Debt supercommittee members brace for failure [WaPo]
The congressional “supercommittee” stumbled its way toward failure Sunday, with final staff-level discussions focusing mostly on how the panel should publicly admit that lawmakers could not meet their mandate of shaving $1.2 trillion from the federal debt. Rather than making a final effort at compromise, members of the special deficit-reduction committee spent their final hours casting blame and pointing fingers, bracing for the reaction from financial markets that are already jittery over the European debt crisis.

Kyl, committee divide on taxes [The Hill]
“We are not a tax-cutting committee,” Kerry said. “We’re a deficit-reduction committee.”

U.S. Billionaires Avoid Reporting Gains to IRS [Bloomberg]
When billionaire Billy Joe “Red” McCombs, co-founder of Clear Channel Communications Inc., reported a $9.8 million loss on his tax return, he failed to include about $259 million from a lucrative stock transaction. After an audit, the Internal Revenue Service ordered him to pay $44.7 million in back taxes. McCombs, who is worth an estimated $1.4 billion and is a former owner of the Minnesota Vikings, Denver Nuggets and San Antonio Spurs sports franchises, sued the IRS, settling the case in March for about half the disputed amount.

Enron’s Tenth Anniversary: Arthur Andersen’s Audit Failures at Enron and Elsewhere [GOA]
From the Grumpies: “Arthur Andersen was not a hapless bystander when Enron’s managers committed their accounting frauds, nor was it a duped auditor, nor an innocent victim of the media. Perhaps it was a scapegoat as all the large firms have engaged in audits of less than stellar quality, but that does not excuse its poor performance at Enron.”

Olympus’s $687 Million Takeover Scam Lay Hidden in Cardiff Filing System [Bloomberg]
Olympus on Nov. 8 admitted inflated advisory fees paid in the $2.1 billion acquisition of Gyrus were used to conceal soured investments dating back decades. In a practice known as “tobashi” — loosely translated as “to make fly away” — the company used offshore entities to park assets in the hope that a market recovery would erase losses before they had to be accounted for. A week after Olympus paid $620 million in March 2010 to buy back preference shares given to its advisers as fees, former Chairman Tsuyoshi Kikukawa and two senior aides, who were all serving as Gyrus directors, filed financial statements saying it wasn’t “meaningful to estimate a fair value” for the securities. Gyrus instead booked them at $177 million, the documents show.

Loyal Olympus workers feel betrayal over accounting scandal [Reuters]
“I cried in front of my family when I watched that news conference,” one male employee wrote on Facebook, using the social-networking site to vent his feelings after television news coverage of the president’s revelation of the scandal. A co-worker posted a message to console him, appealing to a sense of loyalty for customers rather than the company, saying they simply had to work hard to regain their trust. But the co-worker was also enraged. “I know it’s deep in the night and everyone has fallen asleep. But I just want to scream out loud ‘idiots!!'” he wrote.

Financial Statement Fraud: Olympus Makes It Look Easy [Fraud Files]
Fraud never gets lost in translation.

US SEC sues ex-Ernst worker in insider trading case [Reuters]
The SEC accused defendant Mark Konyndyk, a Los Angeles resident, of making $9,725 of illegal profit through his purchases of Activision call options before and soon after his Nov. 2, 2007 resignation from Ernst & Young. The combination was announced on Dec. 2 of that year. Konyndyk, who was a manager in Ernst & Young’s transaction advisory services group, made the trades after briefly working on a team conducting due diligence on behalf of Vivendi for the merger, which was code-named Project Sego, the SEC said.

Repo Accounting: After Lehman, another Debacle was Just a Matter of Time [Accounting Onion]
Tom Selling told you so.

SEC Nearing Decision on Accounting Standards [WSJ]
The Securities and Exchange Commission this week cleared the way for a long-awaited decision on whether U.S. companies should switch to using global accounting rules. The SEC chief accountant’s office issued two fact-finding papers Wednesday about the use of the global rules, known as International Financial Reporting Standards. Those papers lay the groundwork for a recommendation from the SEC’s staff to the commissioners, expected by the end of the year, on whether they should move to IFRS and away from U.S. generally accepted accounting principles. The staff’s work “gives me the confidence that lets me know they are moving toward a decision,” said Joel Osnoss, Deloitte Touche Tohmatsu Ltd.’s global leader for IFRS.

Tax Spat Stymies Debt Panel [WSJ]
Days away from a deadline, Congress’s deficit-reduction supercommittee is stymied, stumped in large part by one of Washington’s seemingly unsolvable problems: What to do with the Bush-era tax cuts? Republicans are digging in against any agreement that does not extend current income-tax rates, which are scheduled to expire at the end of 2012.

Yelp Files for I.P.O. [DealBook, S-1]
Yelp, which makes the bulk of its revenue from advertising contracts with local businesses, is not yet profitable. Though revenue rose 79.9 percent, to $58.4 million for the first nine months of this year, the company recorded a loss of $7.4 million.

Fund Transfers Are Focus of MF Global Probe [WSJ]
Regulators have unearthed new details indicating MF Global Holdings Ltd. shifted hundreds of millions of dollars in customer funds to its own brokerage accounts in the days before its bankruptcy filing, according to people familiar with the matter. Such moves could violate regulations stipulating that commodities brokers can’t mix customer funds with brokerage funds. Brokerage funds often are used to back proprietary trading positions. According to MF Global’s internal records, the transactions were as large as hundreds of millions of dollars at a time, these people said.

Rule of 72? [Tax Update]
Please keep filing tax returns after your 72nd birthday.

Barnier’s audit reforms ‘might be delayed’ [Accountancy Age]
You know how things are.