Accounting News Roundup: Tax Reform Reality Isn’t Pretty; Deloitte Finds a Bargain; Work Hard, Rest Hard | 11.08.12

Obama to Push Tax Break [WSJ]
“President Barack Obama, in one of his most dramatic gestures to business, will propose that companies be allowed to more quickly write off 100% of their new investment in plants and equipment through 2011.

The proposal, to be laid out Wednesday in a speech in Cleveland, tops a raft of announcements, from a proposed expansion of the research and experimentation tax credit to $50 billion in additional spending on roads, railways and runways.

Companies can now deduct new investment expenses, but over a longer period of time—three to 20 years. The proposed change, which would let companies ks meant to give companies who may be hesitant to invest an incentive to expand, acting as a spur to the overall economy.”

Oil Tycoon Says PWC Caved to Pressure [WSJ]
“Defense lawyers for jailed Russian oil tycoon Mikhail Khodorkovsky are turning their legal guns on one of their client’s former allies: auditor PricewaterhouseCoopers.

The attorneys for Mr. Khodorkovsky—once the main shareholder and chief executive of petroleum producer OAO Yukos and now on trial for allegedly embezzling tens of billions of dollars from the company—say PWC acted improperly when it withdrew its seal of approval from ten years of Yukos’s financial statements.

Mr. Khodorkovsky’s legal team contends that PWC, which served as Yukos’s auditor and adviser for years, withdrew its audit opinions in order to protect its own business interests in Russia and to shield its partners from possible jail time—not because of any real questions about the reliability of Yukos’s books.”

The Five Best and Worst Things About Telecommuting: The Finance Edition [FINS]
Being able to slob around in your sweats all day isn’t really conducive to a positive day.

PwC boss Ian Powell’s salary up to £3.6m despite partner profits slump [Accountancy Age]
“PwC partners voted to increase Ian Powell’s wages have increased to £3.6m despite partners’ average profits falling to £759,000.

Powell earned £3.3m last year.

Asked whether he believed he had earned his wages, Powell stressed that it was the senior PwC executives who set his remuneration.

‘It’s the partners that decide what I earn and I’m exteremely grateful to them for that.’ “

Barclays Names Diamond CEO, Pledges to Retain Universal Model [Bloomberg]
“Robert Diamond, the architect of Barclays Plc’s investment banking expansion, was appointed chief executive officer and pledged to boost the bank’s consumer unit.

Diamond, 59, will become deputy CEO next month before John Varley, 54, steps down at the end of March, the lender said in a statement today. He will move to London from New York and receive as much as 11.48 million pounds ($18 million) in salary and bonuses as CEO.

Chairman Marcus Agius today defended the bank’s universal model, where it acts as both a consumer and an investment bank, as a U.K. government commission considers forcing lenders to separate the businesses. Barclays, the U.K.’s third-biggest bank, is trying to cut the proportion of pretax profit generated by its investment bank to a third, down from two-thirds in the first half of this year.”

PwC opens Mongolian office [Accountancy Age]
“PwC has set up shop in Mongolia where it hopes to take advantage of a burgeoning natural resources market, the Big Four auditor said in a statement today.

The new audit office, in the capital Ulaanbaatar, will provide assurance, advisory and tax services to companies operating in the country which is credited as the first nation to use paper money.”

Guest Post: Subprime Auditing – The Fox In The Chicken Coop [Re: The Auditors]
“We all remember the story of The Three Little Pigs. This story is about the 4 Big Pigs, more commonly referred to as the Big 4. These are the four gigantic international accounting firms that have a virtual monopoly of the auditing industry – PricewaterhouseCoopers, KPMG, Deloitte, and Ernst & Young. They rule the roost and conduct themselves in a manner that ignores their responsibility to the citizens of our great country.”

Read My Lips: No New Taxes [NYT]
Grover Norquist gets a spot on The New York Times Op-Ed page.

Obama and Boehner Advance Toward Deal to Cut Deficit [WSJ]
Until now, Republicans have shot down every proposal that involved higher taxes. But Democrats could be the major obstacle to this package because they worry that upfront spending cuts would be ironclad while any tax increases would be subject to later agreement. With prospects of a government default looming in early August, leaders on both sides denied Thursdaose. But the White House provided an outline of the deal to Democratic congressional leaders, aides said.

Democrats Recall Reagan’s Tax Increases [Bloomberg]
Reagan, renowned by Republicans as a tax-cutter, also increased revenue about a dozen times when confronted with surging deficits. The Treasury Department has estimated those measures would be the equivalent of $300 billion annually today — more than what many Democrats are now seeking as part of a deal to raise the U.S. debt ceiling. That often-forgotten history has some lawmakers trading places, with Democrats hailing the former Republican president as an example for today’s budget negotiators.

Four More Credit Suisse Bankers Charged in Tax Case [WSJ]
U.S. prosecutors on Thursday charged Credit Suisse Group’s former top offshore banking executive in North America and three other senior bankers with defrauding the U.S. government, increasing pressure on the Swiss bank over U.S. customers’ secret accounts that the officials say were used to evade taxes. The charges add senior-level executives to an indictment filed in February against lower-level bankers who were charged with conspiring to defraud the U.S. by opening and maintaining thousands of offshore accounts for wealthy Americans with as much as $3 billion in hidden assets.

Congress Plans Oversight Hearing on IRS Tax Preparer Regulation [AT]
The House Ways and Means Oversight Subcommittee plans to hold a hearing next Thursday on the Internal Revenue Service’s recent efforts to step up regulation of tax return preparers. “This hearing is a continuation of the Subcommittee’s oversight of the IRS and the alarming rates of tax noncompliance,” Charles W. Boustany Jr., R-La., who chairs the subcommittee, said in announcing the hearing Thursday. “With so many Americans relying on paid professionals to prepare their returns, it is critical that we better understand what the IRS is doing and what impact the new regulations will have on taxpayers, paid tax return preparers, and tax compliance.”

PKF and BDO in hot water over China fraud [Reuters]
The fourth time was the charm for shareholders suing the auditors of Shenzhen-based China Expert Technology. China Expert shareholders have been trying unsuccessfully to sue the company’s accounting firms for failing to detect an alleged $132 million fraud. U.S. District Judge Alvin Hellerstein in New York has previously dismissed the suit three times, saying the shareholders’ claims were inadequate.

Florida Rep. Rivera faces federal probe over casino contract [MH]
Agents with the FBI and the Internal Revenue Service have begun interviewing witnesses knowledgeable about a $1 million consulting contract between Flagler Dog Track — now known as Magic City Casino — and Millennium Marketing, a company co-owned by Rivera’s 70-year-old mother and her business partner, according to sources familiar with the investigation.

Ex-NASA agent pleads guilty in church theft case [AP]
A former NASA special agent pleaded guilty Thursday to failing to report nearly $300,000 he stole from his Southern California church on his tax forms. Alvin Danielle Allen, 42, of Lancaster admitted before U.S. District Judge George H. King that he filed fraudulent tax returns from 2004 to 2008. He faces up to three years in federal prison when he is sentenced Nov. 7.

Accounting Cops Delay New Rule on Leases [WSJ]
The Financial Accounting Standards Board and the International Accounting Standards Board said they will reintroduce a revised lease-accounting proposal for public comment later this year, with changes from their original proposal last year.

‘Nerdy’ accountant ready to lead healthcare merger [Reuters]
For a self-described nerdy accountant who shuns attention, Express Scripts Inc (ESRX.O) chief George Paz just thrust himself into the limelight. With his $29.1 billion planned purchase of rival Medco Health Solutions Inc (MHS.N), Paz would run the clear leader in managing prescription drug benefits for millions of Americans.

IRS Whistleblower Office Issues Annual Report [TaxProf]
It was a banner year!