Accounting News Roundup: Deloitte Sued; KPMG Sued; Ernst & Young Sued | 11.29.12

Audit firms sued in HP's Autonomy acquisition [Reuters]
A new shareholder lawsuit over Hewlett-Packard's acquisition of British software firm Autonomy has named Big Four audit firms Deloitte and KPMG as defendants, alleging they missed numerous red flags about Autonomy's accounting. The lawsuit, filed on Tuesday in federal court in San Jose, California, also named HP's board of directors, officers, and former executives, alleging breach of duty and negligence for their role in HP's acquisition Autonomy. [...] In a statement, KPMG said it was not engaged to do any audit work or oversee the Deloitte audit work being questioned. KPMG provided limited services not related to Autonomy's audit and "we can say with confidence that we acted responsibly and with integrity," the firm said. Deloitte said it had nothing to add to its statement last week that it was not responsible for due diligence on the Autonomy acquisition. Deloitte also denied last week that it had any knowledge of any accounting improprieties or misrepresentations in Autonomy's financial statements.

Anglo Irish Bank sues Ernst & Young [FT]
Anglo Irish Bank has begun legal action against its former accountant Ernst & Young, which audited the lender’s financial returns in the years leading up to Ireland’s financial crisis and the bank’s nationalisation in 2009. The law suit is the first example of an Irish bank taking legal proceedings against its auditor following the country’s banking crisis, which ultimately forced Dublin to accept a €67.5bn international bail out. “IBRC can confirm that it issued proceedings . . . 27 November 2012, against Ernst & Young, Chartered Accountants,” said the bank. “These proceedings relate to the role of Ernst & Young as auditors to Anglo Irish Bank Plc pre-nationalisation.”

Deloitte CEO: Left Meeting With Obama 'Extraordinarily Optimistic' [Dow Jones]
Deloitte LLP CEO Joe Echevarria said he left the meeting "extraordinarily optimistic" that Washington policy makers understand the need to instill certainty and prevent the combination of sharp spending cuts and tax increases set to take place at the beginning of next year. He said Mr. Obama began the conversation by discussing tax rates and revenues, and the need for those in the upper 2% to pay their share. "He started with rates for what we would define as the upper 2%,...that we have to pay our fair share and I think everyone was in agreement with that notion," Mr. Echevarria said.

Standard Chartered Nears Iran Settlement [WSJ]
Standard Chartered is nearing a settlement with U.S. authorities over transactions with Iranian clients that may have violated U.S. sanctions against the Middle Eastern country, said people involved in the negotiations. The bank is likely to pay around $300 million in fines, concluding investigations brought in recent years by the U.S. Department of Justice, the U.S. Treasury Department, the Federal Reserve and the Manhattan District Attorney's office, according to the people. The authorities declined to comment.
 
Audit committee: The toughest job you’ll ever love [Reuters]
It's not all leather-bound chairs and free refreshments, you know.
 
Grant Thornton taps Dave Wedding to lead Carolinas practice [CBJ]
Wedding, a Deloitte and Arthur Andersen alum, is replacing Brad Gabosch.
 
PCAOB Approves 2013 Budget and Strategic Plan [AWEB]
FYI.
 
‘For $25,000, we wouldn’t be here’ [CO]
A $25,000 dual password system likely would have prevented hackers from stealing state tax data belonging to 6.4 million consumers and businesses from the S.C. Department of Revenue, a special state Senate subcommittee investigating the data breach was told Wednesday. “I almost fell out of my chair,” Sen. Kevin Bryant, R-Anderson, co-chairman of the cyber-security breach subcommittee, said after the hearing. “For $25,000, we wouldn’t be here.”
 
Federal gasoline tax increase proposed as part of fiscal cliff solution [DMWT]
Kay Bell: "Some folks say it's time that the federal gasoline tax, which has been at 18.4 cents per gallon has not gone up since 1993, be increased as part of any plan to deal with the impending expiration of the Bush-era tax cuts and coming budget sequestration. Nineteen years ago, the gas tax hike was 4.3 cents and none of that increase was credited to the Highway Trust Fund. The added collection went entirely toward deficit reduction. The same should happen now, gas-tax-hike advocates say. But with the Taxpayer Relief Act of 1997, signed into law by President Bill Clinton on Aug. 5 of that year, the 4.3 cent general fund gas tax increase was redirected to the Highway Trust Fund, which helps pay for road construction and improvement. That's where we are now."

No one reported shot, stabbed or slashed in New York City on Monday, police sources say [NYDN]
To be sure, someone did pull a trigger Monday -- a 16-year-old walked into Bronx Lebanon Hospital in the early evening with a gunshot wound to his right thigh. But police later determined the teen accidentally shot himself and was not involved in a crime. The streak ended 11:20 a.m. Tuesday when a 27-year-old man was shot in Brooklyn at Ralph and Flatlands Ave. That was the first shooting since 10:25 p.m. Sunday, when a man in Bedford-Stuyvesant was shot in the head and badly wounded by a gunman wearing a red and black jacket and black hat.

 

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