Ed. note: ICYMI, we’re taking a breather this week, but there will be the occasional year-end listicle, and Open Items stands ready for your questions. Drop us tips and links at [email protected] In a Complex Tax Bill, Let the Hunt for Loopholes Begin The Internal Revenue Service had to warn retailers that cutting keys doesn’t make […]

Ed. note: As is our holiday tradition, Going Concern is working on a reduced schedule this week, so posts will consist of abbreviated news roundups and perhaps a perfunctory year-end listicle or two, but not much else. If you see any stories worth covering or want to complain about how much you’re working thanks to […]

A busy accountants is a happy accountant. Ed. note: The Accounting News Roundup will be off next Monday and Tuesday, returning Wednesday. While things are quiet, send tips and links to [email protected] And remember Open Items is like 7-11.   Tax Bill Is Great for Accountants — Unless They Have Holiday Plans [NYT] Yesterday, we mentioned […]

AICPA Reacts to Congressional Passage of Tax Legislation [AICPA] It sounds like AICPA President, CEO and porg rancher Barry Melancon is none too pleased about CPA firms being left out of the tax cut party. [T]he AICPA is very disappointed by lawmakers’ decision to exclude CPAs from the measure’s treatment of pass-through entities. Congress should have […]

U.S. Businesses Find Welcome Surprises in Tax Bill [WSJ] “If someone would have said 11 months ago, by the end of the year we’d able to produce a bill and get it to the president’s desk that does these things, skepticism would have been sky high.” That’s not Speaker of the House Paul Ryan or […]

File Your Taxes on a Postcard? A G.O.P. Promise Marked Undeliverable [NYT] The promise of a simplified code will go unfulfilled: “It leaves nearly every large tax break in place. It creates as many new preferences for special interests as it gets rid of. It will keep corporate accountants busy for years to come. And […]

Several Republican Senators Press for Late Changes in Tax Bill [WSJ] Senator Marco Rubio (Fla.) is threatening to not vote for the bill if it doesn’t expand the child tax credit. Senator Mike Lee (Utah) is also undecided, while Senators Susan Collins (Maine), Bob Corker (Tenn.), and Jeff Flake (Ariz.) are not sure things at […]

For Pass-Through Businesses, Let the (Tax) Games Begin [WSJ] For law, accounting, and other service-oriented pass-throughs feeling left out of all the tax cut fun, rest assured that some of your counterparts are already making plans to get in on the action by splitting their businesses in two.  “[Tom] Wheelwright’s accounting firm is considering separating […]

Trump administration explains details of how tax plan would pay for itself, immediately gets attacked for assumptions [WaPo] No one is buying the conclusions of a one-page memo that expects the tax plan to generate a full percentage point more of economic growth than the Congressional Budget Office estimated. “One percentage point of higher growth […]

BDO Network Announces Global Revenues Increase to $8.1 Billion [BDO] Bravo Delta Oscar’s global haul is quaint compared to what Big 4 draw in say, the U.S., but the Financial Times reports that BDO’s global CEO Keith Farlinger cares not one iota about that: “We are not looking to become part of the ‘Big Four’. […]

Senate Votes to Begin Tax-Overhaul Negotiations With House [WSJ] Among the items on the bargaining table: reinstating the medical expense and SALT deductions, and fully repealing the alternative minimum tax. Conferences have no inkling how they’d pay for those changes, however. Elsewhere in now-that-we’ve-read-this-tax-bill news: “Holy crap, what’s this?” Only 1,700 Estates Would Owe Estate […]

SEC Accountants Voice Resource Constraints [CFO] SEC Chief Accountant and budding motivational speaker Wesley Bricker spoke about the constraints in the OCA at the AICPA Conference on SEC and PCAOB Developments. OCA’s staff of 50 responsibility stretches across financial reporting and auditing for issuers, but also trying to assess the effect of new technology like […]

Audit Firm Charged With Fraud Relating to Auditing of Penny Stock Companies [SEC] File to Accountants Behaving Badly: They just made the numbers up. “The SEC’s Enforcement Division alleges that Anton & Chia LLP and its accountants ignored numerous indications of fraudulent financial reporting by three of the firm’s audit clients – microcap companies Accelera […]

Senate Passes Sweeping Revision of U.S. Tax Code [WSJ] The Senate tax bill passed early Saturday morning, 51-49, with Tennessee Senator Bob Corker the only Republican voting against it. There were all kinds of last-minute goodies thrown in for special interests, including wealthy real estate developers. Weird! The Senate and House bills now go to […]

Republican Tax Bill Hits Snag Over Deficit Concerns [NYT] Remember when Republicans said that these tax cuts would pay for themselves? Hahaha, no, just kidding. The Joint Committee on Taxation estimates, even when taking into account economic growth, the tax bill would still add over $1 trillion to the deficit. So now, Republicans have to […]

If you spent your Giving Tuesday budget on Cyber Monday, at least donate some time to catch up on your reading. The 3 False Promises Of The GOP’s Tax Plan [Forbes] Tony Nitti picks apart three common arguments in favor of the tax plan making its way through Congress: 1) That the tax cuts will […]

Put your back Intuit Here’s a strange thing that Brad Smith, CEO of Intuit and taker of weird selfies, said recently: “Anyone who wants to stay in the business of, ‘Send me your shoebox, and I’ll type it in, and I’ll charge you by the hour,’ I think those will be the ones who will […]

Put your back Intuit QuickBooks is synonymous with small business accounting software. This is great for Intuit, as people can’t think about doing their bookkeeping without thinking “QuickBooks.” On the other hand, the brand is so pervasive that infects everything else it does (see: QuickBooks Capital). And now that the company has gotten around to […]

Slow-walking revenue recognition People have been dreading the new revenue recognition rules that go into effect later this year for a while now. FASB delayed the rule once and, sure, maybe the extra time was necessary, but it also managed to prolong the agony. One guy, you may recall, is worried enough that he wants […]

EY’s hiring As we’ve discussed, Big 4 firms like to boast about how many people they hire. For most of their history, they’ve been hiring accounting majors, but that seems to be changing. Here’s EY’s head of recruiting talking to Accounting Today: “We continue to see demand grow for many of our services, and while […]

The Talent War I’ve noticed that there’s something hostile about how people describe the search for qualified finance and accounting professionals. Statements like, “IT’S A WAR FOR TALENT” or “THE BATTLE FOR THE TALENT IS ON” are so pervasive, I’ve been assuming for awhile now that human resource departments line up every Monday to calls […]

Grant Thornton “Mike McGuire aims to make Grant Thornton the Tesla of accounting” is the Accounting Today headline, and I guess that means GT is going electric? Or will start throwing estimates to the wind? I kid, I kid. McGuire explains: [H]e doesn’t see his firm as just positioning itself against the Big Four. “Tesla […]

Robots How’s this for a creepy lede: One of Statoil ASA’s newest employees, Roberta, spends her days in the energy firm’s treasury department searching for missing payment information and sending out reminders. Her boss, Tor Stian Kjøllesdal, said Roberta’s heavy workload would improve overall efficiency in the group. Roberta doesn’t have a last name, a […]

Mortgage interest deduction This Wall Street Journal story reports that while the mortgage interest deduction appears to be safe in a quest to reform the federal tax code, however, the proposal to double the standard deduction might render it moot: Under current law, a typical homeowner would need to purchase a home worth at least […]

Reverse mentoring This New York Times article on millennial mentoring programs delves into the “just how perplexed some executives are by the young people in their midst.” Although it’s a little surprising to learn that some of these perplexed executives are pretty young: Melanie Whelan, 40, the chief executive of SoulCycle, holds monthly meetings with […]

Kiting Here’s a doozy: The Securities and Exchange Commission today announced charges against former senior officers of Mexico-based homebuilding company Desarrolladora Homex S.A.B. de C.V. for their roles in the company’s $3.3 billion accounting fraud. Homex settled SEC charges earlier this year without admitting or denying allegations that it reported fake sales of more than […]

Hacks Earlier this week, The Guardian reported more details on the hack of Deloitte’s email server. The story listed several U.S. government agencies, Fannie Mae, Freddie Mac, and many unnamed multinational companies as being “made vulnerable.” In that account, “Deloitte did not deny any of these clients had information in the system that was the […]

Ignoring rules The other day I mentioned that it might be fun to work in Tesla’s accounting department since Elon Musk doesn’t seem too hung up on things like production estimates or sales projections. And as fun as playing fast and loose with numbers might be, it pales compared to Uber’s laissez-faire attitude about the […]

Deloitte hack A couple weeks back we learned that Deloitte had been the latest mega organization to suffer a cyberattack. At the time, I wrote this: It always seems like when a scandal hits a huge company, they play it down, only to discover a week or two later that the bad event was worse […]

Estimates Elon Musk is a big thinker, a visionary, perhaps a bit insane, but that’s why people love him. He sees the world’s potential and wants to make that potential a reality, not getting too hung up on details like sales estimates, production guidance, etc. The Wall Street Journal pointed out over the weekend, however, that […]

Working to death It’s October now, which means some of you are working like crazy to meet the deadline on the 15th…er, 16th. That’s fine, Godspeed, serve those clients, etc. etc., but also remember that working yourself too hard can have consequences: Miwa Sado, a young journalist for Japan’s state-run broadcaster, spent the summer of […]

Robots The Institute of Management Accountants, proving again that an accounting trade group can have a sense of humor about itself, released a new ad earlier this week. This time it took on the coming robot apocalypse: Are they sure that no robots will be sitting at the big conference table with the humans? Will […]

PwC revenue Hey, great job, everyone: PricewaterhouseCoopers recorded $37.7 billion in global revenue in its most recent fiscal year, up 5% from the previous year in U.S. dollar terms, the Big Four accounting firm said Wednesday. Revenue for the year ended June 30 rose 6.5% when holding exchange rates constant, as PwC prefers to measure […]

Fines & Punishment Paying financial penalties is a cost of doing business for Big 4 firms. That cost of doing business has been more expensive of late, most notably the U.K.’s Financial Reporting Council fines of PwC this year and the PCAOB’s $8 million fine of Deloitte Brazil from late last year. Still, some people […]

How’s tax reform coming along? The Trump Administration is making progress on tax reform, people. Back in April, officials released a one-page set of bullet points. Yesterday, after months of hard work, Trump and Congressional Republicans presented “Seven pages of general highlights and a disturbing absence of detail” according to Tony Nitti. No matter how you […]

Procrastination In a recent speech, SEC Deputy Chief Accountant Sagar Teotia had some advice for companies that have been dragging their feet on the new accounting standards: For those companies that may be in the earlier stages of your implementation efforts, I would encourage you to significantly ramp up your efforts. There is still time for […]

Amazon This New York Times story shares examples of how city leaders from all over the country are groveling for the opportunity to be the home of Amazon’s next headquarters. “Mayoral letters to Amazon are actually becoming a YouTube subgenre.” People are obsessing over hundreds of hours of videos of Jeff Bezos. Tucson tried to […]

Youth As a young(er) professional, I remember being frustrated by my lack of experience. Being young was great, being relatively poor was not, so I needed more experience so I could make more and not be poor. Of course, gaining more experience meant losing my youth, which was a hard trade-off. These days, I’m more […]

Award shows Even before the Emmys aired last night, people who watch award shows were probably wondering: “Can the accountants screw it up again?” Of course, EY tabulates the Emmys, and before the show, the Television Academy President seemed confident that everything would be okay: “Our accounting firm is Ernst & Young,” [Hayma Washington] said […]

Deloitte In the past, we’ve poked fun at Deloitte’s tendency for boasting. For awhile there, the firm liked to claim that it was more exclusive than Harvard, but then again, so are a lot of things. One of the firm’s other frequent brags is that it hires lots of people. Only Donald Trump goes on […]

Plus, Deloitte made some money last year. Work perks (?) Ladies and gentlemen, I give you the guy in charge of tax reform: Secretary Steven Mnuchin requested use of a government jet to take him and his wife on their honeymoon in Scotland, France and Italy earlier this summer, sparking an “inquiry” by the Treasury […]

Just slowly dying over here. SoFi Late on Sunday, The Wall Street Journal reported that fintech unicorn SoFi had been dealing with a workplace culture issues, specifically, allowing an environment that is openly hostile and sexually improper towards women. This included the former CFO, Nino Fanlo, who: would commonly make comments about the physical appearance […]

Mike Pence is hoping he gets to sit down soon.  Sarbanes-Oxley Back in July, we noted a hearing on Sarbanes-Oxley where a slew of witnesses, including New York Stock Exchange President Tom Farley, spoke about its “great cost on corporate America” and that its “benefits are not entirely clear.” The requirement that companies comply with […]

What’s the AICPA up to? “Congressmen concerned about misuse of .cpa domain” is an Accounting Today headline and sure, I suppose some members of Congress don’t have anything better to do. The issue in this case is that the AICPA has been trying to secure “.cpa” as a generic Top-Level Domain (“gTLD”) string for a […]

Sticking with clients Paul Gillis notes a story about Goldman Sachs stopping its work on an IPO for a unit of HNA, a Chinese conglomerate, remarking on PwC’s connection: HNA’s public companies are audited by PwC. This raises the question of how PwC is able to continue as auditor. Auditing standards require auditors to annually […]

EY’s revenue The firm formally known as Ernst & Young announced its global revenue yesterday and it was $31.4 billion. That’s 6% more than last year’s $29.6 billion, but that’s not stated in the firm’s press release. No, the growth EY shares is 7.8% “in local currency terms” because in EY’s better working world, you […]

Burnout I wrote briefly about workaholism right before the holiday weekend, and now that we’ve returned, some of you might feel angst and woe about returning to work. I think this is normal and should not concern you. However, if those feelings occur on an average Tuesday, then maybe something else is going on: Burnout. […]

All work and no play makes you a dummy. Ed. note: Going Concern will be off on Monday, observing Labor Day. See you back here on Tuesday. If anything interesting happens between now and then, drop us a line at [email protected] or create a post in Open Items. Workaholism Accounting firms have long had a […]

Accountants behaving badly If this section of ANR has taught you anything, it should be that embezzling money from your employer is a horrible idea. If you still aren’t convinced, let this story from the heartland serve as another reminder: The former finance director of the Substance Abuse Treatment Unit of Central Iowa headquartered in […]

The black box of auditing A classic complaint about PCAOB inspections is that they don’t add value to the audits they review. Sure, a warm fuzzy feeling might creep into someone’s belly if they know that an auditor is auditing the auditors, but many people want something measurable. For those that fall into that group, […]

How’s tax reform coming along? The lede from this Bloomberg article tells you all you need to know: President Donald Trump is planning to kick off one of the most important sales pitches of his presidency this week — getting Americans fired up about rewriting the U.S. tax code. But there’s no plan to sell. […]

Come on, people. Not in your eyes. Should lawyers run Big 4 firms? Now, before you start throwing tomatoes, hear me out. This Harvard Business Review article shares the results of a study that found that lawyer CEOs have a knack for something you’d already assume they have a knack for: [L]awyer-run firms experienced 16% […]

Even cats are embarrassed at the U.S. Chamber’s sorry turnout. Audit regulation Last week, I mentioned that the U.S. Chamber of Commerce, who has never met a regulation it didn’t like, sent a letter to the Securities and Exchange Commission asking them to reject the new expanded auditor’s report rule. Accounting Today reported yesterday that […]

Forgetting a career limiting move If you get in trouble with the Securities and Exchange Commission and they suspend you for, say, five years — do you forget about it? I mean, five years is a decent stretch, so things change, you move on with your life, you find some new work. So would you […]

CEO fallout What did we learn this week? Well, I think one thing we learned is that when the President of the United States fails to pick a side between white supremacists and people protesting white supremacists, most CEOs need a few days to say, “We can’t be associated that guy.” And on the one […]

How’s the businessman president getting along with business? Not too good, man. President Trump’s nightmare of a news conference on Tuesday started the unraveling earlier in the week, and then yesterday, everything fell apart: On a 45-minute conference call that started around 11:30 a.m. ET Wednesday, members of the President’s Strategic and Policy Forum decided […]

PwC As we’ve noted, 2017 has been a rough one for PwC across the globe. Bloomberg reports that it’s gotten only slightly worse, as the U.K.’s Financial Reporting Council levied its largest fine in its history against the firm: PricewaterhouseCoopers LLP was fined 5.1 million pounds ($6.6 million) for misconduct over its audit of RSM […]

CEOs and Trump Yesterday, I wrote about Mark Weinberger, EY’s Global CEO, and that he should resign from President Trump’s Strategic and Advisory Council. Since I wrote that post, two more CEOs — Under Armour’s Kevin Plank and Intel’s Brian Krzanich — resigned from the manufacturing council, the same one that Merck’s Ken Frazier left […]

You’re not missing anything. Recruiting trends Should you be recruiting on Snapchat? I have no earthly idea, but then again, maybe that’s where all the accounting talent is hiding? On the other hand, I’m surprised that someone would even suggest that you should consider recruiting on Snapchat. The best PwC could come up with was […]

Taxes Consummate bullshit artist and current POTUS Donald J. Trump repeated one of his favorite falsehoods yesterday, saying, “We pay more tax than anybody in the world.” Although this has been discredited by countless economists and tax experts, they made the rounds again including this exasperated guy from the Tax Foundation: “Two years later, and […]

Job search survival I enjoyed this interview with Harvard Business School Assistant Professor Ethan Rouen about job search survival, not only because he’s nauseatingly enthusiastic about accounting, but because he seems to appreciate his weaknesses: I have no self-control around sweets. Without some kind of forced regimen, I’d eat cake for every meal. That being […]

Businessman telling businesswoman about how he’ll be working late, but not as late as her, and not be judged for it. Convenience tests This Bloomberg BNA article discusses the strange but very real issue for workers who work from home but also work in an office…that’s in a different state. New York, Pennsylvania, Delaware, and […]

How’s tax reform coming along? Felix Salmon writes about the folly of the charitable deduction, and by extension, why the Trump Administration’s suggestion to raise the standard deduction is a good idea. A larger standard deduction means lower taxes for many people, and it also means fewer taxpayers itemize deductions, which means complying with the […]

Comeuppance A jury found the insufferable client, boss, and person Martin Shkreli guilty on three of eight counts of securities fraud on Friday. And if you’re feeling schadenfreude, you might be disappointed to learn that he’s mostly fine: During his postverdict live-stream, Mr. Shkreli, sipping from a bottle of India pale ale, speculated that his […]

Florida accountant A Sarasota CPA is suffering from a case of a mistaken identity, and in the age of the Internet, that means putting up with a lot of angry strangers calling to curse at you and make empty threats: “Your son is a f****** piece of s***,” one caller said. Robert Wenzel has gotten […]

BDO revenue BDO, the accounting firm most likely to pie its top performers, announced its fiscal year 2017 revenue haul yesterday. They U.S. firm brought in $1.41 billion, an increase from $1.29 billion last year. The firm states that its revenue has more than doubled from $683 million in 2013 to this year’s mark. Accounting […]

EY Oh, brother. EY has caused a bit of a ruckus in New Zealand by excluding a huge story involving one of its clients from the nominations for its business journalism awards: Journalist Rebecca Macfie quit the judging panel saying it was clear that one entry was not going to be recognised “because of the […]

No one’s texting. Incredible. Short tenures You see it every year — one or two new employees at a Big 4 firm flame out after two weeks or a few months on the job. This usually manifests in one of two situations: The new employee realizes he or she has made a big mistake. The […]

Big 4 Interns I guess it was National Intern Day yesterday? Okay, I admit it, I knew it was National Intern Day and was too busy to mention it. Forgive me, interns, for not recognizing you. But don’t worry, Big 4 firms are still laying it on thick. Here’s EY: It’s #NationalInternDay! And we can’t […]

PCAOB vs. China Paul Gillis notes that the PCAOB’s ban of Crowe Horwath Hong Kong means that “[the] 22 US listed clients (mostly microcaps) must find new auditors (and most of its employees must find new jobs).” But also, that the PCAOB chose an easy fight: While I think the PCAOB is right in its […]

Bans The PCAOB announced yesterday that it has banned Crowe Horwath Hong Kong from auditing U.S. listed companies for three years. This came about after the firm refused to cooperate with the Board’s investigation by failing to provide workpapers for an unnamed client. This might seem strange since the PCAOB reached an agreement with Chinese […]

Bike taxes My initial hot take when I saw this Tax Foundation article on Oregon’s new bike tax was — OREGON MUST HATE FREEDOM. And if you cruise the web, a lot of Oregonian bike riders are plenty miffed by the $15 tax “on the purchase of bicycles with a retail price of $200 or […]

What are you doing with your accounting degree? Although it’s been said that “Poker’s an honest trade” I don’t recommend that most of you try to capitalize on your accounting education this way: A New Jersey man with a degree in accounting is this year’s World Series of Poker champion. Scott Blumstein won the series’ […]

How’s tax reform coming along? Nothing gets proponents of tax reform sentimental quite like the Tax Reform Act 1986. The cooperation of Congress and the support of the Reagan Treasury Department seems almost quaint by today’s standards of governing. Plus, everyone yearns for a tax code that is simpler, with lower rates, and doesn’t result […]

Deloitte I linked to this yesterday, but the news that Deloitte is scrapping its affinity groups for “inclusion councils where white men hold important seats at the table” was…surprising? They explained it this way: “We are turning it on its head for our people,” says Deepa Purushothaman, who’s led the WIN group since 2015 and […]

Lottery tickets One other remarkable thing that came out of yesterday’s House Financial Services subcommittee on capital markets hearing re Sarbanes-Oxley was noted by Francine McKenna in her write-up at MarketWatch: In a hearing on Tuesday of the House Financial Services subcommittee on capital markets, Rep. Warren Davidson, a Republican from Ohio, compared the stock […]

Professional skepticism In part one of a pair of Tom Selling posts about professional skepticism, he tries to get to the essence of what the ol’ cliche of the auditing world means: Skepticism is to have doubt as to the truth of something. But how much doubt? The PCAOB’s standards state that the auditor should […]

Non-competes This New York Times story reports on Idaho’s unusual place within a major labor issue: The Gem State is more accommodating to non-compete agreements, making it easier for businesses to sue employees who leave for a competitor. Non-competes have always struck me as a strange tactic; in a way, it’s a business’s way of […]