Accounting News Roundup: Another Finance Exec Breaks With Tesla; Female CFOs; Who Gets the Pass-through Deduction? | 03.14.18

Company report pace frustrates accounting experts [Reuters]
Author and lawyer Michael Young jokes about the days when it took more time to get some companies’ financial statements than it did for Columbus to discover America. Alas, those days are still here.

Google May Reap $1 Billion Tax Benefit from Motorola Deal [CFOJ]
Robert Willens, an independent tax and accounting expert who is president of Robert Willens LLC in New York, told CFO Journal that the NOLs are “a really significant item.” The former Lehman Bsaid Motorola has about $3 billion in NOLs. While the IRS restricts the entire amount of NOLs that can be applied after a change in ownership, Google should still be able to use a portion of them over time. Willens estimates Motorola could reduce Google’s tax bills by about $1 billion over the next six years, on an undiscounted basis.

PwC faces fine over JPMorgan audit [FT]
After a year-long investigation into the audit firm, the Accountancy and Actuarial Discipline Board is taking disciplinary action against PwC for failing to meet the professional standards expected of it, and failing to report “with due skill, care and diligence”.

Memo to Staff: Don’t Panic [WSJ]
From company memos to “town hall” meetings, corporate leaders are looking at how they can jack up morale in the work place. At the same time, many are dealing with employees already skeptical of management—given the rounds of layoffs in recent years—and must choose their strategies carefully.

Interpublic sells half of its Facebook stake [FT]
Interpublic, the advertising group, sold half of its 0.4 per cent stake in Facebook for $133m to an undisclosed buyer. The sale is likely to put the spotlight back on to the secondary market for private company stock. The loosely regulated market attracted scrutiny from regulators earlier this year after shares in internet companies such as Facebook and Groupon began trading at multibillion-dollar valuations without public listings.

A war tax? It’s still not a bad idea [WaPo]
White House Press Secretary Jay Carney last Wednesday caught my eye when he talked about members of Congress, currently vocal about the deficit, who were on Capitol Hill over the past decade and voted for unpaid large tax cuts but “put two wars on the credit card without paying for them.” That last phrase reflected words used in 2007 by several House Democrats who wanted to institute a war surtax to pay for the then-increasing costs of U.S. activities in Iraq and Afghanistan. These days, one of them, Rep. Jim McGovern (D-Mass.), believes such a levy should be on the agenda of the debt-reduction “supercommittee.”

Corporations are people too! [Tax Update Blog]
Mitt Romney had a great time at the Iowa State Fair.

IRS: Woman claims 19 non-existent children [SVMN]
The IRS says Coronel claimed that all the children had been born to her at a Los Angeles hospital on Dec. 11, 2002, then obtained fraudulent Social Security numbers for them and claimed them as dependents. Hospital records show she gave birth to one child, a boy, on that date.

KPMG Foundation Awards $400,000 in Scholarships to 40 Minority Accounting Doctoral Scholars [KPMG]
The students include 10 new recipients and 30 students whose scholarships have been renewed. Each scholarship is valued at $10,000 and renewable annually for up to five years.

Obama Warns of Default Risk [WSJ]
With Congress deadlocked a week before the government runs out of cash to pay its bills, President Barack Obama warned Monday in his starkest terms yet that the U.S. is on the brink of a default that could trigger an economic upheaval. Mr. Obama made his comments in a prime-time national address followed immediately by a response from House Speaker John Boehner (R., Ohio), who dismissed not only the president’s approach, but virtually his entire record in office. Both men spoke just hours after the top Republican and Democratic leaders in Congress unveiled competing debt plans. Thely faced opposition that could make it hard to pass their respective chambers.

More U.S. lawsuits target Chinese reverse mergers [Reuters]
Accounting debacles at U.S.-listed Chinese companies have prompted a surge of securities fraud lawsuits, but investors might have trouble recouping their losses even if they win. More than one-fourth of the 94 U.S. securities fraud lawsuits seeking class-action status and filed from January to June related to so-called Chinese reverse mergers, according to a study released on Tuesday by the Stanford Law School Securities Class Action Clearinghouse and Cornerstone Research in Boston.

News Corp. Board Challenged [WSJ]
The Journal [!] reports that the audit committee is even less independent than we thought.

IRS Change Helps ‘Innocent Spouse’ [WSJ]
The Internal Revenue Service is giving some relief to “innocent spouses” who otherwise may have been liable for a partner’s tax debt. Effective immediately, the agency has eliminated a rule that disqualifies taxpayers from innocent-spouse status if they fail to file for relief within two years—a provision that snagged people who otherwise qualified, including abused women.

UK company auditors told to stand up to banks [Reuters]
“We find too many audits that require significant improvement. Scepticism is a key factor in those audits that do need an improvement,” said Paul George, director of auditing at the Professional Oversight Board (POB). The POB’s annual survey of audits found that the UK operations of the “Big Four” — KPMG, PwC, Deloitte and Ernst & Young — along with two smaller firms Grant Thornton and BDO, all failed to be sceptical enough. PwC was told to pay more attention to how impairment of goodwill is calculated, while Ernst & Young should make sure there is enough evidence to back growth rates. Grant Thornton, KPMG, BDO and Deloitte were told to apply appropriate challenges to company bosses.

Bad Food? Tax It, and Subsidize Vegetables [NYT]
Simply put: taxes would reduce consumption of unhealthful foods and generate billions of dollars annually. That money could be used to subsidize the purchase of staple foods like seasonal greens, vegetables, whole grains, dried legumes and fruit.

Men use ‘sniff test’ to tell clothes’ cleanliness, survey shows [MSNBC]
For some reason, this required a survey.

Auditors’ Somewhat Raised Confidence [CFO]
First the good news: fewer companies are carrying around the burden of a going-concern qualification. […] Now the bad news: the numbers are still high. And the drop in qualifications has more to do with companies dropping out of the public-company sector, getting acquired, or — confirming their auditors’ predictions — going bankrupt.