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:
- "Intuit's CFO wants to follow you home and watch you work" is the creepiest headline of the week.
- “We see a lot of [investment] advice coming from CPAs, when it’s not their strong suit.”
- Not a good tax situation.
- Surviving the Big 4
- Rogue Star Wars fans threaten to ruin The Force Awakens via 'spoiler jihad'