July 19, 2018

Accounting News Roundup: Workers vs. Owners; KPMG Quits Liberty Tax Audit; Fraud and Strippers | 12.11.17

accounting news kpmg liberty tax

Tax Plans May Give Your Co-Worker a Better Deal Than You [NYT]
The tax bill puts wage earners, currently about 80 percent of the working population, at a big disadvantage. “So a decorator, an artist or a plumber would have a higher tax rate than an owner of a decorating business, an art shop or a plumbing supply store. A corporate accountant could have a higher rate than a partner in an accounting firm.” And while that seems unfair to a lot of people, what’s even more ironic is that under the House bill, lazy (i.e., passive) investors do better than their active counterparts. “[T]he head of a family business who works 60-hour weeks would have a higher rate than her brother, who doesn’t work there and can spend his days sleeping on the couch.”

Elsewhere in tax bill problems: Senate Bill’s Marginal Rates Could Top 100% for Some

Liberty Tax Discloses Resignation of Independent Accounting Firm [Liberty Tax, 8-K]
There’s something wonderfully meta about accountants ditching an accounting business client. In this particular instance, KPMG had concerns about the former Liberty Tax CEO, John T. Hewitt, who remained chairman of the board, and sole shareholder of Class B shares. The firm told Liberty’s management and board that Mr. Hewitt’s actions “have created an inappropriate tone at the top which leads to ineffective entity level controls over the organization.” These actions included replacing two independent board members, which led to the resignation of the Audit Committee Chair, an announcement of the CFO’s intention to resign, as well as another board member who wouldn’t stand for reelection.

Elsewhere in accounting firms and troubled clients: “The pressure will be on PwC to complete their investigation as quickly as possible,” into irregularities at Steinhoff International Holdings.

U.S. Bitcoin Futures Climb in First Day of Trade [WSJ]
All aboard the hype train! “Trading of the hotly anticipated U.S. bitcoin futures began at 6 p.m. Eastern Standard Time on Sunday on an exchange run by Cboe Global Markets Inc., while its larger rival CME Group Inc. plans to introduce its own bitcoin futures a week later. The bitcoin contract expiring in January opened at $15,000 and rose to $16,660 within the first six minutes of trading, an 11% surge. About 1,000 contracts changed hands in the first three hours of trade.”

Banc of California Whistle-Blower Alleges Fraud, Strippers [Bloomberg]
File to Accountants…er, CFOs Behaving Badly: Questionable Use of Business Funds Edition. A lawsuit filed by a former employee, Heather Endresen “said she was wrongfully terminated after complaining about the shifting pool of bonuses as well as the behavior of the company’s then-chief financial officer Francisco Turner. Turner used company funds to pay for strippers and had sex with employees in his office, according to the complaint. He also used drugs and pressured junior employees to join him, Endresen alleged.”

Previously, on Going Concern…

I speculated on the report that PwC is shopping its government services practice around.

In Open Items, an intro to the new tax category, and a question about PwC’s Flexible Talent Network compensation.

In other news:

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You Know That Guy That Panhandles on Your Block? He May Be a CPA.

Anybody out there looking to help their fellow CPA, who’s down on his luck?
The Wall St. Journal is reporting that the former BDO Seidman LLP CEO, Denis Field may have to pay back a portion of $180 million that is being sought by prosecutors in the tax shelter case that involves Field and six others.
Natch, everybody has denied wrongdoing. The charges include conspiracy and tax evasion. Good luck with that.

Prosecutors Seek Ex-BDO Seidman CEO, 6 Others To Forfeit $180M
[WSJ]

Partners at Grant Thornton are Just Getting Lazy

Grant-thornton-logo.JPGGrant Thornton is really making our lives easy today: “Grant Thornton has agreed to pay nearly £6,000 in fines and costs after it failed to correctly sign off 43 audit reports.”
Measly fine, obv but 43 audit reports? And a incorrectly signed off report is one that, “had not been signed off by a responsible individual of the firm”.
So apparently the Brits have got their interns signing off on the audits. Gold star for you today, GT.
ICAEW fines Grant Thornton over audit sign-offs [Accountancy Age]