Going Concern

Review Comments

Review Comments | 01.04.10

Caleb Newquist
January 5, 2010

• Turbotax Timmy? Dancing Helio? Let’s Pick the 2009 Taxpayer of the Year! – There’s also the guy that said hookers were medical expenses. [Tax Update Blog]
• Tax Consequences of Extreme Philanthropy – Rick Warren’s reverse tithing sounds confusing. [TaxProf Blog]
• Levin apologises for $164bn AOL deal – It was just arguably the worst merger ever, it’s not like it brought down the entire economy or anything. [FT]
• CBIZ, Mayer Hoffman McCann buy South Florida firm – MHM functions as the audit arm of CBIZ and took the attest portion of Goldstein Lewin & Co. while CBIZ took the non-attest portion. [Kansas City Business Journal]
• Open Letter to the Securities and Exchange Commission: Conflicting Disclosures by Overstock.com Reveal Improper Audit Opinion Shopping – Sam Antar points out the gory details behind the Overstock.com/Grant Thornton blamestorming. Guess whose pants are on fire? [White Collar Fraud]
• H&R Block settles nationwide IRA lawsuit – Not such a good day for H&RB. [Reuters]

IRS Sticks It to Amateur Tax Preparers

Caleb Newquist
January 5, 2010

Any tax preparers out there that got their stripes by virtue of an 8 hour course in the basement of a church will have to start hitting the books. Today, the IRS announced that it is putting a stop to all the amateur 1040 jockeys out there by issuing new requirements for all paid tax preparers.

The new requirements came after complaints from taxpayer rights’ groups who wanted stronger oversight over the industry. Apparently there are too many “tax professionals” that can’t tell the difference between a W-2 and a sack of doorknobs.

WSJ:

[S]tarting in 2011, all paid tax preparers will have to register with the IRS and include a unique identification number on any returns they prepare. Preparers will be given three years to pass a competency exam in either individual or small business taxation.

Attorneys, certified public accountants and enrolled agents will not be required to pass the competency tests. They will remain subject to the requirements of their respective licensing bodies.

But the exams and new annual, continuing education requirements will impact likely hundreds of thousands of preparers, from employees of chain preparation firms like H&R Block Inc. and Jackson Hewitt Tax Service Inc. to mom-and-pop storefronts that offer tax preparation as one of several services.

Three years to pass an exam? Even the dimmest of CPA Exam candidates manage to finish in 18 months. Also, we’re curious as to what diabolical plot the H&R Blocks and Jackson Hewitts of the world will devise in order to speed their professionals into compliance.

Regardless of the shortfalls, Doug “Don’t expect me to apologize” Shulman said that the new requirements were ‘long overdue’. He also said that the Service will be forming a task force to look into determining the accuracy of tax prep software for possible future standards over that industry.

One thing is for sure, somewhere Doug’s boss is asking his friends if they know any good CPAs.

IRS to Boost Oversight of Paid Tax Preparers [WSJ]

Uncategorized

CPA Poll: Are You Securities Licensed?

Caleb Newquist
January 5, 2010

TPTB, in their never-ending quest for world domination, have requested the CPAs out there to answer the following harmless question. Your help is appreciated.

Online Surveys & Market Research

Uncategorized

Jeremy Newman Has Had It

Caleb Newquist
January 5, 2010

So much so that he wrote a letter. The BDO ~~International~~ Global Coordiation CEO and infrequent blogger sent his letter to the Financial Times today in response to previous letters to the FT that unequivocally placed the blame for the financial apocalypse on accounting rules.
Newman, who strikes as the mild-mannered sort, comes as close to telling all the haters out there, “OH, HELL NO” as one might expect:

Sir, It is unfortunate if people are persuaded that accounting rules are to blame for bad lending decisions and poor investments (Letters, December 29). Banks, and other financial institutions, needed injections of monies from governments (and others) because they lost money and were short of cash – not merely because of accounting issues. Inadequate bad debt provisions, if such was the case, may have resulted in unduly large bonuses being paid but it was not the bonuses that created the cash shortages – it was the poor lending decisions that resulted in such bad debts. Equally, accounting rules did not result in companies overpaying for acquisitions – it was the poor investment decisions that resulted in a decision to overpay.

It’s pretty clear that J. New is sick and tired of everything being blamed on accounting rules and he figured writing a stern (but cordial) letter to the FT was the best way to draw the line in the sand. While that might have some effect, we would invite him to cut loose (read: go completely ape shit) on his blog to tell those IFRS haters what they can do with their pointer fingers. If you want us to read a draft JN, we’re here for you buddy.
Poor business decisions were behind losses [FT]

California CPAs to be More Ethical Starting in 2010

Caleb Newquist
January 5, 2010

The California Board of Accountancy is ringing in the New Year with some increased requirements for California CPAs including additional ethics training to maintain an active status.
With so much unethical behavior in the world today, the CBA figured a few more hours of CPE will straighten you all out:

CBA president Manuel Ramirez said the regulation changes are part of an increased focus by the CBA on ethics and education. “I believe the newly approved continuing education requirements are an important step to increasing the CBA’s consumer protection mandate, while also reestablishing CPAs’ reputations as one of the most ethical professions in the country,” he said in a statement.

Not only will California have the most ethical CPAs in all the land but the CBA is jumping on the transparency bandwagon by broadcasting its future meetings via webcast. This will “give both consumers and CBA licensees a ‘window’ into important issues and how decisions are made.” Prior to this ‘window’, anyone wanting to observe a meeting had to attend — GASP — in person. One can safely assume that the CBA’s decision was partly due to realizing that webcasts would save them the embarrassment of A) a near empty meeting and B) those in attendance snoozing through the whole thing.
California Toughens Requirements for Accountants [Web CPA]
Other California CPA News:
CalCPA Is Doing About Everything It Can to Motivate You to Reactivate Your CPA
Arnie Signs 150-Hour Rule for California

Career Center

Job of the Day: Get Started on that Resolution Now

Caleb Newquist
January 4, 2010

For those of you that punched the “Find a new job” button on our resolution post, this will help you get started. Even if you indicated that want to do less work in 2010, you may want to do less work at a new job.
Get details for an Accounting Analyst position at BlackRock in San Francisco, after the jump.

Company: BlackRock
Title: Accounting Analyst
Location: San Francisco
Minimum experience: 2 – 3 years
Description: The Accounting Analyst is engaged in the accounting, analysis and reporting of securities lending and cash management revenues. This includes securities lending rebate and fee settlement with counter-parties (securities dealers and brokers). In addition, the Analyst will create analytical and performance reports as needed. The position will be in communication with accounting personnel from other securities brokers and will work closely with GIMG Securities Lending’s Trading and Operations.
Responsibilities: Prepare rebate and fee statements and settle with counter-parties; prepare and process journal entries; analyze, research and reconcile accrual variances; prepare and distribute relevant management reporting analytics
Required Skills: College degree (BS/BA) preferably in Finance/Accounting/Business; strong computer skills, including Oracle, OFA (Oracle Financial Analyzer), and advanced Excel
See the entire description over at the GC Career Center and visit the main page for all your job search needs.

Uncategorized

For Those of You Not Already Walking on Water

Caleb Newquist
January 4, 2010

Many of you have promised promised promised to stick with your resolutions this year and we think that’s admirable. Personally, we think you’re all fine the way you are but we understand that lots of you are perfectionists.
Whether it’s more appropriate use of work email or actually billing the hours you work, you’ve probably got some resolutions in mind. If we’ve nailed yours below, pull the lever or if you’ve got other ideas on how you’re going to be more kick-ass in 2010, share in the comments.

Online Surveys & Market Research

The JDA

Apparently the Fed Needs More Money

Adrienne Gonzalez
January 4, 2010

Editor’s Note: Want more JDA? You can see all of her posts for GC here, her blog here and stalk her on Twitter.
I know, the headline stunned me when I read it the first time too. First via James Turk, I had to stop and look at that for a second. Don’t they make it? How could they possibly need it?
Initially, the Fed called this proposed deposit facility a component of its “exit strategy” (the existence of which, much like Sasquatch, is still up for debate), insisting that by creating an interest-bearing drain for banks’ funds held at the Fed, it could clear out some of the money sloshing around in the system.

Although they also believe asset sales to be an option, I’m still not sure who the hell they are expecting to buy these bonds (unless they’re willing to take a loss, and knowing the Fed that’s not too likely) so stay tuned.
I believed this whole interest-bearing deposit facility nonsense was really just a Bad Bank for Dirty Fed money but it’s actually the Fed begging for deposits, so I guess I was wrong. But why, then, would they paint this as an exit strategy?
From the Turk piece:

The US government needs ‘deposit currency’ – or ‘electronic’ currency, to put it into Mr. Bernanke’s terms – so that it can pay its bills by check or wire transfer. Payment for goods and services by deposit currency are made through the banking system, and nearly all commerce in the United States is conducted in this way. So where will the Federal Reserve get enough deposit currency to enable it to continue purchasing US government debt?

In 2008, “public debt” was considered to be $9.9 trillion dollars or 70.2% of GDP. By 2009, that number had ballooned to over $12.9 trillion dollars, nearly 91% of GDP. Even more disconcerting? This is using governmental accounting rules which — as any of you who have ever worked in government can attest to — don’t necessarily coincide with GAAP logic.
Let’s not forget that a large chunk of this debt is owed to the Fed itself (for some reason) perhaps because inflation isn’t bad enough and we somehow should pay them more for the convenience of having printed money and payment systems.
I’m not 100% on what’s going on here but it’s beginning to look awfully suspicious.

KPMG

Is Tim Flynn Being Vetted as the Next Secretary of the Treasury?

Caleb Newquist
January 4, 2010

Welcome back, servants of the capital markets. We’ll dispense with anything substantive this morning in order to help you combat the depression. We’ll start off by presenting you with the following:

As you can see, this is the POTUS ~~on vacation~~ working in Hawaii with the entourage in tow. One member of said entourage just happens to be donning a KPMG cap and since not just anyone can get their hands on these coveted lids — and since the gentleman’s face is mostly obscured — we’re curious about a few things: 1) Is Tim Flynn leaving the Radio Station for a cabinet position and if so, which one? 2) Was Phil Mickelson joining the Prez for some time on the links and had a overwhelming urge to represent? 3) If this is just some Obama yes-man, did he receive the cap from a Klynveldian representative and is this a bold move to get KPMG representation in the President’s inner circle?
If you’ve got thoughts, theories, or wild-ass guesses, dispense them in the comments and again, welcome back.

Preliminary Analytics

Preliminary Analytics | 01.04.10

Caleb Newquist
January 4, 2010

• Fed Chief Edges Closer to Using Rates to Pop Bubbles – However, don’t even think that the low interest rates were the cause of the housing bubble, that was due lax regulation, thankyouverymuch. [WSJ]
• Auditors Missing in the Financial Crisis — Readers Offer their Thoughts – “It’s not just that the Big Four tetrapoly fail the essential tests of insurability, although they do – because of sector concentration, unpredictability of losses and inability to quantify exposures. It’s also that if any such ‘super-audits’ actually existed, the auditors would surely be performing them already.” [Re: Balance]
• Tax Person of the Year – How Charlie Rangel was even a nominee, we’ll never know. [TaxProf Blog]
• Family Business Challenge: Attitude of Entitlement – “Someday all this will be yours” could have unintended consequences, like the kids screw up your life’s work. [The Exuberant Accountant]
• Small Biz Exemptions from IFRS? – A la SOx. [The Summa]
• Dubai’s “superscraper” makes history in hard times – After a couple of delays Burj Dubai is finally opening today and despite all the trubs in the Dubai lately, “experts” are saying that all 1,100 units are sold. [Reuters]

Review Comments

Review Comments | 12.31.09

Caleb Newquist
December 31, 2009

• Subsequent Events Proposal Issued By FASB – Someone please tell Norwalk to take a break. [FEI Financial Reporting Blog]
• Are Taxes the Root of Unhappiness? – Of course! [WSJ]
• Die Now – “If your estate totals between $1.3 million and $3.5 million, it’s cheaper–from a tax perspective–to die this year.” Time is running out! [Tax Vox]
• Here’s what’s not gonna happen in the new year – Tiger Woods giving marital advice. [NYP]
• 2010: Walking away will gain cachet – From your house that’s under water, that is. [Rolfe Winkler/Reuters]
• Jets Ban Alcohol at Giants Stadium for Final Game – GASP [Bloomberg]
• CFOs Prefer Restaurants for Meetings – According to a survey. Was that really necessary? [Web CPA]
That’s it for us today. Happy New Year! Go out tonight and make a scene (safely). We’ll see you on Monday!

CPA Exam

>75’s Year in (CPA) Review

Adrienne Gonzalez
December 31, 2009

Shameless self promotion: JDA also did a Year in Review and I tried really hard to keep the accounting crap out of it.
Anyway, on to the CPA exam. We’re heading into the last day of the year and I have got to say, you bastards have me overdosing on Red Bull just to keep up. I’m not sure what happened this year but it feels like a lot of you got fed up with dragging your asses along on this exam. Or maybe you got laid off and all the sudden had a whole bunch of time to study. I’m guessing a lot of you finally realized for the first time in your careers that you can’t coast forever.
I talked to a lot of you this year. A LOT. So many that I’m about ready to crawl into bed for the next 72 hours (after we make the last day of the year, of course) and hibernate. Where did all of you come from? Why now?

Whatever inspired this surge in interest in those three letters, I have to say I saw a lot of inspirational shit go down in CPA exam land. Like the guy with a learning disability who finished in a year using both a full review and a supplement each time. Guess what? CPA. Or the student who put this off for so long she couldn’t believe she was that old sitting in that chair taking that test she’d dreaded for 15 years since college. She failed miserably the first time around, walking in there convinced she would.
The Self Fulfilling Prophesy candidate probably makes up 15% of our student base (I’m making that number up) and takes a little extra encouragement to pass. The second time around, she went in there and got through the exams. Now she just needs to find a job.
And that’s our other student. My Firm is Paying for This guy doesn’t realize that there’s no such thing as a free lunch, nor that there’s a bonus in it for him if he can just pass. Hell, they bought his ticket in. But they also worked him into the ground and he never studied on account of always being “too busy”. He’s got lots of time to study now that he’s laid off but his materials are outdated and useless. Too bad.
Wherever they come from, whomever pays for them to get there, this was sort of the year for the CPA exam. Or maybe the AICPA just scared everyone shitless with that IFRS threat and that’s why everyone is scrambling to take this exam and get it over with. Whatever works, I’m okay with it. I keep a case of Red Bull under the sink in the office.

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