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December 4, 2022

FSA

Accounting News Roundup: Auditors ‘Portray Worrying Lack of Skepticism’; Are Tax Strategies Patentable?; Method Man Pleads Guilty, Cuts Check for NYC Tax Evasion | 06.29.10

FSA accuse auditors of failing to question management bias [Accountancy Age]
The Financial Services Authority has decided that it was about time it called out a few people, “Auditors have become yes men who don’t adequately question management bias according to concerns raised by the UK’s chief financial regulators. The Financial Services Authority (FSA) and the Financial Reporting Council today released a scathing discussion paper into the profession following concerns raised in the wake of the financial crisis. Among its concerns is that auditors ‘portrays a worrying lack of skepticism’ when scrutinising potential management bias.”

Not onlef=”http://www.accountancyage.com/accountancyage/news/2265630/fsa-audit-report-regulator”>FSA wants new enforcement powers including the ability to ” fine, censure or disqualify audit firms.” The FSA also wants to meet with auditors several times a year, rather than just once, as well as direct access to audit committees.

Alex to Become Hurricane as Swells Reach Gulf Spill [Bloomberg]
“Tropical Storm Alex, the first named system of the Atlantic hurricane season, strengthened today, forcing the evacuation of rigs in the Gulf of Mexico and pushing swells toward the worst U.S. oil spill.

The storm, packing maximum sustained winds of 70 miles (110 kilometers) per hour, was 460 miles southeast of Brownsville, Texas, before dawn today, moving north-northwest at 8 mph, the U.S. National Hurricane Center said in an advisory. The circulating winds were near reaching hurricane status of 74 mph.”

New York state may tax out-of-state hedge fund execs [Reuters]
Desperate idea of the day from the brain trust in Albany, “Recession-hit New York could raise an extra $50 million a year by collecting income taxes from people who work for hedge funds in the state but live elsewhere, according to a legislative plan to raise revenue…A spokesman for Democratic Assembly Speaker Sheldon Silver said by telephone on Monday that it means hedge fund managers would be treated the same way as other commuters.”


Aprill: The Impact of Bilski on Tax Strategy Patents [TaxProf Blog]
In non-PCAOB SCOTUS news, the decision in Bilski v. Kappos addressing “Whether a ‘process’ must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing (‘machine-or-transformation’ test), to be eligible for patenting….” was examined by Ellen P. Aprill of Loyola-L.A. regarding the impact on tax strategy patents:

“Bilski is at best a mixed bag for those who think tax strategies should be patentable. It gives little help and does allow business method patents, albeit somewhat begrudgingly. It demonstrates that for those who believe that tax strategies should not be patented, legislation is needed.”

Method Man pleads guilty to NYC tax-evasion charge [AP]
“Hip-hop star Method Man pleaded guilty to a tax-evasion charge Monday, writing a check on the spot for the final $40,000 restitution payment after owing about $106,000.” What, no cash?

U.S. Court to Hear Janus Appeal In Securities Case [Reuters]
“The lawsuit, brought on behalf of those who bought Janus stock from mid-2000 through early September 2003, alleged that the prospectuses of several of Janus funds created the misleading impression that the company would adopt measures to curb market timing, when in fact secret arrangements with several hedge funds permitted such transactions, to the detriment of long-term investors.”

Accounting News Roundup: UBS Set to Release More Names as Standoff Ends; SEC Drops Cassano Inquiry; Levin, McCain Want Stock Option Gap Closed | 06.17.10

Swiss Parliament Backs UBS Pact [WSJ]
After a short standoff in Swiss parliament, Swiss lawmakers approved the agreement with the U.S. to turn over the remaining names of UBS clients, per the agreement between the two countries. The lower house dropped the referendum proposal that would have delayed the release of the names and likely caused UBS to miss the August deadline which would have resulted in new charges against the Swiss behemoth.

The Journal reports that a Swiss government is prepared to release an additional 1,200 names following the initial 500 released last year.

Lawmakers Weigh Changes tostor Protections [Bloomberg BusinessWeek]
Congress is kicking around the possibility of an office within the SEC to respond to whistleblower complaints. Brilliant!


McGladrey Mourns the Loss of Former Partner Ray Krause
Mr Krause passed away on Monday after 40 years of service to both McGladrey and the accounting profession. He served on many professional standard setting groups including AICPA’s Accounting Standards Executive Committee, the Financial Accounting Standards Board’s Emerging Issues Task Force, and on the Financial Accounting Standards Advisory Council. H was memorialized by his friend and colleague Jay Hanson, McGladrey’s National Director of Accounting:

Ray died unexpectedly yesterday. He was on vacation in Orlando with his nine-year-old grandson doing what he loved—visiting Disney World.

Before his retirement six years ago, Ray spent more than 40 years with McGladrey. He practiced in a number of locations, including a long stop in the national office as national director of accounting. He retired as partner in 2004 but continued to work for the national office part-time in Rockford, Ill.

During his long career, he served in a number of professional standard setting groups, including the AICPA’s Accounting Standards Executive Committee, the Financial Accounting Standards Board’s Emerging Issues Task Force, and on the Financial Accounting Standards Advisory Council.

Ray is best remembered for being the consummate professional and his easy-going style. He was very well respected in the accounting profession. Comments coming in from those that knew him include: “Ray was one of the true gentlemen of the accounting profession,” and “Ray was about as fine a human being as there is.”

He was a great mentor to many colleagues in the national office. His style of giving his complete attention to whomever he was talking to, providing understandable explanations for complex topics, probing deeply for all the facts, and his uncanny ability to help draw a conclusion with full understanding will be greatly missed. Ray could convey the message to someone that they were getting to the wrong conclusion with such delicacy that you didn’t even feel it, and felt good about the answer. He knew many of the “back stories” about how and why some of the most complex accounting standards came about, which is often important to understand what they mean.

Ray will be greatly missed by his daughter, son, four grandchildren and other family and friends. McGladrey and the accounting profession have also suffered a great loss.

Inquiry Ends on Cassano, Once of AIG [WSJ]
The SEC has dropped its investigation of Joseph Cassano, the former head of AIG’s Financial Products Unit, which means he won’t face civil charges in the unit’s role in financial crisis. The SEC is also declining to pursue charges against another AIGFP executive, Andrew Forster, who was also under scrutiny.

Senator sees big reporting gap in stock options [AP]
Senator Carl “Shitty Deal” Levin and new Snooki BFF John McCain “have proposed legislation that would require that the tax deduction for stock options not exceed the expense for options reported in financial statements.”

The two are a little rankled about the $52 billion gap between the amount of stock option expenses recognized for financial reporting purposes and the expense reported for tax purposes. Guess who’s getting the short end on that one?

Bank auditors were fully involved in developing report [FT]
John Hitchens, head of the Institute of Chartered Accountants of England and Wales (ICAEW) and a PwC Partner would like to dispel any notion that auditors will resist reform after taking it on the chin for the financial crisis:

As chairman of the ICAEW working group that produced the proposals, I would like to correct this impression.

Bank auditors from the six largest audit firms were fully involved in developing the report and supportive of all its recommendations, including the proposal that banks develop summary risk statements which auditors would then give comfort over.

Feel better?

U.K. Scraps FSA in Biggest Bank Overhaul Since 1997 [Bloomberg]
Chancellor of the Exchequer George Osborne will do away with the Financial Services Authority, replacing it with three new regulatory bodies and giving most of its oversight powers to the Bank of England.

Intuit Works to Restore Online Access [WSJ]
Any individuals or small businesses that use TurboTax, Quicken and QuickBooks have been in a world of hurt as online access has been down, down, down. “Some Intuit websites were beginning to come back online late Wednesday afternoon,” according to an Intuit spokesperson. The situation is fluid.

Fannie Mae, Freddie Mac to delist from NYSE [CNN]
Meant to mention this yesterday since it was the DoD but you know how it goes. Anyway, see you another life FNM and FRE.