~ Happy Presidents' Day, everyone. Yes, it's a holiday you don't get to celebrate but fortunately for us at Chez Going Concern, we go with the banks. Thus, there won't be a Daily Grind but we'll publish here and there to keep you company. If you're so inclined, caption the photo above or drop the name of your favorite President below and we'll make wild judgments about your choices.
New York to Pursue Ernst & Young Lawsuit [Bloomberg] Ernst & Young LLP, bankrupt Lehman Brothers Holdings Inc. (LEH)’s former auditor, should “disgorge” $125 million in fees earned in an alleged fraud involving so- called Repo 105 transactions that concealed tens of billions of dollars in debt, the New York attorney general said. Attorney General Eric Schneiderman asked a judge today to let him pursue the suit after the auditing firm tried to get it dismissed. The state is limited by law from recovering the fees for itself or for Lehman’s former shareholders, Ernst & Young said. “E&Y is wrong on every count,” Schneiderman said in a court filing in U.S. District Court in Manhattan. “It is well- settled that the state can, and frequently does, obtain disgorgement of ill-gotten gains under public enforcement statutes.”
Working All Day For the I.R.S. [James Stewart/NYT]
Mitt Romney is not alone. I thought Mr. Romney’s 13.9 percent federal tax rate would be hard to beat. But among the 400 Americans with the highest adjusted gross incomes in 2008, 30 of them paid less than 10 percent and another 101 paid less than 15 percent. And these people earned, on average, more than 10 times Mr. Romney’s $21.7 million — an average of $270.5 million each.
Throughout the extraordinary surge in Apple Inc. (AAPL)’s share price, a persistent question has lingered: Why is the stock still so cheap? One overlooked answer may be that Apple’s accounting isn’t as conservative as it used to be. [...] Thanks to an accounting- rule change for which it lobbied, Apple gets to book revenue from sales of bundled products such as iPhones -- which include hardware, software, services and upgrade rights -- more quickly than it used to. In short, one reason Apple’s earnings have been so high is accounting inflation, and the market realizes this.
The major challengers to the big four accountants have told the Competition Commission (CC) that the audit market for listed companies must be opened up for the good of British business. [...] BDO and Grant Thornton, the fifth and sixth biggest audit firms worldwide, and London-based Mazars, gave presentations to the inquiry last week, arguing that listed firms must be forced to regularly re-tender audit work to crack the big four's stranglehold of the market. More than 70 per cent of FTSE 100 companies have not held a competitive tender to appoint auditors for at least 15 years.
Rick Santorum makes Obama-esque tax planning move [Tax Update] Joe Kristan gives tithe-adverse Presidential candidate Rick Santorum some free tax advice.
Romney and Obama vie for title of most charitable; Santorum gave least to charity [WaPo]
It's a photo finish.
Principles-based Accounting: Wishing and Hoping [GOA]
Grumpies: "It’s been a decade or so since the FASB started talking about principles-based accounting. We are not sure what caused the impetus, but we think the first serious discussion occurred when the FASB issued a document for public comment on October 21, 2002. It wasn’t particularly compelling then, and it hasn’t gotten any better with age."
The term “trusted advisor” is so overused and embellished in public accounting—to the extent that this term now breeds complacency. In this blog we’ll explore this complacency, what our clients need and what service from a real trusted advisor looks like.