Accounting News Roundup: Congress Delay on Taxes Could Hit January Paychecks; KPMG Settles with Hollinger; PwC Asking Clients to Share Internal Info | 10.07.10

Republicans See a Political Motive in I.R.S. Audits [NYT]
“Leading Republicans are suggesting that a senior official in the Obama administration may have improperly accessed the tax records of Koch Industries, an oil company whose owners are major conservative donors.

And the Republicans are also upset about an I.R.S. review requested by Senator Max Baucus, the Montana Democrat who leads the Finance Committee, into the political activities of tax-exempt groups. Such a review threatens to “chill the legitimate exercise of First Amendment rights,” wrote two Republican senators, Orrin G. Hatch of Utah and Jon Kyl of Arizona, in a letter sent to the I.R.S. on Wednesday.
ick to point out that the I.R.S. was put under tight restrictions about access to Americans’ tax returns as a result of political shenanigans by the Nixon administration involving tax audits.”

AIG’s Real Numbers Still Shrouded in Secrecy [Jonathan Weil/Bloomberg]
“Two years ago when the government seized control of AIG, the Treasury in effect took a 79.9 percent ownership stake in the company, through preferred shares and warrants it received as part of AIG’s $182 billion bailout package. By keeping its stake below 80 percent, the government ensured that a financial-reporting method known as push-down accounting wouldn’t be permitted under U.S. accounting rules.

The reason that was so important? Had AIG chosen to implement push-down accounting, it would have had to undergo a complete re-assessment of all its assets and liabilities. And, with a few possible exceptions, the company would have been required to begin showing them on its balance sheet at their fair market values, which may have left AIG’s books looking a lot worse.”

Delays to Tax Tables May Dent Paychecks [WSJ]
“Lack of congressional action on 2011 income taxes may force the Treasury Department to make unprecedented moves to prevent U.S. workers from seeing large tax increases in their January paychecks.

The issue: 2011 tax-withholding tables. Treasury officials usually release the tables, which determine the take-home pay of millions of wage-earners, by mid-November because it takes payroll processors weeks to adjust their systems before Jan. 1.”

Steven Bandolik Joins Deloitte’s Distressed Debt & Asset Practice [PR Newswire]
“Deloitte announced today that Steven Bandolik has joined its distressed debt and asset practice. Bandolik’s hire marks the latest in a series of strategic growth initiatives executed over the last 18 months to expand Deloitte’s distressed debt and asset practice.

‘Challenges need to become opportunities in order for borrowers, lenders and investors to move forward, and get back to their core business of making positive returns on investments. Despite lower interest rates, obtaining new financing regardless of loan performance continues to be an issue unless properties and financial positions are extremely strong,’ said Bandolik. ‘In this environment, clients require intellectual capital to re-structure transactions, and design sensible underwriting, due diligence and risk management procedures. Their debt may need to be structured more conservatively, requiring higher equity levels that could withstand future stress, with a focus on deleveraging over the holding period.’ ”

Hollinger Inc.: Settlement of Claims Against KPMG LLP [Marketwire]
“The Litigation Trustee of Hollinger Inc. (“Hollinger”) announced today that he has entered into a settlement agreement with KPMG LLP to resolve all claims against Hollinger’s former advisor advanced by the Litigation Trustee on behalf of Hollinger. The settlement entails no admission of liability on the part of KPMG LLP. The terms of the settlement include releases in favour of KPMG LLP from Hollinger and its subsidiaries, as well as from third parties involved in related Hollinger litigation. The settlement and the releases are subject to court approval, which will be sought on notice to other affected parties. The rest of the terms of the settlement agreement are confidential.”


CAQ Reports on Fraud Best Practices, Launches New Effort [Compliance Week]
“The CAQ conducted five roundtables and 20 in-depth interviews to develop consensus on how companies can best create a financial reporting environment where fraud has little potential to seed or take root. The CAQ published the findings as a cornerstone to further collaborative efforts with other professional groups to share ideas and best practices on how to derail fraudulent financial reporting.”

PwC audit clients asked to give up internal information [Accountancy Age]
“Ian Powell, chairman of PwC told an audience of 300 business professionals, the audit model needed reform, and believed some internal discussions, now privately held between an auditor and company, needed to be made public.

‘It may well be that by making more of those discussions public, the value of an audit can be collectively improved,’ he said.

‘I have asked our lead audit partners to discuss this idea with audit committee chairs of PwC clients to see if we can work together on a voluntary basis to improve the disclosure of such matters over the next reporting cycle.’

The comments come as the European Commission prepares to release a green paper on audit competition, due later this month, and the House of Lords prepares to hear evidence on the issue, next week.”

Greenspan: Financial overhaul to have ‘significant impact’ on economic growth [On the Money/The Hill]
Some people are still listening to this man.

Madoff clan denies fraud role, seek suit dismissal [Reuters]
A consistent message may actually convince someone, some day.

Republicans See a Political Motive in I.R.S. Audits [NYT]
“Leading Republicans are suggesting that a senior official in the Obama administration may have improperly accessed the tax records of Koch Industries, an oil company whose owners are major conservative donors.

And the Republicans are also upset about an I.R.S. review requested by Senator Max Baucus, the Montana Democrat who leads the Finance Committee, into the political activities of tax-exempt groups. Such a review threatens to “chill the legitimate exercise of First Amendment rights,” wrote two Republican senators, Orrin G. Hatch of Utah and Jon Kyl of Arizona, in a letter sent to the I.R.S. on Wednesday.

Republicans were quick to point out that the I.R.S. was put under tight restrictions about access to Americans’ tax returns as a result of political shenanigans by the Nixon administration involving tax audits.”

AIG’s Real Numbers Still Shrouded in Secrecy [Jonathan Weil/Bloomberg]
“Two years ago when the government seized control of AIG, the Treasury in effect took a 79.9 percent ownership stake in the company, through preferred shares and warrants it received as part of AIG’s $182 billion bailout package. By keeping its stake below 80 percent, the government ensured that a financial-reporting method known as push-down accounting wouldn’t be permitted under U.S. accounting rules.

The reason that was so important? Had AIG chosen to implement push-down accounting, it would have had to undergo a complete re-assessment of all its assets and liabilities. And, with a few possible exceptions, the company would have been required to begin showing them on its balance sheet at their fair market values, which may have left AIG’s books looking a lot worse.”

Delays to Tax Tables May Dent Paychecks [WSJ]
“Lack of congressional action on 2011 income taxes may force the Treasury Department to make unprecedented moves to prevent U.S. workers from seeing large tax increases in their January paychecks.

The issue: 2011 tax-withholding tables. Treasury officials usually release the tables, which determine the take-home pay of millions of wage-earners, by mid-November because it takes payroll processors weeks to adjust their systems before Jan. 1.”

Steven Bandolik Joins Deloitte’s Distressed Debt & Asset Practice [PR Newswire]
“Deloitte announced today that Steven Bandolik has joined its distressed debt and asset practice. Bandolik’s hire marks the latest in a series of strategic growth initiatives executed over the last 18 months to expand Deloitte’s distressed debt and asset practice.

‘Challenges need to become opportunities in order for borrowers, lenders and investors to move forward, and get back to their core business of making positive returns on investments. Despite lower interest rates, obtaining new financing regardless of loan performance continues to be an issue unless properties and financial positions are extremely strong,’ said Bandolik. ‘In this environment, clients require intellectual capital to re-structure transactions, and design sensible underwriting, due diligence and risk management procedures. Their debt may need to be structured more conservatively, requiring higher equity levels that could withstand future stress, with a focus on deleveraging over the holding period.’ ”

Hollinger Inc.: Settlement of Claims Against KPMG LLP [Marketwire]
“The Litigation Trustee of Hollinger Inc. (“Hollinger”) announced today that he has entered into a settlement agreement with KPMG LLP to resolve all claims against Hollinger’s former advisor advanced by the Litigation Trustee on behalf of Hollinger. The settlement entails no admission of liability on the part of KPMG LLP. The terms of the settlement include releases in favour of KPMG LLP from Hollinger and its subsidiaries, as well as from third parties involved in related Hollinger litigation. The settlement and the releases are subject to court approval, which will be sought on notice to other affected parties. The rest of the terms of the settlement agreement are confidential.”


CAQ Reports on Fraud Best Practices, Launches New Effort [Compliance Week]
“The CAQ conducted five roundtables and 20 in-depth interviews to develop consensus on how companies can best create a financial reporting environment where fraud has little potential to seed or take root. The CAQ published the findings as a cornerstone to further collaborative efforts with other professional groups to share ideas and best practices on how to derail fraudulent financial reporting.”

PwC audit clients asked to give up internal information [Accountancy Age]
“Ian Powell, chairman of PwC told an audience of 300 business professionals, the audit model needed reform, and believed some internal discussions, now privately held between an auditor and company, needed to be made public.

‘It may well be that by making more of those discussions public, the value of an audit can be collectively improved,’ he said.

‘I have asked our lead audit partners to discuss this idea with audit committee chairs of PwC clients to see if we can work together on a voluntary basis to improve the disclosure of such matters over the next reporting cycle.’

The comments come as the European Commission prepares to release a green paper on audit competition, due later this month, and the House of Lords prepares to hear evidence on the issue, next week.”

Greenspan: Financial overhaul to have ‘significant impact’ on economic growth [On the Money/The Hill]
Some people are still listening to this man.

Madoff clan denies fraud role, seek suit dismissal [Reuters]
A consistent message may actually convince someone, some day.

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