Accounting News Roundup: Auditor Shopping, Certifications and Tax Deferrals | 01.10.17

By | 5 months ago

Auditor shopping

1Malaysia Development Berhad has gone through a number of auditors, including KPMG, EY and most recently Deloitte. The latter resigned last July in the midst of allegations against 1MDB for corruption and money laundering. With that level of stench on it (along with cycling through 3 of the Big 4), there's no wonder that the fund has had trouble finding a new auditor. Bloomberg reports that the new winner is…Parker Randall.

Certifications

The Wall Street Journal reports that the AICPA, along with the American Society of Appraisers and the Royal Institution of Chartered Surveyors, are ready to roll out their new credential for valuation professionals. 

[P]rofessionals with at least 3,000 hours of valuation work experience can get a Certified in Entity and Intangible Valuations credential from the three organizations, after completing 30-hours of training,  a two-part exam, depending on experience, and paying fees that could be more than $1,000.

“We think it will create a more uniform-thinking bunch,” said Myron Marcinkowski, a managing director at financial advisory and valuation firm Duff & Phelps Corp.  He was among the 40 experts who worked on creating the standard since 2013.

Anyone anxious to get their CEIV (?) will be able to sit for that exam "early this year."

Tax deferrals

Andrew Ross Sorkin of the New York Times writes that critics of the tax deferral allowed for cabinet member nominees who are calling it a "loophole" have it all wrong:

The actual law, which was put in place by President George Bush, governs what is known as Section 1043 of the tax code. It allows government appointees to apply to the Office of Government Ethics to receive approval to defer paying capital gains on stock sales as part of any divestment plan that is required by their office.

As long as appointees sell all of their stock and then reinvest it in Treasuries or mutual fund indexes that don’t pose a conflict with their roles in the administration, the capital gains are deferred until they sell the Treasuries or mutual funds.

But notice this: The taxes are not eliminated. Not at all. They will eventually have to be paid.

The operative word here is "eventually." It's true, the taxes will have to be paid, but a deferral does allow for the possibility that some crazy tax exemption could become law and then mega rich people could take advantage. I can't help but think that a lot of tax planning is grounded in this idea.

Previously, on Going Concern…

Rachel Andujar wrote about pizza. I wrote about KPMG choosing Orlando for its new training center.

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Correction: An earlier version of this post misidentified the firm serving as 1MDB's auditor. The firm is Parker Randall, not Park Randall.

Image: iStock/chendongshan

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