• Financial reporting based on bygone era, Microsoft says [Accountancy Age]
Softie’s Technical Accounting Director Bob Laux says that the financial reporting model is waaaaayyyyy behind the rest of the world in providing relevant information. In a letter to the IASB, Mr. Laux describes the broken model:

“In essence, we have a financial reporting model largely based on a manufacturing economy and the industrial age, while the economy has moved to the information age and the financial reporting model has failed to change accordingly,” he said.

He also said that arcane accounting rules, creative accounting to meet analyst expectations, etc. are all ‘symptoms of a bigger problem – a broken financial reporting model.’

This is probably the most poignant example of the “historical financial reports are of limited use” argument that we’ve ever heard. No one uses historical financial statements to make decisions about investing anymore. Sure there are fundamentals that you can derive from them but ultimately you have outdated information that’s part of a large compliance exercise and in this day and age, few people (including Microsoft, apparently) have little use for that.

• Tax Rates for Top 400 Earners Fall as Income Soars, IRS Data [Tax.com via Bloomberg]
If you’re wealthy (Chris Rock definition) then you’ll be happy to know that your taxes during 2007 were the lowest they had been in 20 years, according to statistics provided by the IRS.

The top 400 earners paid an average effective tax rate of 16.6% during the ’07 while in 1993, the average effective rate was 29.4%. KA-ching. Now before you rich haters get all worked up, there is another way to see this data:

Bill Ahern, director of policy and communications for the Tax Foundation, a Washington research group that advocates lower taxes, said the 2007 data doesn’t reflect the current economic circumstances.

“In a good year like 2007, it’s not surprising to see that the owners and managers of the nation’s largest firms made a fortune,” Ahern said. “Notice that two-thirds of their 2007 income was in capital gains, which have dropped like a rock since then.”

Regardless of how you feel about the widened gap, it’s not a stretch to say these facts will be exploited as populist pandering during the upcoming election cycle, as Democrats see their popularity slipping.

• U.N. Climate Chief to Resign [WSJ]
Yvo de Boer will be resigning his position with the United Nations to join KPMG as an adviser on climate and sustainability as well as working with several universities on the issue.

“It was a difficult decision to make, but I believe the time is ripe for me to take on a new challenge, working on climate and sustainability with the private sector and academia,” said Mr. de Boer, who has led the U.N. Framework Convention on Climate Change as its executive secretary since September 2006…

“I have always maintained that while governments provide the necessary policy framework, the real solutions must come from business,” he said in a statement.

Plus the money is probably good. Pretty impressive for KPMG to bag such a high profile dude on a still-emerging issue. Seems that KPMG et al. are making a seriou push into climate change as the IFRS and XBRL opportunities are slow to develop.

• Convergence plan will ‘facilitate’ possible IFRS adoption [FT]
Apparently the FT piece in yesterday’s Roundup on the IASB throwing its hands up over convergence with the FASB was DEAD WRONG. That is, if you ask the Gerrit Zalm, the Chairman of the Trustees of IASC Foundation. He wrote a letter to the FT telling them that they’re mistaken and that the International Accounting Mavens are super proud of the work they’ve done with the FASB and that they’re pretty sure that Bob Herz and Co. will eventually come around:

I was surprised to read your interpretation of recent enhancements to the governance of the International Accounting Standards Committee (IASC) Foundation (“IASB softens stance on convergence”, February 16), and in particular your assertion that a constitutional emphasis on adoption of International Financial Reporting Standards (IFRS) represents a weakening of the trustees’ support for the ongoing work to converge global accounting standards.

Nothing could be further from the truth. The trustees of the IASC Foundation strongly support the work plan that the International Accounting Standards Board has established with the US Financial Accounting Standards Board, which will reduce the differences between, and improve, IFRS and US standards. By reducing differences and thereby reducing any cost of transition, convergence will “promote and facilitate” the possible adoption of IFRS.

So instead of getting all worked up over the FASB doing its own thing, just sit tight and let the IASB work its magic and we’ll have converged standards before you know it. The whole process is like herding cats on acid, so everyone just cool it.

• Walgreen to Acquire Drugstore Chain Duane Reade [WSJ]
Don’t worry, the Journal is reporting that “nearly ubiquitous” (the “nearly” isn’t necessary) chain will still retain its name in the $1 billion deal. Confusion avoided.

• Former church accountant sentenced to 17 months for theft [Springfield News-Sun]
Have we weeded out all the accountants that steal yet? Diane Maddy stole over $300,000 from her church from January 2003 to December 2006 and in August of 2008 and 2009.

Besides, “WTF lady, who steals from a church?” what caused her to take a break for 18 months and then another break for 12 months? Maybe walking out of a house of worship with huge grips of cash caused her to think twice (three times!)?

Listen up accountants who are thinking it: don’t steal. Just because you have access to money doesn’t make it yours. How many “accountant pleads guilty to theft” stories do we have to read? Now we have church accountants stealing? This is the bottom people.