“Frankly, the people don’t care. My finances are very clean.” — President Trump, when asked if he would release his tax returns, which he claims are still under audit by the IRS. [Roll Call]
Our QOTD comes from Deloitte CEO Cathy Engelbert, who shared the stage with AT&T Business CEO Thaddeus Arroyo and CNN host Anderson Cooper a couple of weeks ago during the AT&T Business Summit in Dallas to discuss how to be an effective leader in a digital world. Cooper, who moderated the discussion, mentioned that people […]
It seems that the Tax Cuts and Jobs Act is making New York CPAs’ jobs more hellish than they already are. From Crain’s New York Business: For New York’s largest accounting firms, the biggest tax overhaul in decades has put significantly more work on their staffers’ plates. But it’s not just New York CPAs who […]
“I don’t think the SEC’s culture is one that will make this effective one iota,” said Sherron Watkins, a one-time vice president at Enron, referring to expanded protections for whistleblowers included in the Dodd-Frank financial reform law. If she was in the same situation today as 10 years ago, when Watkins approached government authorities about accounting fraud at Enron, she would probably instead take her information to an organization like WikiLeaks, Watkins said. [Paper Trail]
“Could Ernst & Young have done a better job? Maybe, but claiming they could have done a better job doesn’t necessarily make them liable. Even the best of auditors can be fooled.”
~ Anthony Sabino, professor of law and business at St. John’s University
Chief Financial Officer Patrick Pichette on Thursday downplayed the competitive threat from social-networking giant Facebook Inc., arguing that the digital economy will create a “ton of winners.” “Everybody will benefit if the Web is more social,” he said. “It’s not a zero sum game.” [Dow Jones]
Comments reflected “a lot of unanimity around, if we go in this direction, allowing sufficient time for companies to adjust,” said Schapiro in a question-and-answer session following her keynote address to the American Institute of Certified Public Accountants’ national conference on accounting and auditing issues for public companies. “It’s likely to be a minimum of four years,” but that’s still a point for the SEC to decide, she said, assuming it decides to incorporate IFRS into U.S. capital markets. [Compliance Week]
“Zero Hedge kindly requests any and all Big 4 (and all other) accounting firm whistleblowers to please stand up and let us know of any and every case of improper accounting they are aware of (preferably with supporting documentation).”
“I think we got off to a good start yesterday. There are going to be ups and downs in this process but I’m confident that we’re going to be able to get it done.”
~ President Obama is making us nauseous.
“Congress has gone since 2002 without dealing with the December 31, 2010 expiration of the Bush-era tax cuts. What’s another week or two?”
~ Joe Kristan hasn’t considered the risk of tryptophan hangovers.
“These material weaknesses are likely to continue to exist until the SEC’s accounting system is either significantly enhanced or replaced, key accounting activity in other systems is fully integrated with the accounting system at the transaction level, information security controls are significantly strengthened, and appropriate resources are dedicated to maintaining effective internal controls.”
~ From a report issued by the Government Accountability Office
“Everybody must sacrifice so this quiet killer won’t eat us alive before we have a chance to fix what was our doing.”
~ Former Senate Budget Chairman Pete Domenici who, along with Alice Rivlin, rolled out their fiscal deficit solution today that includes a 6.5% national sales tax.
“One item that I think we all agree on that was in the Senate bill, not in the House bill, but became part of the law was 1099, which affects small businesses and small contractors and how they report their transactions. They know what it means, and they know they’d like to see it go. I think that’s probably the first place we could go together.”
~ The soon-to-be former Speaker of the House is willing to talk about this one.
“I told them that there are things in there that inspire me, and there are things in there that I hate like the devil hates holy water. I’m not going to vote for this thing.”
~ The Illinois Senator doesn’t like the sales pitch from Erskine Bowles and Alan Simpson.
“We plan to do everything possible to enact AMT relief legislation in a form mutually agreeable to the Congress and the president. We urge the Internal Revenue Service to take all steps necessary to plan for changes that would be made by the legislation.”
~ One of those “letters” that legislators write to bureaucrats as a form of grandstanding. This particular letter was from Max Baucus, Chuck Grassley, Sandy Levin and Dave Camp to Doug Shulman
“In the recently-released 2011 State Business Tax Climate Index, New Jersey finally moved out of its last-place ranking on that list, in part due to Christie’s veto of the millionaires’ tax he mentioned during his interview. While it still ranks a pretty dismal 48 out of 50, it proves that improvement is possible, even in a state with a tax policy legacy as historically abysmal as New Jersey’s.” [Tax Foundation]
This all started when a shareholder asked Michael about this, and he said that we’re looking into it. Well, of course we’re looking into it.
~ Brian Gladden, CFO of Dell, comes off a little sassy discussing the possibility of the company going private.
“Antitax voters clearly won a victory on Tuesday. But it would be a stretch to say that they don’t want higher taxes on the wealthy. More likely, they just didn’t want higher taxes on the nonwealthy.”
~ Robert Frank, on Washington’s rejection of Initiative 1098.
One of the main reasons [for dissatisfaction] is a lack of role models. Half of female respondents said there aren’t enough women at the top to look up to in top management, while only a third of men complained that there aren’t enough males. On the topic of mentors, however, both sexes feel there aren’t enough of them. More than two thirds of both genders said they haven’t had or currently do not have a mentor to support their career. [FINS]
Ernst & Young, take my word for it, will never be indicted by the U.S. government, as a firm, for its role in any Lehman fraud that’s eventually proven. It’s also highly unlikely – 1000 to 1 odds I’d say – EY will be fined by the SEC or the PCAOB, as a firm, in a civil or disciplinary case.
~ Francine McKenna says it’s a longshot.
“We’re confident that a Congress manned with our pledge signers will be prepared to take the necessary steps to pass permanent repeal of this un-American, outdated policy and stand up for small family businesses, the real job creators in our country.”
~ Dick Patten, President of The American Family Business Institute, says the estate tax is toast now that Senate candidates like Sharron Angle, Ken Buck and Rand Paul are on board with the AFBI’s “Death Tax Repeal Pledge.”
“How about going online and printing [the statement or report] every month as if it were mailed to you — and actually looking at it?”
~ Stephen Pedneault, a veteran forensic accountant, isn’t crazy about all the benefits of technology.
“Ever since the tax cuts were enacted in 2001 and 2003, policy makers have known the law would expire at the end of 2010. That ‘drop dead’ date offered an auspicious way to galvanize a systematic effort to reform a tax system that is badly in need of repair. Instead, policy makers pretty much ignored the issue until just before the 2010 Congressional recess, when politically tinged efforts to extend some or all of the tax cuts finally began — a ‘debate’ that was too little, too narrow, and too late.”
~ William G. Gale, Miller Chair at the Brookings Institution and co-director of the Urban-Brookings Tax Policy Center
“I’m tired of pastors submitting to this tyranny — and I’m expecting to try to get the IRS to sue us so that we can take it all the way to the Supreme Court and restore freedom in America’s pulpits.”
~ Pastor Cary Gordon, of Cornerstone World Outreach in Sioux City, Iowa, has some strange ambitions.
“They will help investors to better understand off-balance sheet risks, and to alert them to the possibility of so-called window dressing transactions occurring at the end of a reporting period.”
~ Sir David Tweedie talking up the new rules that were published by the IASB today.
“The largest companies are generally served by one of the Big Four firms and I think that’s going to continue to be true and one of the reasons are the needs of that market place, due to the scale of those enterprises.”
~ Deloitte Global CEO Jim Quigley (who must have been making the rounds today) doesn’t see a return to the Big 5.
“The question is, Do we get more money from the person that’s gonna serve me lunch today, or do we get it from me? I think we should get it from me.”
“Citi still seems to have aggressiveness with financial targets (well above historical), accounting (tax credits) and corporate governance. Also, the strategy does not always seem in sync with execution and/or financial reporting.”
“If the President really wants to help small businesses, he should insist that Congress not leave town without cutting spending and stopping his tax hike to help create jobs – particularly small business jobs. By failing to act, the President is turning his back on American families and small businesses.”
~ The House Minority Leader, in a statement, nanoseconds after The President signed The Small Business Jobs and Credit Act of 2010 into law.
“Swearing does provide a sort of release that other language doesn’t provide.”
~ Dr. Daniel Zimmerman, a co-author of a study that says cursing can “clear the head,” and “conveys the sort of aggression that is rewarded with honors and promotions in high-stress workplaces.”
“It’s amazing to me how difficult it is to work together around here, even when we want to.”
~ Orrin Hatch (R-UT), referring to how the U.S. Senate managed to drag out the passing of the small-business bill.
“The Big 4 don’t even like being called AUDITORS. Rather they provide ‘ASSURANCE Services,’ and act as ‘TRUSTED ADVISORS.’ This isn’t just rhetorical. It’s a cynical PR move and an effort to limit their liability.”
“Every time she touches a balance sheet, she leaves behind a tral [sic] of tax liens and penalties. If Rep. Haley really is an accountant, she is as incompetent as her mentor is at job recruitment.”
~ Trav Robertson, spokesman for South Carolina Gubernatorial candidate Vincent Sheheen, is talking out of his ass a little but the jab at Mark Sanford is duly noted.
“He flies in the face of business sense, fashion manufacturing and retailing sense.”
~ Bryan Roberts, research director for retail analysts Planet Retail, couldn’t get through to Deloitte in time with this message.
“Because of the way the value of sports franchises generally appreciates each year in the marketplace, each owner is in it for the holy grail, and that is to sell the team eventually when they realize very nice capital gains.”
“She promises to significantly reduce their IRS tax debts, but instead preys on their vulnerability, taking large up-front payments but providing little or no help in lowering their tax bills.”
“That is quite a risk to put at the end of the list.”
~ Peter Henning isn’t so sure that General Motors is taking the whole “disclosure controls and procedures and our internal control over financial reporting are currently not effective” serious enough.
“If it weren’t for the immigration bust by the Obama administration, the company would have been OK this year.”
~ “[A] source close to American Apparel” quoted in the Post obviously isn’t familiar with the company’s debt position.
“This administration will side with those who want fundamental change. It is not tenable to leave in place the system we have today. We will not support returning Fannie and Freddie to the role they played before conservatorship, where they fought to take market share from private competitors while enjoying the privilege of government support.”
~ The Treasury Secretary has had it up to his coif.
“At least part of it is focused on the March 2008 capital raise where they went out and did a preferred deal. Erin Callan made some very positive bullish statements about Lehman. About how the nature of its finances would mean that it did not need more capital and three months later Lehman Brothers needed more capital and then came the decline of the firm.”
~ The Fox Business Correspondent/Ace Reporter insists that an announcement is “imminent.” That’s what the rumor mill says anyway.
“If you wanted to irritate the raise-taxes folks with tax-hiking proposals designed to nettle and sting their tender flanks, what would you do?”
“Uncertainty about the sustainability of the recovery continues to limit planned investment and hiring.”
~ Professor Mark Lang on the results of the AICPA/University of North Carolina’s Kenan-Flagler Business School survey of CPAs in leadership positions.
“We believe that the IRS has neither demonstrated the need for extending the non-signing preparer requirements to CPA firms nor that its proposed testing program merits shifting IRS resources away from other mission-critical programs.”
~ Thirty-one members of Congress sent a letter to Tim Geithner, asking TG, Doug Shulman & Co. to, pretty please, reconsider the requirement for non-signing CPAs.
“We thought auditors and investors would like to have an avenue to report violations of accounting and auditing standards and financial fraud.”
~ Claudius Modesti, PCAOB Enforcement and Investigations Division director. Last year, the Board fielded 179 tips – a record – that alleged wrongdoing by audit firms and their employees.
“We thought it was important for people to appreciate that the announcement today has nothing to do with the operational performance of the company, it is all about Mark’s behavior and judgment.”
~ HP Chief Financial Officer Cathie Lesjak, who is now interim CEO after an abrupt resignation by Mark Hurd amid sexual harassment allegations.
“I believe the time has come for us to ask Congress to change the law and make our enforcement proceedings public, unless there is some good reason for a particular matter to be closed.”
~ Dan Goelzer, Acting Chair of the PCAOB, would like to get things out there.
“Instead of reprising their partisan, tiresome, and largely unproductive argument about what to do with the Bush tax cuts, President Obama and Congress ought to be asking a very different question: How do we build a tax system capable of generating the revenues we need to fund the government we want in the most efficient and fair way possible?”
“Sixty years ago, I survived a Chinese attack in North Korea and have said that I haven’t had a bad day since. But after today, I may have to revise that statement.”
~ Rangs had a helluva run. Not that it’s any consolation.
“Without a budget in place that addresses our $19 billion budget deficit, every day of delay brings California closer to a fiscal meltdown,”
~ California Governor Arnold Schwarzenegger probably wouldn’t mind having the ability to go back in time and try to do something. Anything.
“I’m guessing that if Mike Tyson walked into a job interview for a financial analyst position at PricewaterhouseCoopers with his half-face tribal tattoo, he probably wouldn’t be asked back for a second interview.”
~ Brie Reynolds, over at Ology, is making the assumption that the baddest man on the planet wouldn’t be able to provide the PwC Experience.
“I couldn’t tell you, Mike, that there is a company in the world that does not have a threat of a criminal investigation at some point in time. I mean, every company in the entire world has that. All I can tell you is that we are not aware of any criminal investigation of Goldman Sachs.”
~ Goldman Sachs CFO David Viniar, responding to CLSA analyst Mike Mayo, who really, really, really, really wants to know if there is a threat of a criminal investigation into Goldman Sachs.
“Accounting is the CEO’s “weapon of choice” that transforms the perverse incentive into what economists, regulators, and criminologists agree is a “sure thing” in crises (means).”
~ William K. Black, Associate Professor of Economics and Law at the University of Missouri-Kansas City.
“The answer to that question for both proponents and detractors of the bill is to read it. All of it. Then decide.”
~ Steven M. Davidoff, the Deal Professor, read all 2,300 some-odd pages and just assigned all of you some homework. It’s going become law after all.
“[I]t’s like saving money when they shop is a new kind of game, a way to stick it back to the man.”
~ Pat Conroy, vice chairman and Deloitte’s consumer products practice leader, is proud of all the consumers out there.
“How can any self-respecting attorney still argue – and any lucid judge still believe – that PwC’s global firm is not just a sham legal construct, an artificial vehicle for the strongest member firms to control and potentially exploit their weaker ones, all under the guise of ‘improving quality and seamless delivery to multinational clients…’ ?”
~ Francine McKenna still isn’t buying it.
“The audit committee is essentially its organization’s financial conscience. The responsibilities have grown demonstrably, and committee members need appropriate guidance to carry out their essential charge. That’s the AICPA’s goal for its first audit committee forum.”
~ Carol Scott, AICPA vice president for business, industry and government thinks it’s about time we got down to business.
“If we can’t get converged (on financial instruments), it would suggest the convergence effort is going to be challenged and questioned on a significant basis.”
~ FASB member Tom Linsmeier levels with everyone on the FASB’s big test in the convergence process this fall.
“During the course of the financial crisis, we made our fair share of mistakes. We lost a considerable amount of money through our exposure to leveraged loans and mortgages.”
~ Goldman Sachs CFO David Viniar, in his opening statement before the Financial Crisis Inquiry Commission.
“I did not expect actual, economic losses on the portfolio. That said, I was truthful at all times about the unrealized accounting losses and did my very best to estimate them accurately, in consultation with others at AIG-FP, as well as with my supervisors, AIG’s senior accounting staff, and its internal and external auditors.”
~ Joe Cassano, in his prepared testimony before the Financial Crisis Inquiry Commission
“Beckstead and Watts, LLP, and the Free Enterprise won, but there is no prize for them.”
~ Professor David Albrecht (guest posting at JDA), pointing out that despite a victory, the petitioners basically get jack squat.