ANR: PwC Partner Throws Staff Under the Bus for Centro Audit Debacle; Change (or Lack Thereof) at Olympus; Florida's Rent-a-cow Loophole | 04.19.12

Junior employee blamed for Centro's bungled audit [The Age]
The PricewaterhouseCoopers partner who presided over Centro's flawed audit in 2007 has told a court he still does not believe he did anything wrong, and instead blames the debacle on a junior PwC staff member he supervised. Stephen Cougle also denied accusations by Centro's lawyers yesterday that he was lying to the Federal Court or being deliberately dishonest about what happened at a Centro board committee meeting in September 2007. Under cross-examination in a class action, Mr Cougle said he was disappointed that tasks recorded to be done in worksheets compiled by the PwC audit team were not done. Those tasks included checking the size and maturity dates of Centro's debt facilities to ensure the property group's loans were properly classed as short-term or long-term. Mr Cougle agreed with Centro's counsel that he did not believe he had done anything wrong as lead auditor and that in his view all the errors were done by PwC staff whom he supervised. Asked who he blamed the most, Mr Cougle named Brad Duggan. ''Brad was supervising the staff in that area; they didn't do it,'' Mr Cougle said. ''He reviewed the section. That's where it should have been picked up definitively. It wasn't done. It's very disappointing to me,'' Mr Cougle said.

GOP witness: IRS understaffed for health law tax enforcement [The Hill]
The federal government's Internal Revenue Service has too few employees to be able to implement the healthcare reform law's tax penalties on employers who don't offer insurance, a Republican witness testified Wednesday. "There are consequences to having that tax passed, and No. 1 would be whether the IRS has the resources to be able to enforce it," tax accountant Leonard Steinberg testified on behalf of the Small Business and Entrepreneurship Council. "Right now the IRS is operating razor thin, as it is, with their budget. "They don't have the resources to enforce current tax law; how are they going to have the resources to enforce additional mandates that are being passed through the Affordable Care Act?" Steinberg said.
 
Morgan Stanley Beats Estimates as Trading Gain Tops Peers [Bloomberg]
Morgan Stanley (MS), owner of the world’s largest brokerage, reported first-quarter results that beat analysts’ estimates as fixed-income trading revenue climbed more than at any other major U.S. bank. The net loss of $94 million, or 6 cents a share, compared with profit of $968 million, or 50 cents, a year earlier, the New York-based company said today in a statement. Excluding accounting charges tied to the firm’s own credit spreads, profit was 71 cents a share, topping the 44-cent average estimate of 17 analysts surveyed by Bloomberg. [...] The accounting charge is known as a debt valuation adjustment, or DVA. It stems from increases in the value of the company’s debt, under the theory it would be more expensive to buy back the securities. Morgan Stanley booked $3.4 billion of gains in the third quarter of last year as its credit spreads widened.
 
At Olympus, the More Things Change… [WSJ]
At a shareholder meeting Friday, a majority of Olympus stockholders are likely to back a slate of management-proposed directors—despite opposition from proxy advisers and some prominent foreign investors. Japanese institutional investors constituting roughly 15% of Olympus's voting shares said they are planning to vote with management. Lenders and corporations that do business with Olympus also are expected to stick closely with management recommendations. Together, those votes are likely to total at least the 50% needed to approve the slate, based on discussions with several investors.
 
Deloitte Names Deborah L. DeHaas Chief Inclusion Officer [Deloitte, Earlier]
You can expect more interviews like this one.
 
MF Global Trustee Seeks Court Date Over U.K. Funds [WSJ]
The trustee unwinding MF Global Holdings Ltd.'s brokerage unit on Wednesday called for litigation in the U.K. to resolve a long-simmering dispute over about $700 million in customer assets held there. The move escalates five months of wrangling between U.S. trustee James Giddens and KPMG LLP, the special administrator appointed to handle MF Global in the U.K., over money that both sides have seen as their responsibility. The $700 million in question makes up part of an estimated $1.6 billion in money held with MF Global by former customers that has yet to be returned in the months since MF Global collapsed on Oct. 31. "We believe the beginning of a litigation process in the United Kingdom is the most efficient way for this dispute to be decided," a spokesman for Mr. Giddens said on Wednesday. A spokeswoman for KMPG [sic] had no immediate comment.
 
America's Dumbest Tax Loophole: The Florida Rent-a-Cow Scam [Atlantic via TaxProf]
It's known as Florida's greenbelt law. The statute is meant to preserve farmland by taxing it at special, low rate. But some of the act's biggest beneficiaries are deep-pocketed developers, who often take advantage of it by literally renting cows. [...] To qualify for the exemption, property owners are required to use their land for "bona fide" agricultural purposes. But what does "bona fide" mean? That's far from clear. Aided by lax court rulings, developers have seized on that ambiguity by leasing out their land to cattle ranchers while they prepare to build, often shaving hundreds of thousands of dollars off their tax bills. 
 
Idiot Steals Gas from Cop Car, Posts Picture on Facebook, Goes Directly to Jail [Gizmodo]
Someone who's doing it wrong.
 
Skier Lindsey Vonn's Tax Problems Snowball [AWEB]
Renowned skier Lindsey Vonn wasn't able to clear one hurdle that all taxpayers face. According to a news report, Vonn owes more than $1.7 million in taxes from 2010, a staggering total. The two-time Olympic champion said on her Facebook account that she wasn't aware of the problem until recently. Public records in the Elko County recorder's office in Nevada show that the IRS imposed a tax lien against Vonn earlier this month. The Detroit News was the first to report the action. In an e-mail to the newspaper, Vonn said, "It is no secret that my last year off the mountain has been filled with many personal challenges. This matter was only recently brought to my attention and I took immediate and deliberate steps to remedy the situation. I have made arrangements to pay in full the balance due."

 

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