We just received word that Pandora is blocked for Uncle Ernie's troops. We're thinking if BW had got ahold of this news, E&Y would have dropped out of at least the top five. We think this is a strange way to wish everyone a nice holiday weekend but we understand that everyone shows love differently. Anyone else out there now working in eerie 2001-esque silence? Confirm for us or discuss in the comments.
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Irony in the Daily CPA Letter
From a reader:
Here are two headlines, in this order, on CPA Daily Letter this morning. Fannie Mae decides to rent to people that are currently not able to pay their mortgage? Peaked my interest and made me ask the question, “WHAT?” Then, I scrolled down and read the second headline…and then thought…well, yeah…that would be the necessary outcome…time for a new business model anyone?
While the reader has a good point (i.e. Fannie Mae is still a giant shitshow and should seriously consider going back to the drawing board) we’re more curious as to who over at the CPA Letter has the sense of humor. Then again, it could be one giant coincidence.
The Latest Solution to Your State’s Fiscal Troubles
CNN, who sometimes puts out pure and utter crap, has issued a 50-state ranking of potential tax revenues that could be earned if marijuana was legalized and taxed.
The ranking is based on “state-by-state marijuana consumption, from Jeffrey Miron (Harvard University, Department of Economics), Budgetary Implications of Marijuana Prohibition,” according to Paul Caron at TaxProf Blog. The total tax revenue projected by the study is $778 million.
Shockingly, California would benefit the most (especially since they won’t get additional money from Ahnuld), earning an estimated $105 million. A couple of notable states in the top twenty include Colorado and Oregon who both jumped considerably on the list as compared to where they rank in population. In other words, ganja use per capita is higher there (yes, that’s an intentional pun).
What the study fails to incorporate is the increase in sales tax revenues that would result from the surge in junk food and movie ticket sales. Despite this omission, the study demonstrates that all states would earn money that they would otherwise gone to some weird dude that only has black lights in his apartment.
Since this partial solution makes entirely too much sense, we expect the majority of states to continue to cut education and public service jobs to meet their budget goals.
Projected Revenues From Marijuana Tax [TaxProf Blog]
Because There is No Shortage of Criminals
Editor’s Note: Want more JDA? You can see all of her posts for GC here, her blog here and stalk her on Twitter.
Over the weekend, I had the pleasure of speaking with Sam Antar of White Collar Fraud. I won’t give him too many props (lest he think his wily criminal charms got to me) but our conversation was both relevant and disconcerting.
In case you aren’t acquainted with Sam, he’s the ex Crazy Eddie CFO who ripped them off and now does speaking tours talking about, well, crime. But there’s a lot more than that at work here, that’s just his schtick.
So what did I learn?
I believe my editor thinks I’m a doom and gloomer so here’s some good news: besides suggesting we start training more qualified forensic auditors fresh out of school, Sam insists there is a chance for real financial reform.
Do you take your reform advice from an ex-criminal? I remind you here that a tax cheat is in charge of the IRS, do with that information what you will.
Anyway, the point here is that financial statements lack integrity. Without integrity, investors are groping in the dark and criminals are able to execute their schemes. Foreign investors are scrambling to leave US capital markets, could that be because our statements are – generally speaking – unreliable?
So. Sam’s 3 step plan to restoring sanity to financial statements. Take it for what it is.
1. Redefine audit committees as truly independent. No member of the audit committee should derive a salary or other compensation from stock options or stock holdings. Period.
2. Committee members should be qualified. CPAs and securities lawyers are qualified to sit on an audit committee, not marketing managers and other “average” sections of the corporate population.
3. Forensic accounting should be standard curriculum in university accounting programs. Don’t eliminate 404(b), if a corporation can’t afford the audits required to be a public company, then don’t become one.
We’ll have to agree to disagree on that final point, I don’t think tedious audits are the solution. However, perhaps if we had more qualified auditors out in the trenches, I might be inclined to be slightly less skeptical about the effectiveness of more softcore audits.
Stay tuned as we’ll be picking Sam’s brain again soon.
GC Posts Referencing Sam Antar:
Grant Thornton: Patrick Byrne’s Pants Are on Fire
Obvious Sign of Fraud: You’re Having Sex with the Client