Accounting News Roundup: Insulting New York's Wealthy; State Taxes and Migration; No Love for OCI | 09.05.13
IRS Rule Leads Restaurants to Rethink Automatic Tips [WSJ]
An updated tax rule is causing restaurants to rethink the practice of adding automatic tips to the tabs of large parties. Starting in January, the Internal Revenue Service will begin classifying those automatic gratuities as service charges—which it treats as regular wages, subject to payroll tax withholding—instead of tips, which restaurants leave up to the employees to report as income. The change would mean more paperwork and added costs for the restaurants—and a potential financial hit for waiters and waitresses who live on their tips but don't always report them fully.
Wealthy New Yorkers Call De Blasio’s Tax Plan Offensive [Bloomberg]
“It shows lack of sensitivity to the city’s biggest revenue providers and job creators,” said Kathryn Wylde, president of the Partnership for New York City, a network of 200 chief executive officers, including co-Chairman Laurence Fink of BlackRock Inc. (BLK), the world’s biggest money manager. Days before next week’s primary election, de Blasio, 52, has seized the lead decrying economic inequality. After 20 years of Republican and independent mayoral rule during which crime rates and welfare rolls plummeted and parks, stadiums, shopping, tourism and luxury apartments and office towers rose up, de Blasio speaks of a “Tale of Two Cities,” where almost half of New York residents are poor or struggling. De Blasio’s new frontrunner status has renewed attention to his tax-the-rich idea, with opponents saying the plan hinges on unlikely support from the state legislature. Finance executives say it may hurt the local economy and drive out the wealthy, who already pay a disproportionate share of income levies.
Back To School: Tax Breaks For Cyclists And Other Commuters [Forbes]
Get on your bike and ride.
Income Migration: What Does It Really Mean for States? [Tax Analysts/Cara Griffith]
The decision of where to locate is not done in a vacuum. It is the result of many factors, income tax burden being only one of those factors. Employment, family connections, and quality of public services (in particular education and health care) play roles as well. Migration solely because of tax policy is uncommon and likely restricted to the very rich. But this does not excuse bad tax policy. Good state tax policy dictates a stable system with a broad base and low rates. High income tax rates can cause a small, but wealthy portion of the population to leave and can directly affect small businesses. We have the federal government to worry about income redistribution and business regulation. States should focus on tax systems that will create competitive business climates.
Narrow Net-Income Reporting Can Misguide Investors: Study [CFO]
[P]ublicly held companies typically give the non-net-income portions of comprehensive income much less prominence than earnings. The "key focus for measuring financial performance remains with net income," according to a new report by the Georgia Tech Financial Analysis Lab. Net income, however, excludes what's known as "other comprehensive income" (OCI): gains or losses stemming from foreign currency conversion; cash-flow hedges; securities that are available for sale; and pensions and other post-retirement benefits. And that can confuse investors, according to the study, which looks at the elements of OCI for the S&P 100 companies from 2010 to 2012 . "Because net income excludes gains and losses that are often quite material, evaluations of financial performance based on net income may be misguided," its authors state.
Detroit woman's good deed rewarded with $5,300 tax bill. Diligent, comprehensive record keeping saves the day [DMWT]
Good news out of Detroit?
Man Buys Promoted Tweet to Complain About British Airways [Mashable]
Are Some Americans Paying Federal Income Tax They Don’t Owe? [TaxVox]
Opposition Mounts to Lease Accounting Changes [AT]
Idaho's Tax Commission is trying to get sales taxes out of a 12-year-old fruit stand. [ISJ]
The AICPA continues the CGMA blitz. [AICPA]
Check out this sweet profile of my pal and Maryland Association of CPAs Chair Byron Patrick. [CPA Practice Advisor]
Exclusive: JPMorgan subject of obstruction probe in energy case [Reuters]
Jonathan Weil has a funny today: "There's an amusing line in this notice yesterday by the Federal Reserve and the Federal Deposit Insurance Corp. The regulators told banks they should "not rely on the provision of extraordinary support by the United States or any other government" when drafting their so-called living wills. Those are the documents that describe how they could be dismantled if necessary in a crisis. In other words, when writing up the plans that assume they will die, they're not allowed to assume that they won't. Go figure." [Bloomberg]
Founder of $3 billion hedge fund busted in prostitution sting, it is unclear how many investors will *cough* pull out. [CNBC]
Just FYI, you little money-grubbing monkeys, there are jobs out there that pay better than yours after just two years of college. Oh the humanity! [CNN Money]
Diversity, as you all know, is critical to the success of any major company's efforts to appear as though they care about something other than making money.
You might hear something like, "We celebrate diversity at our firm because it's the right thing to do, yada yada yada, but it's also good for business."
Okay, so it's still about money.
Anyway, accounting fims have had lots of success making inclusion an integral part of their "we care about stuff" messaging; so much so that they get recognized for their efforts, chat with influential people, and even train people how to be more inclusive-y.
Yes, you might remember back in March when we were introduced to Deloitte University's Leadership Center for Inclusion. Here's what that was all about:"One of the primary goals of the Leadership Center for Inclusion is to fundamentally redefine what inclusion looks like in the workplace," said Smith. "This is not just about programs or initiatives; it is the leadership issue of our time." The DU Leadership Center for Inclusion will host training programs, lectures and special events for Deloitte professionals, clients and thought leaders to further the dialogue on inclusion and share leading practices. In addition, the Center will foster innovation by expanding the understanding of inclusion through stories and discussions, which disrupt the traditional views of diversity and work-life fit. Great. Wonderful. With that in mind, here's what DU has in store for us today:
A new study from the Deloitte University Leadership Center for Inclusion and law professor Kenji Yoshino indicates widespread instances of "covering," the process by which individuals downplay their differences relative to mainstream perceptions, in ways costly to their productivity and sense of self at work. Three out of four (75 percent) research participants state that they have covered their identity; and, surprisingly, half (50 percent) of straight white male respondents report hiding their authentic selves on the job.
"Covering" is a wonderful euphemism, isn't it?
What exactly are they covering? Here's a hit list:
- Appearance: avoiding aspects of self-presentation -- including grooming, attire, and mannerisms -- identified with their group
- Affiliation: avoiding behaviors identified with their group
- Advocacy: avoiding engagement in activities on behalf of their group
- Association: avoiding contact with individuals in their group
Straight white males are "covering" these things? How, exactly? By not listening to O.A.R. at work while wearing a wrinkled blue button-up shirt and going to lunch with any of their straight white male co-workers?
The press release goes on to explain that the "groups that are historically under-represented are "blacks (94 percent), women of color (91 percent) LGB (91percent) and women (80 percent)" was expected but the straight white guys thing was not.
Okay, fine. But if this study tells us anything, it's that nearly all work environments have managed to get a large portion of their people to avoid embracing the things that make them different from everyone else. What does that leave us? I guess it would result in a bunch of business casual clad drones who either talk shop or make idle chit chat throughout the day, conforming to whatever the organization has in mind for its ideal employee. In other words, a typical accounting firm.
I'm no expert, but that seems like the EXACT OPPOSITE of what you'd want.
Of course one could look at this way -- if you (yes, you) aren't comfortable being authentic at work, and you (yes, you) aren't comfortable being authentic at work either, and I'm not comforable being authentic at work, then we're all being inauthentic together! And that's something, I guess.
This Way to CPA has stooped to a new low, insulting children. Sure the little snot-nosed brats aren't very smart but do we really need to say that out loud?
We all know the youth of America is pretty doomed as is but I'm fairly sure little kids saying they want to be CPAs when they grow up is one of the signs of the Apocalypse.
"And I saw another mighty intern come down from heaven, clothed with a wrinkled blue shirt: and a smart haircut was upon his head, and his face was as it were the sun, and his feet as pillars of loafers: And he had in his hand a Financial Accounting book open: and he set his right foot upon the sea, and his left foot on the earth, And cried with a loud voice, as when a lion roareth: and when he had cried, seven audit committee members uttered their voices. And when the seven audit committee members had uttered their voices, I was about to write: and I heard a voice from heaven saying unto me, Seal up those things which the seven audit committee members uttered, and audit them not."
Be afraid. Be very afraid.
Accounting News Roundup: Brits Going After Olympus; FASB Panel Pushes Back on Lease Proposal; Dress (like the Boss) for Success | 09.04.13
British fraud agency to prosecute Olympus over accounting scandal [Reuters]
Britain's fraud agency will prosecute Olympus Corp (7733.T) and its British unit Gyrus for falsifying accounts, the Japanese medical equipment maker said on Wednesday, dragging a $1.7 billion accounting scandal back into the spotlight after it erupted nearly two years ago. Olympus plunged into the red and its share price tanked after details of massive hidden losses were discovered late in 2011, but it has since swung back into profit and Sony Corp (6758.T) paid 50 billion yen ($500 million) to become its biggest shareholder this year.
Deloitte kicks off "Team USA Road Show" of Olympic athletes [AT]
"The 'Team USA Road Show' demonstrates Deloitte's focus on strengths-based leadership and the high performance culture many students today seek," said Patty Pogemiller, director of Deloitte Services and talent acquisition leader, in a statement. "Olympians and Paralympians are exceptional talents who stretch themselves, thrive as leaders and turn passion into reality. These qualities make them strong ambassadors of our culture and ideal motivators for students to ignite their own careers."
FASB Panel Says Ditch Lease Accounting Proposal [CW]
FASB's Investor Advisory Committee met with FASB last week to explain their concerns over the complexity of FASB's pending proposal to require new accounting for lease contracts that would bring all leased assets and their related liabilities on to corporate balance sheets. IAC told FASB the current proposal would produce information that would not necessarily be all that helpful or important to users of financial statements. “Overall, the idea that liabilities related to leases is something that would be helpful to investors -- it's definitely the right idea to get more transparency on that,” said David Trainer, CEO of New Constructs and a member of the IAC. “However, I think the complexities of the underlying activity make it almost impossible to create a one-size-fits-all solution that we can just put on the balance sheet. The most decision-useful information is to enhance disclosure to let analysts who, given their multiple potential interpretations, can do with it what they wish.”
Could dressing like the boss lead to a promotion? [Telegraph]
More than half of employees said they were influenced by what their managers wore to work, while 61 per cent said dressing like their colleagues created a better and more productive work atmosphere. And managers are not immune to the flattery of workers copying their clothing and style choices, with 68 per cent admitting staff with a similar look to them gained brownie points and were more on their radar.
Gen Y managers perceived as entitled, need polish [CNBC]
Generation Y managers are widely perceived as entitled, and score significantly lower as hard-working team players in newly released research from EY, the global firm that includes Ernst & Young LLP. That's especially striking since members of Gen Y, or the millennial generation, which EY defines as people aged 18 to 32, are moving into management at a rapid pace. Some 87 percent of Gen Y managers in the EY survey took on a new management role, between 2008 and 2013, compared with 38 percent of Gen X managers and just 19 percent of those aging baby boomer managers. Gen Y workers, including managers, now make up about a third of the U.S. workforce, according to Karyn Twaronite, EY's Americas inclusiveness officer. And at EY itself, which hires thousands of young recruits every year, Twaronite says the workforce is almost two-thirds Gen Y.
Baker Tilly completes RSM Tenon acquisition [Accountancy Age]
Baker Tilly has completed the acquisition of RSM Tenon's trading operations. The acquired firm will continue to trade under its own name "for a short period of time" until it operates under the single Baker Tilly brand. The jobs and employment rights of RSM Tenon's 2,300 partners and staff, across its 35 offices, wil be unaffected.
Man wears sign apologizing for threatening police [WKYC]
Richard Dameron, 58, threatened police during 911 calls and then skipped out on his punishment. Cleveland Municipal Court Judge Pinkey Carr ordered him to hold a sign this week outside of the Second District police station in Cleveland. The sign reads, in part: "I was being an idiot and it will never happen again." He told Carr he couldn't show up to his last court appearance because he didn't have a ride.
Gartner needs Senior Reporting Analyst in Stamford, CT. [GCJ]
The former Burberry accountant who bilked the fashion house to fund a BMW X5 -- among other things -- has been ordered to pay back £113,658.17 between Burberry and his other former employer, Hackett. That $0.17 is going to be a pain. [Vogue]
S&P calls U.S. lawsuit retaliation for stripping 'AAA' rating [Reuters]
For my tax-hating conservative friends, here are the 10 states with the highest gasoline taxes. [ABC]
Inquiring minds want to know: how do you pass the time when you're waiting for your CPA exam score? [NJSCPA Exam Cram]
"When the partner says something without realizing its slightly inappropriate double meaning..." Really, aren't we all 12 year old boys on the inside? [HSWAFM]
Your office for-money fantasy football league is (pretty much) legal, kinda. [Above the Law]
Republicans Are Confused About Their Leverage in the Debt Debate [Tax Analysts]
According to Francine McKenna, broker-dealer audits are still broken. [re: The Auditors]
The SEC is warming up to the idea of social media as a viable way to deliver material information to investors but it's going to be awhile before your favorite public companies are tweeting forward-looking statements. [CFO.com]
Sacred Heart to launch master’s program in accounting Famous last words:The demand for qualified accounting graduates is at an all-time high, and the AICPA survey indicates that nearly 90 percent of public accounting firms estimate that they will maintain or increase the number of graduates hired in the future. All signs indicate that this is the right time to add a master’s in accounting program.” [Fairfield Sun]
Welcome to a special Tuesday after Labor Day edition of To Whom It May Going Concern, our infrequent feature of the best (read: worst) and worst (read: best!) tips and feedback we get from readers. Have a tip or feedback for us? Email us at email@example.com or drop something in the tips box. All messages on are on the record unless stated otherwise.
It's the first day back after a long holiday weekend which is nearly as eventful as the first day before a long holiday weekend, so it dawned on us a little cheap entertainment may be in order. Luckily, we were handed the feedback from this year's GC Reader Survey this afternoon and it does just the trick.
We got plenty of people saying nice things like "love it" or the tepid "[It's] occasionally entertaining," or "it's the tits" and we appreciate those, but we think you'll enjoy these more interesting comments.
Let's kick things off with someone who obviously put a lot of thought into their response:
At the risk of pissing off firms even more you have to stop being so sterile and provide more detail wherever possible. so many of the articles that would be otherwise compelling where people are looking for name, rank and serial number read like the home page for AOL which is wickedly lame in trying to get your curiousity piqued to click on the story, "the website this intern visited that changed her life at work" and then there's very little in terms of detail. There's reasons for not disclosing certain information which is totally understandable but to say you heard that one firm is firing a partner because of improprieties and leave it at that is not worthy of reading - it happens all the time. The only time you get into detail is when something is already in the public domain and newswires. You need to be cutting edge where people read your articles, forward them and mention - you're not going to believe this...You don't want your website to be as boring as the poor accountants that read it... better investigative reporting, more cutting edge news, pick it up a notch.
We got one personnel suggestion:
Get rid of Caleb. He's a tool.
As well as content ideas:
Needs a forum
Too many adds. When I get ot home screen an immediately have a pop up without a "X-out" option... that is bullshit. Won't be returning to the website if that is the case going forward.
Here's some community management advice:
Please encourage the posting of substantive comments and discourage (to the extent possible) the disruptive and crude, pointless remarks. Some of the threads have really valuable input, while most are destroyed by frustrated/angry people who don't seem to like their lives.
There are potential stalkers:
Kudos to Adrienne for her fiery articles and dry humor...love it! Someday, when I get my CPA license, I'd love to go to the Maryland CPA day and meet her in person.
And honest expressions of regret:
I only read your articles with fun sounding titles/images because I am immature like that. Thanks for being both informative and sympathetic towards people who dislike their careers.
A nonsensical insult:
Collin is kinda weird. Hard to imagine him auditing anything other than his shoes....
An accurate critique:
I think Adrienne Gonzalez is RUDE! (and uses vulgar speech)
Someone is outright confused:
Often, I can't even tell what the topic of an article or discussion is.
And of course more than a few people don't like our attitude:
Snark is good but sometimes you're sacrificing important information just to achieve cheap snarkiness.
Stop being so bitter! It's depressing
[Y]our jaded mentality toward the profession is often over the top and just comes off as annoying.
If you didn't get the chance to leave feedback in our survey, you can do it below or email us.
Thanks for your continued support of Going Concern.
Remember this chart from last month?
— Rick Telberg (@CPA_Trendlines) August 15, 2013
Yep, the one where EY!'s deficient audits blast off like rockets into Syria. It's the kind of info that doesn't make any of the new EY! glossy marketing materials, but could be unsettling for anyone concerned about audit quality (whatever that means).
HOWEVAH! We're sure marketing teams at the Black and Yellow knew about IPO market share in 2013 well before Audit Analytics tweeted about it:
Auditor market share for 142 IPOs in 2013: EY (35%), PwC (24%), DT (13%), KPMG (10%), GT (5%), BDO (5%), other (8%).
— Audit Analytics (@AuditAnalytics) September 3, 2013
In case the most current deficiency rates had escaped you, here they are again:
- Deloitte 25%
- KPMG 34%
- PwC 39%
- EY 48%
Reactions? Certainly none of surprise.
Accounting News Roundup: Grant Thornton's Latest Acquisition; IRS Probes Will Drag On; Taking a Professional Sabbatical | 09.03.13
McKinsey & Co. Isn’t All Roses in a New Book [DealBook]
It often goes unmentioned, but McKinsey has indeed offered some of the worst advice in the annals of business. Enron? Check. Time Warner’s merger with AOL? Check. General Motors’s poor strategy against the Japanese automakers? Check. It told AT&T in 1980 that it expected the market for cellphones in the United States in 2000 would amount to only 900,000 subscribers. It turned out to be 109 million. The list goes on.
Grant Thornton Acquires MarketSphere's Oracle Solutions Business Unit [GT]
Looming fiscal fights threaten IRS probes [The Hill]
Republicans on Capitol Hill are acknowledging that the fall’s looming fiscal fights could peel attention away from their investigation into the IRS’s singling out of conservative groups. [...] “The committee has a wide span of issues on its plate, but we can walk and chew gum at the same time,” Sarah Swinehart, a spokeswoman for House Ways and Means Chairman Dave Camp (R-Mich.), told The Hill. “These investigations take a long time, and we’re under no illusion that this will be over quickly.”
You're Probably Wrong About Millennials [HBR]
One of those misconceptions is that millennials are "entitled," a word that has become synonymous with Gen Y in the management ranks. "I believe that they expect many things to come easy before the work has been put in," says Dean Lawyer, Regional Director of Business Sales for T-Mobile. Contrary to what managers say, Gen Y's are work horses and have a persistent hunger to discover new experiences, take advantage of opportunities and push the boundaries.
How to Plan a Sabbatical-Style Career Break [Lifehacker]
Just what you need after a long holiday weekend.
Rialto Unified accountant stuffed money in her bra [San Bernadino Sun]
Judith Oakes, 48, resigned from her job as accountant for the school district’s Nutrition Services Department the day after her Aug. 8 arrest on suspicion of grand theft, embezzlement and burglary. Police allege that Oakes had been stealing money from the district since June, possibly longer. [...] Derek Harris, the school district’s risk manager, called police on Aug. 7 after Oakes’ supervisor, Cindi Stone, told him she saw Oakes on video surveillance on at least two occasions concealing large amounts of cash in her bra, according to the affidavit, filed Wednesday in San Bernardino Superior Court. Thousands of dollars in student lunch money passed through Oakes’ hands daily as it was collected from district schools and sent to her to inventory and deposit into the district’s bank account. Daily bank deposit slips dating back to June, obtained in the initial stages of the police investigation, noted a discrepancy of $2,000, according to the affidavit.
By Jason Bramwell
Despite concerns about the risks and costs associated with health care, US CFOs maintain a more positive perspective as they enter the second half of 2013, especially toward hiring and employment opportunities, according to a new survey.
Of the 226 CFOs of public and private businesses polled for the CFO Quarterly Global Outlook Survey, which was conducted by Financial Executives International (FEI) and the Baruch College Zicklin School of Business in New York City, 61 percent plan to hire within the next six months, and employee compensation is expected to increase by 3.5 percent.
The respondents' optimistic view on hiring and employment at their companies is reflected in their plans to hire mid-career professionals, entry-level college graduates, and experienced and skilled technical workers. In addition to their plans to hire, nearly three-quarters of CFOs (72 percent) said they did not have to reduce their workforce over the past twelve months. CFOs also expect the US employment rate to improve, declining slightly to 7.3 percent one year from now, according to the survey.Other Key Survey Findings
Other findings from the CFO Quarterly Global Outlook Survey include the following:
- The majority of US CFOs anticipate their businesses will be affected by health care changes, with 58 percent of respondents expecting the new health care regulations will increase the employee copay within their companies, and 43 percent expecting it will reduce the quality of health care packages available and/or reduce benefits for employees. When asked about the impact of the Affordable Care Act within the past six months, companies experienced on average a 4 percent increase in related costs as a result of this regulation.
- CFOs stated they are most commonly accessing capital from banks, with one-third accessing capital from equity and one-quarter from debt markets. While the majority of respondents said they are not using or considering any alternative sources of funding, 16 percent said they are considering asset-backed loans, and 11 percent are considering an acquisition in the next twelve months.
- CFOs expect the rate of inflation will be 2 percent on average six months from now and close to 3 percent one year from now. CFOs continue to carry a low-to-moderate level of concern toward inflation, as evidenced by 75 percent of respondents selecting "three or lower" on a concern scale of one to five. The majority of respondents indicated that this level of concern is consistent with their level of concern in the previous quarter. However, for 61 percent of CFOs, the volatility of energy prices has increased expectations for inflation.
- CFOs expect interest rates to remain below 1 percent over the next six months and increase slightly one year from now. The majority of CFOs are not overwhelmingly alarmed about interest rates this quarter, with 69 percent rating their concern at levels "three or lower" on a scale of one to five.
However, CFOs project a 10 percent increase in costs related to health care during the second half of this year.
"Previous surveys have shown reduction or minimal growth in the number of US CFOs with plans to hire additional staff. However, the results of this quarter's survey could indicate this trend is turning around," FEI President and CEO Marie Hollein said in a written statement. "It is hopeful to know that employment opportunities are expected to increase for professionals across a variety of levels and that health care costs have not deterred many businesses from taking on full-time staff members."
The quarterly optimism index for US CFOs toward their own businesses increased three points, from 67.1 percent last quarter to 70.7 percent. Confidence toward the economy among respondents improved, rising to 61.2 percent from 58.5 percent in the first quarter, with nearly half of all respondents (49 percent) indicating they believe the economy to already be in the midst of a recovery.
In the next twelve months, CFOs anticipate an 11 percent increase in net earnings and an 8 percent increase in revenue. Financial executives plan to increase technology spending by 7 percent. More than half of the CFOs surveyed (53 percent) said they are currently directing investments toward dashboard and performance metrics. Financial executives are also investing in social media marketing and looking at research and development, cybersecurity, and risk management.
CFOs also weighed in on their concerns about various international economies. Their confidence in the global economy showed improvement, up from 50.8 percent in the previous quarter to 53.9 percent. Nearly three-quarters (73 percent) of respondents believe their businesses will be unaffected by a slowdown in China's and India's economy, and more than half of CFOs polled estimate that the current government stimulus program in Japan will be unsuccessful.
Businesses appear to be more vulnerable to the European economy, with 78 percent of respondents rating their concern about the fate of the Eurozone at a "three or higher" on a scale of one to five (with one being "not concerned"). Moreover, 44 percent of respondents do not expect to see a recovery of the European economy until 2015 or beyond.
About the survey:
The CFO Quarterly Global Outlook Survey, conducted by Financial Executives International (FEI) and the Baruch College Zicklin School of Business, interviewed 226 corporate CFOs from the United States electronically from July 26 to August 9. CFOs from both public and private companies and from a broad range of industries, revenues, and geographic areas, including some offshore companies, are represented. The respondents are FEI members.
Labor Day Weekend Footnotes: Johnny Football; Tax Reform Tour's Next Stop; Bad Academic Writing | 08.30.13
~ That's it for us, capital market servants. No posting on Labor Day so we'll see you back here on Tuesday. Enjoy the long weekend!
Maybe IRS should take a look at Johnny Manziel [C-J]
The complex proposition of an NFL franchise in England. [Grantland]
A Lesson for Boardroom Battles [DealBook]
Max Baucus and Dave Camp are taking the tax reform tour to Memphis. [The Hill]Academics Really Use Way Too Many Adjectives and Adverbs [TaxProf, Earlier] This is How Apple’s New iPhone Trade-In Program Works [Wired] Roel Campos, the lawyer for Holly Paz, told senior House Republicans that their recent letter charging that Paz had offered testimony contradicted by other IRS staffers only exacerbated the harassment his client has faced. Paz and her family, Campos said, have faced intimidating phone calls and visits at their home “because of prior inaccurate reports and allegations.” Paz’s sons were forced to hide in their room after a process server attempted to push his way into the family house, and someone asserting to be a reporter also followed one of her sons after he got off his school bus. “These are but a few examples of the many forms of harassment to which the Paz family has been subjected,” Campos wrote in a letter dated Tuesday to House Oversight Chairman Darrell Issa (R-Calif.) and Rep. Jim Jordan (R-Ohio). “Your letter and accompanying press release recklessly adds to the danger and damage to Ms. Paz and her family.” [The Hill]
While the attack on the New York Times this week was inconvient to say the least, it appears the hack also forced the AICPA to reschedule a planned CGMA chat on Twitter. I'm sure all of you were very broken up to hear this news:
That gives you a whole 3 day weekend to get your questions ready, unless the anti-Rush Limbaugh crowd has recruited Anonymous to take down the AICPA in the meantime for those Feed the Pig ads that aired on his show. Unlikely. So plan accordingly. I'm looking directly at you, trolls.
Before you get out of the office and begin the unofficial end of summer, take time out of your busy day to chat each other up in this week's Open Items.
Did I miss your career advice question? Ask it here. Is there an accounting angle on Syria you'd like to bring to light? We'll allow it. What's the name of your fantasy football league that is stocked with a bunch of the people you came up with in public accounting? Mine is "Chargeable Hours League."
Discuss this and anything else you want amongst yourselves. Enjoy the holiday.
Accounting News Roundup: The Tax Angles in NFL Settlement; Management Accounting Content 'Dwindling' on Campus; A Strange Résumé | 08.30.13
Gay Spouses in All States Now Married Under U.S. Tax Law [Bloomberg]
The decision by the Treasury Department today implements the U.S. Supreme Court’s decision in June to overturn part of the federal Defense of Marriage Act, which had forbidden the Internal Revenue Service from letting married homosexual couples file joint tax returns. The U.S. government’s decision is a win for same-sex couples who were married in one of the 13 states, the District of Columbia or foreign countries that recognize such relationships and now live in one of the 37 states that don’t. “This is a very positive development,” said Derek Dorn, a partner at Davis & Harman LLP in Washington and outside counsel to the Human Rights Campaign, which advocates for lesbian and gay Americans. “Additional details need to be worked out in more nuanced areas of the tax law.”
Another Budget Deal Bites the Dust [WSJ]
I really thought they were going to pull this one off, you guys.
Tax Aspects Of The NFL Settlement Payments [Forbes]
Tony Nitti: "Have you ever wondered what your brain is worth? Well, if you’re a retired NFL football player, the Blue Book value has been set: your cognitive capacity is worth a cool $150,000."
Labor Day travel highest since recession [CNN]
The number of Americans traveling for Labor Day will be at its highest level since the recession, according to a forecast from AAA. The majority of the 34.1 million travelers taking a trip at least 50 miles from home will be on the road, 29.2 million Americans traveling by car, with gas prices for the period running lower than last year. Another 2.6 million will fly. The busiest travel day of the Labor Day period will be Friday, Aug. 30, when 46 percent plan to make their getaway. The second busiest day is Monday, Sept. 2 for the big return.
IMA Has High Hopes for Higher Education Endorsement Program [AWEB]
After surveying and reviewing the undergraduate accounting curriculum of many universities and colleges across the United States as well as receiving input from faculty, the Institute of Management Accountants (IMA) found that the content being taught at higher-learning institutions was more CPA-oriented – and that accounting programs' management accounting content was dwindling. "We feel that it is absolutely the wrong direction for the profession to go in," Raef Lawson, PhD, CMA, CPA, CFP, CFA, vice president of research and professor-in-residence for the IMA, told AccountingWEB. "The IMA has sponsored research that has looked at the competencies that corporate America is looking for in terms of new accounting hires, and in many cases, those skills are not being developed in students. We believe that schools should prepare students for their lifelong careers, not just for their initial jobs."
Kangaroo and Dog Tussle [Outside]
WHO YA GOT?
Footnotes: Every Partner's First Question; Grover's 140 Character Tax Reform Plan; Legal Pot's a Go | 08.29.13
EY! has a new Americas Tax Policy Leader. [EY]
Make Time for the Work That Matters [HBR]
Every Partner’s First Question: ‘What’s in It for Me?’ [CPAT]
What We Need Is a Godless Tax Code! [Tax Analysts]
Grover Norquist can plan tax reform in 140 characters!
Pro-growth tax reform should reduce corp & individual rates to 25%, fully expense all investment and move to territorial tax system.
— Grover Norquist (@GroverNorquist) August 29, 2013
Obama administration will not block state marijuana laws, if distribution is regulated [WaPo]
Rich Daniele is the new head of tax for PwC's Rocky Mountains region. Rich, if you're ever in Capitol Hill, doesn't hesitate to look me up. We'll party, obviously. [PwC]
And Now for the Movie: Fewer Americans Pay No Federal Income Tax [TaxVox]
Kittens on Subway Line Delay Trains for an Hour [Gawker]
In light of the Great Score Delay of 2013 (NEVER FORGET, we will rebuild!) and all the criticism heaped on the AICPA and NASBA for their part in the tragedy, we dug up this old post from NASBA that points out 10 ways candidates screw up. Don't do any of these things:
1. Exiting Out of the Exam Prematurely
As Murs once said, "C'mon, you don't leave work early on pay day." While accidents happen -- I somehow manage to back out of 1 out of 25 unsaved blog posts on this very website and lose my work at least twice a month -- it makes absolutely no sense to hit the "Exit" button, read “You have not answered all questions in this testlet. Are you sure you want to leave this testlet?” and respond "yes" if you aren't actually done with a testlet. THERE IS NO GOING BACK, don't do that.
2. Rescheduling Appointments
Life happens. Usually it's not life so much as "not studying" that might necessitate an appointment change but if you do need to reschedule an appointment, be sure you went all the way through the process before assuming you're all set. You'll get a confirmation email once the appointment is changed; if you're missing this email, you didn't get to the finish line.
3. Timing Out in the Introductory Screens
We've covered this one before. It's a bit cruel that they give you 10 minutes to get through the introductory screens but don't actually allow you a timer ON said screens but we all know the administrators and protectors of the precious CPA exam are heartless villians who derive pure joy from your torture every step of the way. Don't waste time writing down mnemonics on your scratch paper or board or whatever it is they are letting you scribble on these days if you are going to forget you only have 10 minutes to do it. You'll blow your entire exam, in which case that brain dump was totally useless.
4. Notifying NASBA
If anything -- ANYTHING -- goes wrong during your exam, you have 5 days to file an official complaint with NASBA. Alert your Test Center lackey right away and then write your bitchy email in your head as you're driving away from that horrible, horrible place while you're still nice and upset.
5. Taking the Wrong NTS to the Testing Center
This seems so obvious it's sad NASBA even has to point it out, which means it must happen more than a handful of times a year, but before you leave the house, please for the love of God make sure you have the right NTS. 45 minutes before your exam is NOT the time to dig through your crap looking for it so be a smart little squirrel and lay it out the night before like test day is the first day of school.
6. Arriving Late
This one especially applies to my friends in areas like Washington, DC, where you can easily get stuck in a traffic jam at 1 in the morning for absolutely no reason. Plan for traffic, road closures, riots and/or picketers to hold you up. Set eleventy billion alarms, make sure you have gas in your car and don't screw around by picking up donuts and coffee. JUST GO. And get there on time. Prometric does not have to let you test if you show up late, though a rogue Test Center hack may have mercy on your soul but most likely they'll turn you away.
7. Going to the Wrong Testing Center
Prometric allows you to "Test Drive" the exam before exam day, so if you're the type who always gets lost even with GPS, take them up on that. If your GPS has ever led you to a closed business or told you to take a wrong turn onto a one way street, you'll want to know exactly where your test center is and how to get there. If you show up at the wrong one, they will not allow you to test. This is likely because their computers are so old, the actual exams are delivered each morning on floppy disks and your floppy is halfway across town.
8. Waiting to Schedule an Appointment
They recommend you schedule your exam no less than 45 days before the actual date you want. It is especially important to plan ahead if you want to get the date and location you want at the end of a testing window and/or in the last quarter of the year when everyone who has been dragging their feet all year realizes the year is almost gone and they have accomplished little more than jack squat.
9. Forgetting to take the NTS to the Testing Center
You get up early, take a shower, have a nice nutritious breakfast, hop in the car and arrive at the Test Center a whole 45 minutes early ready to kick some ass... only to realize you left your NTS sitting on your kitchen table. FAIL.
10. Reporting Issues at the Testing Center
Because Prometric computers are older than most of you, technical issues can and do happen. If anything is wonky with your exam while you're in the middle of it, don't wait to report it to Test Center grunts until you're done. Immediately let them know their old ass computer is a piece of crap.
Are you a prudent business person staring at his/her five-line balance sheet thinking, "As a prudent business person whose financial reporting isn't bound by generally accepted accounting principles and doesn't engage in transactions that require highly-specialized accounting guidance, I'm interested in some simpler accounting framework options. I've gone through the PCC's Private Company Decision-Making Framework but I really like to obsess over details because I'm demented like that. Gosh, I wish there a document designed to help me determine if the AICPA's FRF for SMEs was right for my business."
Yes? This is you? Boy oh boy, it's your lucky day:
The American Institute of CPAs (AICPA) has released guidelines to help privately held businesses determine which accounting framework, including the Financial Reporting Framework for Small- and Medium-Sized Entities (FRF for SMEs), best meets their financial reporting needs. The National Association of State Boards of Accountancy (NASBA) provided input into the development of the new tool for CPAs and America’s Main Street (#MainStFinancials) businesses.Prior to the issuance of this tool, the AICPA released illustrative financial statements and disclosures, developed as an aid to implementing the FRF for SMEs framework and to help distinguish between financial statements based on the new framework and GAAP-prepared statements. The AICPA has developed the FRF for SMEs framework for use by private, owner-managed businesses when GAAP financial statements are not required. The framework was designed to provide financial statement users with useful, relevant information in a simplified, consistent, cost-effective way. The tool is available at no cost at Decision Tool for Adopting an Accounting Framework.
Here's the deal -- if you're running a "private, owner-managed business" you probably use the cash basis of accounting. At some point, you may walk into your friendly neighborhood bank and say, "I'd like some money, please," the bank will say, "Sure! We just need you to fill out these forms, and submit tax returns and financial statements," and you'll provide them. No big deal. You'll get the money and everything will be great.
Now it's possible that you don't get the money right away; the bank may come back to you and say, "Hi, business owner. These financial statements are great, but we'd like an auditor's opinion with these," and you might grit your teeth a bit but eventually come back with, "Sure thing. Let me get on that."
Then you'll hire your friendly neighborhood CPA to audit your books; there may be some accounting method adjustments, there may not be. You'll get the auditor's opinion with the audited financial statements and a few footnotes. The bank will review them and say, "Thanks for doing that. Here's your money." (Or maybe not, but we're trying to keep this simple, so SHUT IT.)
AT NO POINT IN TIME will your banker or your CPA say, "You could really use accounting framework that is intended for a private, owner-managed business such as yourself. Have you heard about this FRF for SMEs from the AICPA? It's the coolest thing going right now and we should consider it."
NO. NO, THEY WILL NOT.
Don't forget what Greg wrote earlier this week:The FRF is not GAAP. It's an OCBOA, joining the prestigious ranks of cash basis accounting and modified cash basis accounting. Unlike Little GAAP, the FRF is complete and ready to use right now, as long as your company knows how to apply it, your CPA knows how to provide assurance for it, and your bank approves of you using it. This FRF for SMEs thing is a con. A ruse. It's nothing but a new revenue stream for the AICPA. It's no different from the CGMA, except that in this instance the AICPA is trolling the FASB rather than the IMA. Do not feed the troll.
Here's Your Open Thread for Rothstein Kass, Crowe Horwath, BKD, Moss Adams et al. Comp Discussions (2013)
A year ago TODAY we did the et al. compensation thread for any and all accounting firms that typically fly below the radar, so it seems fitting that we would mark the occasion again on August 29th.
Plus, someone at Rothstein Kass is practically begging us:Can you please open a compensation thread for Rothstein Kass? Raise meetings have started and will continue through September 20th. Following the layoffs that happened earlier this year (and the low morale), one might assume top brass to up the ante and provide raises that will retain the top performers. The disparity they're promising probably won't be enough, which will lead to exodus at the top and mass exodus at the middle and bottom. From what I've heard so far, I'm beginning to think it'll be barely above a cost of living adjustment. So much for living the Core Values. Ah, yes. The RK layoffs. Those were contentious, weren't they? Enough about RK. If you want to get in this, get in this (NO YOU, Klynveldians; your time will come). There are plenty of CPAs at firms who have no doubt had their summer RUINED and they need some inspiration:
This is your moment, Big 4-ish rejects and refugees. Enjoy.