June 24, 2018

Accounting News Roundup: Behind the Scenes of Big 4 and SEC vs. PCAOB; Political Spending Disclosures; Chicken Parm Tastes Good | 12.17.15

Accounting industry and SEC hobble America’s audit watchdog [Reuters]
If you've always enjoyed the political jockeying between the Big 4 and the PCAOB, then this story from Reuters will not disappoint. It stars PCAOB Chairman James Doty and SEC Chief Accountant James Schnurr and it starts with latter's speech last December where he said the Board was "moving too slowly" on its projects:

These were fighting words in the decorous auditing profession, and they hit their target. PCAOB Chairman James Doty was among those attending the annual accounting-industry gala where Schnurr spoke. And Schnurr was Doty’s new supervisor.

“This is going to get ugly,” Doty said to a colleague afterward.

In his new SEC job, Schnurr now had direct authority over the PCAOB – a regulator that just a few years earlier had derailed his C-suite ambitions at Deloitte & Touche. As deputy managing partner at the world’s largest accounting firm, Schnurr had commanded an army of auditors – until a string of damning PCAOB critiques of Deloitte’s audits led to his demotion.

And that's not even the good stuff. Back in 2011 when Doty first became chairman, people weren't expecting much because of his ties to Baker & Botts where he served clients like Halliburton, George W. Bush and even Deloitte. But he's given the audit firms fits at every turn, including other SEC Chief Accountants. Former Chief Accountant James Kroeker's (a Deloitte alum) only comment for this story was, "Because the elements of the story presented to me appear to be based on non-public information, I can say only that they are inaccurate," which is just a hilarious denial.

And then there's this beauty featuring Kroeker's successor Paul Beswick (EY) and his deputy Brian Croteau (PwC) who were trying to hammer out a deal on partner disclosure in 2012:

For months, Doty negotiations with Beswick and Croteau went nowhere. Tensions came to a head at Doty’s 8th floor corner office in the PCAOB headquarters on Farragut Square in Washington, D.C. Doty told the SEC’s Croteau that he was carrying water for the Big Four, according to a person close to Doty and Croteau. Croteau and his staff stormed out.

In a subsequent meeting, Beswick urged Doty to focus on less-controversial rules. Doty told Beswick that he was so biased in favor of the accounting industry that he had no business serving as chief accountant and that he should resign, according to a person briefed on the meeting.

The upshot from this story is that Doty, like it or not, has turned out to be a reformer and that has upset a lot of people. The uncertainty of his future with the PCAOB  is by design.

Deal Restricts SEC From Requiring Disclosure of Corporate Political Contributions [WSJ]
In unrelated SEC news, the 2016 budget proposal has a rider attached to it that prevents the Commission from requiring filers to disclose their political contributions:

If signed into law, the provision would prevent the SEC from using funds authorized by the bill to “finalize, issue, or implement" a rule on disclosure of political contributions, or contributions to trade associations and other tax-exempt organizations, according to text of the bill posted early Wednesday.

Debate over requiring the disclosures gained steam following the Supreme Court’s 2010 Citizens United ruling, which struck down limits on corporate political expenditures and paved the way for groups called super PACs that can raise and spend uncapped sums of money.

The SEC has received over a million comments on a 2011 rule-making petition from a group of professors supporting disclosure of corporate political spending.

Chicken parmigiana eaten by forensic accountant every week for a year in search for perfect recipe [ABC Brisabane]
The quotes from this article chronicling Stephen Humphreys' quest for the perfect chicken parmigiana are amazing:

"What I'm tasting is everything that's on the plate; the chicken has to be good, the ham needs to be a slice of ham and the tomato sauce has to taste like tomato sauce." […] "The thing I complain about the most is the chicken being on top of the chips … it affects the taste of the chips later on," he said. "It also makes it hard to photograph when the chicken piece is on top."[…] "I've had parmas where they haven't even melted the cheese and where they've cooked the cheese like leather."

And of course: "I don't know if it's had a positive impact on my weight, but certainly I will [continue to] eat parma." Which probably also explains Peyton Manning's performance this year.

In other news:

Related articles

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.