Accounting News Roundup: Has the Supercommittee Super Screwed Everyone?; PwC, KPMG Inspection Reports; Accused Tax Evader, Supporters Get Naked | 11.22.11

Supercom[m]ittee Failure Poses Threat to U.S. Recovery [Bloomberg]
The implosion of the congressional supercommittee is likely to delay any major deficit-reduction agreement until after the next presidential election and may pose an immediate threat to the struggling U.S. economy.The committee’s failure to reach a deal means several tax programs, including a payroll tax holiday, risk expiring at the beginning of next year, weighing on the household spending that accounts for about 70 percent of the world’s largest economy. The panel’s inability to agree on $1.2 trillion in budget cuts, w��������������������wn yesterday and Treasuries higher, also stoked doubts about U.S. lawmakers’ ability to overcome partisan gridlock and safeguard the nation’s fiscal health. “They could not agree even on the smaller challenge of $1.2 trillion,” said former White House budget director Alice Rivlin, among a coalition of officials who pushed the panel to “go big” and find $4 trillion in savings, in an e-mail. “I do not see a way to get to the big deal before the election, if then. It is really discouraging!”

Auditing Watchdog’s Audit of PwC, KPMG Find Weaknesses [WSJ]
The government’s auditing regulator found deficiencies in 28 audits conducted by PricewaterhouseCoopers LLP and 12 audits by KPMG LLP in its annual inspections of the Big Four accounting firms. The Public Company Accounting Oversight Board said many of the deficiencies it found in its 2010 inspection reports of the two firms, released Monday, were significant enough that it appeared the firms didn’t obtain sufficient evidence to support their audit opinions.

At PWC, They Now Have Names [Economix/NYT]
The response from PWC this time breaks welcome new ground. It is signed by real people: Bob Moritz, the firm’s United States chairman, and Tim Ryan, the United States assurance leader. In the past, these letters — like audit reports signed by the firms — never mentioned a name. So it was impossible to even know if top management of the firm had approved the response. In this case, top management signed it.

Senator Gets Deloitte Information on Federal Audits [WSJ]
In a Nov. 7 letter to Deloitte LLP, Sen. Claire McCaskill (D., Mo.), who is chairwoman of a Senate subcommittee on oversight of government contracts, said she was requesting the information because the criticisms “raise serious questions regarding the integrity of all audits conducted by Deloitte.” She also said she wanted to better understand the impact on the federal government. The government spent more than $958 million on contracts with Deloitte LLP in 2010, she said in the letter. A Deloitte spokesman said the firm has “cooperated with the senator’s request.”

Taxman Preoccupies Wall Street to Upper East Side in IRS Levies [Bloomberg]
New York is where the 1 percent live — and they have the tax returns to prove it. Nine of the 10 most heavily taxed neighborhoods in the U.S. are in the city’s metropolitan area, Internal Revenue Service data show. The nine neighborhoods, which range from Manhattan to Fairfield County, Connecticut, accounted for 0.2 percent of all federal income-tax filers in 2008, the latest year for which data are available, according to IRS statistics compiled by Bloomberg. They paid 1.6 percent of all individual income taxes, eight times their proportionate share of the filing population.

MF Global HK can’t be sold as going concern-KPMG [Reuters]
KPMG, provisional liquidator of the Hong Kong unit of collapsed U.S. futures brokerage MF Global Holdings, said it was focused on returning client funds having failed to sell the business. Tuesday’s statement from KPMG came as the Australian arm of MF was shut down after failing to get an adequate offer and underscored the difficulty liquidators have had in selling MF’s Asian business, which generated around 14.4 percent of the company’s global revenue. MF Global, which filed for bankruptcy on Oct. 31 having placed disastrous bets on European sovereign debt, has laid off nearly half its staff globally, including more than 1,000 employees of the company’s broker-dealer unit.

Should j2 Global Communications Restate its 2010 Financial Reports? [WCF]
Sam Antar says, “maybe!”


Fired Olympus C.E.O. to Press Board on Fees [NYT]
“I am returning to the world headquarters of Olympus,” Mr. Woodford said by phone from London on Monday. “And I will use the opportunity to emphasize that all the facts come out.” He later told reporters at a London news conference that he was “not afraid of challenging my board members.”

Supporters Go Naked for Accused Tax Evader [Forbes]
Now that’s a support group.

Supercom[m]ittee Failure Poses Threat to U.S. Recovery [Bloomberg]
The implosion of the congressional supercommittee is likely to delay any major deficit-reduction agreement until after the next presidential election and may pose an immediate threat to the struggling U.S. economy.The committee’s failure to reach a deal means several tax programs, including a payroll tax holiday, risk expiring at the beginning of next year, weighing on the household spending that accounts for about 70 percent of the world’s largest economy. The panel’s inability to agree on $1.2 trillion in budget cuts, which drove stocks down yesterday and Treasuries higher, also stoked doubts about U.S. lawmakers’ ability to overcome partisan gridlock and safeguard the nation’s fiscal health. “They could not agree even on the smaller challenge of $1.2 trillion,” said former White House budget director Alice Rivlin, among a coalition of officials who pushed the panel to “go big” and find $4 trillion in savings, in an e-mail. “I do not see a way to get to the big deal before the election, if then. It is really discouraging!”

Auditing Watchdog's Audit of PwC, KPMG Find Weaknesses [WSJ]
The government's auditing regulator found deficiencies in 28 audits conducted by PricewaterhouseCoopers LLP and 12 audits by KPMG LLP in its annual inspections of the Big Four accounting firms. The Public Company Accounting Oversight Board said many of the deficiencies it found in its 2010 inspection reports of the two firms, released Monday, were significant enough that it appeared the firms didn't obtain sufficient evidence to support their audit opinions.

At PWC, They Now Have Names [Economix/NYT]
The response from PWC this time breaks welcome new ground. It is signed by real people: Bob Moritz, the firm’s United States chairman, and Tim Ryan, the United States assurance leader. In the past, these letters — like audit reports signed by the firms — never mentioned a name. So it was impossible to even know if top management of the firm had approved the response. In this case, top management signed it.

Senator Gets Deloitte Information on Federal Audits [WSJ]
In a Nov. 7 letter to Deloitte LLP, Sen. Claire McCaskill (D., Mo.), who is chairwoman of a Senate subcommittee on oversight of government contracts, said she was requesting the information because the criticisms "raise serious questions regarding the integrity of all audits conducted by Deloitte." She also said she wanted to better understand the impact on the federal government. The government spent more than $958 million on contracts with Deloitte LLP in 2010, she said in the letter. A Deloitte spokesman said the firm has "cooperated with the senator's request."

Taxman Preoccupies Wall Street to Upper East Side in IRS Levies [Bloomberg]
New York is where the 1 percent live — and they have the tax returns to prove it. Nine of the 10 most heavily taxed neighborhoods in the U.S. are in the city’s metropolitan area, Internal Revenue Service data show. The nine neighborhoods, which range from Manhattan to Fairfield County, Connecticut, accounted for 0.2 percent of all federal income-tax filers in 2008, the latest year for which data are available, according to IRS statistics compiled by Bloomberg. They paid 1.6 percent of all individual income taxes, eight times their proportionate share of the filing population.

MF Global HK can't be sold as going concern-KPMG [Reuters]
KPMG, provisional liquidator of the Hong Kong unit of collapsed U.S. futures brokerage MF Global Holdings, said it was focused on returning client funds having failed to sell the business. Tuesday's statement from KPMG came as the Australian arm of MF was shut down after failing to get an adequate offer and underscored the difficulty liquidators have had in selling MF's Asian business, which generated around 14.4 percent of the company's global revenue. MF Global, which filed for bankruptcy on Oct. 31 having placed disastrous bets on European sovereign debt, has laid off nearly half its staff globally, including more than 1,000 employees of the company's broker-dealer unit.

Should j2 Global Communications Restate its 2010 Financial Reports? [WCF]
Sam Antar says, "maybe!"

Fired Olympus C.E.O. to Press Board on Fees [NYT]
“I am returning to the world headquarters of Olympus,” Mr. Woodford said by phone from London on Monday. “And I will use the opportunity to emphasize that all the facts come out.” He later told reporters at a London news conference that he was “not afraid of challenging my board members.”

Supporters Go Naked for Accused Tax Evader [Forbes]
Now that's a support group.

Related articles

RSM US Adds 68 New Partners and Principals

Oct. 1 was a big day for the denizens of RSM US, as 68 new partners and principals were released into the wild. RSM is pleased to announce our 68 newest partners and principals! https://t.co/seOK5zui4F pic.twitter.com/YqsSwVGjiA — RSM US LLP (@RSMUSLLP) October 1, 2018 This year’s class of new partners and principals at the firm […]