Going Concern

Career Center

Job of the Day: Genworth Needs a Financial Analyst

GoingConcern
February 3, 2010

An analytical CPA/CFA/MBA is needed for a position located at the Genworth HQ in Richmond, Virginia. Qualified candidates need to have at least five years of Big 4/public accounting experience or experience in financial services or insurance.

Check the more details for this position after the jump.

Company: Genworth Financial U.S.

Title: Sr. Finance Analyst – Strategic Capital Planning

Location: Richmond, VA

Minimum Experience: 5 years

Description: Genworth Financial is looking for a highly experienced and analytical CPA, CFA or MBA to join the Genworth HQ Stat Financial Planning & Analysis team.

Responsibilities: Liaison with various functional areas of the business, including Treasury, Tax, HQ GAAP FP&A, Business Development, Controllership, and Segment Finance groups as needed to consolidate long-term enterprise-wide financial plans, including all key financial metrics; Maintain models for use in updating the consolidated financial plans as needed and to show the impacts of various “what-if” scenarios on all key financial metrics; Use this information and analysis to support strategic corporate planning, including communications to the Board of the Directors; Support the management of the Corporate and Executive Capital Committees, including maintaining committee calendar, minutes and follow-ups, organizing and distributing materials, and documenting project statuses and approvals; Support the Business Development team by providing regular financial inputs, and ad hoc data and analysis as required; Support Board of Director, Quarter Close, Planning, Rating Agency and Capital Committee presentations and analysis as needed

Qualifications: CPA, CFA, or MBA designation; 5-7 years Financial and/or Insurance Experience; Prior Big 4 or public accounting experience; Corporate Finance Experience;

See the entire description over at the GC Career Center and visit the main page for all your job search needs.

Sex Change Expenses Are Deductible but You’re on Your Own for the C Cup

Joe Kristan
February 3, 2010

He seemed to have it all — a wife, three kids, a successful career. But it wasn’t enough. What he really wanted was another X chromosome. Our taxpayer, explains the Tax Court, “was uncomfortable in the male gender role from childhood and first wore women’s clothing secretly around age 10…discomfort regarding her gender intensified in adolescence…[The taxpayer] was a female trapped in a male body, and continued to secretly wear women’s clothing.”

So our taxpayer consulted a licensed social worker, which is apparently how these things are done, and after suitable counseling, decided to try on XX for size. The first steps down the path the the Misses Department seemed to suit the taxpayer, so he took the next big leap. $21,741 of surgical and related expenses later, the taxpayer was Ms. Rhiannon O’Donnabhain.

The Tax Court got involved when she deducted these expenses on her 2001 tax return. The IRS said that the expenses were not “medical” expenses under Sec. 219. It would be an unusual man who would undergo this sort of thing absent dire medical need: “The procedures that Dr. Meltzer carried out included surgical removal of the penis and testicles and creation of a vaginal space using genital skin and tissue.”

It took 139 pages and 4 separate opinions, but the Tax Court agreed that the gender reassignment surgery is a deductible medical expense. It’s surprising that it was so difficult, considering that the court is largely composed of men who wear dresses at work. But they felt it was necessary to go into the sort of privacy-killing detail that makes taxpayers think twice before spurning an appeals offer and going to Tax Court (oh, you mean you’re that Rhiannon O’Donnabhain!):

Petitioner, anticipating the formal recommendations for her surgery, went for a consultation and examination by Dr. Meltzer in June 2001 at his offices in Portland, Oregon. Dr. Meltzer concluded that petitioner was a good candidate for sex reassignment surgery. Dr. Meltzer’s notes of his physical examination of petitioner state: “Examination of her breasts reveal [sic] approximately B cup breasts with a very nice shape.”

Nice enough for government work, anyway. The Court ruled that while the hormone therapy, vaginoplasty, feminizing facial surgery and penis and testicle removal were deductible, breast augmentation was, well, too much:

given the contemporaneous documentation of the breasts’ apparent normalcy and the failure to adhere to the Benjamin standards’ requirement to document breast-engendered anxiety to justify the surgery, we find that petitioner’s breast augmentation surgery did not fall within the treatment protocol… Instead, the surgery merely improved her appearance.

So if the Tax Court’s view holds up on appeal, you can deduct the cost of changing sides, but if that’s not enough to make you sufficiently hot, you’re on your own.

Deloitte

Deloitte San Jose Re-signs Lease for a Nightlight

Caleb Newquist
February 3, 2010

We got pointed to an article about Deloitte’s San Jose office signing a new 10 year lease (subscription required) which is pretty ho-hum although since a $50,000 Deloitte sign sealed this particular deal it made us think back to the idea of the Big 4 and shameless self-promotion.

According to the San Jose Business Journal, the mere idea of a Deloitte sign was the ultimate temptress, “permission to put a sizable sign near the roof of the 16-story building was too tempting to pass up.” This despite the a 25% vacancy rate in downtown San Jose and a 20% vacancy rate in Silicon Valley. All that and we learned that when the sign is illuminated it’s only visible as far away as I-280 and U.S. Route 87.

Couldn’t they get something brighter? If it were us, we’d be looking for something akin to the Aurora Borealis.

Having never been to the Deloitte offices in San Jose (we’d love a tour though, virtual of course, or maybe just some still images of the cube farms) we can’t tell you if the troops out there were in desperate need of an upgrade in facilities. WTFK, maybe everything at 225 W. Santa Clara St. is tip-top. Aaaannnnnd maybe it was the best deal to stay put but the fact that the sign was the clincher seems a little, well, shameless.

More Deloitte Construction:
Deloitte’s Version of Delta Chi Breaks Ground Tomorrow

Non-Profits Are Feeling the Pain

Adrienne Gonzalez
February 3, 2010

WSJ has a Monday piece “Once-Robust Charity Sector Hit With Mergers, Closings” (the Recession Forces Nonprofits to Consolidate) that may be found here. It tells the story of a “homeless” woman with terminal lung cancer and a charity no longer able to afford to help her out. Sad.

When one charity’s COO says “we’ve had funding cut after funding cut, and we never know when the next shoe is going to drop,” that is a bad sign.

Hit by a drop in donations and government funding in the wake of a deep recession, nonprofits—from arts councils to food banks—are undergoing a painful restructuring, including mergers, acquisitions, collaborations, cutbacks and closings.

“Like in the animal kingdom, at some point, the weaker organizations will not be able to survive,” says Diana Aviv, chief executive of Independent Sector, a coalition of 600 nonprofits.

I saw that on the Discovery Channel and it wasn’t pretty.

Note: the Service says the value of your blood is not deductible as a charitable donation but cars are. As of 2005, cars are only deductible at FMV, not Blue Book. Damn you, fair value, foiled by the free market again!

Blame the Service for tightening its charitable donation rules at the worst possible time? Not sure on that one. While you’re reluctant to donate your $200 Toyota (ha) to charity because you could have claimed $2,000 under old rules, find some comfort in the fact that (alleged) terrorist “non profits” can not file for 2 years and somehow get away with it. You wonder why I advocate fixing the system from the ground up?

You can text $10 to Haiti but what about the “Economic Homeless” here in America? asks Young Money.

If this were a survey and you asked me “What do you think the IRS could do to encourage charitable donations?” I would answer “Tax breaks. It isn’t the Treasury’s job to distribute bailouts.” Yet they continue to behave as though it is their duty.

See the problem yet?

Accounting News Roundup: Is Your Next Job in Government? New Overstock.com CFO Isn’t a CPA; Death to Tax Reform Commission | 02.03.10

Caleb Newquist
February 3, 2010

• Obama’s Budget Plan to Create Government Finance Jobs [FINS]
The biggest beneficiary of CFOs not hiring may be the Federal Government. We mentioned in the routhe SEC got a decent boost in the POTUS’ proposed budget and likewise, so did the Treasury Department, “Department employment levels are projected to increase by 253 workers since 2009. Last year’s headcount of 1,089 workers is expected to grow to 1,266 in 2010, and reach an estimated 1,342 workers in 2011.”

Some of the areas within the Treasury that could benefit have yet to be created under the Financial Reform Initiatives including the Office of National Insurance and the Financial Services Oversight Council. We’re sure that Congress will get their act together in time so some of you can consider these potential employers.

One group in the Treasury that won’t have to wait is the Office of Terrorism and Financial Intelligence who was appropriated just over $1 million for new personnel. Whether or not you get to carry a weapon is not clear so just take it easy with all your 24 fantasies. Besides, financial people are the ones who usually end up dead on that show.

• Why Overstock.com and David Chidester Parted Ways [White Collar Fraud]
Sam Antar would like to know why David Chidester and Overstock.com came to a “mutual agreement” for Chides to leave the company. With new Overstock auditor KPMG on board, someone with eleven years experience at the company, that functioned as both the CFO and the Senior Vice President Internal Reporting and Information, might be able to help make the transition easier. Nope!

Sam postulates that the Chidester might have known too much, ” I believe that their so-called ‘mutual agreement’ is based on Patrick Byrne not wanting David Chidester to stay around and David Chidester not wanting to be around to answer questions as KPMG continues its audit of the company’s financial reports.”

KPMG is playing catch up with this new engagement and now they are dealing with a new CFO, Steve Chesnut, who Sam reports, “joined the Overstock.com in January 2009, was not around when most of the financial reporting improprieties under investigation were committed by management,” and isn’t a CPA. He’s got a less enviable job than KPMG.

• Obama’s Tax Reform Commission: RIP [Tax Vox]
Remember President Obama’s Tax Reform Commission? They asked you, the American Taxpayer, to give them ideas on tax reform and, by God, you delivered. After going through all that ingenuity, the commission announced that it get back to those ideas “after the holidays” to get crackin’ on our tax code.

Well! It appears that was time well spent because now it sounds like the tax reform commission is being put out to pasture. Tax Vox reports this exchange from yesterday’s budget briefing with Office of Management and Budget dreamboat Peter Orszag:

“Q: The President was supposed to receive tax reform recommendations in December and that was delayed indefinitely. Is there a possibility that that could be folded into the fiscal commission’s review, or is it just on the back burner?

DIRECTOR ORSZAG: I would imagine that it will be folded into the fiscal commission. I would imagine that — again, the commission will be examining a variety of things, including tax reform.”

We’ll just assume everyone’s ideas are being thrown on the scrap heap. Thanks for your help though!

Quote of the Day: Are You Saying the Plan Didn’t Work? | 02.02.10

Caleb Newquist
February 3, 2010

“[A]t Deloitte we began planning for the downturn and beyond in 2006. Not having a crystal ball, we didn’t anticipate such a violent contraction.”

~ Barry Salzberg, CEO of Deloitte.

The JDA

New Obama Proposal Would Invest $30 Billion TARP Funds in Small Banks

Adrienne Gonzalez
February 3, 2010

One can only postulate that since there was no room in President Obama’s bloated 2010 budget for small business initiatives, he instead chose to apply some TARP money that’s just lying around to get small business working again. I wish Mr President the best of luck on that plan as he’ll be needing it.

WSJ:

President Barack Obama proposed a $30 billion small business lending program Tuesday, the latest in a series of administration efforts to jump-start hiring by the nation’s small businesses.

The program, which Mr. Obama detailed at an appearance in Nashua, N.H., would invest $30 billion from the government’s Troubled Asset Relief Program in community banks to encourage them to lend to small businesses. If approved by Congress, the program would incentivize small and midsize banks to provide loans valued at several times that figure.

Didn’t we invest $700 billion in the Too Big to Fail banks for this same purpose? Not that it matters, we’ll try it again with the hopes that community banks will be able to accomplish what TBTF couldn’t.

A proactive sort of administration, White House officials were already prepared to counter the argument that TARP was never intended as a general piggy bank for funding the administration’s whims:

“The law is very clear: The monies recouped from the TARP shall be paid into the general fund of the Treasury for the reduction of the public debt. It’s not for a piggy bank,” [Sen. Judd] Gregg said.

[White House Budget Director Peter] Orszag said new legislation would be required to create the new small-business plan. He said the cost of the plan would depend on the subsidy rate of new activity and wouldn’t amount to a net cost, in terms of the deficit, of $30 billion.

Considering that he’s referring to a deficit of $3.8 trillion, I guess $30 billion isn’t really anything to get stressed out about after all.

Meanwhile, can community banks counter the continued deterioration of commercial real estate weighing on their balance sheets? I guess we’ll have to wait it out and see.

News

Dita von Teese’s Accountant Understands Why She Has to Spend $70k on a Dress

Caleb Newquist
February 3, 2010

Last month we mentioned that while we enjoy her genius, we wouldn’t want to be of Lady Gaga’s accountant. She definitely falls into the “clients that make you want to jump out the window” bucket.

Likewise, if we had our choice of clients, we wouldn’t be chasing down burlesque artists that marry rock stars, in this case, Dita von Teese. Not because we don’t enjoy burlesque artists and the rock stars they love, quite the contrary actually; it’s just seems that the headaches associated with such a client would be more trouble than it would be worth.

Surprisingly, DVT takes money quite seriously and is not as slipshod as you might expect.

“I refuse to go to the hair salon and have a $300 hair dye job – I do it myself at home with an $8 dye kit… I’ve always been a saver…I saved at least 15[%] of everything I earned and invested it in mutual funds“

Jesus, talk about sensible. However there is this glimmer:

“I think nothing of spending $8,000 on a corset for my show. My accountant once said he couldn’t understand how I spent $70,000 on a single dress but then he came to my show and saw how lavish it was and told me afterwards that now he understood.“

Those are work related expenses though; count us unimpressed. We’re expecting Gaga-esque negligent wasting of money. Like seriously getting carried away.

“I bought [a Jaguar] one night on eBay for $35,000 when I’d had too much champagne.“

Yes. That’s the best she can offer. Plus, there’s this:

“I pay my [credit card] balances off every month.”

More sensible behavior. Doesn’t sound like she’d be that bad of a client at all. Hell, she probably even keeps all her receipts. L. Gaga’s accountant might consider asking her for some advice.

Dita von Teese: ‘I spent $70,000 on a single dress for my show’ [Telegraph]

Managing Diversity for the Accounting Firm of the Future

Daniel Braddock
February 3, 2010

E&Y tweeted an interesting release this morning regarding their outlook on cultural diversity and how it relates to future success, both at their firm and in tomorrow’s global economy. I encourage you to read the full text (linked above), but here is an exercept I want to focus on:

“Our recent study “Redrawing the map: globalization and the changing world of business” reveals that the boards of many global companies lack the diversity to deal with intercultural challenges. At the same time, they cite the need for internationally experienced staff as the most important cultural factor in conducting business globally.”

Every firm is well aware of the importance for cross-cultural efficiencies as an accelerator to getting business done in the global markets. I agree with the article’s point that, “If an organization does not leverage the potent weapon of diversity, it risks limiting its creative potential and ultimately losing its competitive edge.” This is absolutely true. But how does a firm balance the “need” for cultural diversity with the reality that the leadership of many clients oftentimes resembles more of an Old White Man’s Club than that of an idealistic HR workplace? From schoolyard to the boardroom, we as people are naturally drawn to the bubble of comfort created by surrounding ourselves with those who are similar to us; commonalty breeds security. Think back to your last happy hour or the lunch table in 4th grade – what has changed?

On a personal level, E&Y isn’t failing at its internal diversity efforts; per Caleb’s post last week, they are second among the Big4 in terms of overall diversity hires (29%) and their male/female ratio is an even-steven 50%. These numbers are most likely bolstered by increased retention over the last 18 months as well as a focus on diverse hiring from the campus pipelines.

That’s not to say that the ongoing effort to strike a better diversity balance is unrealistic or futile. The next generation of partners (i.e. you new associates sweating through your first 80 hour workweek) are better prepared for the global workforce than the average 20 year veteran partner. The influx of group work, community service, and international students enrolled in American higher education institutions remains at the origin of preparedness. Couple these attributes with the fact that these colleges and universities see the statistical advantage to stirring the Diversity Melting Pot, today’s students are prepared more than ever for the corporate boardroom. If only you could send your partners back to experience the same thing.

The challenge for any firm lies in managing the differences created across cultures and generations. The basis of this responsibility lies within personal relationships formed between colleagues; something that no report or Fortune statistic can analyze.

You can follow Daniel Braddock, your friendly Human Resources professional, on Twitter @DWBraddock.

CFOs
Tax

White House Backs Down on Corporate Foreign Earnings Tax

GoingConcern
February 3, 2010

This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.

The Obama administration is slowly starting to pick its battles; starting with taxes on corporations’ foreign earnings.

The administration has abandoned its proposal to eliminate U.S.-based multinationals’ ability to defer tax on income by shifting assets to foreign subsidiaries, according to a published report.

While details are sketchy, Bloomberg reported on Tuesday that the administration’s proposed budget for fiscal 2011 shows that it has abandoned its plan to eliminate the so-called “check the box” system under which U.S. companies can defer U.S. tax on income by shifting income-generating assets to foreign subsidiaries without recognizing gains on the transfer.

The proposal would have eliminated companies’ ability to avoid tax on such transfers and forced the repatriation of earnings shifted in this way.

According to Bloomberg, the administration backed down in the face of intense opposition from multinationals. Observers note that Congress has tried to squelch the efforts of the Internal Revenue Service to clamp down on U.S. companies getting foreign tax breaks at the same time as U.S. tax breaks, although many of those breaks are facilitated by the check the box system.

“Maybe the administration figured this was one it did not need to pick a fight on,” Jasper Cummings, a partner in the Raleigh, N.C., office of Alston & Bird and a former associate chief counsel of the IRS, said in an email to CFOZone Tuesday. “They have enough fights as it is.”

Still, Cummings noted that the administration still has “a pretty long list of other changes” in international taxation that it is pursuing. Chief among them is a plan to tighten the pricing rules for transfers of intangible assets.

As CFOZone reported last fall, one such proposal would crack down on asset transfers of employee compensation. In a paper released in May outlining its budget for the last fiscal year, the administration said it would “clarify” the treatment of transfers of intangible assets to include shifts of such expenses.

At present, many companies avoid paying tax on gains resulting from transfers of so-called “workforce in place” under rules that also allow goodwill and “going concern” to go untaxed. In early 2007, however, the IRS issued a staff directive and audit guidelines warning that it was “improper” for taxpayers to classify workforce in place as goodwill and going concern. And an IRS official in September indicated that transfers of workforce in place should include the value of products or services the employees create if much of the work is complete at the time of the transfer.

According to Bloomberg, the administration’s proposals to toughen the rules on transfer pricing would generate $15.5 billion in tax revenues for the coming year and along with other international tax changes produce $122.2 billion over a decade.

Career Center

Job of the Day: Fund Accounting Analyst at J.P. Morgan

Caleb Newquist
February 2, 2010

Who wouldn’t want to get into Jamie Dimon’s house? JPM is looking for an AVP/Fund Accounting Analyst in Boston.

Check the details for this position after the jump.

Company: J.P. Morgan

Title: Fund Accounting Analyst – Supervisor

Location: Boston, MA

Description: As an Assistant Vice President in the Global Support Unit, you will be responsible for establishing and reviewing the controls of the daily operation, ensuring adherence to procedures and policies, and for providing necessary data to senior management and clients.

Responsibilities: Manage up to four supervisors, each with a staff of four to six fund accountants, senior fund accountants and support positions; Your core responsibilities include: interviewing, hiring and coordinating the training of new employees; performing salary and performance reviews of the staff; reviewing key areas of daily operations in order to ensure accuracy and compliance with procedures and controls; ensuring the completeness and timeliness of reporting to clients, outside parties, and other internal departments; assigning responsibilities and ensuring an efficient work environment; reviewing accounting related issues including posting corporate actions, interpreting tax rulings

See the entire description over at the GC Career Center and visit the main page for all your job search needs.

Fraud

Ernst & Young Gives Going Concern Warning to Allen Stanford Liquidator

Caleb Newquist
February 2, 2010

If you’re given the task of running down assets that are left over from a Ponzi scheme, you’d think somone would throw in a little something for the effort. That stolen money is going to find itself after all.

Well! Apparently this is not so, especially as it relates to UK recovery firm Vantis. Vantis has been scouring the Earth for any of the plunder left over from the Allen Stanford hide the $7 billion game.

Six months into it, Vantis can’t get paid for its treasure hunt services and now Ernst & Young has said that the firm’s very life is at stake if they can’t start convincing some people to pay up.

Among the excuses that Vantis is claiming are the fact that most of the assets in the U.S. have been frozen and that the U.S. liquidator Ralph Janvey doesn’t play nice.

But hey! They’re still confident everything will be hunk-dory, “The UK recovery firm said it remained ‘confident’ that it would be able to recover its fees ‘in due course’ but said the timing remained uncertain.”

So more or less you’re day-to-day, right? Welcome to the prestigious Club of Those Ripped off by Allen Stanford.

Vantis faces going concern threat over liquidation of Allen Stanford’s bank [Telegraph]

Careers

Big 4

News

Technology

Practice Management

Site Search

Twitter Feed

Get the Accounting News Roundup

Quick Reads

Sponsored Content

Get the Accounting News Roundup

AO: Senior Accountant, Advisor

Remote Tax Manager

Remote Tax Advisor, CPA Firm

AO: Senior Accountant, Advisor

Remote Tax Manager

Remote Tax Advisor, CPA Firm