A new survey of more than 300 chief audit executives (CAEs) by Grant Thornton LLP finds that while nearly half believe that the shifting regulatory landscape poses the greatest threat to their company, a vast majority (88%) do not believe that the Sarbanes-Oxley Act (SOX) should be repealed. Of those that believe SOX should be repealed, the cost of compliance is the main reason for doing so. “Since the passage of SOX, organizations have had to dedicate significant resources to comply with a host of new laws and regulations,” noted Warren Stippich, a Chicago-based partner and Grant Thornton’s national Governance, Risk and Compliance solution leader. “Based on discussions with various CAEs during the survey process, many believe that SOX brings a continued focus by management on financial and governance-related controls. However, CAEs believe that compliance audit processes are now well-defined and are currently exploring ways to contribute value creation to the organization well beyond compliance monitoring and reporting.” [GT]
Category: News
What Are Your Questions for a Forensic Accounting Partner?
Afternoon, gang. As the busy season winds down, you might be thinking about your next career path. Lots of you have expressed interest in forensic accounting and fraud investigations and as luck would have it, I got introduced to Derek Royster, a partner with RGL Forensics in Charlotte, North Carolina. From his bio, Mr. Royster has been with RGL since 1997, having worked extensively with insurance companies and attorneys focusing the scope of his career on forensic accounting, the measurement of economic damages and litigation support. He has lots of letters behind his name and has provided testimony as a damage expert witness.
Mr. Royster has agreed to discuss his career and other aspects of a forensic accounting with GC but since you people are the ones with career decisions to make (whilst I just write about it) we thought it would be best to get your questions for Derek. So whatever you want to know about a career in forensics but were afraid to ask, this marks your opportunity to get the answers.
Leave your questions for Derek in comments below or (email them to us) and we’ll get the answers for you and post our discussion with him.
And Now…CPAs Acting Out a Scene from the Empire Strikes Back
Last year the Pennsylvania Institute of CPAs went on a video production bonanza that incorporated Snuggies, public service announcements from the 1980s and your breathlessly judgmental friends. As impressive as those videos were, putting a CPA spin on a climatic scene from the best film in the Star Wars series takes things to a whole new level.
The breathing at 0:39 and the subsequent scream are priceless, as is the cough at 0:55.
Nearly One in Four of Your Co-workers Is Not Down with March Madness Pools
Our friends at Vault put together a fun little survey on your gambling habits at work and, no surprise, nearly 75% of you participate in a March Madness pool. What about the remainder? Well, there are the puritanical types who probably leave Bible verses on your desk, “My office is awash in sinners. Some day a real rain will come and these cubicles will be cleansed.” But then there’s the jerks who are simply all business:
“The next time I see [colleagues using work time to focus on office pools], I’m going to put an anonymous note on all the bosses desks to make them aware” warns one respondent. (Presumably they fall into the 22 percent of respondents who disapprove of workplace betting altogether.)
If you know someone who is capable of this level of dickishness, the temptation to violently pinch them with a stapler remover is great, however we’d ask that you refrain from this until they actually make good on their threat. Of course if you impress upon them that there is a valid purpose for studying a bracket, maybe they’ll let it slide.
Vault 2011 Office Betting Survey
View more presentations from philstott.
Ohio Mistakenly Notified a Woman That She Was Due a $200 Million Tax Refund
Ohio, like many states, is in a bit of a budget pickle and perhaps this level of vigilance is part of the reason.
Denise Bossetti received a notice in the mail that indicated she was due $200 million but was skeptical (even with the letterhead).
Apparently 9,700 Ohioans received notices of inflated refunds and the Ohio Department of Taxation claims this is a new one and that “The problem has been fixed.” Probably a good idea.
Woman gets $200 million tax-return notice — but it was mistake [Sandusky Register via AT]
Here’s How This Year’s NCAA Men’s Basketball Tournament Would Shake Out If It Were Based on Accounting Research Production
It’s that time of year again where thousands of Americans spend countless hours of company time researching basketball teams and agonizing over which #12 seed will pull a minor upset only to have someone from marketing, who doesn’t know a damn thing about basketball, to win the pool. It also marks the time of year when the accounting faculty at BYU puts outs their own simulated version of the tournament, played out based on the productivity of accounting researchers over the last six years.
As you can see, a lot of similar schools are making a run again this year including Texas (last year’s simulated champion) and Michigan State. If you’re interested in what this year’s non-bracketed accounting rankings are, you can check them out on the campanion research page.
Games start on Thursday tomorrow (obviously I’m not in a pool) so if you’re having trouble filling out your bracket, this seems like a good place to start. You could do a helluva lot worse when it comes to strategy.
Accounting News Roundup: Will E&Y Take the Brunt of Lehman’s Bankruptcy?; Texting Japan Donations; Richard Hatch’s Light Sentence | 03.14.11
Japan Battles Nuclear Meltdown as Millions Without Power, Water [Bloomberg]
Workers battled to prevent a nuclear meltdown after a second blast rocked an atomic plant north of Tokyo, as helicopters and convoys of army trucks headed toward areas worst-hit by Japan’s strongest earthquake. No large release of radiation was detected after the explosion, which didn’t breach Fukushima power station’s No. 3 reactor and followed a build-up of hydrogen gas, Chief Cabinet Secretary Yukio Edano told reporters in Tokyo today. The risk of a large leak is very small, he said.
BOJ Takes Action to Bolster Money a href=”http://online.wsj.com/article/SB10001424052748704893604576199261875222164.html?mod=WSJ_hp_MIDDLETopStories”>WSJ]
The Bank of Japan jumped into action Monday to temper the economic blow from the earthquake, tsunami and nuclear emergency that hit northern Japan, doubling the size of its asset-purchase program and pouring a record 15 trillion yen ($183.17 billion) into money markets to ease liquidity concerns. “What we were most concerned about was the possibility that increases in anxiety and risk-aversion moves would negatively affect the real economy, so we judged it appropriate to mainly boost purchases of risk assets,” BOJ Gov. Masaaki Shirakawa said after the bank’s policy board meeting, which was cut to one day from two because of the crisis.
Lehman Auditor May Bear The Brunt [WSJ]
Federal investigators have grown increasingly doubtful they can prove Lehman executives violated the law by using an accounting maneuver known as Repo 105, which obscured the amount of risk Lehman held, making the firm’s finances look better than they were, The Wall Street Journal has reported. But Ernst & Young, Lehman’s auditor, is fighting fraud charges filed in December by the New York attorney general for, among other things, allegedly failing to adequately follow up on a whistleblower’s claim that Lehman was misstating the value and size of its assets.
Texting Japan earthquake donations [DMWT]
$10 will be added to your next phone bill for contributions to the following charities: American Red Cross, Salvation Army, Convoy of Hope, GlobalGiving and World Relief.
Big 4 Bias – Can We Ever Overcome It? [BDO/CEO Insights]
BDO Global CEO Jeremy Newman wants some respect!
Nine Months is Not a ‘Severe Punishment’ Fitting Survivor Winner Hatch [Yahoo]
Hatch famously failed to pay the taxes due on the $1 million prize won from the first season of “Survivor” more than 10 years ago. He was convicted of tax evasion and subsequently served more than three years in prison. He also, obviously, was ordered to refile amended tax returns that accurately reflect his 2000 and 2001 income and pay the income taxes due. Though any reasonable person disinterested in spending any more time in federal prison would have immediately filed corrected tax returns and pay the taxes due, Hatch failed to do so, and according to the Hollywood Reporter, he has been sentenced to prison for an additional nine months. Hatch was released from prison in 2009, and since then has been serving a three year term of supervised release.
India’s IFRS Carve-Outs and the Pipedream of Global Accounting Standards [The Accounting Onion]
If IFRS adoption was ever a goal worth pursuing, it has long since vanished, and the political motivations of its remaining supporters are now deprived of any pretense of legitimacy. It’s time to let the rest of the world “countdown to IFRS” if they want to, but If the SEC were really serious about protecting investors, it would scrap the IFRS roadmap. In it’s place, there should be a new plan for making U.S. GAAP unquestionably the pre-eminent financial reporting system in the world.
AIG Adopts Poison Pill to Preserve $65 Billion NOL [TaxProf Blog]
AIG, like GM and Citigroup before it, has adopted a poison pill to preserve its $65 billion NOL by ensuring that no investor acquires a 5% stake and triggers the change of ownership rules.
LECG Fire Sale Continues; San Fran Forensic Accounting Group Joins FTI Consulting
After last week’s news of LECG Corp. selling off pieces of itself to FTI Consulting, Grant Thornton and WeiserMazars, today the company announced that it has also sold its forensic accounting practice in San Francisco to FTI:
Professional services firm LECG Corporation (NASDAQ: XPRT) announced today that it has transitioned its San Francisco forensic accounting practice to FTI Consulting, Inc. The transition involves approximately 25 employees.
Not only that but the pieces left are also up for bid for anyone interested, although common shareholders shouldn’t expect to see anything:
With the advice of its restructuring advisors, LECG continues to negotiate the transition of all practice groups remaining after today’s transaction and transactions disclosed in previous public communications. LECG will use the proceeds from all practice group transitions to repay the $27.8 million in principal outstanding under its credit facility. The company will use the balance of any proceeds to make payments to other creditors. Contractually, if there is any remaining value available to equity holders, it would be first allocated to the company’s outstanding preferred stock. The company believes that the transitions and these transactions will not result in any proceeds for the common shareholders.
The Philly Business Journal reports that the company still has about 500 employees left but at the rate things are going, they’ll be elsewhere by St. Patrick’s Day. Good luck to everyone affected.
LECG Transitions Parts of Forensic Accounting Practice Group to FTI [LECG]
LECG jettisons another practice group, this time in San Francisco [PBJ]
Earlier:
WeiserMazars Moves into Chicago as Part of Acquisition of LECG Units [GC]
Accountant, Who Avoids Confrontation ‘as a General Rule,’ Guilty of Hitting a Trashman with Her Car
Question for the group: what could have been going on in this woman/accountant’s life that caused her to do the following?
An accountant drove into a bin man ‘in a rage’ after his lorry blocked the road, a court heard. Frances Henshaw, 43, was alleged to have snarled ‘like a rabid dog’ when she got stuck behind the wagon. She was hauled before the courts after bin man Craig Kelly claimed he was hit by her car as she forced her way through a tiny gap. Henshaw was found guilty of driving without due care and attention, leaving the scene of an accident and failing to report an accident.
We’ve come across a fair share of accountants that resemble a rabid dog (i.e. crazy eyes, violent biting, uncontrollable drooling) so that description is certainly believable but she does fall back on the passive nature of a many a beancounter:
She said: “They’d done a few clumps of bins and they’d made no effort to let me past. I felt there should have been an occasion where they acknowledged my presence. “I wasn’t shouting. I never shout at anyone. I avoid confrontation as a general rule. I would have stopped if I had hit someone. It’s just not something that’s in my nature to do, it’s incredulous to me.”
Raging accountant ‘drove her car into bin man who blocked the road’ [MEN]
Another Accountant Superhero Is in Our Midst
You may remember back in January when a PwC employee put down his pencil to – according to his farewell email – fight crime as the caped avenger. At the time, we expressed concern not only because there can’t be two Batmans but because…well, we’re just skeptical of any cube-dweller’s ability to make the streets safe for the rest of us.
Despite our doubts, that hasn’t stopped another accountant, Irene Thomas (aka Nyx), from taking to the streets to fight for truth, justice and all that crap.
By day Irene Thomas says she is a ‘boring’ accountant who lives in a cramped New Jersey flat. By night she puts on a black catsuit and mask with a red belt, gloves and boots, gets into her Honda Accord car and comes out the other side of the Lincoln Tunnel in Manhattan as ‘Nyx’. The 21-year-old is just one member of the Real Life Superhero Project, a group of humans who aim to bring a helping hand to people everywhere and thwart crime on city streets.
It doesn’t appear that Nyx wasn’t born with natural crime fighting abilities, as the Real Life Superhero Project has documented her training on their website. As with all superheroes, there has to be another side to Nyx that we don’t get to see. What kind of pain or personal aguish has she gone through that has caused her to take up this cause? Does the thought of spending hours upon hours in a cube farm staring at spreadsheets haunt her dreams to the point of insomnia, thus leading to the spending her nights running around the City a dominatrix outfit? Is she looking for more from life besides a good paycheck, generous benefits and half-days Fridays during the summer? Or is it something deeper?
‘Like the night, I cannot be proven or disproven to certain degrees – and also much like the night, when morning comes, there will be no trace of me.’
Jesus, who knows. Fly-by-night psychoanalysts are welcome to weigh in now.
BREAKING: Some Banks Are Uncooperative with Auditor Requests
From the mailbag:
Just thought I’d share some developments from the audit world. Some financial institutions which respond to our audit requests are adding disclaimers such as the following:
“…The recipient acknowledges that [the respondent] does not represent and warrant that the information is complete and accurate. The recipient further acknowledges that the information may not disclose the entire relationship between the customer and [the respondent]…”
Basically, this is making the confirmation process entirely pointless as banks are saying that even if they sign and respond to a confirmation, they aren’t guaranteeing that their response actually means that the balance is accurate. They are also doing this in the fine print attached to a lot of confirmations so it wasn’t entirely obvious until some people started actually reading that fine print. This is causing issues as we can no longer rely on these confirmations for our audit procedures if they contain such a disclaimer.
(UPDATE, VIDEO) GW Accounting Professor Gives Qualified Opinion of Referee’s Services, Gets Ejected
Up until now, we’ve heard more about accounting professors losing their clothes (shirt, pants) than anything their tempers. But today, we learned about a prof who was expressing an expert opinion (perhaps a little too strongly) on the value of a service:
An accounting professor and high-profile supporter of the GW Athletics program was escorted from the Smith Center Saturday for verbally confronting a referee over a foul call. From his sideline seat on the court, Robert Kasmir yelled at the referee over a foul call on sophomore forward David Pellom, prompting his removal from the court by a member of the athletics department. “Basically, I told the ref he was the worst ref I’d ever seen and he wasn’t worth the $1,600 dollars they were paying him and that was it,” Kasmir said. “And then he ejected me from the game.”
We’d be remiss if we didn’t mention the fact that Mr Kasmir isn’t that bad of a guy:
Kasmir’s ejection came after he and his family were honored during the second half for their contributions to GW Athletics. Kasmir, who received his MBA from GW in 1974, has made at least one donation to the University ranging from $10,000 to $24,999, according to financial documents. Kasmir said the ejection would not keep him from making further donations to the University in the future.
But as for that referee, Kasmir has a very unqualified view, “I think the official should never be allowed to officiate another game in the Atlantic 10, in college basketball, in the United States.”
UPDATE: From the Post for those of you that like visuals:
Professor, donor tossed from basketball game [GW Hatchet via Deadspin]