Sam is certainly as insightful as the Easter Bunny:
From: Sam E. Antar
To: Patrick Byrne
Board – Jonathan Johnson
Joseph Tabacco
Dear Patrick Byrne and other persons from Overstock.com:
Overstock.com’s Q2 2010 conference call is scheduled for today at 3 PM ET. I will be calling in. I expect to be permitted to participate in said call and ask relevant questions about Overstock.com. As I recall, in 2005 you allowed a lay person named Phil Saunders AKA Easter Bunny to participate in the call.
Last we heard from Patrick Byrne, the Overstock.com CEO and Farmville enthusiast, he had just disposed of 140,000 shares of OSTK via High Plains Investments, LLC, an entity 100% owned by PB. This had a few people scratching their heads, including us.
At the time, we wondered why Patsy would need to dump the shares, especially after all the excitement the company generated by turning their first profit ever in 2009 and a profitable Q1. We were hoping that the KPMG engagement team – that was doing such a bang-up job – would get some new Segways to cruise SLC but pesky independence rules probably got in the way of that.
Regardless, Q2 wasn’t expected to be a showstopper but when asked, Patsy wasn’t worried, telling Investor’s Business Daily, “Given that in 2009 we had close to $40 million of free cash flow (and $8 million net income), I think we should just continue building the intrinsic value of the business right now.”
Well! The Company reported its Q2 earnings after the close yesterday and, um, they missed the numbers badly. The $0.02/share loss expected by analysts was tripled with a loss of $0.06/share. As you might expect, the shares are taking a beating and Byrne nemesis Sam Antar finds this just a little bit fishy:
[N]ine days after Q2 2010 ended, Byrne led investors to believe that Overstock.com was going to break even in that quarter by citing previous year’s free cash flow numbers. However, Byrne did not mention that Overstock.com’s free cash flow for the six months ended June 30, 2010 was negative $54.8 million compared to negative $35.8 million in the previous year’s comparable perid [sic] or about $19 million lower.
So, there’s that. OH! And the $3 million in shares. Don’t forget that.
Technically it’s the Financial Accounting Foundation that has the handle: @FAFNorwalk and it also includes anything the GASB but really the FASB is who we expect to go on the offensive here.
They’ll be able to take on the haters with pithy commentary, give us the latest on their (less) ambitious convergence efforts and maybe, if we’re really, really, really lucky Bob Herz will spin off his own version of @CrankyKaplan. @DisturbedHerz, perhaps?
Unless you were born blind and deaf, you may have noticed that South Florida has its share of shady characters. We all know that Berns Madoff frequented the area. Plus there’s the obsessively dapper Lew Freeman, who was Miami’s go-to forensic accountant until he thought he’d just keep his client’s money.
Another model citizen/criminal in FLA is Scott Rothstein. His Ponzi Scheme managed to bring in just over $1 billion and he got 50 years for his trouble. But now the fallout from Rothstein’s little stunt is now raining hell on Miami accounting firm Berenfeld Spritzer Schechter & Sheer.
The trustee overseeing the bankruptcy of Rothstein Rosenfeldt Adler has accused Berenfeld, et al. of funneling $450 million to Rothstein.
As you can imagine, the crew over at BSS&S aren’t thrilled with the accusations and called the suit, “inaccurate and flawed,” and claim that they “conducted [our] duties professionally, conscientiously and in good faith.”
Well, the trustee obviously doesn’t see things that way and laid out several allegations, specifically, the following:
• Berenfeld improperly adjusted RRA’s income by $20 million in 2007 and by $75 million in 2008.
• Berenfeld withheld information from RRA President Stuart Rosenfeldt (who has claimed he had no knowledge of firm finances and couldn’t read a balance sheet).
• Berenfeld prepared tax returns in a way that did not distinguish between RRA operating cash and client trust funds, giving the misimpression that RRA had more available cash than it actually owned.
• Berenfeld did not pursue information about bookkeeping after RRA staff – including CFO Irene Stay and COO Debra Villegas – denied access to information about bank statements, fee income and trust accounts.
• Berenfeld “knew of wildly inaccurate RRA bookkeeping and inadequate accounting personnel evidenced by the way in which books and records were created and maintained, leading to extraordinary adjustments, tantamount to rewriting the books and records of RRA.”
• Berenfeld provided a “nebulous” letter to Rothstein to help cover up $15 million in suspicious transactions in response to an anti-money laundering compliance inquiry from Gibraltar Bank.
Now, we’ve heard that law firms aren’t the best when it comes to running their businesses, but ‘wildly inaccurate bookkeeping and inadequate accounting personnel’ that leads to ‘extraordinary adjustments, tantamount to rewriting the books,’ takes things to a whole new level. Berenfeld employee TerryTracy Weintraub gets special attention in the suit, so we can presume he’s the one responsible for knowing – and not being too concerned – about RRA’s exceptionally shitty books. Oops!
Good question, you say? If you mosey around the web for a nanosecond, you’re likely to run into an article that is debating whether or not the 43rd President’s tax cuts from 2001 and 2003 should be continued. Since Nancy Pelosi is determined to get a vote on this pre-election day, the political rhetoric on this issue is flowing like a river of sewage you dare not dream of.
To help you make sense of it all, we perused some of the tax wonkiest corners of the web to bring you some perspective. And of course, some less bright observations.
• The Tax Foundation has a breakdown of how the expiration of the tax cuts would affect “Average Middle-Income Family, by State and Congressional District.” It’s simple to find your state/district to see the effect that the expiration of the cuts would have on you.
• Over at the Journal, Washington Wire presents the biggest winners and losers from the tax cuts being extended:
Among the states that would save the most from extending the tax cuts, according to a draft of the study: Alaska ($1,959 per family); Connecticut ($1,903); Maryland ($1,756); Massachusetts ($1,831); New Jersey ($1,860) and Utah ($1,779). The lowest savings for middle-income families would be in D.C. ($1,237); West Virginia ($1,316); and Mississippi ($1,355).
• Apparently Alan Greenspan still has a shred of credibility left because he weighed in a couple of weeks ago, telling Bloomberg, “I should say they should follow the law and let them lapse.”
• The Beard doesn’t agree with his predecessor, telling the House Financial Services Committee, “In the short term I would believe that we ought to maintain a reasonable degree of fiscal support, stimulus for the economy. There are many ways to do that. This is one way.”
• William G. Gale, a senior fellow at the Brookings Institution and co-director of the Urban-Brookings Tax Policy Center, wrote in the Washington Post about five myths around the tax cuts, including their affect on small businesses:
One of the most common objections to letting the cuts expire for those in the highest tax brackets is that it would hurt small businesses. As Sen. Orrin Hatch (R-Utah) recently put it, allowing the cuts to lapse would amount to “a job-killing tax hike on small business during tough economic times.”
This claim is misleading. If, as proposed, the Bush tax cuts are allowed to expire for the highest earners, the vast majority of small businesses will be unaffected. Less than 2 percent of tax returns reporting small-business income are filed by taxpayers in the top two income brackets — individuals earning more than about $170,000 a year and families earning more than about $210,000 a year.
• Derek Thompson is a little more pragmatic than most, arguing that President Obama should extend them for a year in order to buy some time to work on comprehensive tax reform:
The president should extend the Bush tax cuts — yes, the whole dang thing — for a year to temporarily silence his critics. Then he should use 2011 to knock it down and build a tax system that’s right for the next decade. Working off a bipartisan plan, real tax reform would simplify the income brackets and eliminate the multitude of deductions and exemptions that distort the economy with bad incentives and leave hundreds of billions of dollars on the ground.
• Fred Thompson (no relation that we know of) is using his camera moxie to voice his support for the extension of the cuts:
The cuts for the rich are likely to be extended for at least two years. The cuts for the middle class are sure to be extended for even longer than that. Total cost to the deficit over the next 10 years? More than $3 trillion, and maybe more than $4 trillion.
But according to a Pew poll, the American public isn’t as sure about this as the politicians are. A slight plurality — 31 percent — want all the tax cuts repealed. Thirty percent want the cuts for the rich extended. In other words, opinion is divided.
• And even though she needed crib notes, Sarah Palin managed to tell Fox News’ Chris Wallace that letting the cuts expire ‘idiotic’:
“[Obama’s] commitment to let previous tax cuts expire are going to lead to even fewer job opportunities for Americans,” Palin said. “It’s idiotic to think about increasing taxes at a time like this.”
“My palm isn’t large enough to have written all my notes down on what this tax increase, what it will result in,” Palin continued.
Host Chris Wallace noticed that Palin did indeed have something written on her palm. “Can I ask you, what do you have written on your hand?” he asked.
“$3.8 trillion in the next 10 years,” Palin responded, “so I didn’t say $3.7 trillion and then get dinged by the liberals saying I didn’t know what I was talking about.”
But who would ever get the idea that Sarah Palin didn’t know what she was talking about?
Back in April when he was testifying before the House Financial Services Committee, FASB Chairman Bob Herz couldn’t really say one way or another what he thought about the repurchase accounting that Lehman Brothers was using.
At the time, Herz just said that FASB would work diligently with the SEC (no porn allowed), that Lehman skirted the disclosure rules and that they were going to get to the bottom of this, come hell or Barney Frank’s shrewd disposition.
“Once we’re made aware that people are trying to structure around specific provisions in the accounting literature, it makes you think about whether those provisions need to be looked at,” he told the board. “We’ve asked the staff to take a look at that and come back with some recommendations in the pretty near term,” he said.
Now that it’s officially August, that means a few things:
1) Everyone around starts bitching how summer is almost over
2) The tax compliance folks take a field trip to the nearest Radio Shack to stock up on their batteries for the two and a half month stretch and
3) This year’s interns starting getting their offers for fulltime employment.
This of course means that your coffee jockeys and Xerox operators will start stressing over everything that they’ve ever done this summer and whether it’s good enough to be blessed with the honor and privilege to attain fulltime Big 4 employment.
So if you veterans out there have been doing your job, you’ve shaped some fine, young, booze-drenched minds into someone that is going to your new associate next fall. If you feel like giving them some credit below. And interns, if you’ve gotten some good news (official or otherwise) jump for joy below and share your experiences – the good, the bad, the truly mortifying (extra bonus points here).
UPDATE: Straight out of the rumor mill, we’ve heard that some E&Y interns have already found out that they won’t be partying with Mickey & the Gang:
There was a round of interns who were let go on Friday. They were told to come in to the office and terminated, offers not given. Saves the expense of sending them down to Disney (the interns that remain leave this Wednesday). There were at least 3 let go in NY.
Eight years ago on this this glorious day, the ‘Public Company Accounting Reform and Investor Protection Act’ (in the Senate) and ‘Corporate and Auditing Accountability and Responsibility Act’ (in the House) came together to bring us Sarbanes-Oxley.
Most of you didn’t realize it at the time but this particular piece of legislation created thousands of new jobs at Big 4 firms, only to find those people out on their asses a few years later. Oh, well. Luckily, there are plenty of options with you holders of the accounting degree.
• The final version passed the House 423-3 – Jeff Flake (R-AZ) and Ron Paul (R-TX) were two of the three voting ‘nay,’ but Flake and Paul pretty much vote against everything.
• It passed the Senate 99-0 but our friend Jim Peterson has said, “the inability of Sarbox to reach global-scale problems shows the futility of legislation so politically anodyne that it passed the US Senate [unanimously].”
• GWB called SOx, “the most far-reaching reforms of American business practices since the time of Franklin D. Roosevelt.” This, many will argue, has now been trumped.
• The PCAOB! If it wasn’t for Sarbanes-Oxley, there would be no PCAOB. Well, and some recent help from the SCOTUS.
Anyway, we’ve probably said enough. If you have fond wishes or memories of Sarbanes-Oxley that have transpired over the last eight years, cut loose in the comments.
Mary Schapiro needs constructive comments from the peanut gallery because this thing is a week old and since some people at the Commission have the attention of Tom Petters, they can’t afford to lose focus.
Just jump over the Public Comments page and let ‘er rip. Any section you want get down with your wonky financial reform knowledge is welcome.
It has not even been a week since the President signed the regulatory reform legislation into law, but at the SEC we are already working to fully implement the dozens of studies and rulemakings required of our agency,” said Chairman Schapiro. “We recognize that the process of establishing regulations works best when all stakeholders are engaged and contribute their combined talents and experiences. We look forward to preliminary public comments in these areas.
Not only that! The SEC needs more people. This 2,000-some odd page behemoth is putting asses in cubes and more of the kicking ass and taking names will be had. Just two ways you can join the good times going on at the SEC.
A couple of weeks ago we told you about fired Tyco accountant Jeff Weist who wasn’t really into, among other things, mermaid greeters and costumed wenches. Whether or not he’s not a fan of starfish bikinis wasn’t the issue, it was the principle of the matter.
You see, some Tyco executives got into a bit of trouble back in the day for some accounting fraud but the kicker was the footage of a four-day “Roman orgy” rager in Sardinia. The jury didn’t have much problem throwing the book at former CEO Dennis Kozlowski and former CFO Mark Swartz after concluding that awesome party = crooked execs. Weist figured the company didn’t really need more trouble so he raised a fuss over the expenses for another epic bash that was being planned for execs in the Bahamas.
FOX Business Network’s Neil Cavuto got wind of this and had Weist on his program only to do most of the talking. When Weist was able to squeeze a word in, he didn’t exactly come across as a fun-loving guy but more like your typical accountant that would probably frown on these types of shenanigans. Nevertheless, Weist was given the boot and that has caused a bit of stir – specifically, Weist filing suit against Tyco.
Anyway, a guy that knows a little something about awesome parties – Dennis Kozlowski – caught Cavuto’s little program and felt obligated to write a letter (a copy follows in the following pages) expressing his disappointment.
Koz writes, “As I write this letter in my 6′ x 9′ cell jail cell, all I can muster in response to your show is ‘My, how things have changed.’ “
Right! Like, how on Earth can you justify stingray feedings? COME ON. You want sexy men and women running around in togas, that’s understandable. You just raid your linen closet and you’re good to go. But can you believe someone would throw a corporate bash in the Western Hemisphere? Shameful.
He goes on to hem and haw that if it wasn’t for some idiot deciding to tape his little bash in Sardinia, which was later shown to 12 Manhattan jurors, he wouldn’t even be in this predicament. Further, DK would like to know where the outrage is re: the mermaids, wenches, tattoo artists, bonuses and so forth, “With the Tyco extravaganza where employees were paid ‘bonuses’ to attend, you have to ask where is the outrage?”
Well? Outrage? Anyone? The man is in a prison upstate and he can’t hear you!
From the very first day we swapped our totally unprofessional Twitter account for one with less F-words and started finding accountants to follow, we have been constantly impressed with the concentration of accounting folks in social media. But in the constantly-evolving world of Internet communication, there are always a few bright spots that stand out as ahead of the curve, and the New Jersey Society of CPAs’ communications strategy sets itself apart as one such bright spot.
We were able to get a few moments with NJSCPA’s Don Meyer to discuss their strategy, successes and the drive behind their major social media push of the last three years. Operating with three goals in mind – driving member retention through a greater level of engagement for current me orking and learning opportunities for current members; supporting existing membership acquisition programs – the NJSCPA has learned to use the power of blogs and social networking to reach potential, new and long-time Society members as well as CPA exam candidates across the country. Turns out that we got way more insight into the NJSCPA social media brain than we can share here and were terribly impressed by their varying campaigns, daring strategy and dedication to delivering information.
AG: First things first: let’s talk about your social media campaigns. What sort of things are you heavily involved in and why?
DM: We launched our first blog, NJSCPA Exam Cram, about three years ago to help guide student members and exam candidates through the exam process. We’ve been on Facebook for almost two years and have attracted more than 1,800 fans. We developed our page to maintain contact with student members who sometimes change mailing addresses and emails following graduation, but we now find that the page is a valuable source of professional and Society information for members in all age groups. Our LinkedIn group, launched almost two years ago, serves much the same purpose, providing information for our members and a place for them to connect. We jumped into Twitter about a year ago. We currently have more than 700 people following us. Our Twitter page is linked to our news blog, CPA Observation Post. We use those tools to provide daily professional and Society updates, but we also use Twitter and the blog to help NJ accounting firms promote themselves.
AG: Is there anything you’ve tried that hasn’t worked out as well as you’d hoped?
DM: We tried a financial literacy blog, but we couldn’t generate much interest. I think there may be too much competition out there and we couldn’t find the right niche. Our financial literacy Facebook and Twitter pages have not taken off as quickly as we had hoped.
AG: Anything that really surprised you when it comes to social media?
DM: I was not a believer in Twitter before we started using it extensively last year. Now I think it’s my favorite social media site. I think it’s a great tool for disseminating news and information quickly and easily. I’m also surprised how successful our Facebook advertising has been. I was skeptical that anyone on Facebook would click on ads promoting our page, but it’s played a key role in helping us promote our presence.
AG: The NJSCPA Exam Cram blog has been around for awhile (we noticed it quite some time ago) and seems to get a great response. Can you tell us more about how this came about and how you select exam candidates to participate? Do you follow them after they’ve successfully completed the exam?
DM: Many of us involved in the Society’s student outreach programs have never taken the exam, so we felt we needed to get the perspective from aspiring CPAs who had experienced the ups and downs. This way if a student or candidate asked us a non-technical exam question (e.g. in what order should I take each section, how should I study, how do you feel when you fail one part of the exam, etc.) we could refer them to the blog. We started out with one blogger but soon discovered that work and personal commitments would preclude any blogger from posting as often as we would like. So we gradually added more bloggers. At the moment, we have five CPA Exam candidate bloggers and one staff person blogger, Janice Amatucci. We don’t have a set procedure for how we pick our bloggers. We ask student members who have been involved with the Society through one of our various student programs or simply ask for volunteers via email or at events. The first five bloggers all passed the CPA Exam and continue to contribute to the NJSCPA by writing articles, serving as team leaders at student events or attending other Society events. To date, we’ve attracted more than 72,000 pageviews.
You can find the NJSCPA all over the place online here.
Before you go!
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Going Concern now has thousands of open accounting jobs.
Technically it’s the Financial Accounting Foundation that has the handle: 
Good question, you say? If you mosey around the web for a nanosecond, you’re likely to run into an article that is debating whether or not the 43rd President’s tax cuts from 2001 and 2003 should be continued. Since 
Now that it’s officially August, that means a few things: 
