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Footnotes: PwC Gets Into the Law Business; The Bongs’ Great Idea; Post This | 08.14.14

Posted on by Adrienne Gonzalez

Diversity of services key in changing accounting industry This will definitely end well [WCBJ]

Atlanta accountant and three others charged with insider trading Four men were charged with insider trading, including an Atlanta accountant who allegedly learned of a pending takeover while giving tax advice to a member of the O’Charley’s restaurant chain’s board of directors, according to federal authorities. The four didn’t admit guilt, but agreed to pay a total of $420,000 — mostly in penalties — to settle charges that they illegally profited from inside information, according to the U.S. Securities and Exchange Commission, whose Atlanta office conducted the investigation. [Atlanta Journal-Constitution]

From accountant to "fattogram" the story of a mother of two who gave up balance sheets for showing off her assets [Daily Mail]

CPA’s Sons Score $3M To Bring Order To Financial Audits The Bong brothers had a crazy idea: “One night when we came home from the gym, my dad was screaming and yelling at his computer. He wouldn’t let us touch anything, but we took a look and we saw how cryptic it was,” Steven Bong said. “When he told me how much the software cost, the number made my head explode. I thought, ‘Hey, we can build an auditing program. How hard can it be?’” [WSJ]

PwC tries its hand at law Because of course it does: "Global accounting firm PwC has thrown its hat in the ring to compete with Australia’s largest law firms, ­hiring corporate ­heavyweights Tony O’Malley and Tim Blue to head their legal team. The two ex-King & Wood Mallesons partners have an ambitious revenue target of $100 million within five years, and are looking to recruit another twenty partners to join them. 'Tim and I are very excited about the prospect of joining PwC and pursuing together this growth strategy for the legal industry,' Mr O’Malley told The Australian Financial Review." [Financial Review]

Tax Revenues Still On Pace To Break Records In 2014 [Forbes]

IRS handed taxpayer information to contractors without background checks [WaPo]

Lawsuit Claims Google Wrote Down Plan to Steal Idea on Some Post-Its Didn't Tom Hood call this the year of the Post-It? [Valleywag]

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Footnotes: Pleasing the PCAOB; Deloitte UK Adds a Couple Partners; Freaking Narcissists | 06.09.14

A British accountant who took a trip to Sri Lanka to climb Mount Everest is […]

Problem of the Day: Do You Quit Your High-Paying Job with the Idiot Boss?

Thumbnail image for lumberg1.jpgThe BBC reported last week that 49% of workers in the UK would leave their jobs if it meant working for someone that didn’t make bad decisions.
As we’ve noted, the Brits seem to be less hung up on money than us but that still doesn’t mean you wouldn’t leave for less money if you could get away from that boss who can fuck up a cup of coffee not to mention every decision that affects your work directly.
So we have a simple question for you. Under normal circumstances, would you leave your high paying job if it meant you didn’t have to work for an idiot boss?

Overstock.com to Restate Financial Statements; Reassures Profitability for 2009

Well, then. This all very awkward for Pat Byrne and Co.

In an 8-K filed late yesterday Overstock.com announced that it would be restating the consolidated financial statements contained in its 2008 annual report, and the those contained in the Company’s last three 10-Q’s: period ended March 31, 2009; June 30, 2009; and September 30, 2009 (unreviewed!).

It goes without saying that those financial statements can no longer be relied upon.


The restatement is a result of errors that Overstock fired Grant Thornton for last year that led to a bit of a cat fight between the firm — who is not mentioned in the filing — and humble servant Patrick Byrne.

The Big O also admitted that it “incorrectly amortized the expense related to restricted stock units based on the actual three year vesting schedule rather than a three year straight line amortization and applied an outdated forfeiture rate in calculating its expense under the plans.” While they were at it, they threw a bunch of other corrections that were “[not] material either individually or in the aggregate,” as the saying goes.

The Company is still mulling over the numbers with both PwC and KPMG so there’s a chance that they could change but as of now, $1.9 million of income is going back to 2008 from 2009 and an increase in expense of $350k in 2008 and $900k in 2009.

But wait! The filing reminds us that “Patrick Byrne, the Company’s Chief Executive Officer, had stated to The New York Observer, ‘that the company is about to report its first annual profit.’ The Company continues to believe that it will report positive net income for fiscal 2009.” Whew! See shareholders? More commitment from your servant.

Sam Antar has been following this story from the very beginning and he is not shy about being vindicated:

Today’s news is a complete vindication of my analysis of Overstock.com’s financial reports and shows that the company willfully engaged in a financial reporting manipulation scheme. The company is restating its financial reports to correct GAAP violations, exactly as I have recommended in this blog. To date, every single initial financial report issued by Overstock.com throughout the company’s entire existence has violated GAAP or some other SEC disclosure rule. The company now has the dubious distinction of having to restate its financial reports three times in the last three years to fix GAAP violations.

We shot Sam an email last night and he simply told us, “I am going out for a glass of fine wine.”

So while this appears to wrap up the SEC’s Division of Corporation Finance investigation, one little problem that still remains is that the SEC’s Enforcement Division has not wrapped up its probe of the company. Yeah; so there’s that. Considering the the track record of the SEC, we’d typically give a company a 50/50 shot of coming out of a probe by the Enforcement Division unscathed but in the case of Overstock, we’ll be going with Schape’s crew.