• Accounting News Roundup: Big Auditors, A Tax Situation and United | 04.11.17

    By | April 11, 2017

    Big auditors

    Accounting Today reports on the latest numbers out of Audit Analytics on public company auditors. And congrats to EY, the audit-yiest of the auditors:

    Big Four firm Ernst & Young maintains its top spot in the rankings of auditors of public companies, with over 250 public company clients more than its nearest rival, according to a recent study.

    In Audit Analytics’ Who Audits Public Companies – 2017 Edition, which was just completed, EY totaled 947 public companies, followed by fellow Big Four firms PwC, KPMG and Deloitte & Touche with 696, 665 and 642, respectively.

    For those scoring at home, the seven largest firms — Big 4 + BDO, Grant Thornton, RSM — audit 96.5% of the large accelerated filers.

    A tax situation

    A couple of years ago, when the Department of Justice charged Jersey Shore star Michael Sorrentino with tax evasion, most people shrugged and said, “Sounds about right.” Last Friday, the DOJ expanded on their indictment of Sorrentino and his brother Marc, which also seems about right:

    According to the superseding indictment, Michael was a reality television personality who gained fame on the television show “The Jersey Shore,” which first appeared on the MTV network. Michael and his brother Marc created businesses, such as MPS Entertainment LLC and Situation Nation Inc., to exploit Michael’s celebrity status. The superseding indictment alleges that the brothers conspired to defraud the United States by not paying all federal income tax owed on approximately $8.9 million that Michael earned between 2010 and 2012. It is alleged that the brothers filed or caused to be filed with the Internal Revenue Service (IRS) false tax returns that understated gross receipts, claimed fraudulent business deductions, disguised income payments made to the brothers and to others and underreported net business income. As part of the conspiracy, the brothers also allegedly commingled funds among business and personal bank accounts and used the money from the business bank accounts to pay for personal items, such as high-end luxury vehicles and clothing.

    I’m sure the Sorrentinos socked plenty of money away to pay defense attorneys for precisely this kind of….oh never mind.

    People are worried about IRS phone scams

    Nah, everything’s fine now:

    Indian police said on Saturday they had arrested the suspected mastermind behind a call center scam run out of a Mumbai suburb that targeted thousands of Americans and netted more than $300 million.

    Sagar Thakkar, 24, also known as Shaggy, was arrested at Mumbai’s international airport in the early hours of Saturday after he flew in from Dubai, Mukund Hatote, a police officer on the case, told Reuters.

    Good job everyone.

    United

    Years ago, when I was still serving the capital markets, I was flying back to New York after visiting friends in Colorado. I had a layover in Chicago and, of course, United oversold the flight and needed volunteers to give up their seats. They were offering the usual — free meals, hotel, a $400 voucher — but also seating in 1st Class for the first flight out the next morning. I wasn’t in a hurry to get back to work (life at KPMG wasn’t so great at this time) so I emailed my manager and said I would be in late. No problem. I happily took all the loot and even had a free beer for breakfast on the flight home.

    The weirdest thing about the whole United-violently-dragging-a-passenger-off-a-flight debacle is that no one wanted an $800 voucher. I get that some people — including the doctor they dragged off! — needed to get to where they were going, but there wasn’t a single miserable CPA on that flight who wanted to avoid work for just a little bit longer? You have to seize these opportunities when they come your way.

    Previously, on Going Concern…

    Marsha Leest wrote about political opinions when choosing an employer. And people who want to get out of paying taxes should suffer more humiliation than an IRS tattoo.

    In other news:

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    • Tyler Durden

      Not a huge substantive difference but psychologically, it’s harder to accept an offer once you’re already boarded and seated on the plane ready to get the f out. With that said, I probably still would’ve done it if I wasn’t in a hurry. It also depends on whether you can use the voucher all at once or are they eight separate $100 vouchers ( or four separate $200, etc.) and you can only use one per booking. I think I’ve encountered that before, forgot which airline.

    • dumpus

      I’ve paid for overseas 1st class trips using vouchers I’ve negotiated up when the carrier has overbooked. After asking for volunteers a second time, most counter attendants seem to have a rather wide latitude in what they can award. I’ve gotten $1,000 vouchers and first-class arrangements on other airlines for the trip home just by being nice to the attendant and tactfully pointing out that I’m the only person in front of him/her/it willing to make a deal. Having status helps a little, too.

      The best part is getting the direct flight from the other carrier instead of the layover from the one I like flying, and getting home within 30 minutes of when I was originally scheduled.

    • Frank

      Let’s do a little reasonableness test:

      A) A flight is overbooked. It’s happened since the beginning of time.
      B) After not surfacing any volunteers to deplane, United randomly selects people that must deplane.
      C) A passenger refuses.
      D) Police now board the damn plane.
      E) What on earth do you think is going to happen if you resist the police? (those were police btw, not United employees).
      F) Idiots pull out their phones and start recording. Immediately start posting to Twitter. These are the same types of idiot rubberneckers that stop traffic to look at a car wreck on the freeway.
      G) Internet rage ensues.

      Conclusion: the internet needs to be deleted. (‘cept hoodclips and goingconcern)

      • dumpus

        The problem is the flight was not overbooked; it was at 100% capacity with paid customers already seated and the plane being prepped for departure, and United decided that they needed to fly their employees in place of paying customers so they evicted people. And, contrary to the statements of the soon-to-be-ex-CEO, it is not a random choice; first class passengers, frequent flier status holders, and full-fare paying main cabin customers are NEVER EVER bumped.

        Reasonable is for United to deadhead their employees in a completely clandestine manner that doesn’t disrupt normal business operations…you know, like pretty much every other company does. If United couldn’t get their employees on that flight, they should have moved them on later flights *prior* to the plane being fully boarded or they should have sent them on a different company with an IOU. This is 100% United’s fault.

      • Tyler Durden

        You got some of your facts screwed up. Simply put, imagine going to a hotel you reserved and paid for, checked into the room and unpacked, started taking a nap, and then the hotel manager comes up and says you need to pack your stuff and get out so we can have our own staff stay in your room for free, we’ll even throw in a hotel credit for you. You want to make a fuss about it and say no? Fine, we’ll have the police come up and bash your face against the wall and drag you out. Never mind that if I needed a room for my own staff, I can get a room for them at the hotel across the street. Btw, just trust me, you were selected randomly.

        • MM

          A 69 year old senior medical doctor