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Accounting News Roundup: EY Settles With Partner Over Sexual Harassment | 05.03.18

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Ernst & Young settles sex-harassment suit from partner [NYP]
Jessica Casucci has agreed to leave the firm as part of a settlement over the allegations in a complaint filed with the Equal Employment Opportunity Council last month. The Post reports that John Martinkat, the partner at the center of the allegations, has been fired from the firm.

Elon Musk’s Most Dumbfounding Moments on Tesla’s Earnings Call [Bloomberg]
Last fall, we mentioned on a couple of occasions that Tony Stark impersonator and Tesla CEO Elon Musk doesn’t seem too hung up on production estimates, sales projections, among other things that Wall Street analysts tend to care a lot about. In Tesla’s earnings call on Tuesday, Iron Man finally reached his wit’s end with the number crunchers:

Musk aimed his sharpest words at Toni Sacconaghi of Sanford C. Bernstein, who rates Tesla the equivalent of a hold. After the analyst asked a question about whether the company could reach its 25 percent gross margin target on the Model 3, Chief Financial Officer Deepak Ahuja said recently imposed tariffs, more expensive commodities and higher labor costs factored into the company’s guidance.

“Yeah, but we’re talking about a 3 percent to 5 percent difference, and that’s something that we’ll solve like within three months to six months later,” Musk said. “So don’t make a federal case out of it.”

Musk wrapped that exchange with: “Boring, bonehead questions are not cool. Next?” and at one point admitted, “Sorry, these questions are so dry. They’re killing me.”

Has The TCJA Supercharged The Economy? The Data Don’t Show It. [TPC]
Howard Gleckman of the Tax Policy Center cites trends in GDP, the S&P 500, the 10-year Treasury rate, and unemployment as evidence that Tax Cuts and Jobs Act hasn’t turned out to be the “rocket fuel” to the economy at President Trump promised, at least not after the first quarter.

Private equity firm KKR to convert to a corporation after U.S. tax reform [Reuters]
KKR follows Ares Management as the second private equity shop to convert to a C corp as a result of the new tax law. The change is effective July 1st and “is designed to broaden our investor base, simplify our structure and make it easier to invest in our shares,” according to the company’s co-CEOs, George Roberts and Henry Kravis.

Previously, on Going Concern…

Greg Kyte’s Exposure Drafts cartoon touched on ghosting post-busy season.

From the archives: Auditing in China Sounds Like Pure Hell. See also: How to Cope With Post-Busy Season Depression

In other news:

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  1. The best part from the article about the EY partner “Jessica Casucci, who was made a partner in the Big Three accounting
    firm’s tax division in 2014, claimed that the company did nothing to
    help her for years,”

    I’m not sure whether it’s an error on the author’s part or whether the author really wanted to slight KPMG.

  2. I was sexually assaulted by a managing directors drunken wife at the annual Christmas party. She saw how many commas I had in my bank account and charged at me with a vengeance. Just another day in the life of a rich partner.

      1. Don’t call it a comeback, he’s been penetrating DYNAMIC CHOSEN MARKETS using his WHOLE SELF engorged by his INSTINCT FOR GROWTH for years!!!!!

          1. I haven’t been here in three years so glad to see the good trolls are still around

  3. I’m glad to see KKR is still in the game. I heard about this asset management firm in college and watched a Bloomberg tv show about it. But, has anyone else seen KKR consolidated balance sheet? To me it looks weird. The balance sheet includes intra-company accounts on it, like “Due from Affiliates” and “Due to Affiliates.” Aren’t you suppose to eliminate intra-company accounts and transactions on the consolidated financial statements? Maybe these intra-company accounts are from investment companies they own that are not required to be consolidated, according to FASB? Also, “Cash and Cash Equivalents Held at Consolidated Entities” should be either included in the regular “Cash and Cash Equivalents” account or included in the “Restricted Cash and Cash Equivalents” account based on KKR’s definition of “restricted cash.” Personally, I think it should be included in “Restricted Cash and Cash Equivalents” account. I’m not sure what Deloitte was doing during this audit. This was shoddy audit work if you ask me.

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