June 23, 2018

Accounting News Roundup: Phony Email and Cross-examination | 03.13.17


Don’t send it. Don’t send it. Don’t send it.

Phony email

Last year, several stories emerged about executive email scams. These are the schemes where an unsuspecting accountant receives an email that appears to be from a C-suite or other high-ranking executive for an immediate transfer of funds. They would find out later, of course, that the executive had not ordered a transfer and that the money was probably gone and never coming back. The FBI estimated last year that the scam resulted in $2 billion in losses in 2 years.

So here’s a story of an L.A. accounting firm, Taylor & Lieberman, that had any employee fall for one of these scams and then tried to get their insurance company to cover it. Guess how that turned out?

A Chubb Ltd. unit is not obligated to provide coverage to an accounting firm that transferred more than $99,000 of its client’s money to criminals in response to fraudulent emails, says a federal appeals court, in affirming a lower court ruling.

Apparently this particular insurance policy didn’t cover forgery like this one (i.e. “emails inducting T&L to wire money were not financial instruments like checks, drafts and the like”); this situation didn’t qualify for “computer fraud coverage” because it wasn’t “an unauthorized entry into the recipient’s computer system,” and the one that really hurts:

There is also no funds transfer fraud coverage, said the ruling, “This coverage is inapplicable because T&L requested and knew about the wire transfer,” said the ruling in upholding the lower court’s dismissal.

Isn’t this situation one of the imaginary scenarios you think about when you purchase insurance? “You know, there’s always the possibility that we’ll make a really dumb mistake, so we should have insurance.” Any smart business person knows that there’s always a chance that someone does something colossally stupid and it results in a loss of some kind. When that happens, the person thinks, “That’s why we have insurance!”

Then it’s a real kick when the claim gets denied. And then you get mad and wind up in court because, “This is what insurance is for!” Only, this isn’t what insurance is for, based on how the contracts are written. Ned Flanders was right, insurance is just a gamble.

PwC on trial

According to the New York Post, PwC lawyers cross-examined ex-MF Global CEO Jon Corzine for 5 hours on Friday getting him to admit that MF Global had plenty of problems that had nothing to do with the firm’s role as auditor.

Brought to you by Accountingfly

If you’ve been thinking about returning to school for an MBA, Beech Valley’s Josh Tarica discussed some questions you should ask yourself.

Previously, on Going Concern…

In Open Items, a senior associate at a regional firm is considering a move to a Big 4.

In other news:

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Accounting News Roundup | 01.21.10

How to find the “best and brightest” [CPA Success]
This may be a better topic for the friendly HR professional but figuring out who these future accounting rock stars are before they show up on their first day is “more art than science”, as Tom Hood notes.
Popular to some old-school thought, GPA does not always indicate who’s going to dominate in the real world and “soft skills” — besides being a terrible term — are in more demand than ever.
Help The The American Red Cross of Greater Chicago Help Haiti [Re: The Auditors]
The American Red Cross of Greater Chicago is having a drive today and since Francine’s friend is the CFO, we’ll be glad pass around the news:

One of my oldest and dearest friends, Guillermo Becerra, is the CFO of the American Red Cross of Greater Chicago. I asked him how I could help him, and the Red Cross, during what must be an incredibly busy time post-Haiti earthquake.

“The Chicagoland community will come together on Thursday, January 21 to give to the American Red Cross as we help the people of Haiti recover from the catastrophic earthquake that devastated their country last week.
The Chicago Helps Haiti media relief drive begins at 5 a.m. and lasts until 11 p.m. Nearly every TV and radio station in our area will be promoting this fundraising effort throughout the day. You can help too, by giving via phone or online, and sharing your thoughts here, on Facebook or Twitter, and by asking others to give.
To give from 5 a.m. to 11 p.m. CALL 1 (877) 565-5000 or visit www.chicagoredcross.org/haiti

Plus, we’re guessing that if you give, your 2009 tax return isn’t much of a concern.
If Your Password Is 123456, Just Make It HackMe [NYT]
The Times is concerned that you have a shitty password which puts you at a huge risk of being hacked by someone sitting in their parents’ basement.

Imperva found that nearly 1 percent of the 32 million people it studied had used “123456” as a password. The second-most-popular password was “12345.” Others in the top 20 included “qwerty,” “abc123” and “princess.”

You know who you are, ye with stupid passwords. Also, don’t even think of changing it to “654321” because that drops in at #19.

Accounting News Roundup: Haiti Relief Passes Senate; Accounting Job Surge? CPAs Basically Control People’s Lives | 01.22.10

Senate votes for faster tax breaks for Haiti gifts [WaPo]
As expected, the U.S. Senate unanimously passed legislation yesterday that allows taxpayers to deduct donations made for Haiti relief efforts. You have until the end of February to donate so that it may be included on your 2009 return.

Maybe it’s bad legislation but we’ve been over that.

CPA Jobs Set for Surge. But When? [CPA Trendlines]
That’s the question, isn’t it? Rick Telberg, who has done a great job of tracking the Bureau of Labor Statistics on accountants, points out that while the latest BLS forecasts a 22% increase (279,400 jobs) by 2018, there’s no indication that it’s happening now:

[M]any tax, accounting and finance professionals are still slogging through the Great Recession. The Association for Financial Professionals, for instance, reported that about one in four respondents say their organizations will contract in 2010. At the same time, a PricewaterhouseCoopers survey of private companies found 43 percent of CEOs and CFOs still budgeting no expansion over the next 12 months to 18 months. The data just seem to reinforce economic uncertainties and a weak outlook.

The BLS is looking past the past the recession for the jump in opportunities but just when the hell will that be? Just because the economy isn’t contracting currently, doesn’t mean it won’t in the future and this “recovery” has been tepid at best.

Theismann to CPAs: You Are the Conscience of America [Web CPA]
Joe Theismann gets it. He knows that without all of you out there in CPA land, your clients don’t stand a chance. They’d be finished. Finished!

“You’re the conscience of America,” Theismann told conference-goers. “You are the survivors in tough times. With accountants, I’m not looking for someone to file taxes and do my financials. I can do that myself online. In your position you can basically control people’s lives.”

So get out there and control somebody’s life. Joe Theismann is expecting it.