Accounting News Roundup: Corporate Taxes and KPMG’s Next Global Chairman | 03.09.17

By | 2 weeks ago

Corporate taxes

As you probably heard, heavy-equipment manufacturer Caterpillar had an unexpected visit from federal agents last week. Investigators from three different agencies showed up at the company’s headquarters in Peoria, Illinois to seize files, computers and whatnot and apparently this is not a common occurrence:

“It’s not unusual to go in and do a search of, say, a crack house. But it is somewhat unusual to go to a Fortune 500 — Fortune 100 company and begin conducting a search to find evidence of a crime,” said Ken Yeadon, a Chicago attorney who served as a federal prosecutor for 10 years, and an enforcement attorney for the Securities and Exchange Commission before that.

Yeadon said he hasn’t seen this kind of raid since the FBI moved on Enron about 15 years ago.

It’s funny because tax avoidance seems to be the drug of choice for many Fortune 500 companies. Granted, they don’t have federal agents showing up at their door but that’s probably because their strategies, while distasteful to some, aren’t technically illegal. Caterpillar on the other hand has been accused in a report by an accounting professor from Dartmouth of tax and accounting fraud, which is slightly more serious.

KPMG

Bill Thomas will succeed John Veihmeyer as global chairman of the firm on October 1. Apparently KPMG partners don’t hold much credence in the old dictum: “Never trust a man with two first names.” Full disclosure: I worked at KPMG and didn’t personally know any two-first-name Klynveldians. But if I had, I probably wouldn’t have trusted them.

Anyway, Thomas ran the Canadian firm from 2009 to 2016 and has been on the global board since ’09. He’s only 49 and has been with the firm for 28 years. A lifer! Congrats on the new gig, Bill.

Accountants behaving badly

Neal Morton, a director of business affairs at a Carmel, California golf club, had a famously intimidating boss — filmmaker Clint Eastwood. That did not stop Morton from embezzling $182k over a 5-year period by “unauthorized petty cash checks and checks forged with the signatures of assorted colleagues.” Morton’s attorney asked for leniency because “Morton gave much of the money away to undisclosed charities, the needy, and to help neighbors and friends spay and neuter their pets.” Perhaps if Judge Bob Barker was presiding this would’ve been an effective argument, but he wasn’t, so Morton received a 19-month sentence.

Elsewhere in ABB: Joseph Castellano, a CPA in Connecticut was sentenced to six years in prison for a Ponzi scheme that bilked his clients out of $1.5 million. That’s on the (relative) high end. On the other end of the spectrum, the California Board of Accountancy fined Eva Tsai $6,083 for “not registering the firm name with the CBA and failing to comply with professional standards.”

And now, a word from our sponsor

Gleim CPA Review shared this post yesterday on NASBA’s new Experience Verification service that is available in nine jurisdictions. It allows CPA candidates looking to meet the minimum experience requirement to do so by submitting their work for verification, participating in an interview with a licensed CPA and having NASBA make a recommendation to the qualifying state board of accountancy.

Previously, on Going Concern…

I wrote about how Donald Trump is failing to put H&R Block out of business.

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