Obama Warns of Default Risk [WSJ]
With Congress deadlocked a week before the government runs out of cash to pay its bills, President Barack Obama warned Monday in his starkest terms yet that the U.S. is on the brink of a default that could trigger an economic upheaval. Mr. Obama made his comments in a prime-time national address followed immediately by a response from House Speaker John Boehner (R., Ohio), who dismissed not only the president’s approach, but virtually his entire record in office. Both men spoke just hours after the top Republican and Democratic leaders in Congress unveiled competing debt plans. Thely faced opposition that could make it hard to pass their respective chambers.

More U.S. lawsuits target Chinese reverse mergers [Reuters]
Accounting debacles at U.S.-listed Chinese companies have prompted a surge of securities fraud lawsuits, but investors might have trouble recouping their losses even if they win. More than one-fourth of the 94 U.S. securities fraud lawsuits seeking class-action status and filed from January to June related to so-called Chinese reverse mergers, according to a study released on Tuesday by the Stanford Law School Securities Class Action Clearinghouse and Cornerstone Research in Boston.

News Corp. Board Challenged [WSJ]
The Journal [!] reports that the audit committee is even less independent than we thought.

IRS Change Helps ‘Innocent Spouse’ [WSJ]
The Internal Revenue Service is giving some relief to “innocent spouses” who otherwise may have been liable for a partner’s tax debt. Effective immediately, the agency has eliminated a rule that disqualifies taxpayers from innocent-spouse status if they fail to file for relief within two years—a provision that snagged people who otherwise qualified, including abused women.

UK company auditors told to stand up to banks [Reuters]
“We find too many audits that require significant improvement. Scepticism is a key factor in those audits that do need an improvement,” said Paul George, director of auditing at the Professional Oversight Board (POB). The POB’s annual survey of audits found that the UK operations of the “Big Four” — KPMG, PwC, Deloitte and Ernst & Young — along with two smaller firms Grant Thornton and BDO, all failed to be sceptical enough. PwC was told to pay more attention to how impairment of goodwill is calculated, while Ernst & Young should make sure there is enough evidence to back growth rates. Grant Thornton, KPMG, BDO and Deloitte were told to apply appropriate challenges to company bosses.

Bad Food? Tax It, and Subsidize Vegetables [NYT]
Simply put: taxes would reduce consumption of unhealthful foods and generate billions of dollars annually. That money could be used to subsidize the purchase of staple foods like seasonal greens, vegetables, whole grains, dried legumes and fruit.

Men use ‘sniff test’ to tell clothes’ cleanliness, survey shows [MSNBC]
For some reason, this required a survey.

Auditors’ Somewhat Raised Confidence [CFO]
First the good news: fewer companies are carrying around the burden of a going-concern qualification. […] Now the bad news: the numbers are still high. And the drop in qualifications has more to do with companies dropping out of the public-company sector, getting acquired, or — confirming their auditors’ predictions — going bankrupt.

Doubts emerge over U.S. move to global accounting [Reuters]
Once thought inevitable, a decisive move by the United States to one-world accounting is now in serious doubt. Blame delays, shifting timelines, or huge debt and high unemployment problems in the United States’ own back yard, but the idea of a massive change in companies’ accounting framework is not the crowd-pleaser it once was. “If there was a compelling value proposition that said, ‘as a policy, this is the right thing to do,’ it would be going faster than it’s going,” said Steven Nielsen, chief executive officer of Dycom Industries.

Gridlock for Debt Talks [WSJ]
Republicans and Democrats on Capitol Hill moved along separate tracks Sunday toward a deal to increase the U.S. government’s borrowing authority, setting America’s gridlocked political system on a collision course with jittery financial markets around the world. The two camps remained split over how much to increase the debt limit—enough to get past the 2012 election or not—and how much to cut spending. A break in the impasse is needed to ensure the government won’t run out of cash to pay its bills after Aug. 2.

Owling: The new planking? [WaPo]
“Because planking is so two months ago.”

More red flags for Carlyle’s China portfolio [Reuters]
More Chinese companies in the Carlyle Group’s Asia portfolio have had questions raised about potential weaknesses in their accounting practices or financial controls, bringing further scrutiny to the private equity firm’s investments across the country. Carlyle, invested in more companies in China than any other private equity firm, is not alone in having to sort out parts of its portfolio. Several other major foreign players there have been caught up in various accounting issues that surfaced in the last few months.

Green Mountain Coffee: A Bad Cup of Java [Grumpy Old Accountants]
With lawsuits recently filed against it for securities violations, we can no longer ignore the financial reporting indiscretions of Green Mountain Coffee Roasters (GMCR). This is not just a case about bad financial reporting, and likely financial reporting fraud. GMCR offers absolute proof that compliance with generally accepted accounting standards does not necessarily yield transparency in financial reporting.

PwC Hedges Bet Between Bank of America And Federal Home Loan Banks [Forbes]
Safe money is still on PwC towing to BofA.

Detecting internal control overrides [Fraud Files Blog]
News you can use.

To Plank or Not to Plank [The Summa]
There is no question.

Moody’s downgrades Greece [FT]
The second bail-out of Greece will weaken the credit ratings of Europe’s strongest countries as well as resulting in a default for Athens, Moody’s said on Monday. The US rating agency downgraded Greece by three notches to Ca, Athens’ lowest rating and one that implies the country is already in default.

KPMG Chairman-Elect Michael Andrew Announces Appointments to Global Leadership Team [KPMG]
Among them is Mark Goodburn, currently head of Advisory in the U.S., to Global Head of Advisory.