Going Concern

IFRS

Hans Hoogervorst Doesn’t Want the U.S. to Worry Its Pretty Little Head About Losing Influence Over Accounting Rulemaking

Caleb Newquist
October 5, 2011

Hoogervorst said U.S. sovereignty would be protected by the SEC having a final say before any IASB rule is introduced. “Such endorsement mechanisms provide an important ‘circuit breaker’ if the IASB produced a standard with fundamental problems for the United States,” Hoogervorst told an accounting conference. The SEC would remain in full control of enforcement. “So there is absolutely no danger of importing different enforcement standards from abroad into the United States,” the former Dutch finance minister added. [Reuters]

Is the IRS Going to War with Canada?

Joe Kristan
October 5, 2011

Wars with Canada turn out badly. While the Canadians are a seemingly peaceful people, content with their Tim Horton’s and their hockey, they seem to come out on top in a fight. Ethan Allen and Benedict Arnold learned that lesson early on, and things went no better in 1812.

Now IRS Commissioner Shulman is baiting Canada for another war:

Premier David Alward, one of New Brunswick’s best known dual citizens, says he has been caught in the same broad net U.S. officials have cast to catch international tax evaders.

This prominent Canadian has been dragged into a U.S. tax nightmare the same way as thousands of other well-meaning expats:

Alward was born in Beverly, Mass., and spent his early years in the United States before his family settled in New Brunswick.

“I’ve had to scramble like thousands of other people,” Alward said, adding that he is complying with the U.S. demand for tax returns going back years and detailed disclosures.

The IRS is going after offshore tax violators in a big way. It’s natural that there are more in Canada than anywhere else because of geography and economics. But the IRS approach has been to enforce traffic safety by shooting jaywalkers.

While the US taxes its citizens on worldwide income, many, maybe most, expatriates have little or no U.S. tax liability. The foreign earned income exclusion and the foreign tax credit take care of that. But the long-obscure “FBAR” requirement to report foreign financial accounts over $10,000 threatens to impoverish many of these people anyway. The penalties for failing to file the FBAR Form, Form TD 09.22-1, are the greater of $10,000 or half the value of the account. The IRS is freely asserting these penalties even when little or no tax is due, and is even applying them to Canadian retirement accounts of U.S. expats like Alward.

The IRS has had two “amnesties” to draw expats into its loving arms, and the program has been a disaster for many ordinary folks who have signed up to try to clean up their records. Taxpayers living in Canada since childhood are presumed to be tax cheats, and penalized accordingly.

The IRS could learn a lot from states in handling these issues. The IRS “amnesties” have been progressively more restrictive, with higher penalties, making it more and more dangerous for folks with trivial paperwork violations to come out of the cold. Many states, in contrast, have standing deals where out-of-state taxpayers can clean up their tax histories by filing a few years of back tax returns, no questions asked. If the IRS would take this approach, and waive FBAR penalties for accounts under, say, $200,000 — and for all retirement accounts –maybe we won’t have to worry about the White House getting sacked again.

On Campus

West Virginia University to Offer PhD Program in Forensic Accounting and Fraud Investigation

Caleb Newquist
October 5, 2011

Did you ever have dreams of being a doctor that busted the bad guys? Something like Quincy. Or maybe Robert Langdon. When you opted to go into accounting, you probably thought those dreams were hopeless.

Well, we have good news for you aspiring number-crunching crime fighters who still yearn for the “Dr.” prefix. West Virginia University’s College of Business and Economics is announcing (later today, we’re told) that they will be offering the first doctoral program in Forensic Accounting and Fraud Investigation. The program will admit its first students in August 2012 and will prepare individuals for a career in accounting research and teaching at the university level.

Shall we hear from scholarly types? Okay!

“West Virginia University’s Forensic Accounting and Fraud Investigation program has been a model for other colleges and universities across the country,” said WVU President Dr. Jim Clements. “Our expertise has made us a national leader in this field, and the addition of the Ph.D. program will provide WVU with an important opportunity to create scholars in the areas of fraud, forensics and ethics. I applaud the faculty for all they have done to make this possible.”

Dr. Clements is referring to WVU’s Graduate Certificate in FAFI and the new PhD program will simply add to the University’s scholarly fraud-busting prowess. Dr. Jose V. Sartarelli, Milan Puskar Dean, of the school said, “This new Ph.D. program is the next logical step in building a complete educational offering in these specific areas, and that step is due to the commitment and expertise of our excellent faculty. This program is a reflection of their long and dedicated work.”

So this is a pretty exciting for the accounting sleuths (amateur or professional) out there if you’re interested in taking your wonkiness to the next level. Whether or not it has the Sam Antars of the world shaking in the boots is another question.

Anyone interested should contact Dr. Tim Pearson or check out the program on the WVU website. Get crackin’.

CPA Exam

Did You Blow Off the CPA Exam to Have an Epic Summer? Here’s How to Start Your New Job and Study Smart

Adrienne Gonzalez
October 5, 2011

If you have a CPA exam question for me or (even better), our audience as a whole using me as a pawn in your game to get better information, please get in touch. I’ll try to Google any answers I don’t know and will not berate you for your choices. Unless your choices are stupid.

Hi Adrienne,

I appreciate you offering to give CPA advice to readers of GC.

I am starting with GT next week, but due to summer school, summer work, and an awesome trip to Europe I opted to not even look at CPA exam material until now. I went against better advice saying I should study with the free time I had, and instead opted to genuinely enjoy my last Summer before life officially ends.

Accounting News Roundup: Dems Discuss a More Palatable Millionaire Tax; IRS Gives Oakland Dispensary a Buzzkill; Again with the Tax Shelters, KPMG? | 10.05.11

Caleb Newquist
October 5, 2011

U.S. and New York Sue BNY Mellon [WSJ]
Bank of New York Mellon Corp. was hit by a one-two legal punch that escalates a currency-trading crisis for one of the nation’s largest banks. The Justice Department and New York’s attorney general filed separate civil lawsuits alleging that the bank fraudulently charged clients for currency transactions. Filed within hours of each other late Tuesday, the suits allege that BNY Mellon defrauded or misled state and public pension funds, private companies, universities and banks in a decade-long scheme of overcharging for foreign exchange.

Democrats discuss tax on US millionair=”http://www.ft.com/intl/cms/s/0/dc930870-eed7-11e0-959a-00144feab49a.html#axzz1ZuZb93Gd” target=”_blank”>FT]
Democrats in the Senate have discussed a new tax on US millionaires to pay for at least part of $447bn in fresh economic stimulus measures pushed by the White House. According to a Democratic congressional aide, no final decisions were made on Tuesday on whether to present a new tax on the wealthiest citizens, and there were no estimates on how much money it was intended to raise.

Robbers Invade CEO’s Midtown Home [WSJ]
The armed thieves took more than $260,000 worth of cash, jewelry and other valuables in the Monday robbery at the home of George Bardwil, the CEO of Bardwil Industries, police said. Mr. Bardwil, 59 years old, was meeting with a business consultant and an accountant in his East 51st Street apartment when there was a knock on the door about 2:30 p.m. As Mr. Bardwil answered, two gunmen shoved their way inside and ordered the men to get to the ground. The attackers tied up the men and ordered them to keep their eyes closed and not look at them, according to a police official with knowledge of the matter. They then went into Mr. Bardwil’s bedroom, where they removed cash and jewelry from a safe.

For some of the rich, budget and tax battles bring worries — of paying too little [WaPo]
“It is going to be really bad for rich people,” said Charlie Fink, 51, a former AOL executive, imagining an American financial collapse that could wipe out his wealth. “It’s going to be [bad] for everybody. But most people are living close to the bone anyway. So they have less to lose.”

Oakland medical cannabis club owes IRS millions in back taxes [SVMN]
“They’re attempting to tax us out of business,” Harborside owner Steve DeAngelo said Tuesday by telephone. Ironically on the same day he received the IRS letter, DeAngelo was photographed handing the city treasury a check for $360,000. The payment was the third installment of $1 million in city-owed taxes generated by the dispensary in 2010. Oakland’s four dispensaries pay a 5 percent tax to Oakland on top of regular sales taxes that contributed about $2 million to California’s budget.

U.S. wins three tax cases involving big banks, KPMG [Reuters]
United States prosecutors said on Tuesday they had won three major cases against American clients of questionable tax shelters including ones used by a Dallas billionaire and Wells Fargo Co. and others designed by Citibank and accounting firm KPMG LLP. The separate cases, the verdicts of which were rendered last Friday, represent a significant victory for the US Justice Department, which was sued by each of the three clients when the Internal Revenue Service denied as improper their claimed deductions that totaled hundreds of millions of dollars.

Tax

Frank Wolf Has Grover Norquist’s Attention

Caleb Newquist

October 5, 2011

Earlier we learned that Virginia Congressman Frank Wolf is completely creeped out by Tax Terminator Grover Norquist’s BSD status in the Republican Party.

It’s been bothering Mr. Wolf so much that his “conscience” compelled him to give a speech on the House floor today to remind everyone what kind of Grover company keeps (i.e. the “unsavory” kind).

And since Grover has Viking DNA coursing through his veins, you’d be a monkey’s uncle if you thought that he was going to let this shit slide:

Norquist branded Wolf’s speech a “hissy fit” and a “compilation of whack job criticisms.” He added that he thought the Virginia Republican, one of the relatively few GOP members of Congress to have not signed the tax pledge, was lashing out at him because he did not want to call out his Republican colleagues. “He is the only Republican arguing that tax increases are a good idea,” Norquist told The Hill. “What he has is a problem with the American people and the modern Reagan Republican Party.”

But hey, GN is old political cat; he knows how the game is played:

“[I]f he wants to chew on my ankles, I can take it.”

How’s that for a visual?

Norquist: GOP lawmaker’s criticism ‘beneath him’ [OTM/The Hill]

Tax

Warren Buffett Dares Rupert Murdoch to Whip It Out

Caleb Newquist

October 5, 2011

His tax return, people. His tax return. Remember last week when the Journal told O^3 he should put up or shut up since he’s so gung ho about increasing taxes on the ultra-rich? Well, he sure does and he seemed delighted when someone asked him about it today:

Asked about the editorial on Tuesday at Fortune’s Most Powerful Women Summit, Buffett said he was willing to release his tax returns, on one condition: “I think it might be a terrific idea if they would just ask their boss, Rupert Murdoch, and he and I will meet at Fortune, and we’ll both give you our tax returns and you can publish them,” Buffett said. “I’m ready tomorrow morning,” he added.

Your move, Rupes.

Buffett challenges Murdoch on tax returns [CNN]

EY

Where Is Ernst & Young Finding All This Musical Talent?

Caleb Newquist

October 4, 2011

Look, I understand that these firms want well-rounded individuals but when more and more people start showing talents that outshine their professional services skills, it makes you wonder if the recruiting folks need a talking to. I bring this up because, unbeknownst to us, FORTUNE puts together a Battle of the Corporate Bands every year and this year’s winner is American PI, a 12-member band, 11 of which are E&Y employees. Granted, they won’t be winning Record of the Year any time soon since they’re simply covering I Heard It Through the Grapevine, Southbound, People Get Ready, and Superstition but they did have three members win “best of” awards.

And with this triumph by American PI, E&Y now has rock, show tunes, and hip-hop covered. It’s probably only a matter of time until they manage to poach the PwC pianist.

[via AT]

Tax

Grover Norquist Gives Congressman Frank Wolf the Heebie Jeebies

Caleb Newquist

October 4, 2011

“My conscience has compelled me to come to the floor today to voice concerns I have with the influence Grover Norquist, the president of Americans for Tax Reform, has on the political process in Washington,” Wolf read from a statement on the floor of the House of Representatives today. Wolf listed a series of associations that he said undermines Norquist’s credibility as a policy advocate. Among them, he cited a relationship Norquist had with former lobbyist and convicted felon Jack Abramoff. “Mister Abramoff essentially laundered money through ATR and Mister Norquist knew it,” Wolf said. [Bloomberg]

Career Center

On Campus

Going Concern Wants Your Schwag

Daniel Braddock

October 4, 2011

Keep your pants on, folks – we’re talking Post-its, t-shirts, and whatever else you got your grubby hands on at this season’s campus recruiting events.

Career fair season is in full swing and many of you have already met with the firms’ campus recruiting teams, waited in line for hours to shake the sweaty palm of a 1st year associate, attended countless Powerpoint-heavy presentations.
u were bound to receive some goodies to go along with the “work-life is amazing here!” speeches. Professionals, I’m sure you hoarded the highlighters and page flags. Because I am pinned to my desk in Midtown and Caleb is busy eavesdropping on Denver coffee shop regulars, we were not able to travel to campuses this semester but we would still like to be kept up to date on the latest and greatest (and lamest) in campus recruiting schwag. Dig through those “green” bags from the career fair and share the accounting firm lovin’ with us.

What to share:

1. Mail us your extras. If you’ve got some great goodies you want to share with us, email Caleb for his address and put that shit in the mail. As a thank you, he’ll return the favor by sending you Going Concern schwag. Nothing says “too cool for management accounting class” like a Going Concern bumper sticker.

2. Take some pictures. Don’t want to part with that leaky coffee mug from Grant Thornton? Did you win a XXL winter PwC fleece at the University of Miami career fair but want to hold on to it “for when it gets chilly”? Send Caleb (suitable for work) pictures of the gear. Bonus points if the EY teddy bear is taking it to the KPMG stuffed puppy.

3. Tell us a story. Did something ridiculous happen at one of the recruiting events? Partners making out with interns? Intern on intern action? Did someone lose an offer because they had one too many flaming nipple shots?

For those of you worried about your privacy…

Come on now, it’s a moot point by now. It’s no secret that this site would not exist without the anonymous sources, tips, career advice questions, and cutthroat comments that you all provide every day. You make this place bearable, welcoming, helpful, and funny as hell.

Think about some of the stories that Caleb has covered here – PwC’s re-branding strategy, KPMG’s random hiring freeze, McGladery firings. Does he ever blow the top on his sources? Do I ever turn around and call the HR department of every firm who’s professionals reach out to us about looking for jobs? Ummmmm…no. We’re grown ups. We respect your decisions and appreciate it when they are relevant to a story for GC.com. You scratch our backs with tips, and we provide you and the rest of the industry an opportunity to sound off.

Why are we doing this?

We want to keep everyone up to date on how their potential bonus money is being spent on frivolous travel alarm clocks, obviously. That, and we thought it’d be fun – brainless, thoughtless, and not-as-negative-as-every-other-story-in-the-news-today kind of fun. Plus, we know that all recruiting efforts are not created equal. What is handed out in Chicago is not what’s thrown your way in Dallas. Do you really think Greendale Community College see the same hand-outs as Lehigh students? Hell no. Share the stories, share the free schwag lovin’.

Salaries

Comp Watch: Vault Ranks the Firms That Give You the Most Bang for Your Buck

Caleb Newquist

October 4, 2011

All of you people have dreams. Not your-name-in-lights dreams, however. Most of you are more interested in shopping-at-Bergdorf’s dreams. But which firm is going to give you the best combination of salary/bonus/Omaha Steaks to make you happy? Vault’s Compensation Ranking should give you an idea. Here’s your Top 5 out of 20 (previous year’s ranking in parenthesis):

1 (11) SS&G Financial Services
2 (5) Armanino McKenna
3 (8) WithumSmith + Brown
4 (7) Dixon Hughes Goodman
5 (1) Marcum

Where are the Final 4 Horsemen of the Accounting Firm Apocalypse, you ask? Well, a couple of them are completely MIA. Here are the other two plus some notables:

9 (10) Rothstein Kass
10 (NR) Grant Thornton
14 (19) CBIZ/Mayer Hoffman McCann
15 (18) Moss Adams
19 (20) PwC
20 (17) Deloitte

Seriously, I think Stephen Chipman is putting something in the water at Grant Thornton. Whatever it is, KPMG and E&Y would be wise to get their hands on it. Check out the full ranking if you’re not satisfied. And feel free to share feelings on your firm’s presence (or lack thereof).

Accounting Firms Rankings 2012: Best to Work For: Compensation [Vault]

CPA Exam

China Freaks Out Over Five CPA Exam Questions Illegally Posted to the Internet

Adrienne Gonzalez

October 4, 2011

Can you guys imagine what would happen if this were to go down in the good old USA?

According to China Daily, answers to China’s national accounting exam (similar to the CPA exam in that it’s an exam professional accountants take to work in accounting, duh) were leaked over the Internet last week and some are concerned that this unfortunate turn of events might erode trust in the exam and – worse – the profession. As if China’s sketchy accounting practices didn’t already achieve as much.

Answers were posted to an Internet forum just before the 2011 Chinese National Uniform CPA Examination was to be taken on September 17 and 18.

Here in America, CPA review providers are given retired CPA exam questions to distribute to their students but are not allowed to share actual exam content. Not like they’d know what’s on the exam anyway – many major review course providers haven’t taken the CPA exam in 10, 15 or even 20 years. Back in those days, they’d hand out copies of old exams to study. Like actual exams. Since the CPA review crew is a close-knit bunch of OGs, it’s highly unlikely that any one of them would risk their close relationship with the AICPA to hand out exam questions to needy students.

In China, a former writer of architect exam questions was sentenced to 18 months in prison for leaking state secrets after he was caught giving his students copies of exam questions during tutorials. Different world, eh?

Anyway, according to the few Chinese media reports we’ve seen, five audit multiple choice questions and answers were posted to the Internet and the Chinese CPA exam folks are understandably in a tizzy over this. To put it in perspective, their audit section consists 47 questions worth a total of 105 points, and candidates must answer at least 60 correct to pass. So really? Five questions?

That’s not all. Apparently some candidates received texts asking if they might be interested in, er, peeking at the upcoming exams’ content.

“I began to receive at least five text messages a day selling exam questions a month before the exam took place. All of them claimed they could provide genuine questions and answers. They also promised a full refund if the questions were not genuine,” 28 year-old Zhu Hua told China Daily. “I wonder how they got my number in the first place, because I only provided my contact information when I registered for the exam.”

Was this an inside job?

The Chinese Institute of Certified Public Accountants (CICPA) has sworn to conduct an investigation into the leaks and to prosecute anyone found to have leaked this information to the full extent of the law. Prepare for hangings, people, this is serious shit.