Because you’ve caused a ruckus.
KPMG
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KPMG
(UPDATE) Which One of You Left Your Benz Parked In Front of KPMG HQ?
By Caleb Newquist- /
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KPMG
New Jersey Appeals Court Deals ‘Devastating Loss for KPMG’ Over Malpractice in Cast Art Merger
By Caleb Newquist
We briefly mentioned this case on Monday but since everyone seems to have checked out mid-week, we’re sure you won’t mind.
Way back in the dawn of the Clinton Administration, some financial reporting chicanery went down at Papel Giftware, Inc. so that Cast Art Industries of Corona, California would run into the company’s outstretched arms. More specifically, chicanery that consisted of ” ’systemic, organized, improper accounting practices at Papel.’ ” Cast Art failed in 2003 which made everyone sad/mad.
KPMG was on watch as this all went down and a jury found the firm negligent in 2008 under the Accountant Liability Act.
The bitch of it is, the KPMG partner was thisclose to pulling out of the engagement, “[A] July 2000 letter by KPMG partner John Quinn that said Papel Chief Financial Officer Rick Wasserman gave an ‘unfair and misleading characterization of the accounting and auditing issues.’ Quinn said he was ‘very much inclined’ to recommend ending work with Papel after that year’s audit, according to the opinion.”
That ‘very much inclined’ didn’t result in “we withdraw from the engagement.”
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Big 4
Consulting Magazine Throws a Few Bones to the Big 4 with Latest “Best” Rankings
By Caleb NewquistThe Big 4 managed to squeeze onto a a couple different recent lists for their consulting efforts including Consulting Magazine’s 2010 Best Firms to Work For and Vault’s 2011 Consulting 50.
We’ll roll out the particulars of Consulting Mag’s lists first and give you Vault’s results later today.
(UPDATE) Dick Bové: The KPMG Citi Team Is ‘An Exceptional Acceptable Group of Auditors’
By Caleb Newquist 
This man thinks highly of you you're acceptable, KPMG
And you know he’s not messin’ because that’s what he told Charlie Gasparino and God knows you best not lie to the Fox Business Network’s ace reporter. Sure Bové didn’t actually say “KPMG” (hell, he’s probably never heard the name) but he’s giving credit to auditors which is about as unheard of as Tiger Woods using Trojans with hookers.
Bové may have mentioned some other things about Mike Mayo, Citi, Deferred Tax Assets so on and so forth but we’re sure you’re not worried about that.
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ANR
Accounting News Roundup: Ex-Dell Accountants Sued by SEC; Mosque Organizer Owes Back Taxes; Tax Reform Panel Disappoints | 08.30.10
By Caleb NewquistSEC sues ex-Dell accountants over fraud [Reuters]
“The U.S. Securities and Exchanges Commission on Friday sued two former top accountants of Dell Inc for manipulating financial statements to meet Wall Street earnings targets between 2001 to 2003.
The regulator said in its suit, filed at the U.S. District Court of the District of Columbia, that former Chief Accounting Officer Robert Davis, and former Assistant Controller Randall Imhoff had maintained a number of ‘cookie jar’ reserves — an improper accounting method in a bid to cover shortfalls in Dell’s operating results.
The SEC said the improper accounting led to Dell having to restate all its financial statements from 2003 to 2006.”
Mosque big owes 224G tax [NYP]
“Sharif El-Gamal, the leading organizer behind the mosque and community center near Ground Zero, owes $224,270.77 in back property tax on the site, city records show.
El-Gamal’s company, 45 Park Place Partners, failed to pay its half-yearly bills in January and July, according to the city Finance Department.
The delinquency is a possible violation of El-Gamal’s lease with Con Edison, which owns half of the proposed building site on Park Place. El-Gamal owns the other half but must pay taxes on the entire parcel.”
States See Pickup in Tax Revenue [WSJ]
“Overall tax revenue increased 2.2% in 47 states that have reported their receipts for the three months ended June 30, compared with the same period a year ago, according to a report to be released Monday by the Nelson A. Rockefeller Institute of Government at the State University of New York.
This marks the second quarter in a row of recovering tax collections—and follows five quarters of declines in revenue that hammered local-government budgets. The latest figures are still a mixed bag: Some states continue to see declining revenue, but those were offset by states that saw increases.”
KPMG Accounting Malpractice Verdict Affirmed but $38 Million Damage Award Vacated [Law.com]
Is this what you call a lose/win?
Relax! Iowa Is Funding Hollywood Again [Tax Update Blog]
That is a relief. But Joe Kristan reminds us how things went the first time around, “The film program collapsed in scandal last fall, and the film office director and two filmmakers face criminal charges. Iowa is on the hook for $200 million for credits already committed — about $66 per Iowan. ”
A win is a win and the U.S. Second Circuit Court of Appeals handed one to John Larson, one of three defendants sentenced last year for selling illegal tax shelters. The Court “found Larson’s [$6 million] fine too high, citing a lack of jury findings to support a fine above $3 million. It returned that part of the case to the lower court to recalculate any fine.”
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News
Citigroup Blackballs Analyst Claiming the Bank’s DTAs Should Be Written Down
By Caleb NewquistFox Business Network’s ace news-breaker Charlie Gasparino reports that Citigroup’s management team, including CEO Vikram Pandit and CFO John Gerspach will not meet with CLSA banking analyst Mike Mayo since he’s been telling investors that the big C should be writing down their $50 billion in deferred tax assets.
Carlito reports that Mayo states that this refusal to write down the DTAs amounts to “cooking the books by inflating its earnings through an accounting gimmick.”
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ANR
Accounting News Roundup: EisnerAmper Partner: GM Balance Sheet ‘Stronger’ Ahead of IPO; KPMG Moves on From New Century, Countrywide; No Bookie Needed for Betting on Grades | 08.19.10
By Caleb NewquistGM’s balance sheet draws praise ahead of IPO [MarketWatch]
“Peter Bible, partner-in-charge at accounting firm EisnerAmper LLP, said General Motors is now carrying a much stronger balance sheet than its predecessor, based on the company’s initial public offering filed late Wednesday. ‘Their debt-to-equity ratio looks handsome,’ Bible said in an interview. ‘This thing has gotten restructured quite a bit. GM’s health care liabilities have fallen significantly. As I look at the balance sheet, it is much healthier.’ ”
Move to converge just exported crisis [FT]
An accounting professor in the UK is not taken with Sir David Tweedie and felt compelled to write to the Financial Times:
“The ultimate insult to the taxpayer and bank shareholders is Sir David’s comment that the IASB ‘is not going to show banks making profits when they are making losses.’ This is exactly what IASB’s imprudent mark to market and incurred loss provisioning standards achieved in 2007 and earlier. As a result, the taxpayer and the shareholders picked up the price of the IASB’s reckless accounting model.
Furthermore, I cannot understand why anyone would wish to converge with a US accounting model that has both spawned and exported two major financial crises in the space of eight years.”
Settling For Silence: KPMG Closes The Books On New Century And Countrywide [Re: The Auditors]
KPMG has put two major lawsuits behind them – Countrywide and New Century. One major difference between these two cases was that New Century had a bankruptcy examiner’s report while Countrywide did not.
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ANR
Accounting News Roundup: Tweedie’s Final Months; Lease Accounting Proposal Coming Soon; UCF Accounting Student’s Body Found | 08.16.10
By Caleb Newquist
Goldman CFO Viniar Gets $4.5 Million Options Windfall [Dow Jones]
“Goldman Sachs Group (GS) Chief Financial Officer David Viniar received $4.5 million by exercising more than 67,000 options as part of the investment bank’s disclosure Friday with the Securities and Exchange Commission.
According to the filing, Viniar was among six top executives who have converted some soon-to-be expiring stock options into a windfall of $24 million, cashing in on benefits they received years before the government’s 2008 rescue of the nation’s biggest financial firms.”
Tweedie faces greatest challenge in last days [FT]
“Sir David Tweedie says his staff are concerned about what he might do in his last months as head of the International Accounting Standards Board, the powerful global rule setter that he has chaired for a decade.
‘I think people are quite worried about how I might do in my last six months here, with all my vendettas and all these grudges I’ve been storing up . . . I think they are worried that I might let them go,’ he says with a laugh.”
Rulemakers Plan Global Overhaul of Lease Accounting [Reuters]
“U.S. and international accounting rule makers are planning to propose an overhaul of lease accounting as soon as Tuesday, in a move expected to affect some $1.2 trillion in leased assets.
Traditionally, accounting rules have given companies a lot of leeway in how they record leases for assets ranging from store locations and restaurant equipment to airplanes and machinery. As a result, only certain types of leases appear on the balance sheet, while a majority of a company’s leases can often be kept off the balance sheet and hidden from an investors’ view.
But the Financial Accounting Standards Board, which sets U.S. accounting rules, and the London-based International Accounting Standards Board, which writes accounting rules for more than 100 countries, will aim to change all that this week by proposing to bring many of these assets onto corporate balance sheets.
‘It’s something that needs to be done,’ said John Hepp, a partner in accounting firm Grant Thornton’s professional standards group. ‘Lease accounting is broken.’ ”
Hunt for IASB head hits hurdle [FT]
“The search for a successor to Sir David Tweedie, chairman of the International Accounting Standards Board, which sets accounting rules for most of the world outside the US, has hit difficulty in the face of opposition in Europe to how the process has been conducted.
Sir David has presided over deteriorating relations since the financial crisis, with some senior European officials raising concerns about the transparency of his decision-making amid criticism that he has prioritised an effort to get the US to adopt international rules at the expense of European interests.”
