India Bans PricewaterhouseCoopers From Auditing Listed Firms for Two Years [WSJ] The Securities and Exchange Board of India banned PwC affiliates from auditing listed companies for two years over the $1 billion Satyam fraud (India’s Enron, if you prefer). As you may recall, PwC partners were sentenced to jail for this debacle, but the firm […]
It begins. Talked to two accountants about the Obamas' plain vanilla tax returns. Both said they're ready for Hillary. — Richard Rubin (@RichardRubinDC) April 10, 2015 Competitors say Satyam verdict will haunt PriceWaterhouseCoopers "Some companies would start looking at audit rotation in next six-months, and a mere reminder of Satyam around the same time could make […]
An addendum to the Bloomberg article on the Satyam executives' sentencing we linked to earlier: the former PwC partners involved, S. Gopalakrishnan and Srinivas Talluri, were in the group of ten that were found guilty and sentenced to 7 years in prison as well. PwC is a little sad about this outcome: "As we have said many […]
Satyam Founder Gets 7 Years for India’s Biggest Corporate Fraud [Bloomberg]Ramalinga Raju, his brother B. Rama Raju, and former CFO Srinivas Vadlamani and chief auditor Srinivas Talluri all received 7-year sentences. The Raju brothers were also ordered to pay fines of 50 million rupees (~$800k). IRS Scammed With Losing Lotto Tickets [TDB]This is a better-than-average (although still illegal) tax shelter: […]
Remember Satyam? That Satyam? Yeah, it's been awhile for us, too. Satyam's PwC India auditors already received a lifetime ban, but what about Satyam's founder? Surely you've been wondering what sort of slap on the wrist he'd get for one of the largest and most blatant frauds in history? Wonder no longer: A local court […]
The Indian Express: The chapter of Satyam scam is finally set to close as far as the accounting regulator, ICAI, is concerned. The Institute of Chartered Accountants of India (ICAI) has imposed a life-time ban on four auditors — S Gopalakrishna, Talluri Srinivas, V Srinivasu and VS Prabhakara Rao — involved in the Satyam Computers […]
Fresh Budget Fights Brewing [WSJ]The completion of a tax deal between the White House and Congress sent stocks soaring Wednesday, but the sense of relief belied the fact that more tax-and-spending brinkmanship is expected as soon as February. […] There was muted satisfaction that Congress had sent to President Barack Obama legislation to avoid sudden […]
Olympus Books $9.7 Million Loss [WSJ]Olympus Corp. said Monday that it booked a net loss of ¥756 million ($9.7 million) for the fiscal third quarter, while predicting a full-year net loss of ¥32 billion. The third-quarter net loss for the three months ended December by the Japanese maker of cameras and medical equipment, which is trying […]
The Indian Enron fuckshow otherwise known as Satyam has seemingly been in our lives since before Adrienne had tattoos. Even after settlements, new auditors, and delayed restatement after delayed restatement, one might think that we had heard the last of this godforsaken money pit. Nope! Indian software outsourcer Mahindra Satyam on Monday said it had filed […]
H&R Block selling RSM for $610 million [MW]
H&R Block Inc. said on Tuesday that it is selling its RSM McGladrey unit to McGladrey & Pullen, LLP for $610 million. The firm said the deal will result in a $53 million, or 17 cents a share, after tax charge to s expected to close by the end of the year.
Tax Break for Clergy Questioned [WSJ]
As Congress scrutinizes every nook and cranny of the budget for possible revenue, a surprising court decision is allowing clergy members to buy or live in multiple homes tax-free. The U.S. Tax Court ruled that Phil Driscoll, an ordained minister and Grammy Award-winning trumpeter who went to prison for tax evasion, didn’t owe federal income taxes on $408,638 provided to him by his ministry to buy a second home on a lake near Cleveland, Tenn. Under a provision of the tax code known as the parsonage allowance, first passed in 1921, an ordained clergy member may live tax-free in a home owned by his or her religious organization or receive a tax-free annual payment to buy or rent a home if the congregation approves.
Obama Talks to Buffett About Economy [Bloomberg]
“The president and Mr. Buffett discussed the overall outlook on the economy and the reaction to the headwinds we’ve experienced over the last couple of months,” said Josh Earnest, an administration spokesman. “They talked a little bit about some possible measures that would spur investment and increase economic growth and they also talked about some measures that could address the long-term fiscal situation in this country.”
Mandatory Auditor Rotation: If PCAOB Sanctions Were “Case-By-Case” [Re:Balance]
JP: ” [I]f the PCAOB can sustain its proof that long audit tenure was causally related to its definition of “audit failure,” it could include rotation in its toolkit of post-inspection sanctions.”
Hate Your Job? It May Run In the Family [WSJ]
Sayeth a new study.
Sharma to step down as S&P president [FT]
Deven Sharma is stepping down as president of Standard & Poor’s only weeks after the rating agency issued an unprecedented downgrade of the credit of the US, the company said. Mr Sharma will remain as an adviser to S&P’s owner, McGraw-Hill, for four months and leave the company at the end of the year. He will be replaced as S&P president by Douglas Peterson, chief operating officer of Citibank, the banking unit of Citigroup.
Satyam Gets $463.3 Million Tax Notice [WSJ]
India’s Satyam Computer Services Ltd. Monday said it has received a preliminary draft notice from local authorities for a tax claim of 21.13 billion rupees ($463.3 million) disallowing the exemptions claimed by the company and dealing a setback to its attempt to recover from a fraud in 2009.
Is the Chinese Listing Bubble Going Bust? [CFO Journal]
Suddenly the boom in Chinese listings on U.S. exchanges is looking shaky, and two primary reasons were reinforced in separate developments today. On Wall Street, Renren, dubbed the Chinese Facebook, tanked after its shares debuted at a stratospheric multiple on Wednesday, calling into question the appetite for future Chinese IPOs. Meanwhile, at a New York City financial conference, SEC officials were nearly elbowing each other out of the way to express their concerns about reverse mergers that are allowing Chinese firms to back door their way into U.S. markets.
U.S. Economy Adds 244,000 at 9.0% [NYT]
The United States economy added 244,000 jobs in April after a gain of a revised 221,000 jobs in March, the Department of Labor said on Friday, as the unemployment rate rose to 9 percent in April from 8.8 percent in March.
The Grand Illusion: PwC Settles Satyam U.S. Class Action Claims [Forbes]
Oh boy, “The SEC and the PCAOB would not confirm that their enforcement actions regarding the Satyam audit were finished.”
BDO USA Settles Bankest Suit With Former Client Banco Espirito Santo [Bloomberg]
BDO’s statement emailed to Bloomberg: “BDO USA LLP has entered into confidential settlement agreements with Banco Espirito Santo and Barry Mukamal, the bankruptcy trustee of E.S. Bankest LC, pursuant to which the lawsuits against BDO have been resolved,” sounds a lot like what we published yesterday.
The Kabbalah Centre in Los Angeles is the focus of an IRS investigation into tax evasion [LAT]
Sources familiar with the investigation said the criminal division of the IRS is looking into whether nonprofit funds were used for the personal enrichment of the Berg family, which has controlled the Kabbalah Centre for more than four decades, a period in which it expanded from one school of a little-known strain of Judaism to a global brand with A-list followers like Ashton Kutcher and Gwyneth Paltrow and assets that may top $260 million.
New PCAOB Chairman Pushes for Audit Overhaul [AT]
“I do not believe that the global audit firm networks themselves pose a systemic risk to our economy,” said Doty. “Initiatives to shrink the global audit firms would likely weaken their ability to audit large, multinational companies that may be systemically important.” He said governments should instead focus on regulation. “To protect investors, governments should regulate such firms, not cripple them,” said Doty. “There’s no reason to think that if there were more major firms, they would be more likely to stand up to their clients.”
U.S. auditor watchdog hopeful of access to China [Reuters]
U.S. audit watchdogs are hopeful of ending a stalemate that has blocked inspections of auditors in China, the head of the audit oversight agency said on Thursday. With more Chinese companies raising capital in the U.S. markets, “I believe Chinese authorities understand they have a real interest in solving our impasse,” James Doty, chairman of the Public Company Accounting Oversight Board said.
GE Posts Fourth Straight Profit Rise as Industrial Orders Gain [Bloomberg]
General Electric Co. (GE) posted a fourth straight quarter of profit growth, beating analysts’ estimates, as equipment orders increased, and boosted the dividend for the third time since July. First-quarter profit from continuing operations rose 58 percent to $3.58 billion, or 33 cents, excluding pension results, up from $2.26 billion, or 20 cents, a year earlier, GE said. That exceeded the average estimate of 28 cents a share from analysts surveyed by Bloomberg.