October 23, 2018

Accounting News Roundup: Whistleblowers; Big 4 Impunity; A Big Accounts Receivable Error | 02.22.18


Supreme Court Curbs Protections for Whistleblowers [WSJ]
If you or someone you know is thinking about blowing the whistle on some shady behavior, forget about reporting it internally; take your tip to the Securities and Exchange Commission if you want anti-retaliation protection under Dodd-Frank. Naturally, this came out of a case of accounting shenanigans:

The case stems from a lawsuit filed by a would-be whistleblower, Paul Somers, who says he was fired from Digital Realty Trust Inc. in 2014 after complaining internally about accounting irregularities, among other matters. Mr. Somers argued he was protected by Dodd-Frank even though he didn’t report the alleged problems to the SEC.

Why is no one exposing our failing firms in advance? [The Guardian]
Long-time Big 4 gadfly Prem Sikka writes about a summary of the most recent auditor-involved scandals in the U.K., lamenting that “in the absence of meaningful sanctions the accountants operate with impunity.”

$92 million accounting error delivers blow to Edward-Elmhurst Health’s bottom line [CT]
The EY audit hero that found this doozy gets a gold star:

The west suburban hospital system discovered the error after its auditor, Ernst and Young, recommended it do an evaluation of its accounts receivable, which reflects money the hospital estimates it is owed by insurers and patients.

The analysis found accounting errors over multiple years had added up to an overestimation of $92 million as of the end of its last fiscal year June 30. Nearly half — $42 million — occurred before Edward and Elmhurst hospitals merged in 2013. The analysis was validated by independent auditing firm KPMG.

“Health care reimbursement is incredibly complicated,” the Edward-Elmurst CEO Mary Lou Mastro said.

Partner’s son admits to embezzling $827,000 from Pittsburgh law firm [PPG]
Okay, this isn’t officially an Accountant Behaving Badly, but it’s a person doing accountant-esque things and behaving quite badly:

Assistant U.S. Attorney Lee Karl said [Anthony] Calaiaro, son of partner Donald Calaiaro, handled invoices, checks and payroll, but he didn’t have signatory authority over the business account.

So he forged the name of a partner and made some 500 checks payable to himself between June 2014 and April 2016.

He then falsified the descriptions for the checks in the check register to conceal his thefts, making it look like the checks had been used to pay vendors.

Near the end of the scheme, Mr. Calaiaro also prepared six checks totaling $28,000 made payable to the law firm and drawn on the firm’s Interest on Lawyers Trust Account at Allegheny Valley Bank.

And then also remembering those bad things quite badly: “After Mr. Karl read a description of his crimes, the judge asked Mr. Calaiaro if he agreed. He and his lawyer, Linda Cohn, said he’d been on drugs at the time so couldn’t recall all that happened.”

Previously, on Going Concern…

Jason Bramwell solicited advice from controllers about moving from public accounting to industry.

From the archives: Today in IRS Resistance: Ohio Man Bulldozes His Own House

In other news:

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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.