Going Concern

Review Comments

Review Comments | 11.17.09

Caleb Newquist
November 18, 2009

• IRS Hails ‘Historic’ Response To Amnesty For Offshore Bank Accounts – Scare tactics work. [NPR]
• SEC in talks with IRS about preserving tax breaks for LIFO – Wouldn’t be so good for the likes of ExxonMobil if the breaks went away. A study says it would increase XOM’s tax liability by $9 billion. Lobby much? [CFOZone]
• Sheep Dogs and Stewardship — Why Groom the Next Generation? – “The demands on the recruiting directors of the banks and law firms and accountants are not different. They manage their personnel pipelines because, as a senior Big Four partner put it in a moment of candor, ‘the only reason we hire new staff is so we can re-stock our need for managers.'” [Re:Balance]
• Bill Belichick, Moneyball Savant? – Pats fans, turns out Belichick knows what he’s doing. [TaxProf Blog]
• The Football Plays We Don’t See – No, he really does. [Tax Update Blog]
• President Obama Establishes Interagency Financial Fraud Enforcement Task Force – No less than 23 government agencies, offices, and departments will be involved. How’s that for a dense bureaucracy? [SEC.gov]
• Don’t forget to vote in our two polls from today: Non-profits/Govts and ditiching the bad boss for less scratch. Plus today is the last day to submit a caption for the water closet audit room.

Uncategorized

Hopefully You’ve Got Plenty of PTO

Caleb Newquist
November 18, 2009

DB is reporting that there’s swine flu at Citi and since we’re fairly certain that none of the 1,200 vaccination units were reserved for Klynveldian auditors, you better have your firm-issued surgical masks handy.
That goes for anyone else (read: Big 4 types) working at the Greenwich St. building.
If not, start washing you hands like Howard Hughes.
Earlier: Big 4 Sick Days: Open Thread

Satyam Would Like the U.S. Lawsuits Moved to India, Oh, and PwC Would Like to be Left Out Altogether

Caleb Newquist
November 18, 2009

Satyam wants the U.S. Courts to kindly BTFO of business that should be handled in India. Specifically these silly fraud lawsuits.
Besides, PW India has already said that they want to bury the hatchet, so they feel that this whole will be best handled in the Eastern Hemisphere:

In a court filing yesterday, the software-services provider said it was joining a motion by its auditors, Price Waterhouse and Lovelock & Lewes, to dismiss the American fraud suits brought by investors.
“This case belongs in India,” the auditors wrote. “Satyam’s alleged billion-dollar fraud, as well as the allegedly improper audit, took place in India. Virtually all of the defendants are India-domiciled companies or individuals.”

P. Dubs India and Lovelock want the whole thing dropped since they were acting on the honor system. Annnnnnnd, since PwC International doesn’t have control over any of the individual firms they’d like it very much if the judge just dropped them out of this thing too:

PricewaterhouseCoopers International Ltd. said it should be dropped from the case because the investors failed to show it had control over its Indian member, Price Waterhouse, as is required by U.S. securities law.

From the looks of it, no PwC firm wants to be responsible for anything that went wrong with Satyam even though they signed the audit report. Fine, so can we agree that audit opinion was worthless? That’d be great.
Satyam Says U.S. Fraud Suits Must Be Moved to India [Bloomberg]

Uncategorized

Bob Herz and Jim Kroeker Are Avoiding the Convergence Dance

Caleb Newquist
November 18, 2009

For the love of everything that is good and holy, would someone like to be the FASB Chairman? Or the Chief Accountant of the SEC?
We realize that they’re both thankless jobs but we need people in there that are going to make some things happen.

After Jim Kroeker said this:

“[T]he boards have agreed that the projects that they’re working on are areas that need improvement, not just under U.S. GAAP but under IFRS, then I think convergence efforts should continue or would continue without an SEC finalization of the roadmap,”

Bob Herz is now saying this:

“[T]he ball is mostly with the [SEC] at this point” … Herz noted the SEC has yet to rule on the “roadmap” for U.S. compliance with IFRS it proposed a year ago.

So, let’s get this straight: JK is said, “You go first.” Now Bob Herz is saying, “No, you go first.” Does anyone want to introduce these two clowns? Are they waiting for knighthood before they move on this?
We suggest that somebody toss Mary Schapiro in there to A) complete the trilogy of stooges and B) so she can bonk their heads together. That might get them motivated.
Herz: U.S. Convergence Ball Is in SEC’s Court [CFO]

Uncategorized

Overstock.com Fires Grant Thornton, Files Unreviewed 10-Q, CEO Remains Humble

Caleb Newquist
November 18, 2009

There’s really nothing better than an eccentric CEO throwing caution to the wind, consequences be damned.
Insert Patrick Byrne, CEO of Overstock.com (“OSTK”). He issued a letter via press release yesterday that has many people’s attention.
Byrne opens the letter by quoting Nietzsche:
“All things are subject to interpretation; whichever interpretation prevails at a given time is a function of power and not truth.”

Tragic enough but then Byrne really amps it up, droning on for eleven points about his company’s dire situation. Here’s the gist*:
• The difficult accounting treatment of an overpayment received by OSTK from a “partner”.
• Putting the audit out to bid after “eight years of fine service” from P. Dubs, and hiring GT because “my belief that changing auditors every decade or so might be healthy.”
• SEC inquiries into the accounting treatment of the overpayment.
• GT changing their minds on the accounting treament after said inquiries.
• We’re filing an unreviewed 10-Q, P. Dubs is on board for our treatment, GT is fired, anyone (and I mean anyone) want to audit us?
Byrne spends no less than six paragraphs/points explaining GT’s wishy-washy, bending-over-for-the-SEC ways. The man is nothing if not thorough.
Spineless auditors notwithstanding, Byrne will press on, the company will overcome, and he will remain committed to you, Overstock.com shareholder:

I will hold a conference call to further explain and answer questions regarding this matter on Wednesday afternoon at 5:00 p.m. EST (details below). Until then, I remain,
Your humble servant,
Patrick M. Byrne

10-Q [SEC.gov]
8-K: Dismissal of Grant Thornton [SEC.gov]
Press Release [SEC.gov]
*If you want to debate the particulars, be my guest but this isn’t the Journal of Accountancy, feel me?

Uncategorized

Reader Poll: Non-profits, Government

Caleb Newquist
November 17, 2009

TPTB request that you answer the question below to assist their continued quest for world domination. Your help is appreciated.

Online Surveys & Market Research

Uncategorized

Are Your Holidays Going to be Ruined Because of Inventory Counts?

Caleb Newquist
November 17, 2009

Personally, it would make for a better yarn if we were hearing about Jameson-fueled discussions about healthcare reform that eventually lead to grabbing all the gifts (and the remaining Jameson) and storming out of in-law’s house. Sadly, we’ll have to wait until after the holidays for those.
What we have heard is that PTO still isn’t being granted in the name of inventory counts. One reader notified us that her office still hasn’t released the inventory schedule so A1s and A2s are still going to have to wait to see how much PTO they’ll be able to take for the holidays:

[I] emailed you about a month ago that we (first and second year associates) couldn’t schedule any PTO for Christmas yet- and STILL we can’t schedule PTO. I think it’s ridiculous that it’s almost a month away and we can’t get any time. I talked to a partner…and he said that we’ll get the inventory schedule the first week of December, and then we’ll know when we can schedule vacation. [He said] ‘well you’ll have two days to spend w/ your family, right’

For some people two days with your family is about all you can handle but we understand that may just be people we know.
And regardless of whether you celebrate the birth of JC, lots of people travel in the twelfth month and it’s definitely frustrating if you’re still getting stonewalled on the PTO. We’re not sure if this is an isolated incident so discuss your office’s ability work with you on the inventory schedule or if they’re putting coal in your stocking.
Earlier: Are Inventory Counts the Bane of Your Existence?

Uncategorized

Problem of the Day: Do You Quit Your High-Paying Job with the Idiot Boss?

Caleb Newquist
November 17, 2009

The BBC reported last week that 49% of workers in the UK would leave their jobs if it meant working for someone that didn’t make bad decisions.
As we’ve noted, the Brits seem to be less hung up on money than us but that still doesn’t mean you wouldn’t leave for less money if you could get away from that boss who can fuck up a cup of coffee not to mention every decision that affects your work directly.
So we have a simple question for you. Under normal circumstances, would you leave your high paying job if it meant you didn’t have to work for an idiot boss?

Online Surveys & Market Research

Ernst & Young Severance Negotiable?

Caleb Newquist
November 17, 2009

Everything is negotiable, amiright? We heard that staff in one North Central office were given one month of severance but at least one person made a big enough stink that they ended up with three months. Personally, we thought the Big 4 was pretty inflexible on this point but hey, if it’s true, nice work.
Jump over to the main thread to check the latest discussion and if there are still details to be reported, get in touch.

Preliminary Analytics

Preliminary Analytics | 11.17.09

Caleb Newquist
November 17, 2009

• Bernanke Signals ‘Extended’ Low-Rate Period May Become Longer – In other words, we’re going to start blowing bubbles. Don’t worry, it’s fun! [Bloomberg]
• America’s Newest Land Baron: FDIC – Anyone looking for “a failed condo development on a noisy freeway ramp next to a Motel 6, a Waffle House and a Do-It-Yourself Pest Control.” Sheila Bair is selling. [WSJ]
• Volcker Criticizes Accounting Proposal – Criticism like the idea for the Treasury Department, FDIC, and the Fed to oversee accounting rules is ‘terrible’. [NYT]
• Playboy CFO Resigining – Linda Havard is ‘looking forward to new challenges’ after a dozen years on the job. Tracking Viagra expenses for the founder just doesn’t float her boat anymore. [CT]

Review Comments

Review Comments | 11.16.09

Caleb Newquist
November 17, 2009

• 15M+ taxpayers could unexpectedly owe taxes – That’s never good. [NYDN]
• GMAC Chief Resigns – The Board was sick of “just one more round of TARP and that’s it” routine. More fun facts here. [WSJ]
• The Return of Bell Bottoms – Homebuyer credits, bell bottoms, and drugs. [Tax Update Blog]
• Battle Lines Drawn Over Who Governs Accounting Rules – FASB…it’s…all…slipping…away… [Compliance Week]

Charlie Rangel’s Name to Appear on Tax Scofflaw Website?

Caleb Newquist
November 17, 2009

Maybe! The State of New York remains in a fiscal crisis and is so desperate for money that apparently all ideas are being considered. According to the Daily News, the latest bright idea from Albany is to publish the top 200 businesses and the top 200 individual delinquents on the Internet apparently to shame those delinquents into paying their share.
Everybody seems to think it’s a good idea but can’t agree on who should be handling it. The State Tax Department would prefer that they put the list up themselves but legislators in Albany smell populism:

Tax officials say they oppose the law, preferring to enact the measure administratively.
Given the fiscal crunch, the state tax department has already increased its efforts to go after tax scofflaws.
The department can’t commit to creating a list until it explores the “resources we need,” particularly in a time of fiscal crisis, Burns said.
[Assemblyman William Colton (D-Brooklyn)] said he wants it done soon. “When the state desperately needs dollars to provide services to schools, hospitals and nursing homes, we don’t have time to wait,” he said. “We need to get this program implemented.”

Well played, Assemblyman. But obviously the important question is: will Rangs have to give up his rent controlled apartments? It’s important.
Expose tax cheats’ Web of deceit – pols [NYDN via TaxProf Blog]

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