who went through training with him saw the story online [Monday], and it’s been circulating the office ever since.

Assuming Knaub was fired shortly after his arrest (over two weeks ago), the firm would have wasted no time in removing his name from the directory. I called the Philadelphia office of the firm in question, asked to be connected to Knaub but was told that he was not in the directory.

UPDATE 2:
If you’ve checked the directory lately, looking for Knaub’s name, you’ll find that it’s no longer in the directory. I’ve reached out to the registrar to find out what the story is but have yet to hear back. Will keep you updated.

Unfortunately, Someone You Love May Get a Ride in BKD’s Corporate Jet

Unfortunate because that means they’re really sick. What’s not unfortunate is the firm has joined Corporate Angel Network (“CAN”) and has opted to make their plane available to give free rides to cancer and bone marrow transplant patients that have to travel for treatments.

Each week, CAN enters BKD’s flight schedule into its database and arranges travel for patients when routes match up and seats are available.

“The Corporate Angel Network offers us a great chance to use our company airplane to positively affect the lives of others,” BKD CEO Neal Spencer said. “We’re proud to be able to participate in this program as part of our continuing effort to serve the communities that are home to our offices and employees.”

[via BKD]

Audited Financial Statements for NFL Ventures, L.P. Are Now Available for Your Viewing Pleasure

Today in leaked sports organization financial statements news, Deadspin’s latest scoop is the audited financial statements of NFL Ventures, L.P. and Subsidiaries. NFL Ventures consists of the following subsidiaries: NFL Enterprises, NFL Properties, NFL Productions and NFL International. These companies perform operations from broadcasting to advertising to the NFL Network to Super Bowl hospitality.

As you can imagine, professional football in the United States is a pretty lucrative business. Forget the mess that is the

Ugh. That’s an ugly one, huh? I managed to get pretty close on the math, however. If you multiply the total expenses by 1.09 and then subtract that total from the gross revenues of $1.7 billion, you get the $1.2 billion (within $15-20 million or so). Craggs writes that this “accounts for the drop in net income” although that doesn’t seem correct (I emailed him to see if he can clarify) but is correct in saying that this remittance is simply “money moving from one pocket to another.”

Other than that, the report, also audited by Deloitte, is fairly lengthy and seems fairly innocuous since the companies as a whole appear to be extremely healthy (e.g. robust working capital, growing operating profit, impressive cash flow). There was a cash distribution FYE ’10 of $136 million to the limited partners, however nothing else really stands out.

Of course if you’re a rabid football fan, this is all quite infuriating because it stands as evidence that the team owners simply want more money for themselves. And Craggs smartly points out that since the G-3 program ran dry in ’07, that left some owners in the lurch:

[T]he case could be made that the real dispute at the heart of the lockout lay between the owners who’d exploited the G-3 program to build bright new revenue-generating stadiums and those who hadn’t and now couldn’t because their peers had burned through the fund. In this light, the lockout looks like something else entirely — less a battle between management and labor and more a proxy war in which the owners, unwilling to fight each other for money, decided to extract it from the players instead.

The full report is on the next page. Enjoy.

Nfl Ventures

New CPA Sick of Bare Office Walls, Wonders When Certificates Will Arrive

This just in:

I had a question regarding when you receive those frameable versions of your CPA certificate. I passed and became licensed Oct. of 2010. The [Connecticut State Board of Accountancy] just sent my SBOA CPA certificate (the fancy frame-able one). But I have seen in other people’s (who have their CPA) offices that they have frameable certificates from their state’s SBOA, AICPA and state society (i.e. CT Society of CPA’s).

When do you get the AICPA and State Society of CPA’s version of the frame-able certificate? I want to hang them up…otherwise what else is earning a CPA good for (other than that whole making a living thing).


Just for grins, I called up the State Society of CPAs in the Constitution State only to leave a voicemail with their membership coordinator. I also emailed the AICPA’s VP of Students, Academics, and Membership, so I’ll let you know if I hear anything.

And since it’s been a number of years since I’ve passed the CPA and my memory isn’t what it used to be, I can’t really speculate as to the length of your wait. If others are more familiar with the timeliness or lack thereof as it relates to your paper trophies, please inform our inquisitor by commenting below. In the meantime, maybe he should just get one of those old Farrah Fawcett posters? Other suggestions would be welcome.

Some Internal Auditors Spent £5,000 on a Bongo Drumming Team-Building Event at a Burlesque Club

Building rapport on a team is important. Getting to know the guy/girl next to you in the trenches makes for a stronger unit and the willingness to help each other out when necessary. This can be accomplished in a number of ways. The occasional happy hour. A pool party. And yes, sometimes team building can occur in more tantalizing environment. But with musical instruments? Apparently.

Internal auditors from the Department of Communities and Local Government spent almost £5,000 on a bongo drumming team-building event held at a burlesque club. The vitriolic exposé from the Conservative Party said the department under the Labour government “policed wasteful spending”. Apparently the club’s dancers, Lady Beau Peep and “showgirl sensation” Amber Topaz, were not present during the event.

Bongos help internal auditors spend £5,000 [Accountancy Age]

This EU Guy Really Doesn’t Like the IASB’s New Magical Fair Value Plan

In case you thought the fair value debate was limited to the U.S. circa 2008, think again. A rule you probably haven’t heard of (but will likely see a version of once government debt becomes as much of a pain in the ass here as it has been in Europe) called IFRS 9 (which replaces IAS 39) would allow banks to price some government debt on their books at cost, instead of current awful prices.

Apparently the European Union doesn’t like this idea. EU Internal Market Commissioner Michel Barnier told a webcast meeting in New York this week “I do not believe this will be the first solution to the problems we face in Europe at the moment,” referring to IFRS 9‘s creative interpretation of “fair value.” Ironically, IFRS 9 accomplishes this feat by eliminating available for sale and held-to-maturity classifications for bonds, leaving only amortized cost and fair value.

IASB Chairman Hans Hoogervorst insists this plan is really only the suck less option, not some sort of magical accounting trick that will suddenly make Greece solvent and Irish banks healthy. “Under IFRS 9 impairments will still be painful but I am convinced it would be more timely done because the cliff effect is much less severe,” he said at a recent joint meeting of the IASB’s trustees and monitoring board of public officials, including Michel Barnier.

EU’s Barnier says won’t budge on accounting rule [Reuters]

Mitch McConnell Has Given Up on President Obama

Mr. McConnell said he concluded after the latest negotiations that the administration had “expressed a fundamental unwillingness” to agree to significant spending cuts.

“But after years of discussions and months of negotiations, I have little question that as long as this president is in the Oval Office, a real solution is unattainable,” Mr. McConnell said in a Senate floor speech. [WSJ]

Why Didn’t Anyone Tell Me You Can Earn Gold and Silver Medals on the CPA Exam?!

OK, this is new to me. I’ll admit I don’t know everything about the CPA exam but I try to keep up on as much as I can without actually subjecting myself to that level of masochism. With the deepest respect to those of you who do subject yourselves to that as always, I assure you.

Anyway, what’s this about getting medals for CPA exam scores?! Why didn’t anyone tell me this?

From the Oklahoma State Spears School of Business:

When she received a gold medal for her scores on the Certified Public Accountant exam, Lauren Gorman saw the result that made all of her hard work pay off. Gorman, who is working on her doctorate in accounting, said the award was important in a number of ways. “Receiving the gold medal was important to me because it recognized all of the hard work and months of studying I put into the exam,” Gorman said. “My brother, Ryan Gorman, earned the silver medal on the exam, so I also enjoyed beating him and receiving the gold.” Gorman’s brother took the exam a few years ago. Out of the thousands of students who take the CPA exam, only those who complete all four parts of the exam within one or two testing windows and earn a high score are awarded medals, according to a Spears School of Business press release. Three Oklahoma State University accounting students received the honors. Lauren Gorman and Anne-Marie Lelkes earned gold medals, and Dawn Kruckeberg earned silver.

Correct me if I’m wrong but I think they are referring to the Elijah Watt Sells medals, which isn’t at all clear in the article. A gold medal means A) you studied way too hard and B) you beat out every other candidate testing that year. It also means that you took the exam back when it was paper and pencil, as I’m pretty sure they eliminated the medals post-2004, am I totally wrong?

Prior to the computerized exam, the AICPA would award gold, silver and bronze medals to the top three performers on the CPA exam. When the exam went computerized, thereby allowing more flexibility in testing, they changed it to give the award to 10 of the highest scores in the country each year. To qualify, candidates must score in the very very high 90s on the first attempt (no retakes). Winners receive a plaque and the recognition that comes with being a bad ass high performer (even though no one asks what you got on the exam anyway).

So really… what medals are we talking about? Oh, duh, the Oklahoma State Society of CPAs issues them. It would help if the article mentioned that, I got all excited for a minute there.

Anyway, congratulations and all that.