Accounting News Roundup: MF Global Back on the Hill; Audit Reporting's Proposed Facelift Coming in Q3; A Shot of Liquor Taxes | 03.28.12

MF Global Executive Saw Early Warning Sign on Customer Money [DealBook]
An internal MF Global document suggested that the firm was putting customer money at risk days before its bankruptcy filing, an executive said in prepared testimony that was released on Tuesday for a Congressional hearing on Wednesday. The document showed “a substantial deficit” in the amount of firm money used to protect customer accounts, according to the testimony by Christine Serwinski, the firm’s North American chief financial officer. Futures firms typically keep a cushion of cash in customer accounts as a buffer to cover losses in case of volatile market swings. The deficit, revealed in a report on Thursday, Oct. 27, did not in and of itself violate federal laws, she said. But Ms. Serwinski, who was on vacation during MF Global’s final week, had stated “clearly and repeatedly” that the firm should keep a surplus of cash to protect customer money.

US FASB weighs reform to accounting used by MF Global [Reuters]
The U.S. accounting standard-setting board could this year revamp the accounting treatment that MF Global used to mask risky European sovereign debt exposure, an official at the board will tell lawmakers on Wednesday. "Moving forward with this project will involve a series of public education and decision-making meetings and the exposure of a proposed standard for public comment," said Financial Accounting Standards Board Technical Director Susan Cosper in prepared testimony. "Subject to the board's deliberations, we currently anticipate that any resulting amendments from this project could be issued in 2012."
 
Banks Hold $1 Billion in MF Global U.K. Client Cash, KPMG Says [Bloomberg]
About $1 billion of MF Global Holding Ltd. U.K. clients’ money remains locked away in other financial institutions five months after the brokerage’s collapse, administrators KPMG LLP said. KPMG has collected more than $500 million from those accounts to date, the firm said in an update published on its website. The figures relate to unsegregated client accounts, which MF Global was allowed to mix with its own funds and which have proved difficult for the administrators to recover. KPMG said it was taking action to obtain the $1 billion of unsegregated assets from a “small number of financial institutions” that it didn’t identify. The firm threatened to sue banks that don’t hand over funds, it said at a London creditors meeting in January.
 
Auditor’s reporting model proposal scheduled for third quarter [JofA]
The PCAOB’s proposed changes to the auditor’s reporting model are on track to be issued for public comment in the third quarter of 2012, according to a standard-setting agenda the board released Monday. PCAOB Chairman James Doty said in December that he thought the proposal would be out by the second quarter. The standard-setting agenda also lists the second quarter of 2013 as the target for the final auditor’s reporting model standard, or a reproposed standard for further public comment.
 
Carry-on Q&A: Disposable razors? Yes. Dynamite? No. [CPA Success]
This is a good refresher for anyone that hasn't flown in the last 10 years or so.
 
What CPAs need to know about organized crime [JofA]
This is stuff you didn't learn from watch A&E specials on the subject.
 
Care for something a little stronger? [Tax Update]
A shot of liquor taxes. 
 
Will Cheney's new heart make him nicer? [MSNBC]
Maybe!

 

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