Footnotes: Oy, Derivative Accounting; Should Auditors Ditch Independence?; Our Rich Saviors | 12.06.12

Scrutiny at the Gate: Firms' Role Questioned [WSJ]

Deutsche Bank Ignored Some “Losses” Until They Went Away [S]ome things live in a level-3 world where there are no specific rules and no obvious markets and you rely on good faith and estimates and conversations with your auditors. Tailored credit derivatives where Deutsche Bank was “65 per cent of all leveraged super senior trades” clearly fall in that bucket, so they talked to their auditors and the auditors signed off on what they did and, that’s kind of the end. Was the model (or series of ad-hoc models and reserves and absences-of-models) blessed by the auditors worse than Ben-Artzi’s? Sure! But so what? The model blessed by the auditors for loans – “hold them at historical cost” – is clearly worse than a market-based model, in the sense of “less reflective of the expected probability distribution of future cash flows.” And loans are the bulk of most banks’ assets. Accounting isn’t supposed to be a correct representation of your most likely future cash flows. It’s just accounting. [DB]

Grover Norquist’s Dirty Little Secret [Bloomberg]

Standard Chartered to Pay $330 Million to Settle Iran Money Transfer Claims [DealBook]

IRS Warns Congress About Failure to Address Alternate Tax [BBW]

HP - Autonomy: How Might the Auditors Survive the Fall-Out? Audit performance - and more immediately, the survival of the large firms to serve their global clients and the capital markets - would be better achieved if the current independence requirements and constraints were scrapped altogether. [Re:Balance]

Why Breaking Up H.P. Makes Sense [DealBook]

The Rich Will Pay for Our Sins Everyone knows that taxing the very rich will have no perceptible effect on the deficit. It's all for show. The president and Democrats in Congress can say they stuck it to the millionaires and billionaires. Fairness will abound. The Republicans can tell the world that they are reasonable people willing to compromise on issues as important as taxes. But Americans will still get more government than they are willing to pay for. [David Brunori]
 
Former Summer Associate Busted For Lying About Disability To Get Extra Time On The Bar Exam CPA candidates, please resist the urge. [ATL]

Cops: Patron Attacked McDonald's Worker Over Unwanted Cheese On His Hamburger [TSG]

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