Auditors named in Caterpillar-ERA debacle [FT]
Two of the world’s top accounting firms helped conduct due diligence last year for Caterpillar’s $886m acquisition of ERA, the Chinese mining equipment maker that was later alleged to have accounting irregularities. Deloitte and Ernst & Young conducted due diligence for the transaction, according to two sources close to the deal. Deloitte audited the working capital for ERA, while Ernst & Young conducted overall due diligence, one of these people said.
IRS, Lockheed fight over R&D "rocket science" tax break [Reuters]
Lockheed Martin Corp is challenging the U.S. government in court over $13.6 million in research tax credits in a case that tests the often hazy line between research and production, with future R&D claims by other companies possibly at stake. The aerospace group argued in December in U.S. District Court that the Internal Revenue Service had wrongly rejected research tax credits Lockheed claimed for two projects: a space rocket launcher and a New York City surveillance system. The IRS disallowed Lockheed's claims in May 2012. Lockheed has challenged the IRS' position that some retroactive R&D credit claims were impermissible because they involved costs not for research, but for making prototypes resulting from research. Lockheed said in its court filing that some of the credits were claimed for prototypes, but argued that the designs were new and unproven and should qualify as research. "With Lockheed, you have the actual question of whether this is rocket science," said William Schmalzl, a partner at the law firm Mayer Brown with clients facing similar issues.
Heavy Multitaskers Are the Worst At Multitasking [LiveScience]
People who multitask all the time may be the worst at doing two things at once, new research suggests. The findings, based on performances and self-evaluations by about 275 undergraduate students, suggest many people multitask not out of a desire to boost productivity, but because they are easily distracted and can't focus on one activity. And those people turn out to be the worst at juggling different things, the researchers said. "From a public safety perspective, it's a little alarming that the people who report using a cellphone while driving the most are the persons who are the worst at multitasking," said study co-author David Sanbonmatsu, a psychologist at the University of Utah.
One-time UT kicker indicted in Ponzi scheme [NBC]
If first you don't succeed at fraud: "Former University of Texas kicker Russell Allen Erxleben was indicted Thursday on federal charges that he was running a Ponzi scheme that generated more than $2 million. In 1999 Erxleben pleaded guilty to federal charges of security fraud, serving five years. On Thursday, he was taken into custody after being accused of five counts of wire fraud, one count of securities fraud, and two counts of money-laundering. "According to the indictment, from 2005 until October 2009, Erxleben devised and implemented a scheme to defraud and to obtain money from investors by the use of fraudulent pretenses, representations and promises," the U.S. Attorney's office said in a news release."
H&R Block Supports Uniform Requirements in Tax Preparation Industry [H&R Block]
Because of course they do.
CAQ, AAA team to give researchers access to audit firm personnel [JofA]
A new program announced Thursday by the Center for Audit Quality (CAQ) and the Auditing Section of the American Accounting Association (AAA) will help accounting and auditing academics gain access to audit firm personnel to participate in academic research projects. The joint venture between the CAQ and AAA Auditing Section is designed to help generate research on issues that are relevant to audit practice. Doctoral students and tenure-track professors are the initial group to be provided access to audit firm staff to complete data collection protocols through the Access to Audit Personnel program. “We hope to encourage scholars to focus their research and teaching in auditing, which is critical to the sustainability of the profession,” CAQ Executive Director Cindy Fornelli said in a statement. “We thank our member firms for opening their doors to the next generation of accounting and auditing professors.”
Localities across the New York region, already reeling from the cost of cleaning up from Hurricane Sandy, are confronting the prospect of an even bigger blow to their finances: a precipitous decline in property tax revenues. The storm damaged tens of billions of dollars’ worth of real estate, especially in coastal areas of Long Island and New Jersey. As a result, localities can no longer expect to reap the same taxes from properties that have lost much of their value — in some cases, permanently.
You might as well get to know each other.