As you may have heard, some guys in funny hats are trying to find a new leader to ride around in a funny car. No, it's not Barnum & Bailey's clown troupe; of course I'm talking about the College of Cardinals and their quest for a new Pope.
It's quite the serious affair, as a billion or so people will look to this man for explanations why the Big Guy does what he does. And as anyone who has read Dan Brown knows it's quite an ancient, convoluted process to elect a new Pope. But as other highly-secretive counting exercises have demonstrated, it's nothing that an international network of professional service firms can't handle.Since I was raised Protestant and currently don't subscribe to any specific religion, I would never, in all eternity, expect the Catholic Church to take my suggestion seriously, but since it's Monday and this was the most interesting thing I saw on Twitter today, we're going to take a stab. Plus, Adrienne confirms that it was a good idea. First things first -- all the firms would have to establish a Vatican City office that would ensure immunity to any outside litigation should the vote go horribly wrong and result in a religious scandal1 of Lehman Brothers sized proportions. I'm confident that the pack of international law experts employed by each firm will be able to handle this without breaking a sweat. The actual counting of the cardinals' votes, on the other hand, I'm less sure about. Anyway, here are some possible outcomes should any of the Big 4 be tasked with verifying the results of the papal conclave: Deloitte – Staying consistent with its rash of low-quality audits, Deloitte's procedures somehow confirm that, for the first time in the history of the church, a rabbi will become Pope. PwC – Bob Moritz shows up, dressed for the occasion (i.e. a cardinal cassock) to oversee the conclave, including the smoke signals and the ringing of the bells when a new Pope is finally confirmed. PwC issues three press releases a day during the process. Ernst & Young – EYStaff Twitter account announces the Pope-elect with a #whitesmoke hashtag. Years later, it is discovered the E&Y approved of an unorthodox "repurchase voting" method, the consequences of which was an incredibly misleading result. The Catholic Church collapses in wake of the revelation, yet Ernst & Young continues on quite miraculously. KPMG –- On the day that procedures are set to commence, the partners responsible for the engagement somehow end up in Mecca. They are quickly fired and replaced with PwC. These partners redeem themselves in subsequent years by winning a number of contracts with al Qaeda, building a successful "Alternative NFP Practice." PwC later poaches the partners for their expertise in the field. It's worth noting that Grant Thornton was initially interested in the engagement but ultimately withdrew, citing their commitment to focus their on mid-market religions like the Churches of Scientology and Jesus Christ of Latter-day Saints. In any case, there would be a new Pope, just not without a little excitement that only a Big 4 firm could provide. If there are other possible scenarios that I've overlooked, please offer them up. 1 I am not -- NOT! -- going there in this post.
Over the years we have shared a number of stories from people that have suffered from the plight of Prometric. Everything from a runny nose to the metal detectors to questionable written communication to something that might resemble a hostage situation to a very, very, very awkward search. These anecdotes have provided a sense of added dread for future test takers and a sense of relief for those of us who never plan to take another test in our lives.
But despite all those horrific stories, you have to give Prometric credit -- many people sit for the CPA without so much as a stop testing and frisk. Accordingly, the AICPA and NASBA have re-signed with company to continue cracking prospective CPAs' skulls during their testing experience:
The American Institute of CPAs (AICPA) and National Association of State Boards of Accountancy (NASBA) have agreed to an extension of their agreement with Prometric, the trusted provider of market-leading test development and delivery solutions, to deliver the Uniform CPA Examination, through 2019, across the company's global computer-based testing network. Prometric delivered the first computerized CPA Exam in 2004, and has delivered more than 1.8 million Exams to date.
And for those of you concerned that the CPA exam overlords were not interested in exploring their options, well, they tried:
In a joint statement, the AICPA and NASBA noted Prometric's "operational quality," and said, "After reviewing trends in computer-based testing, we believe that Prometric remains the best choice for the delivery of the Exam, and we look forward to continuing our working relationship with you."
Just try imagining something else.
Accounting News Roundup: A Tax Shelterer's Sentence; Tesla's Filing Delay; Chimera's MIA Reports | 03.04.13
Ex-Jenkens & Gilchrist Lawyer Gets 8 Years in Tax Case [Bloomberg]
Former Jenkens & Gilchrist lawyer Donna Guerin was sentenced to eight years in prison and ordered to pay $190 million for her role in what the U.S. called the largest criminal tax fraud in history. Guerin, 52, pleaded guilty in September 2012 just as she was set to be retried with three other defendants for running a 10-year scheme that created $7 billion in fraudulent tax deductions, more than $1.5 billion in phony losses and $92 million in actual losses to the U.S. Treasury.
Tesla Delays Annual Report To Fix Accounting Error [CI/WSJ]
Tesla Motors Inc., the Silicon Valley electric luxury car maker, says mistakes in the way it accounted for certain capital spending will force it to delay filing its annual report, or 10-K, with the Securities and Exchange Commission. The company says the errors won’t affect the figures it previously reported for its incomes statements, total cash on hand, free cash flows and balance sheet. The company says it now aims to file its 10-K by March 11.
Mandatory Auditor Rotation: The UK's Competition Commission Stirs the Pot [Re:Balance]
JP: "Put in summary, the fundamental dysfunctionalities in the reporting and assurance models are untouchable by the “solutions” urged by those having the authority (if not the evidentiary basis) for their mischief-making, while mandatory re-tendering and rotation remain as “remedies” in search of problems yet to be grounded in reality. But if not stopped, the Competition Commission is likely to work its will."
Unaccountable external auditors [Fraud Mag/ACFE]
Way more that you might want to know about the auditors role in the financial crisis. And more -- like "radical overhaul" to the audit system.
Man charged with getting into jail unlawfully [CNN]
Authorities say Matthew Matagrano, 36, of Yonkers, parked his car at the Manhattan Detention Center using a forged Department of Corrections parking permit and entered the building by flashing a gold shield. While inside the facility, Matagrano stole a radio worth $2,500, supplied inmates with cigarettes and shared a smoke with them, according to a criminal complaint.
Chimera: So Many Questions, Too Few Answers [GOA]
When a company has filed a 10-Q since November 2011 or a 10-K since February 2011, that's a bit of a problem.
Tax Benefit of All Itemized Deductions; Distribution of Federal Tax Change by Cash Income Level, 2015 [TPC]
If you're a fan of tables and things.
FASAB proposes property, plant, equipment implementation guidance [JofA]
Anheuser-Busch defends itself with newspaper ads [Reuters]
Budweiser-maker Anheuser-Busch InBev defended itself against allegations it is watering down its alcoholic drinks by taking out full-page advertisements in newspapers across the United States. The company was placing ads in more than 10 newspapers nationally, a representative of Anheuser-Busch said on Sunday. The ads featured a picture of a can of drinking water below the caption, "They must have tested one of these." Anheuser-Busch donates water to the American Red Cross.
Footnotes: Maybe Sequester Isn't All Bad; Five More Years at PCAOB for Harris, Hanson; Buy an ex-Deloitte Partner's Ocean-front Home | 03.01.13
China-based Keyuan settles SEC accounting charges [Reuters]
IRS: Sequester Won’t Delay Tax Refunds, Maybe Fewer Audits [ABC]
IRS Extends Deadline for Hurricane Sandy Tax Break [AT]
Questioning the Longevity of the Income Tax [Robert Goulder]
Michigan governor clears way for state takeover of Detroit [Reuters]
SEC steps up probe of Chesapeake, CEO McClendon [Reuters]
Steven Harris and Jay Hanson Reappointed to PCAOB [SEC]
Stacy Lewis's KPMG hat has a Twitter account, apparently. [@StacyLewis_KPMG]
Obama 'Jedi Mind Meld' flub mixes confuses 'Star Trek' and 'Star Wars' IMPEACH! [CSM]
What a fine thing for the Manhattan U.S. Attorney to announce on a Friday afternoon that it had reached at settlement with Ernst & Young over its tax sheltering activities:Ernst & Young LLP will pay $123 million to settle a U.S. tax-fraud probe as part of a non- prosecution agreement, according to a statement from the Manhattan U.S. Attorney’s Office. The accounting firm “admitted wrongful conduct” by its partners and employees in connection with four tax shelters, from 1999 to 2004, according to today’s statement. About 200 Ernst & Young clients used the shelters to try to avoid more than $2 billion in taxes, it said. In addition to the money and the admissions, Ernst & Young agreed to a series of permanent restrictions on its tax practice and will continue to cooperate with the government’s tax-shelter investigation. The firm’s cooperation began in 2003, according to the statement. Those restrictions include not doing things that the IRS considers to be a "tax avoidance transaction." But what about the rest of the statement? Well, here's the whole thing and it has all the interesting details that the A small group within E&Y known as the Strategic Individual Solutions Group (“SISG”) was primarily responsible for supervising and coordinating the marketing, implementation and defense of E&Y’s tax shelter products. Certain SISG tax shelter products were designed to appear to the IRS to be substantive investments that had favorable tax consequences when, in reality, the products were actually designed and marketed to clients as a series of preplanned steps that would defer, reduce or eliminate their tax liabilities. The typical client participating in these shelters was primarily, if not exclusively, motivated to achieve a desired tax savings. In order to deceive the IRS as to the true nature of the tax strategies, and to bolster arguments that the transactions had economic substance, some SISG personnel agreed upon and directed other E&Y employees to participate in a concerted effort not to create, disseminate, or publicize documents reflecting the tax motivation behind the strategies, or the preplanned sequence of steps necessary to effect the strategies. If any of this sounds familiar, it's because it sounds a lot like the settlement that KPMG reached with the DOJ back in 2005 over its tax shelter products that helped clients dodge $2.5 billion in taxes. The main difference being that KPMG entered into a deferred prosecution agreement rather than a non-prosecution agreement. Why? Well, my hunch is that in E&Y's case, senior management was not involved as they were alleged to have at KPMG. How did I get this hunch? Hilariously enough, E&Y tells us! Buried deep in the NPA is Ernst & Young's resolution of its board of directors. In that document is a "Statement of Facts" where the firm asserts the following: KPMG? BDO? Unfortunately, it doesn't say explicitly, but it is a nice little dig. Of course the other interesting twist here is that E&Y quickly agreed to cooperate with the government, as early as 2003 when the tax shelter products were still being offered. What's not so clear, however, is why it would take so long to reach a settlement -- they've been cooperating for ten years and they finally got around to it? And who are all these "partners and employees" are and what their statuses are with the firm? We know who some of them are, but you'd think that a firm so anxious to hang people out to dry wouldn't be so chintzy with the names.
MANHATTAN U.S. ATTORNEY ANNOUNCES AGREEMENT WITH ERNST & YOUNG LLP TO PAY $123 MILLION TO RESOLVE FEDERAL TAX SHELTER FRAUD INVESTIGATION [DOJ]
Non-prosecution agreement [DOJ]
Ernst & Young to Pay $123 Million to End Tax-Fraud Probe [Bloomberg]
Ernst & Young to pay $123 million to resolve U.S. tax shelter probe [Reuters]
Pardon my ignorance, but do you guys and gals picture internal auditors working in windowless broom closets, only leaving when they have to catch a plane to some remote location in flyover country to conduct procedures that they've done so many times that they dream about checklists and, on the rare occasion, find inconsequential errors that were the result of an honest mistake that results in no meaningful action one way or another?No? Just me? Okay, well I guess it won't surprise you at all that sometimes an internal audit will find not only an error, but a crime! At a government agency! In Louisiana! More than $800,000 in public money was allegedly misappropriated by an employee at the Louisiana Department of Health and Hospitals, according to a news release from the agency. The theft was uncovered during an internal investigation. The agency's Bureau of Health Care integrity discovered the alleged theft after officials noticed some unusual accounting practice involving the employee, according to DHH. The employee allegedly deposited checks to the department in a non-DHH account and then withdrew the money for personal use, according to the release. Of course the DHH Secretary, Bruce Greenstein, was mostly pissed that such an event could occur and didn't bother giving any credit to the IA sleuths who uncovered the missing money. So if there's one stereotype of internal auditors that was confirmed, it's that they don't really get much credit for doing their jobs. Health and Hospitals employee stole $800,000 from department, according to internal audit [T-P via Richard Chambers]
In one instance at least!
Here's a little anecdote courtesy of the ubiquitous Business Insider:[I]n 1984, Berkshire highlighted its purchase of Nebraska Furniture Mart [in its annual letter to investors]. Buffett was a huge fan of NFM's chairman, the 91-year-old Rose Blumkin, who he affectionately referred to as "Mrs. B."
Here's an excerpt:
I have been asked by a number of people just what secrets the Blumkins bring to their business. These are not very esoteric. All members of the family: (1) apply themselves with an enthusiasm and energy that would make Ben Franklin and Horatio Alger look like dropouts; (2) define with extraordinary realism their area of special competence and act decisively on all matters within it; (3) ignore even the most enticing propositions failing outside of that area of special competence; and, (4) unfailingly behave in a high-grade manner with everyone they deal with. (Mrs. B boils it down to “sell cheap and tell the truth”.)
Our evaluation of the integrity of Mrs. B and her family was demonstrated when we purchased 90% of the business: NFM had never had an audit and we did not request one; we did not take an inventory nor verify the receivables; we did not check property titles. We gave Mrs. B a check for $55 million and she gave us her word. That made for an even exchange. But luckily not every business is as trustworthy as a regional furniture store with a sweet, nonagenarian chairman and therefore, opiners will remain gainfully employed. [BI]
Leslie Lebel used to work in the finance department for the City of Bloomington, Illinois. After seven years on the job, during the time between September and December 2011, she allegedly embezzled $21,000 or so. She was arrested last week this allegedly sticky fingering and prosecutors shared the details in court this week:Lebel accessed the city funds by opening sealed bags containing bank deposits of cash and checks from city departments, according to a statement read in court by prosecutor Phil Finegan. The first discrepancy came after U.S. Cellular Coliseum questioned a bill it had paid but the city showed as unpaid. The Coliseum produced a cancelled check and bank records showed the money had been deposited incorrectly into a police department account, according to the statement. An outside auditing firm hired by the city to review financial records uncovered nine incidents where $21,648 was removed from deposits. When investigators gave Ms. Lebel the opportunity to explain herself, they got this: Lebel told authorities she opened sealed bags to correct errors in deposits and was told by city leaders she was allowed “to do whatever crazy accounting she needed to do to get the deposits to balance.”
Fair enough. But most people manage to use 'crazy accounting' without being accused of embezzlement, lady.
Accounting News Roundup: Big 4 Unions in China (Sort of); Dow's Tax Shelter Ow; Sequest at the IRS | 03.01.13
SEC gets breather on global accounting body [Reuters]
The United States has won a three-year stay on its membership of an accounting oversight panel, keeping alive hopes for a single set of global book-keeping rules that will help investors assess companies. Leaders from world's top 20 economies (G20) have repeatedly called on the United States and the International Accounting Standards Board (IASB) to align their rules so that investors can compare companies easily. The United States has yet to say if it will adopt IASB standards, prompting the G20 this month to tell both sides to come up with an alignment plan by December.
Dow Chemical Loses $1 Billion Tax Shelter Case [TaxProf]
This smarts:"The resolution of this case turns, in large part, on this Court's application of judicial doctrines that have been developed by the courts for more than three-quarters of a century. For the reasons which follow, the Court finds that the Chemtech transactions should be disregarded for tax purposes because: a) the transactions fail both tests under the economic substance doctrine; b) the partnership was a sham and had no legitimate business purpose; and c) even if this Court were to respect the partnership as a separate entity for tax purposes, it would not treat the banks as true equity partners. Finally, the Court finds that a 20% penalty applies for substantial understatement and negligence."
Acting commissioner outlines IRS plans for sequestration [JofA]
With mandatory government spending cuts looming, Acting IRS Commissioner Steven Miller sent a memo to all IRS employees on Thursday, outlining the agency’s plans in the event sequestration occurs as planned on Friday. He outlined spending cuts the IRS plans to make, including employee furloughs, but emphasized that the furloughs would not affect tax season. The IRS’s largest expense is employee pay, and the agency plans to furlough employees, starting in the summer, if the mandatory across-the-board spending cuts take effect. Miller anticipates five to seven furlough days per employee through the end of the government’s fiscal year. The furloughs would apply to all IRS employees and would amount to no more than one furlough day per pay period.
The Charitable Contribution Deduction: Reform and Simplification [TPC]
Who wants to get into the weeds of split interest and partial interest gift rules?
HG: "The latest chapter in Washington’s never-ending fiscal drama is about to play out in tomorrow’s sequester–a word most Americans should never have had to learn. For all the partisan noise about these automatic spending cuts, it is important to keep in mind that they are both relatively small and very stupid." Edinburgh Zoo Pandas Listen To Marvin Gaye's Mood Music Before Hanky Panky [HP]
I'll bet you can't guess which song.
The True Meaning of Sequestration We are headed for a disaster of biblical proportions. What do I mean? I mean Old Testament, real wrath-of-God type stuff. Fire and brimstone coming down from the skies! Rivers and seas boiling! Forty years of darkness! Earthquakes, volcanoes...The dead rising from the grave! Human sacrifice, dogs and cats living together...mass hysteria! [Christopher Bergin]
Webster drops auditor E&Y, hires KPMG [HB]
IRS Employees May Face 5- to 7-Day Furloughs from Sequester [AT]
How the Pope's Retirement Package Compares to Yours [NBC]
The Texas Tech Board of Regents has approved the creation of a School of Accounting at the University. [KCBD]
Speaking of Texas, Deloitte University is a training ground for CFOs, you guys. [DBJ]
After four and a half intense and wonderful years as CEO of Groupon, I've decided that I'd like to spend more time with my family. Just kidding - I was fired today. If you're wondering why... you haven't been paying attention. From controversial metrics in our S1 to our material weakness to two quarters of missing our own expectations and a stock price that's hovering around one quarter of our listing price, the events of the last year and a half speak for themselves. As CEO, I am accountable. [SJMN]
Non-U.S. CFOs Donning Green Eyeshades [CFO]
Dog shoots man accidentally, police say [HT]
"My Oreo machine is based entirely on my dislike for creme and my preference for cookie," Neevel said in a short video that could easily be mistaken for a "Portlandia" sketch. [Yahoo]
When I first saw this KPMG press release, I figured it was the same old insufferable tripe. I mean, read this shit:
Amid continuing economic and political uncertainty, senior management at US-based multinational companies are relying on their tax departments, now more than ever, to provide guidance and expertise on complicated regulatory and compliance issues, according to a new report from KPMG International.
Did you get that? Tax professionals are relied on by management more than ever. This is Osama is dead, stop the presses stuff, people.
But because I really don't have anything better to do, I kept reading and actually found something quite interesting:
While increased visibility within their companies has proven positive for tax departments over the past three years, other factors, including their operational efficiency, are being called into question, according to the report. Under pressure to cut costs, US companies are investing less in improving in-house tax departments than they did in 2009 and less than their global counterparts currently. Instead, US companies appear to be shifting tax department activities to shared services centers at a higher rate than global companies, (at a rate of 50% compared to 30% globally). Further, 25% of US respondents reported they expect their tax department to "change" in the near future. Of these, reducing costs was first among the primary reasons for the change, named in 80% of cases.
Okay, so we have a "shared services centers" thing, a "change in the near future" thing, and a "by 'change' we mean reduce costs" thing. Then if you look at the actual report you'll find a page entitled "Blueprint for Change" that outlines a number of steps for "change," of which, some are useful and others are not. And that's fine, KPMG does this sort of thing, but really when a company says they are going to "reduce costs" they are talking about letting people go. None of this synergizing bullshit; people -- tax people -- are expensive and it's very easy for a CFO to say to VP of Tax, "Here's your budget. Sorry, but you need to make it happen," and then said VP of Tax makes it happen and with any luck, (s)he won't be part of the "change."
But, I don't know, maybe there's some other magical way that tax departments can save money (tax people do like to waste paper, after all) that doesn't involve firing mass amounts of people although I can't imagine what it is. Plus, I don't trust surveys. And I certainly don't trust press releases.
People aren't protesting like they used to. I mean, who has the energy anymore? Drum circles are EXHAUSTING. Then there's the pepper spray. Who needs that? Plus it's winter; Not exactly prime protest season in the northern hemisphere. Still, some guys in Dublin gave it a go today but it was a pretty sorry effort:Up to 30 members of an anti-household and water charge group took part in a sit-in at PricewaterhouseCoopers office on Dublin’s North Wall Quay today. The occupation lasted one hour, before members of Campaign against Home and Water Taxes voluntarily left. The protesters remained in PwC’s reception area during the demonstration. Gardaí were called but no arrests were made. They couldn't even bother to put on facepaint like that one dude at Occupy PwC D.C. The only thing I can come up with is that they found out what the some of the employees like to do in their spare time and figured the firm wasn't all bad. [Irish Times]
One possible alternative title for Accounting Today's "scorecard for new SEC audit clients" would be "Jesus, PwC and Deloitte Lost a Lot of Audit Clients Last Year." I'll go out on a limb and say that it probably didn't even make the short list. AT went with "E&Y, KPMG Top 2012 for Audit Client Wins" which is fine because that is in fact newsworthy, however, there are several angles to a story like this and one might be that PwC and Deloitte's audit practices took it on the chin.
Now, if I were to call up PwC and ask the question, "Is the firm concerned that it lost 34 clients and only gained 18?" The person might tell me off the record, "I doubt it," but would have to get back to me, taking time to think, "WWBMD?" and then officially go with "PwC is committed to giving confidence to the capital markets by providing premier assurance services to its existing clients."
And if I were to call up Deloitte and ask a similar question, I wouldn't get through to anyone, my voicemail would get deleted and my call would not be returned. For the record, Deloitte gained eight clients and lost 34, per AT's numbers.
True, there are probably a number of audit partners at both firms that care quite a bit about the net losses in SEC clients because, you know, money and stuff, but the firm as a collective body couldn't care less. Why? Glad you asked!
PwC, for starters, isn't going to lose audit clients like Goldman Sachs, JP Morgan, Exxon Mobil, or IBM. They just won't. The most prominent companies will demand the most prominent audit firm for their audit opinion and won't change. BoMo & Co. will always be able to point to their roster of audit clients as the most prestigious.
Deloitte, on the other hand, really doesn't care. Why? Because I don't think Deloitte really wants to be an audit firm. Forget what Joe Echevarria says on Bloomberg; the firm made that decision back in early 2000s when they didn't spin off Deloitte Consulting. Plus, the growth in their FAS and Consulting businesses were more than double of the AERS (i.e. audit) practice (see UPDATE below). Their list of SEC audit clients -- which, admittedly, includes Berkshire Hathaway and Microsoft -- isn't nearly as impressive as PwC's. The assurance business simply isn't their highest priority. And it doesn't help that they suck at it.
And to top it all off, they're still the leaders in their industry by a wide margin, outpacing both KPMG and E&Y by BILLIONS of dollars. Unless those two firms plan on starting up merger talks again -- not likely! -- there's really no way for them to close the gap.
But if want to keep scraping together net wins of SEC clients, that's cool. No one at 30 Rock or 300 Madison is losing sleep over it.
UPDATE: Thanks to the helpful commenter that pointed out that I had this wrong. "ERS" is not audit. I should have written like "the 'A' in AERS" or something. Anyway, I regret the error because I don't like to be wrong. HOWEVAH! This mistake did lead me back to the Deloitte press release for a closer look and I read this:
Audit and Enterprise Risk Services (ERS) revenue grew by 6 percent. Audit grew most rapidly in the priority markets, especially in the Asia Pacific region, where Deloitte is well positioned to serve the fastest-growing sectors. ERS drove growth—double-digit growth in every region and industry—fueled by factors including heightened regulatory pressure, positive analyst ratings, and increased awareness of the importance of optimized risk management practices.
Okay, so ERS drove the growth which means audit didn't participate much. That's the first noteworthy item. Second is the "Audit grew most rapidly in the priority markets, especially in the Asia Pacific region where Deloitte is well positioned to serve the fastest-growing sectors" statement. That's nice and all, but will it make up for all the big auditing trouble in big China?
ANR: Let the Sequester Blamestorming Begin!; PCAOB Looking for 'Least Disruptive Solution' re: China; Ambitious Gang Members Steal Tax Returns Rather Than Sell Drugs | 02.28.13
Jockeying Stalls Deal on Cuts [WSJ]
With mandatory across-the-board spending cuts set to begin Friday, the White House and congressional Republicans are poised to let the deadline pass, each calculating that their hand in negotiations only grows stronger if they scorn a quick compromise. The first face-to-face meeting on the issue between President Barack Obama and congressional leaders won't happen until Friday—the deadline for Mr. Obama to set in motion $85 billion in broad spending cuts. None of the participants expect the morning meeting at the White House to produce a breakthrough. In the run-up, with no serious talks under way, each side is maneuvering to ensure the other catches the blame if the cuts kick in.
Pollution levels, accounting records, and other things China classifies as “state secrets” [Quartz]
It's little strange to see "accounting records" and "executions" on the same list.
Reverse Mergers: A Looming U.S.-China Showdown over Securities Regulation? [K@W via Paul Gillis]
In an interview with Knowledge@Wharton, PCAOB chairman James Doty said his agency has made progress innegotiating with China but will have to take stronger measures if China delays or rejects the request for joint inspections.“If the Chinese authorities continue to put up obstacles to legally required inspections of firms that have chosen to register in the U.S., the PCAOB will have to reevaluate the status of those firms in our system,” he stated. If the PCAOB can’t inspect auditors of U.S.-listed companies, by law, it has to deregister those auditors. That, in turn, may well lead to deregistration from U.S. exchanges of companies that employ those auditors, including the China-based affiliates of many U.S. and multinational companies. “We are mindful of the potential consequences,” said Doty. “The PCAOB will work to find the least disruptive solution. Any action the Board takes will be a result of thorough and thoughtful deliberation.But ultimately, our charge is to implement and enforce policy decisions embedded in U.S. law to protect the interests of investors in quality audits.”
UBS Client, 78, Charged With Tax Evasion in Illinois Case [Bloomberg]
Peter Troost, the owner of Troost Memorials, which designs and sells cemetery monuments and gravestones, was charged yesterday in federal court in Chicago. Troost transferred income to his UBS account, evading payment of at least $193,641 in taxes from 2007 to 2009, according to a charging document known as a criminal information that typically precedes a guilty plea.
Disclosure Overload? Maybe Time to Rethink the Framework [The Corporate Counsel]
More is less.
TPC Hosts Program Today on The Charitable Deduction [TaxProf]
Be there, be square.
CPA Firm Offering Chair Massage to Relieve Employee Tax Season Stress [AWEB]
IRS: Gang members stealing tax returns [ABC/WZVN via Tax Update]
The reason? "Investigators say that's because many gang members can make a lot more money filing false claims than selling drugs on the street."
Woman causes crash shaving bikini area while driving [NBC]
Megan Mariah Barnes was meeting her boyfriend in Key West and wanted to be properly groomed for the visit. So during the drive, she decided to shave. Her ex-husband, who was in the passenger's seat, took the wheel while she focused on other areas, according to the report. The site also noted that Barnes was convicted of DUI and driving without a license the day before the crash.
Footnotes: The Lew Guy; E&Y, KPMG Big Audit Client Winners; Where's the Hate for Tax Subsidies? | 02.27.13
Senate approves Lew as new Treasury chief [Reuters]
E&Y, KPMG Top 2012 for Audit Client Wins [AT]
Shares of Papa John's drop after accounting error The Louisville, Ky., company said in a regulatory filing that it found a material weakness in its internal controls and it is implementing remedial measures including a review of joint venture agreements. The company noted that the "corrected accounting treatment" isn't expected to have a meaningful impact on operating results going forward. [AP]
Private Equity’s Tax-Advantaged Rivals [DealBook]
Cops: Florida Man, 36, Assaulted Teen Relative With Taco Bell Burrito Police allege that Erik Brown, 36, throttled the 16-year-old boy in the face with the burrito during a February 15 domestic dispute at a Port St. Lucie residence. The victim told cops that he was having a “verbal altercation” with his mother and Brown, his brother-in-law, when Brown “asked his mother to bring him the burrito,” according to an arrest affidavit. Brown then allegedly threw the burrito “with force” at the victim, striking the boy in the face with the fast food item. While interviewing the teen, cops noted that he had “burrito cheese, sauce and meat all over his clothing and face.” [TSG]
Happy Birthday to the Kennedy Tax Cuts [TF]
Are We in Danger of a Beer Monopoly? [NYT]
What if the Outrage over Excessive Welfare Extended to the Tax Code? In much public discourse, direct government aid for the poor is easily dismissed by the pejorative “welfare.” Yet, spending-like subsidies administered through the revenue code provoke far less outrage. This is true even though many of these tax preferences are economically indistinguishable from direct spending and often add far more to the deficit. [TaxVox/TPC]
Why Wal-Mart Should Be Pushing for Socialism [Gawker]
'Marijuana cannon' used to fire drugs over US border seized in Mexico [Guardian]
Why does Colin always assign me these creeper stories? Oh well.
I don't know about anyone else but reading this gave me the creeps. Maybe because we had two creepy neighbors trying to mack on me when I was a nubile young middle schooler, though the one who drove a Camaro was pretty cool to me at the time in his neon Zubaz pants. But enough about me and my creep bait.
More than two years after Stuart Goldberg pleaded guilty to child endangerment for inappropriately touching a 12-year-old girl at his Main Street toy store, state officials have suspended his accounting license and given him a heftier fine than he received in his criminal case.
The state Board of Regents indefinitely suspended the public accounting license of the 57-year-old owner of Head 2 Head Sports & Games and fined him $2,500, saying in a disciplinary report by the Regents Review Committee that Goldberg’s sentence in village court, which did not include jail time, was “relatively light.”
Let's see... 12-year-old... toy store... creepy CPA. Kid-touching may not be covered in the ethics exam but come on, that should be a given.
Goldberg was sentenced in 2010 and got off (no pun intended1) with a $750 fine and a misdemeanor, as well as court-ordered treatment but no jail time. Earlier in the year, he led the girl by the wrist to the back of the store where he kissed her neck, face and mouth. Gross.
The state Board of Regents report was concerned that Goldberg might have access to kids should he head to clients' homes to work on maximizing their child tax credits and called the crime "unworthy of a licensed professional in this state."
Goldberg - who has been licensed since 1986 - can possibly get his license back if a mental health professional deems him "psychologically fit to practice."
I think the very best part of this is Head 2 Head Games' description on Patch:
With toys, board games, stuffed animals, sports memorabilia, magic kits, Japanese erasers, candy and more, Head 2 Head is heaven for kids of all ages. Located on the center of Main Street in Ivington [sic], it's hard to miss this store's red awning, and once the kids are inside, it is difficult to coax them to leave.
Now if you will excuse me, I need to go take a shower to scrub the heebie-jeebies off.
1 Ed. note: Puns are always intended.