Accounting News Roundup: Internal Controls Get Some Love; Kozlowski's Setback; BDO's LeNature Settlement | 04.06.12

At Large and Small Companies, Internal Controls Matter [DealBook/NYT]
The JOBS Act passed by Congress last week and being signed by the president on Thursday helps smaller public companies avoid for a few years the internal controls reporting and audit requirements put in place in 2002 in the wake of prominent accounting scandals. But just a few days after the bill was passed, Groupon disclosed that it had to restate its results from the fourth quarter of 2011 and that its outside auditor had found weaknesses in its internal controls. There are always trade-offs when it comes to enforcing rules for proper financial reporting. The question is whether this exemption is a benefit to investors who purchase shares in these companies, whether they are well-known brands like Groupon or promising start-ups just getting their bearings.

Wealth or Waste? Rethinking the Value of a Business Major [WSJ]
More than 20% of U.S. undergraduates are business majors, nearly double the next most common major, social sciences and history. The proportion has held relatively steady for the past 30 years, but now faculty members, school administrators and corporate recruiters are questioning the value of a business degree at the undergraduate level. The biggest complaint: The undergraduate degrees focus too much on the nuts and bolts of finance and accounting and don't develop enough critical thinking and problem-solving skills through long essays, in-class debates and other hallmarks of liberal-arts courses. Companies say they need flexible thinkers with innovative ideas and a broad knowledge base derived from exposure to multiple disciplines. And while most recruiters don't outright avoid business majors, companies in consulting, technology and even finance say they're looking for candidates with a broader academic background.

Ex-chief financial officer of Archdiocese held for trial in theft case [PI]
The ex-chief financial officer of the Archdiocese of Philadelphia waived her right to a preliminary hearing Thursday in Municipal Court so that she wouldn't "inconvenience" anyone from the Archdiocese by requiring them to come to court during Holy Week, her attorney said. Anita Guzzardi, 43, of Barrington, Camden County, was charged last month with stealing more than $900,000 in church money, reportedly to pay for trips, gifts and cash advances at casinos.

Former Tyco Chief Kozlowski Is Denied Parole in New York [Bloomberg]
Former Tyco International Ltd. (TYC) Chief Executive Officer L. Dennis Kozlowski was denied parole “due to concern for the public safety and welfare,” the New York state Department of Corrections and Community Supervision said. The Parole Board interviewed the 65-year-old Kozlowski yesterday and informed him today of its decision, Peter Cutler, a spokesman for the department, said in an e-mail. Kozlowski was convicted in 2005 of looting his company and sentenced to 8 1/3 to 25 years in prison. “Your instant offenses are the result of your theft of over $100 million dollars from Tyco, an international public corporation, in glaring violation of the trust placed in you as CEO by the board of directors and corporate shareholders,” the board said in its decision, according to Cutler’s e-mail.
 
IRS chief says congressional inaction could cause tax disaster [AP]
Internal Revenue Service Commissioner Douglas Shulman warned of a disastrous tax filing season next year if Congress puts off dealing with tax cuts that are set to expire at the end of the year or have already expired. If Congress waits until the end of the year or acts retroactively on expired tax laws, "you could have a real disaster in the filing season where there is total confusion" about existing tax law, Shulman said Thursday at the National Press Club. He said one result could be that the IRS would have to delay the opening of filing for some taxpayers, as it did last year.
 
Accounting firm settles $285M claim over LeNature's loan [Bloomberg]
BDO Seidman LLP, the accounting firm, settled investor claims over a $285 million loan that was made to LeNature's Inc. before the drink maker went bankrupt in 2006, according to a court filing. Terms of the settlement were not disclosed in the Monday filing in New York State Supreme Court in Manhattan.
 
You Can't Get a Tax Refund for Buying Groceries - And Other Helpful Advice [KPE/Forbes]
FYI.
 
Ga. Easter egg hunt canceled after past violence [AP]
An annual Easter egg hunt in central Georgia has been canceled after organizers say parents became violent while trying to collect eggs for themselves and their children in past years. This will be the first time in years that the Easter Bunny won't be visiting children during the annual egg hunt at Central City Park in Macon, traditionally one of the largest Easter events in central Georgia.

 

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