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Footnotes: Deloitte’s Costly Negligence; CIA Tax Trouble; PwC Conflict-Free | 07.15.14

Posted on by Adrienne Gonzalez

National debt will exceed entire annual US output by 2039, CBO projects [CSM]

Singer Brian McKnight has settled with his former accountants [tJB]

Madoff Sons Deleted E-Mails, Hindered Probe, Trustee Says In an amended complaint filed today in U.S. Bankruptcy Court in Manhattan, the trustee said he uncovered evidence that Andrew Madoff and Mark Madoff printed e-mails and labeled them as “trash” before deleting them from the server during an SEC probe into Madoff’s investment advisory business. [BBW]

Satyam Founder Ordered to Pay Back Alleged Accounting-Fraud Gains [WSJ]

Deloitte ordered to pay another $33-million in Livent negligence case We think that's $33 million in Canadian money [The Globe and Mail]

The European Commission has no idea what you mean when you say PwC may have a conflict of interest [EurActiv]

U.S. House approves permanent ban on Internet access taxes The House, in a voice vote Tuesday, passed the Permanent Internet Tax Freedom Act, over the objections of some Democrats. In addition to permanently banning states and local governments from taxing Internet access, the bill would ban any other form of Internet-only taxes, although its aimed primarily at taxes on Internet access service. [PCWorld]

Michigan Treasury says CIA owes state over $20,000 in taxes withheld from employee paychecks Wait, what is the CIA doing in Michigan? [COD]

TSA Agent Not Sure What This So-Called "District of Columbia" Is In his defense, the new licenses do look like they were ordered from the back of a 1950s comic book [Gawker]

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PwC’s Re-thinking of the Bell Curve Ranking

pwclogo.thumbnail.jpgA tip we received yesterday mentioned that PwC has been progressively narrowing their performance rating scale. P. Dubs originally had the 1 to 5 scale, then moved down to 1 to 4, and now uses 1 to 3.
Obviously, this leaves less room for interpretation of one’s ranking as it compares to the other firms. As far as we know, E&Y and Deloitte both use 1 to 5, and KPMG has the indecipherable 9 box which is somehow combined with a 1 to 5 scale (we think?).
More, after the jump


So let’s talk about this whole mess. You don’t have to be a Elijah Watts recipient to figure out that, at the very least, PwC is making their rankings clear: 1 – you’re well connected; 2 – you’re lucky; 3 – you’re gone. On the one hand, there’s less confusion. On the other, it’s the firm’s way of squeezing people out based on “performance” rather than admitting that they are impervious to the struggling economy.
The rest of the firms are doing the same thing but due to the unwillingness or inability to make their ranking system less mystifying or subject to manipulation, forced ranking will continue. PwC seems to be the first firm to integrate a system that “legitimizes” it.
Discuss in the comments P. Dubya’s move here and why it works/doesn’t work and what the firms should be doing to improve their ranking systems because as it stands right now, it’s total bunk.

Charlie Rangel Needs Your Help

charlie-rangel.jpgFor those of you that don’t concern yourselves with civics nonetoomuch, Chuck is the chair of the House Ways and Means Committee. Ways and Means writes the tax laws for this fair land of ours. Get it?
Anyhoo, Rangs has a bit of a problem. People are shouting from the rooftops that this guy has to go. Why? A small matter of forgetting to list some assets on his disclosure forms.
Minor omissions, after the jump


Web CPA:

…in the Washington Post today decrying some of the newest revelations from last week, including a Merrill Lynch account valued between $250,000 and $500,000, tens of thousands in municipal bonds, and between $30,000 and $100,000 in rent from a Harlem brownstone that he owns, all of which he failed to list on his congressional disclosure forms from 2002 to 2006.

And if you remember:

This comes on top of the news last year about the four rent-stabilized apartments he rented at below-market rents, his use of government stationery to raise money for a pet project, his failure to report income from his sale of a Florida condo, and his failure to pay taxes on rental income from another home in the Dominican Republic.

According to the WaPo piece, Rangs’s net worth doubled-ish, “from between $516,015 and $1,316,000 to between $1,028,024 and $2,495,000”.
Yeah, so, that’s kind of a big change. We’re thinking that Chuck is way too busy being a tax wonk to track all this stuff. Or maybe he’s just too tired. Either way, it’s way easier to forget about four rent-controlled apartments than you think.
Rangel Under Pressure to Step Down [Web CPA Debits & Credits]

Craptacular Caption Poll Reminder

We’ve got a close race in the craptacular caption contest. Polls close tomorrow night at midnight, so you’ve still got plenty of time to vote if you haven’t already.
Thumbnail image for crapper.jpg
And if you truly think you’ve got worse digs than this, send us your photos, we’re curious as how sadistic clients can be when it comes to accommodating their auditors.