Buffett’s Son Defends Occupy Wall Street [Bloomberg]
“I think it takes that to make things happen sometimes,” Howard Buffett, 56, said of the demonstrations in an interview yesterday in Des Moines, Iowa. Over the past 15 years, “we saw large corporations really screw people.”

Oversight board proposes plan to make accountants more accountable [WaPo]
Auditors are supposed shareholders, but from Enron and WorldCom to the Wall Street meltdown of 2008, they have often been criticized for not barking. They are hired and paid by the companies they audit, and policymakers have struggled for decades to strengthen incentives for them to stand up to corporate management when appropriate.

With Just Three 9s, Cain Refigured Math for Taxes [NYT]
Mr. Cain, a former pizza chain chief executive, wanted a proposal to jolt the economy and give his candidacy some definition. “I said, ‘The first fundamental, guys, is we have to throw out the tax code,’ ” Mr. Cain said Wednesday in an interview. “How do we come up with a bolder plan?” he pressed two of his close advisers. From that exchange emerged the plan that Mr. Cain calls 9-9-9: a flat 9 percent individual income tax rate, a 9 percent corporate tax rate and a 9 percent national sales tax. He has uttered the triple digits repeatedly, metronome-like, in speeches and debates, until they have acquired the catchy power of a brand.

JPMorgan Earnings Fall Less Than Expected on Accounting Change [Bloomberg]
JPMorgan would have reported a loss for its investment bank without the debt-valuation adjustment, which added 29 cents a share, under U.S. accounting rules allowed when the market value of a company’s liabilities declines. Chief Executive Officer Jamie Dimon, 55, said in the statement that the gain “does not relate to the underlying operations of the company,” which suffered from a 13 percent decline in investment-banking revenue from the prior quarter.

Buffett Builds His Tax-the-Rich Case [WSJ]
The biggest mystery is the nearly $23 million gap between Mr. Buffett’s adjusted gross income and his taxable income. Without having his tax return it is impossible to know the reason for the gap for sure, tax experts say. One possibility for the gap is that he made large charitable contributions, itemized deductions that are subtracted from adjusted gross income. Another possible element is interest expense. Mr. Buffett is known for not selling investments but rather borrowing money against them. To the extent that he has investment income, any interest paid on such loans would be deductible.

‘Buffett Rule’ May Be Broken by 25% of Millionaire Taxpayers, Study Finds [Bloomberg]
Preferential treatment of investment income and the reduced impact of payroll taxes on high earners lets about 94,500 millionaires pay taxes at a lower rate than 10.4 million “moderate-income taxpayers,” representing about 10 percent of those making less than $100,000 a year, according to the report by the non-partisan Congressional Research Service dated Oct. 7. The findings put the U.S. tax system in conflict with the so-called Buffett Rule, which says households making more than $1 million annually shouldn’t pay a smaller share of their income in taxes than middle class families, says the report, which analyzed 2006 Internal Revenue Service data.

IRS Auditing How Google Shifted Profits Offshore to Avoid Taxes [BBW]
The agency is bringing more than typical scrutiny to how the company valued software rights and other intellectual property it licensed abroad, said the person, who requested anonymity because the audit isn’t public. The IRS has requested information from Google about its offshore deals after three acquisitions, including its $1.65 billion purchase of YouTube, the person said. The transfer overseas of these kinds of rights rights has enabled Google to attribute earnings to foreign units that pay lower taxes, Bloomberg News reported a year ago.

No. 1 Financial-Strength Ranking Spells Doom [Bloomberg]
Jonathan Weil: “Less than three months ago the European Banking Authority said Dexia SA (DEXB) had passed its so- called stress test with ease. The French-Belgian lender’s July 15 news release carried this headline: “2011 EU-wide Stress Test Results: No Need for Dexia to Raise Additional Capital.” Then last weekend, 86 days after getting its clean bill of health, Dexia took a government bailout to avoid collapsing. Nobody was surprised this happened. Nor should anyone have been.”

Cain ‘9-9-9’ Tax Plan Captures Debate Spotlight as Perry Recedes [Bloomberg]
“9-9-9 will pass,” the former Godfather’s Pizza chief executive said, “because it has been well-studied and well- developed. It starts with — unlike your proposals — throwing out the current tax code. Continuing to pivot off the current tax code is not going to boost this economy.” Other Republican candidates criticized or ridiculed the idea. “I thought it was the price of a pizza when I first heard it,” former Utah Governor Jon Huntsman Jr. said.

Cain: ‘The problem with that analysis ict’ [WaPo]
Cain couldn’t seem to answer any debate questions without at least mentioning his tax code overhaul plan, which would include a flat nine percent tax on businesses, a nine percent tax on individuals and a nine percent national sales tax. Bloomberg’s Julianna Goldman, one of the debate’s co-moderators, said Bloomberg’s analysis found the plan would not be revenue neutral. Instead, the media company found that it would actually raise less money than the current tax code. Cain responded with what is sure to become a useful catchphrase throughout the rest of the primary season. Cain said: “The problem with that analysis is that it is incorrect.”

NY judge: Home confinement in Arthur Andersen case [AP]
A former managing partner at the Arthur Andersen accounting firm was ordered Tuesday to serve three months of home confinement after admitting he engaged in insider trading. U.S. District Judge Robert Patterson praised the good deeds H. Clayton Peterson has done as he decided not to impose the yearlong prison sentence Peterson, 65, had agreed to during his guilty plea. Peterson, of Denver, was awarded the Bronze Star for his service in Vietnam. Defense attorney Steven Glaser had argued for leniency, citing Peterson’s work on behalf of adopted children and efforts to help find employment for 600 Arthur Andersen employees who lost jobs when the Chicago-based company closed.

Why Do Accounting Academics Blog Less Than Other Academics? [Accounting Onion]
Tom Selling would like to know. He has a theory but would entertain others.

Financial Statement Fraud: How It Is Done [Fraud Files]
Tracy Coenen: “One of the most innocent-sounding terms used to describe financial statement fraud is “earnings management.” Such a phrase minimizes the seriousness of the crime. “Management” almost makes it sound like something good! But earnings management isn’t a noble effort. It is, in fact, financial statement fraud. The degree and seriousness can vary, but it is fraud nonetheless. It is the purposeful manipulation of account balances in order to make the financial statements conform to some predetermined template.”

For Funds, a Groupon Deal Could Disappoint [WSJ]
When four well-known U.S. mutual funds invested $450 million in Groupon Inc. last December, it looked as though they might reap a windfall when the online discount-deal service went public. Now, however, expectations that the funds might triple their money or more have come back to earth. And current estimates of the company’s value suggest some funds may find themselves marking down the value of their holdings in the Chicago online coupon company.

IRS Employees Charged $80 Million on Credit Cards [AT]
The IRS provides credit cards to some of its employees to make purchases of under $3,000. The purchases are supposed to be used for low-cost items such as office supplies and training. The Federal Acquisition Regulation prohibits splitting high-cost procurements into multiple credit card purchases and requires, whenever possible, the use of existing contracts. Cardholders are also required to seek approval for purchases and verify that funding is available prior to using the credit cards. However, the TIGTA inspectors found 2,955 purchases that were potentially split into two or more transactions to circumvent micro-purchase limits; and purchases made from improper sources.