FASB issued Accounting Standards Update No. 2011-03 to improve the financial reporting of repurchase agreements, also called “repos,” or other transactions that govern the transfer and repurchase of financial assets. The new guidance gives companies some new parameters to consider in determining whether a transfer is in fact a sale of an asset, and therefore qualifies for sale treatment, or whether an entity has retained some control over the asset and therefore cannot claim to have sold it. [CW]
Category: News
Single Fat Accountant Also a Bit of a Hypocrite, Watches Royal Wedding
A couple of weeks ago, the Single Fat Accountant was suffering from a serious case of Kate and Willy envy. He had called for a blackout of all the Royal Wedding festivities but because he is A) fat; B) single and C) and accountant, the nuptials went on as planned.
Realizing the futility of the situation, SFA eventually succumbed to the pressure of being of loyal British subject (or maybe a party-pooper of a boss) and turned on the teevee to watch the historic event.
Realizing that he might catch some flak for this flip-flop, our hero felt the need to explain his actions:
I was feeling left out by not watching TV. I felt I was going againt the odds with the large proportion of people. It just felt wrong not to watch the wedding. Though my views in previous blog remain unchanged. I am thinking what this says about me:
• I like to belong rather than be the odd one out
• I am bit of a hypocrite!
• I am not strong enough to be an independent thinker.
• I just wanted to see how Kate looked! She looked great.
Kate did look lovely (and catching glimpses of Pippa was a nice bonus) but I can’t help but feel that SFA is buckling like a cheap belt here. On the other hand, it’s conceivable that our fat, lonely friend may have been thrown out of his country had he not complied. If anyone wants to weigh in – being supportive or sharing their own tale of Royal Wedding fever – feel free to do so now.
Wanted: Auditors for Inventory Count Who Won’t Get Queasy at the Sight of a Few Dead Chickens
Did I say a few?
The Alabama Poultry and Egg Association estimated that five million chickens probably died in the tornadoes, which slammed the northern part of the state, where the industry is centered.
Not to worry though, you’ll still be able to get your McNugget™ fix:
That alone isn’t enough to disrupt chicken supplies nationally. The state usually produces about 21.5 million chickens in a week. The U.S. produces roughly nine billion chickens annually.
Storms Destroy Hundreds of Poultry Houses [WSJ via JDA]
Accountant Demonstrates Poor Athleticism in Most Unfortunate Way Possible
Today in doing a disservice to accountants everywhere, Matthew Benjamin Mundy, a double-entry maven in Australia, was fined $500 for accidentally hitting an off-duty federal police officer with an egg.
Apparently MBM was attempting to hit his friend with the ellipsoidal embryo container, missed, and hit the officer who was sitting at a café. Accidents happen but Mundy’s employer better hope his professional misfires are far less material. [ABC]
Dilemma: Administrator Concerned About Partners Giving Significant Others No-show Jobs
Today in predicaments from across the pond, a concerned employee wonders if a couple of partners who have given their wife and girlfriend no-show jobs are up to some financial shenanigans. Of course this prospecting employee is thinking about approaching said partners about this. What could go wrong?
The partners of the LLP I work for have added their wife and girlfriend to the payroll of the company even though neither said wife or girlfriend actually work here. I believe the reason being is to reduce profit, partner remuneration etc to ultimately reduce the amount of tax paid by the partners at the end of each financial year.
The ‘salaries’ are fairly low (£16,500 [$27k USD] and £13,000 [$21.4k USD] per annum) and Tax and NI etc is processed as normal through PAYE. One of the ladies even has student loan deductions. Periodically each lady will have a large ‘bonus’ of around £15,000. I assume the payments go directly in the wife/girlfriend’s bank accounts.
I’m sure there must be some sort of law against this as it seems, to me, too obvious to be a loophole. Does anyone one know what these laws are and the repercussions should the partners get caught?
I work as an administrator for the company and rely solely on accounting and payroll software and therefore only have very limited knowledge on the subject. I am hoping to approach the partners on the matter so any help/information would be greatly appreciated 🙂
Maybe this “administrator” has too much time on their hands and is simply jumping to conclusions (which we applaud) but then again, a no-show job is a no-show job. They are violating NCAA rules or anything but for the puritanical types this could seem a little sketchy.
Berkshire Hathaway Audit Committee Has Some Thoughts on This David Sokol Matter
Namely, he violated Berkshire’s code of business conduct and ethics and violated his duty of candor to the WB, Munger and the rest of the company.
General Electric Is Good at Things Other Than Tax Planning
While everyone has basically forgotten how bent out of shape they were at GE for their tax savviness (all legal!), the company’s CFO mentioned today that earnings are looking decent regardless.
At the company’s shareholders meeting Keith Sherin said “This is the best earnings outlook we’ve had in the last 10 years,” which indicates that tax planning might not be everything. [Reuters]
Woman Realizes Her Dream of an Accounting Degree After 19 Years
Whenever you feel unmotivated to get your accounting degree or are concerned you’ve made an awful career decision, just think about this Iowa woman who worked 19 long, tedious-ass years to get her bachelor’s in accounting.
We’re totally OK with this woman being too busy to take the CPA exam, this is the ultimate excuse to be unable to get through the exam in 18 months. Bow to her greatness and insantly feel guilty for being greedy when it comes to compensation and slacking so hard on the job.
In 1992, a gallon of gas cost $1.13, Bill Clinton won the presidential election and Kathy Vitzthum took her first class at Iowa State University.
Vitzthum has taken about one class each and every semester since. For 40 semesters. Since Miley Cyrus was born. Since Charles and Diana split up. Since Ross Perot pulled out his charts and pointer on TV. Since the World Wide Web was in its infancy (and text only).
On May 7, the 48-year-old Vitzthum, who lives in Slater, graduates summa cum laude from Iowa State. She has achieved her goal — a bachelor’s degree in accounting — after juggling family and career with finals and papers for 19 years.
Now, we don’t judge as we all have our different career paths but while congratulating this woman for her epic accomplishment, it’s wise to point out that we don’t necessarily recommend this bundle of choices for just anyone. It’s easiest to go college, then pass the CPA exam or start work (it’s usually easiest to do the exam in-between school and starting work), then get married and/or have kids. You are welcome to do these in any order you like, we just wouldn’t feel right if we didn’t point this out.
I’m not sure what you all were doing in 1992 but I was in 6th grade. Think about that for a minute next time you hate your life and/or career decisions.
Some People Take Exception with the Idea That Investors Don’t Care About the Lack of Audit Firms
That said, it’s not as if investors can be everywhere at once. Audit committees could stand to get better at sharing information.
Liz Murrall, director of corporate governance and reporting at the Investment Management Association, strongly refutes this claim. “Investors do care”, she insisted, saying “no one wants to see an auditor in place for 50 years”.
However, Murrall warned that investors cannot engage with every company, and therefore cannot be expected to watch over audit committees’ shoulders to check every appointment. “Shareholders want the option of being involved, but don’t want consultation to be mandated – they don’t always have the time or resources.”
Transparency is the order of the day, according to the IMA. If audit committees increased disclosure about the tender process, shareholders would be more motivated and able to engage, boosting choice and competition in the market.
Investors ‘do care’ about audit competition [Accountancy Age]
McGladrey Suing Three ‘Rainmakers’ Who Defected to JH Cohn
That, according to a report in the Minneapolis/St. Paul Business Journal:
At risk are millions of dollars, the company’s reputation and the entire health care practice now led by a Minneapolis partner, according to a lawsuit recently filed by the accounting, consulting and tax firm against the three rainmakers who went to New York-based J.H. Cohn. Bloomington-based McGladrey and the former partners said they’d rather not discuss the dispute. Public records show that McGladrey is seeking a federal court order to keep the partners away from their clients
And unfortunately, that’s all we know. The MSTPBJ is behind a paywall (and my publisher is currently not springing for a membership) so we can’t really tell you much more than that. But we do love a good Benedict Arnold story, so we called around and are anxiously awaiting both firms to call us back. In the meantime, if you’re in the know get in touch or discuss below.
McGladrey & Pullen Names Joe Adams as New Managing Partner and CEO
Joe Adams is 30+ year vet of the firm and gets some high praise from the M&P Chairman of the Board, Jerry Bourassa, “His commitment to quality and McGladrey’s success make him an excellent choice for the Managing Partner position. I’m looking forward to working with him in his new role overseeing McGladrey & Pullen’s national strategy and business operations.”
Joe takes over for Dave Scudder who turned in his papers back in February. Joe was kind enough to give Dave a nod of appreciation in the press release, “I’m looking forward to these new responsibilities, and continuing the excellent work that Dave Scudder did in this role.” He gets the big chair on May 1st and we assume cake and punch will be served but an appearance by Natalie Gulbis has yet to be confirmed. [McGladrey]
Apparently Sponsors of the Louisiana Fair Tax Act Think You’re Stupid
They want to replace a mildly progressive tax with a decidedly regressive tax and make the argument about fairness? You can have an articulate argument about whether income taxes deter economic development. You can have an argument about whether such taxes lead to out migration of people and firms. Heck you can have a philosophical argument about whether society should be able to tax the fruit of your labor (or your trust fund). But you cannot argue with a straight face that replacing an income tax with a broad based sales tax (one that taxes necessities) is fair. That insults people’s intelligence. [David Brunori]