Ed. note: We’re off starting tomorrow, returning Monday. Send tips over the holiday to [email protected] and submit your questions, missives, and tryptophan-induced dream journals to Open Items. Happy Thanksgiving!
Yesterday, the Department of Justice sued to block the AT&T-Time Warner merger. Justice believes the combined company would “greatly harm American consumers” while AT&T says the move “defies logic” which I think is the template reaction to action taken by the Trump Administration. However! Legal experts are split on merits of the suit, especially since the Comcast-NBCUniversal deal from 2011 is so similar.
Accountants behaving badly
Penn West Petroleum (aka Obsidian Energy) agreed to a fine of $8.5 million to settle accounting fraud charges with the SEC. These charges were initially announced in June when the SEC claimed that the company’s former CFO, VP of accounting and reporting, and its operations controller:
manipulated the company’s operating expenses in order to lower a key publicly reported metric concerning the cost of oil extraction and processing needed to sell a barrel of oil. Penn West allegedly created an internal budget target representing the amount it would improperly move in its publicly-reported financial statements and gave the illusion that it was spending less money to get oil of [sic] out the ground. In fact, the SEC alleges, the company historically struggled to keep its operating costs under control, and Takeyasu, Curran, and Grab managed operating expenses to meet the budget target. According to the SEC’s complaint, they frequently met this target to the dollar by having the company record large, round number, and unsupported adjusting journal entries. Within the company, this practice was referred to as “reclass to capital.”
The large, round, unsupported adjusting journal entry will get you every time.
Previously, on Going Concern…
Megan Lewczyk wrote about accountants lacking data analysis skills. In Open Items, someone considers being a Big 4 boomerang; an M&A lawyer wonders about switching to Big 4 transaction services; and: “Is there EVER a good reason to accept a last-ditch counter-offer when you give notice?”
In other news:
- Senate Finance Panel Tax Bill Would Trim Taxes At First But Raise Them For Half Of Households By 2027
- FCC to Outline Plan to Roll Back Net-Neutrality Rules
- Too many cranberries.
- Spam Is Back
- Declassified Soviet cat photos.