Going Concern

Grover Norquist Would Like to Take This Opportunity to Remember Steve Jobs

Caleb Newquist
October 6, 2011

In the most offensive, self-serving way possible.

Jesus, Grover. You went after our grandmothers and we let it slide. But this. This is crossing the line.

IFRS

Did You Guys Hear the IASB Wants the U.S. to Adopt IFRS?

Adrienne Gonzalez
October 6, 2011

While the world is filled with torment, class warfare, famine, racism, war and uprising, those darn kids at the IASB are still concerned with one thing and one thing only. That one thing, obviously, is the U.S. adoption of IFRS.

Anyone else get the feeling Hans and Co. are getting a tad impatient with our heel dragging?

Piggybacking off the post Caleb was too lazy to write himself yesterday, we hear IASB chairman Hans Hoogervorst said in a Boston speech yesterday that adopting IFRS would offer U.S. public companies “the same financial reporting language for both internal management reporting and external financial reporting on a worldwide consolidated basis.” Where this is a benefit for us is entirely unclear to me, but that’s why I’m not chairman of the IASB.

Ol’ Hansy also promised that the U.S. would still play a pivotal role in shaping global accounting rules if we go ahead and trust them and adopt outright now. It is unclear whether that was a threat or not, as it is also unclear if he really thinks we’re that dumb.

This is the IASB chair’s first American speech, and in it he also said that the SEC can serve as a sort of emergency switch should the IASB decide to implement a rule that just won’t work in U.S. markets. “Such endorsement mechanisms provide an important ‘circuit breaker’ if the IASB produced a standard with fundamental problems for the United States,” he told the conference.

“So there is absolutely no danger of importing different enforcement standards from abroad into the United States,” he said. You hear that, kids? Absolutely no danger. Well crap, why haven’t we adopted these fabulous standards already then? It can’t possibly fail, the IASB told us it’s all good!

Accounting News Roundup: RIP Steve Jobs; Dems Dare GOP to Block Millionaire Tax; Tax Reform Poster Boys | 10.06.11

Caleb Newquist
October 6, 2011

Apple’s Visionary Redefined Digital Age [NYT]
RIP, Steve. Thanks for the fun toys.

Steve Jobs Was Always Kind To Me (Or, Regrets of An Asshole) [The Wirecutter]
Brian Lam: “I just feel lucky I had the chance to tell a kind man that I was sorry for being an asshole before it was too late.”

Historic day online: Twitter reaction to Steve Jobs’s death hits record [The Age]
The death of Steve Jobs has provoked the biggest online reaction of any event in recent history, with social media monitoring firm SR7 expecting official Twitter figures to come in at 10,000 tweets per second.

Steve Jobs’s Best Quotes [WSJ]
“I wish [Bill Gates] the best, I really do. I just think he and Microsoft are a bit narrow. He’d be a broader guy if he had dropped acid once or gone off to an ashram when he was younger.”

Dems Seek 5% Millionaire Tax for Job Plan [Bloomberg]
Senate Democratic leaders proposed imposing a surtax on people earning at least $1 million a year to pay for President Barack Obama’s jobs plan, an idea immediately rejected by Republicans as lawmakers head for a showdown over how to boost the economy. Majority Leader Harry Reid, a Nevada Democrat, said yesterday the 5 percent tax would generate $450 billion, enough to cover the cost of the administration’s proposal. Democrats dared Republicans, who oppose tax increases, to block the plan. “The addition of this proposal makes it very tough for Republicans to oppose the president’s jobs package,” said Senator Charles Schumer of New York, the chamber’s third-ranking Democrat. “Republicans will be hard-pressed to explain why they’d allow teachers and firefighters to be laid off rather than have millionaires and billionaires pay their fair share.”

Mouchel chief quits after contract error [FT]
Mouchel, which provides services such as road and building maintenance, said on Thursday that it had overestimated the profits from one contract by £4.3m because of an actuarial error. In June, it had predicted that a one-off gain from the contract – believed to be with a local government client – would insulate it from disappointing trading elsewhere. In a second setback, Mouchel also announced on Thursday that it was increasing accounting provisions related to other contracts by a further £4m or so following a review by Rod Harris, its new finance director. It said the larger provisions reflected “the continuing challenging business environment”.

Billionaire Poster Boys For Tax Reform: Mellon, Buffett, Schwarzman…And Koch? [Forbes]
And we don’t want to see them in their Farrah Fawcett versions.

News

Accounting Firm Merger Mania: LarsonAllen and Clifton Gunderson Feeling Each Other Out

Caleb Newquist
October 6, 2011

It’s been quite awhile since we heard a good merger rumor and this past week we finally heard one that doesn’t involve Moss Adams or Grant Thornton.

Rumor has it Larson Allen and Clifton Gunderson are merging. Vote approved by Larsen Allen, vote pending by CG.

We checked with another source, someone familiar with dealings within the accounting industry, who confirmed that the two firms are talking. According to this person, the combination would make sense as both LA and CG are “sleepy” firms that don’t perform public company audits and have been making small acquisitions here and there. Also it would strengthen CG in areas like Virginia/Maryland where they are rumored to be lowballing engagements and Larson in places like Illinois, Indiana, and Wisconsin where CG has a big presence. This person also said that the deal was “probably 50/50 right now” with the rumored name of the new firm being “CliftonLarsonAllen”.

Clifton Gunderson CEO Krista McMasters told Going Concern that this is “not a story” right now because the firms are simply in “exploratory discussions” and there has not been a vote by the CG partners. Ms. McMasters also denied that there had been any decision on the name of the combined firm, reiterating that they are simply feeling each other out.

Even though it doesn’t sound like things are hot and heavy yet, we rammed a few details together from Accounting Today’s most recent Top 100 Firms list to see what the CliftonLarsonAllen firm would look like:

• A combined $470 million in revenues. That would be good enough to be the 10th largest firm in the U.S.

• 60 offices (probably some consolidation) in 24 states and The District of Columbia.

• Over 300 partners and 3,000 total employees.

A spokesman at LarsonAllen declined to comment but was trying to get someone in the know to call us back. So far, we haven’t heard anything. If you’re in the loop and have more details to share, email us.

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]

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