Accounting News Roundup: Apple Ponies Up; Big Lease Obligations; Walkbacks | 04.25.18

Apple Takes a Step on Payment of Back Taxes to Ireland [WSJ]
The company “completed an agreement” to put $16 billion into an escrow account to comply with an order from the European Commission. Ireland’s finance minister still disagrees with the ruling, but said, “as committed members of the European Union, Ireland is intent on complying with our binding legal obligations in this regard.”

Microsoft denies auditing partner KPMG’s anti-piracy work in India [Reuters]
Although a Microsoft executive explained that the company was “getting an assessment agency to carry out an audit of the process delivery at KPMG to identify and correct gaps” after a surprise inspection by a KPMG employee irritated a politician, the two companies jointly said that no auditing of auditors is going on.

This next accounting rule change will add liabilities to every balance sheet [MW]
In many cases, billions of dollars in lease obligations. Francine McKenna reports on a LeaseAccelerator study that found “76% of the companies reported that there will be a material impact resulting from the transfer of most ‘right-of-use’ assets and liabilities from footnotes onto the balance sheet.” The company in the report showing the biggest impact was Walgreens, with over $32 billion in leases.

Correction: New York Times, “Zelle, the Bank’s answer to Venmo, Proves Vulnerable to Fraud” [PwC]
In Monday’s ANR, we linked to a New York Times report about Zelle’s vulnerability to fraud, and blockquoted an excerpt that cited a PwC partner from the firm’s financial crimes unit as saying, “I know of one bank that was experiencing a 90 percent fraud rate on Zelle transactions, which is insane.” I like to read it in my best Crazy Eddie pitchman voice.

Anyway, the firm has now walked that back:

PwC has determined the 90 percent figure is unsubstantiated. In addition, the statement could be read to incorrectly suggest that there is an issue with Zelle itself rather than merely pointing out that appropriate controls and procedures are needed by banks and other users in order to properly implement any new payment system. We recognize that most banks do have strong fraud authentication and fraud detection controls in place.

We regret the error and take full ownership.

We have contacted the New York Times to inform them the partner misspoke and to seek a correction.

The New York Times story remains unchanged at this time, and it won’t change, but also, it’s a little weird to see PwC correct a statement by one of its experts so publicly. This isn’t a couple of deer-in-headlights partners screwing up the Oscars; this is just a person — an expert in their field — telling a reporter what they know.

Has a statement from an Big 4 expert ever been corrected so publicly before? And do firms regularly go this far out of their way to add this much context? I confess to being ignorant about delicate PR matters such as these, so I asked a veteran PR person why a firm would do this and they suggested that it could’ve been prompted by an “Angry client?” or perhaps a “very angry client?” If someone out knows more, enlighten me.

Previously, on Going Concern…

Jason Bramwell shared the advice of controllers who work for universities.

In Open Items, someone is wondering about getting tax prep experience in a side gig.

From the archives: Auditor Made Nauseous By Computer Screens Needs Some Options

In other news:

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