Accounting News Roundup: Olympus’ Loss; Satyam Is Back in the Game; Expectations Gap, Shmexpectations Gap | 02.13.12

Posted on by Caleb Newquist

Olympus Books $9.7 Million Loss [WSJ]
Olympus Corp. said Monday that it booked a net loss of ¥756 million ($9.7 million) for the fiscal third quarter, while predicting a full-year net loss of ¥32 billion. The third-quarter net loss for the three months ended December by the Japanese maker of cameras and medical equipment, which is trying to emerge from one of Japan's biggest corporate accounting scandals in years, was a sharp reversal from a net profit of ¥2.04 billion in the same period a year earlier.

Oscar ballot counting 'surreal' for L.A. accountant [CTV]
In classic accountant fashion, Rick Rosas admits that he's had the same tuxedo for 10 years.
 
Satyam to Acquire 15% Stake in Dion Global [WSJ]

Satyam Computer Services Ltd. said Friday it agreed to acquire an about 15% stake in Dion Global Solutions Ltd., marking the software exporter's first acquisition since it started recovering form one of India's worst ever corporate fraud. Although Satyam didn't give the deal price, Dion Global said separately that its board has approved issuing equity shares to Satyam on a preferential basis for 350 million rupees (about $7 million). Dion Global is owned by India's billionaire Singh brothers, Malvinder and Shivinder, who founded drug maker Ranbaxy Laboratories Ltd. and hospital chain Fortis Healthcare Ltd. It provides software services to capital markets, covering trading, portfolio management and treasury and research services. Satyam said acquisition will help it expand coverage of its capital markets software solutions business. Banking and financial services, including capital markets, accounted for nearly 18% of Satyam's $1.13 billion revenue in the last fiscal year ended March 31.
 
PwC US Names Former Washington Post Journalist Ceci Connolly as Managing Director of PwC's Health Research Institute [PwC]
Is no one safe?
 
A Year of Tax-Code Reckoning [NYT]
For two decades, politicians have promised — and failed — to overhaul the tax code to make it simpler and fairer. This time they have a deadline of sorts. On Jan. 1, 2013, a major part of the current code turns into a pumpkin. That is when income tax rate cuts — a host of expanded tax deductions and credits, and generous changes in the taxation of dividends, capital gains and inheritances — are set to disappear. That day of reckoning was supposed to have come in 2011, but President Obama signed a two-year extension of President George W. Bush’s tax cuts of 2001 and 2003, along with temporary tax cuts of his own, most notably the two-percentage-point cut to the payroll tax. This time around, Mr. Obama has vowed that he will not extend the tax cuts for upper-income Americans, and no matter who wins the presidential election in November, Mr. Obama will be in the White House on Expiration Day. That will put pressure on Republicans in Congress to prevent a sudden return to the tax code of the 1990s.
 
Fixing Section 409A: Legislative and Administrative Options [SSRN via TaxProf]
409A, aka: Joe Kristan's nominee for worst tax enactment of the (last) decade.
 
The Auditor's Expectations Gap…Not Again! Excuses, Excuses, Excuses! [GOA]
The Grumpies have had it up to here [bridge of the nose]: "These two Grumpy Old Accountants simply can’t believe that today’s global accounting firms continue to rely on an almost 40 year-old excuse to justify their shoddy audit work.  Yes, we know this because we were accounting undergraduates when this feeble defense was rolled out for the first time.  While the “expectations gap” reasoning may have been believable in our youth, today it is nothing but a meaningless excuse.  After all, independent audits now are dramatically improved over days gone by (or so we are told), and the Big Four have had four decades (two generations of investors) to re-educate the investing public on what an independent audit really represents."
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Accounting News Roundup: E&Y to Appoint Non-Exec Directors to Global Board; Accounting Remains a Hot Post-College Job; Barclays Calls New Loan Valuation Proposal ‘Potentially Misleading’ | 07.06.10

‘Big four’ auditors bring in independent directors in response to regulators [Guardian]
The Financial Reporting CouncCAEW, issued a new audit governance code back in January that recommended audit firms appoint non-executive directors to their UK firm however, Ernst & Young will go so far to appoint them to their global advisory boards.

“Although the code technically applies only to our UK business, as a globally integrated organisation, we believe it is most appropriate for us to implement the code’s provisions on a global basis also,” said Jim Turley, global chairman and chief executive of Ernst & Young. “Including individuals from outside Ernst & Young on the global advisory council will bring to the senior leadership of our global organisation the benefit of significant outside perspectives and views.”

BP Won’t Issue New Equity to Cover Spill Costs [WSJ]
But if you want to pitch in, they are happy to take you up on an offer, “BP would welcome it if any existing shareholders or new investors want to expand their holding in the company, she said. BP’s shares have lost almost half their value since the Deepwater Horizon explosion that triggered the oil spill April 20.

BP Chief Executive Tony Hayward is visiting oil-rich Azerbaijan amid speculation the company may sell assets to help pay for the clean-up of the Gulf of Mexico oil spill. The one-day visit comes a week after Mr. Hayward, who has been criticized for his handling of the devastating oil spill, traveled to Moscow to reassure Russia that the British energy company is committed to investments there.”

Looking for a post-college job? Try accounting [CNN]
Happy times continue for accounting grads, according to the latest survey on the matter, this time from the National Association of Colleges and Employers. The average salary listed for an entry-level accounting major is just over $50k and the article also notes that most accounting jobs go to…wait…accounting majors.


FASB, IASB Staff Describe Plans for New Financial Statements [Compliance Week]
As always, the two Boards are hoping that bright financial statement users will chime in with their suggestions but they’ve got the basic idea down, “The FASB and IASB are rewriting the manner in which financial information is presented to make it more cohesive, easier to comprehend, and more comparable across different entities. The proposals would establish a common structure for each of the financial statements with required sections, categories, subcategories and related subtotals. It would result in the display of related information in the same sections, categories and subcategories across all statements.”

Accounting rules “practically impossible to implement”, Barclays claims [Accountancy Age]
Barclays’ finance director, Chris Lucas isn’t too keen on these new loan valuation proposals. Besides the ‘practically impossible’ thing, he says, “The sensitivity disclosures…are highly subjective, difficult to interpret, and potentially misleading, particularly when the underlying data is itself highly subjective,” Lucas said.

“It is hard to see how sensitivity disclosures could be aggregated by a large institution to provide succinct data that avoids ‘boilerplate’ disclosure.”

Asking The Difficult Questions [Re: The Auditors]
“Audit committees too often rely on the auditors’ required disclosures without comment. They sometimes lack the independence, experience, or determination to ask the probing questions. It’s critical, however, that committees seek answers to vexing questions and not accept the response, ‘But that’s the way management has always done it.’ “

Buffett Donates $1.6 Billion in Biggest Gift Since 2008 Crisis [Bloomberg]
WB continues his plan of giving away 99% of his fortune, “[Buffet] made his largest donation since the 2008 financial crisis after profits at his Berkshire Hathaway Inc. jumped.

The value of Buffett’s annual gift to the foundation established by Bill Gates rose 28 percent to $1.6 billion from $1.25 billion last year. The donation, made in Berkshire Class B stock, was accompanied by gifts totaling $328 million in shares to three charities run by Buffett’s children and another named for his late first wife, according to a July 2 filing.”

The case for cloud accounting [AccMan]
Dennis Howlett continues to provide evidence that switching to the cloud provides benefits that are simply too big to ignore, “This 2min 1 sec video neatly encapsulates why this is something you should be considering, especially if you are operating electronic CRM or e-commerce for front of house activities.”