American Airlines Parent Files for Bankruptcy [NYT]
The parent company of American Airlines said on Tuesday that it has filed for bankruptcy protection, in an effort to reduce labor costs and shed its heavy debt load. American’s parent, the AMR Corporation, was the last major airline in the United States to resist filing for Chapter 11 in an effort to shed contracts, a move that analysts said left it less nimble than many of its competitors. AMR intends to operate normally throughout the bankruptcy process, as previous airlines have done. The company doesn’t expect the restructuring to affect flights or frequent flier programs.

Diamond Foods says more lawsuits may come [AP]
Diamond Foods Inc., which is in the midst of an internal accounting probe and facing several related lawsuits, says it expects more suits will be filed against the company in the future. The company, based in San Francisco, is looking into allegations of improper accounting for crop payments to walnut growers. Diamond said earlier this month that its $1.5 billion acquisition of chip company Pringles from Procter & Gamble Co. would be delayed due to the investigation. It is slated to be Diamond’s biggest acquisition yet, more than tripling the size of its snack foods business.

Facebook Said to Plan IPO at $100B Valuation [Bloomberg]
Facebook’s $100 billion valuation would be twice as high as it was in January, when the company announced a $1.5 billion investment from Goldman Sachs Group Inc. and other backers. The IPO is far enough away that the details may change, said Lise Buyer, principal of the Class V Group, an IPO advisory firm. “It’s far too early to accurately predict where the valuation will be on deal day,” Buyer said.

PwC defends ‘honest mistake’ in JP Morgan audit disciplinary [Accountancy Age]
PwC fought for minimal sanctions yesterday after it admitted audit failures in the case of JP Morgan Securities Limited.
Appearing before a disciplinary panel, it argued JPMSL shortcomings were to blame as it omitted to flag up non-segregation of client assets for the seven years to 2008, not systemic audit failure. PwC committed an “honest error” as it “strove to test segregation and reconciliation of client assets”, argued Tim Dutton of law firm Herbert Smith. Dutton said the firm’s penalty should be in the region of £500,000 to £1m, saying it would be “appropriate to keep the fine at the lower end due to mitigating reasons”.

Is the Judiciary about to Give the SEC a Backbone?* [Accounting Onion]
Tom Selling’s old stomping grounds got the business from Judge Jed Rakoff.

Grover Norquist v. Ross Douthat on the Taxpayer Protection Pledge [TaxProf]
We’re still waiting for a real match up.

Legal cloud starting to lift for Fastow [HC]
[Andrew] Fastow is now working full-time for the law firm that represented him in civil matters over the last decade, Smyser Kaplan & Veselka, using his business background under the job title “document review clerk.” “We’ve found him to be very intelligent, creative and meticulous,” partner Lee Kaplan said. “We just gave him a raise, but he’s making far less than his talents are worth.”

Senator Questions Extension of Tax Cut [NYT]
[O]n “Fox News Sunday,” Mr. Kyl, of Arizona, said: “The payroll tax holiday has not stimulated job creation. We don’t think that is a good way to do it.” Moreover, Mr. Kyl said, increasing taxes on the most affluent Americans, including small-business owners who report business income on their personal tax returns, would undermine the fragile economic recovery. “The best way to hurt economic growth is to impose more taxes on the people who do the hiring,” Mr. Kyl said. “As a result, the Republicans have said, ‘Don’t raise the existing tax rates on those who do the hiring.’ ”

Grover Norquist: a misleading accounting of recent history [Fact Checker/WaPo]
Grover’s appearance on Meet the Press yesterday garnered a ranking of Three Pinocchios. That’s out of a possible four (which is classified as a “whopper”).

KPMG sets dates for UK claims on MF Global cash [Reuters]
MF Global UK’s administrator KPMG said the failed futures broker’s clients will be able to claim monies frozen at the firm beginning early next month in a move that offers frustrated investors some hope they will recover their cash. KPMG said on Monday MF Global UK clients can formally make applications from Dec. 8 this year and asked that all claims are submitted by March 30, 2012.

Are Fourth Quarter Write-offs Looming for Deloitte’s Clients? [GOA]
The Grumpies have been busy. They’ve found 24 Deloitte audit clients who they say are at “at significant risk for some type of intangible asset write-down in the very near future.”

MF’s Missing Money Makes You Wonder About Goldman [Bloomberg]
Six months ago the accounting firm PricewaterhouseCoopers LLP said MF Global Holdings Ltd. and its units “maintained, in all material respects, effective internal control over financial reporting as of March 31, 2011.” A lot of people who relied on that opinion lost a ton of money. MF Global filed for bankruptcy on Oct. 31. This week the trustee for the liquidation of its U.S. brokerage unit said as much as $1.2 billion of customer money is missing, maybe more. Those deposits should have been kept segregated from the company’s funds. By all indications, they weren’t. What’s the point of having auditors do reports like this? And are they worth the cost? It’s getting harder to answer those questions in a way the accounting profession would favor.

Ernst & Young on Auditor Rotation [The Summa]
FLASH: They’re not thrilled with the idea.

Appeal for EU to stick by accountancy reforms [FT]
The heads of several midsized audit networks have issued a last-ditch appeal to the European Commission not to dilute sweeping proposals aimed at reducing the dominance of the four biggest accountants and improving audit quality. In a joint interview with the Financial Times, the chief executives called on Michel Barnier, EU internal market commissioner, to hold his nerve as he finalises his recommendations for reforming the sector, which are expected next week.

KPMG’s Andrew Says ‘Significant Fraud’ Evident at Olympus [BBW]
KPMG International LLP’s global chairman, Michael Andrew, said fraud was evident at Olympus Corp. and his firm met all legal obligations to pass on information related to Olympus’s 2008 acquisition of Gyrus Group Ltd. before it was replaced as the camera maker’s auditor. “We were displaced as a result of doing our job,” Andrew told reporters at the Foreign Correspondents’ Club in Hong Kong today. “It’s pretty evident to me there was very, very significant fraud and that a number of parties had been complicit.”