Numbers Cop: FASB Staffer a Leading Candidate for Board [WSJ]
“The foundation that oversees the Financial Accounting Standards Board is considering Russell Golden, the board’s technical director, for the board post, these people said, although they cautioned that no final decision has been made. The chairman’s position would remain unfilled, they said, noting that the search process for a new chairman is at an early stage.
A spokesman for FASB declined to comment. Mr. Golden couldn’t be reached to comment.
The foundation has leaned toward an internal candidate because it would allow FASB to largely continue its work uninterrupted once Mr. Herz departs at the end of the month. Mr. Golden already is involved with the board’s many projects.”
U.S. Companies Added 67,000 Jobs in August [Bloomberg]
“Companies in the U.S. added more jobs than forecast in August, easing concern the economy was falling back into recession.
Private payrolls that exclude government agencies climbed 67,000, after a revised 107,000 increase in July that was more than initially estimated, Labor Department figures in Washington showed today. The median estimate of economists surveyed by Bloomberg News called for a gain of 40,000. Overall employment fell 54,000 for a second month and the unemployment rate rose to 9.6 percent as more people entered the labor force.”
Tax-fraud conviction voided because judge didn’t stop trial to let defendant go to son’s deathbed [Los Angeles Times]
“A federal judge’s refusal to halt a businessman’s tax-fraud trial so he could be at his son’s deathbed was cause to overturn the businessman’s conviction, an appeals court has ruled.
U.S. District Judge Dale S. Fischer also prejudiced the case against Garth Kloehn by failing to inform the jury that he was absent for the final day of trial because his son had died, the appeals panel said. Fischer told the jury that Kloehn “has a right not to be here,” possibly leaving jurors with the impression he was showing a lack of respect for the court, the judges said.
Kloehn was the sole defense witness in his 2005 trial in downtown Los Angeles on charges of failing to report $1.2 million in income. He left the courtroom after testifying to catch a flight to Las Vegas to see his cancer-stricken son, leaving no one to rebut the prosecution’s final testimony. Kloehn arrived at the Las Vegas hospital one hour before 45-year-old Kevin Kloehn died.”
Transparency and the I.R.S. [NYT]
Someone – namely Christopher Bergin, the publisher of Tax Analysts – isn’t convinced that the IRS is serious about transparency. So much so, he wrote the Times and they seemed impressed so they published his letter.
Europe greenlights US audit inspections [Accountancy Age]
“S audit regulators will be able to inspect European firms after the European Commission cleared the way for access to confidential papers, in a move which could allow Lehman Brothers investigators to follow up leads in London.
The European Commission said it will now share internal working documents with audit watchdogs in the US and Australia. The move breaks an impasse which had emerged between US and EU authorities over the sharing of confidential internal audit inspection papers, retained by regulators when they inspect audit firms.”
Chris Gibson – obviously not wanting to disappoint the ABA – wants that to be clear.
~ Update includes comment from IFAC President Robert Bunting of Moss Adams
Maybe! After all, anything’s possible. The Herz retirement wasn’t exactly expected but since Roberto had two years left in his terms but it’s been suggested that it’s been a rough two years since Barney Frank gave him the tongue lashing of his life over the whole mark-to-market thing.
Regardless, The Journal put it out there that the timing of Herz’s departure causes hella handwringing, most notably on the convergence efforts:
Roberto
Yesterday we learned that FASB Chair Bob Herz would be ending his spectacular 8 year run as the head of our favorite accounting standards setting agency.
What we have not learned is who will be replacing him permanently when he escapes next month. In the interest of helping FASB come up with a qualified replacement, we have a few suggestions. Do we need to submit these in comment letter form or can someone just email over for us?
Herz Leaving Marks Boon for Banks [WSJ]
“A new front has opened up in the war over mark-to-market accounting. Suddenly banks find themselves with an unexpected advantage in the fight over how they should value their vast holdings of financial instruments.
That is due to the surprise announcement Tuesday of the departure of Robert Herz as chairman of the Financial Accounting Standards Board. This will give banks an opportunity to push for a successor who is more friendly to their views on the mark-to-market question, as well as the overall idea that accounting should be for more than just investors.”
Former Chief Accounting Officer for Beazer Homes USA, Inc. Indicted on 11 Criminal Counts [FBI]
Michael Rand didn’t have a very good day yesterday.
Block ramped up federal lobbying efforts in second quarter, report says [AP]
H&RB lobbied their asses off from April to June spending $500k talking the ears off at the IRS, Treasury and SEC.
American Apparel Works To File Late 10-Q Before Nov 15 [Dow Jones]
The NYSE has put Dov & Co. on notice that they best get their act together if they don’t want to be sent slumming with the pink sheets. The company is promising to pull things together and if it weren’t for Deloitte quitting, everything would be a-okay.
Fact Checking Minority Leader Boehner’s Claims on “Small Business” and the “Bush” Tax Cuts [Tax Foundation]
In case you didn’t hear, John Boehner suggested that the President fire his entire economic team. Boehner is of the opinion that letting the tax cuts expire will hurt small businesses, citing the Joint Tax Committee. Tax Foundation takes exception with this, saying that the Ohio Congressman and House Minority Leader is misrepresenting the findings of the JTC:
“First off, the businesses that JCT is referring to are not necessarily ’small.’ Saying the word ’small business’ sounds good to the electorate because it brings up an image of a mom and pop store on Main Street America. But plenty of large businesses, as defined by net income or gross receipts, file their taxes under the individual income tax as opposed to the corporate income tax. Merely because a business is paying individual income taxes as opposed to corporate taxes does not mean it is ’small.’ ”
Eight “successful” years is a helluva run, Bob. Not sure if he’s upstaging Tweedie’s exit next year or what. They’re buds and all. So now the speculation should probably start as to who will replace Roberto. Leslie Seidman will be running things as the “Acting” Chair and if you take the PCAOB’s as example, that “Acting” Chair can sit tight for awhile. Dan Goelzer has been “acting” as the Chair for over at the Board for over a year now.
So the important question is, who’s next to fly this ship? Taking shit from bank lobbies, Barney Frank and generally being known as being the biggest double-entry nerd in a gray suit this side of the pond is not an easy gig. We’d suggest a deputy accountant but there’s probably some silly qualifications that she will disqualify her. Does Tim Flynn put down the bag at KPMG? Do we finally get serious and get a knight to run this thing? Suggestions welcome.
NORWALK, Conn.–(BUSINESS WIRE)–The Board of Trustees of the Financial Accounting Foundation (FAF) today announced that the Financial Accounting Standards Board (FASB) will grow from five to seven members. The FASB previously operated with seven board members from its inception in 1973 until 2008. In addition, Chairman Robert Herz has decided to retire from the FASB after more than eight years leading the standard-setting board. FASB member Leslie Seidman has been appointed Acting Chairman, effective October 1, 2010.
Form letters are soulless
Last month we told you about how the American Bankers Association encouraged anyone that disagreed with the FASB’s proposed fair value rule to write a letter telling Herz & Co. how much the proposal sucked. The ABA was kind enough to provide a template for said “FASB Blows” correspondence so the anti-fair value crowd could get the gist of what needed to be said.
The ABA did warn, however, that the FASB hates, loathes, DETESTS form letters, so in order to make a valid point, it was advisable to not simple slap your name in the appropriate place but to articular your own special brand of hatred for the FASB.
As you may recall, many ABA groupies did not heed this warning, which no doubt resulted in Bob Herz and the rest of the Norwalk team using the letters to stoke their mid-summer weenie roast bonfire.
As disappointed as the ABA must have been with the lack of originality, we were sent this shining example that has been making the rounds at the Big 4 (or so we’re told). Our guess is that this is more of what the ABA had in mind:
Bravo, James C. Blaine. Bravo. You are most definitely into the brevity thing. You have, presumably, made the ABA proud. But wait, there is a pro-fair value letter worthy of these pages.
Wells Fargo “Strongly” Opposes Accounting Board’s New Rules on Loan Value [Bloomberg]
“Wells Fargo & Co., the largest home lender in the U.S., said it disagrees with an accounting board’s plan that would require banks to report the fair value of loans on their books.
‘We strongly oppose the expansion of fair value as the primary balance-sheet measurement attribute for virtually all financial instruments,’ Wells Fargo Controller Richard Levy wrote in the Aug. 19 letter. ‘It will only serve to cement a short-term focus on fair-value measures.’
Wells Fargo is the first of the largest U.S. banks to publish its position among letter writers who named an affiliation, according to the Financial Accounting Standards Board website. The letter was written to officials at the board, which said in May that it may require banks to report the fair value and amortized cost of loans and some other financial instruments on their balance sheets.”
PricewaterhouseCoopers to Buy Consulting Firm Diamond Management [WSJ]
PwC is paying $378 million for Diamond Management & Technology Consultants, “[share]holders will get $12.50 a share, a 31% premium to Monday’s closing price. The stock, up 29% in 2010 through Monday, was last at the bid level three years ago.
‘This is an attractive all cash opportunity for our stockholders, creates exciting prospects for our people, and will provide us new and enhanced capabilities to bring to our clients,’ said Diamond President and Chief Executive Adam Gutstein. ‘There’s a clear strategic fit between PwC’s assets and aspirations and Diamond’s positioning.’ ”
Return prudence to accounting [FT]
“What a pity that ultra-theoretical standard-setters around the world have chosen to jettison prudence, a generally accepted accounting convention derived from more than 100 years of experience. This high-risk approach has led to absurdly lengthy and unrealistic annual reports that are now virtually incomprehensible.”
Sex Harassment at Work Gets Weirder, Scarier [Bloomberg]
“Not that I think it’s weird that a brokerage firm chief executive would pin a female clerk on the floor by putting his shoe on her breast (the right one, if you must know), or that some insurance company guy in Fullerton, California, would put a sample of his semen in a female colleague’s water bottle. Twice.
But it did get my attention when I started leafing through this year’s press releases from the U.S. Equal Employment Opportunity Commission and found a case where a supervisor allegedly said that women should outfit themselves in Vaseline, and nothing else; one where a manager in human resources (yes, in human resources) allegedly inquired as to the color of an assistant’s panties; and a case against a company president who the EEOC says pulled a subordinate’s pants down in front of her coworkers.”
