Groupon: Where Were The Auditors? [Forbes]
Francine McKenna: "Management made the assessment of the material weakness in internal controls over financial reporting that caused disclosure controls to be ineffective, not auditor Ernst & Young. Ernst & Young deserves no credit for the announcement, nor any blame, just yet, for the fact that the weaknesses had to be finally admitted. There is no transparency regarding the auditor’s agreement or disagreement previously with Groupon, any public documentation of their discussions or any reason to believe Ernst & Young either encouraged or discouraged Groupon to get their act together sooner."
The internet company balance sheet is generally dominated by intangible assets whose values are based on assumptions that are works of art themselves. And then there’s revenue recognition in these companies with management making all kinds of assumptions about primary obligors, selling price hierarchies, and virtual sales. Yes, what makes internet company accounting “special” is that so many of the applicable accounting rules require major assumptions, many of which could be better characterized as “giant leaps of faith.”
Jim Peterson: "Even if, by whatever name, “convergence” were desirable [...], it is not achievable. The entire effort is massively distracting and a colossal waste of time, energy and resources."
President Obama is set to hit the road on Tuesday to talk up his “Buffett Rule,” as Democrats push an election year message of tax fairness and economic equality. Obama is scheduled to travel to Florida, a swing state that pulled the lever for him in 2008, to press the case for ensuring that those making more than $1 million a year pay a higher tax rate than middle class families.