August 15, 2020

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Frankenstorm Updates: Accounting Firm Closures and One Guy’s CPA Exam Is Cancelled

As you may have heard, there’s a bit of a storm brewing on the east coast. Everything is more or less closed but if your firm is of the general opinion that the heavy stuff won’t be coming down for quite a while and there’s no reason you shouldn’t be at the office until the lights go out, please let us know (and some pictures might be nice).

Accounting News Roundup: Hi, Sandy; Another Romney Tax Shelter; College Football-Ticket Tax Break | 10.29.12

To our readers on the East Coast – Be safe! Keep us updated with the communication from your firm and send us any pictures as Sandy starts to make herself at home. Email us at tips@goingconcern.com. Storm Gains Strength as It Churns North [NYT (Paywall suspended)]Hurricane Sandy grew stronger before dawn on Monday as it churned […]

What Accounting Program Would Jesus Do?

Are you the parent of a future accounting student looking for guidance as you sort through hundreds of brochures in the search for the perfect accounting program for your future CPA? You probably shouldn't email us, we're a bad influence. But if you still want to, go ahead and get in touch and we'll try […]

Footnotes: Neil Barofsky on Auditors, Tax Credits in Chart Form, IRS Keeps ‘Em Honest | 09.12.12

Neil Barofsky On Bailouts, TARP, and Whether It Was All Worth It “The auditors have proven themselves to me, over and over again, to be more concerned about the steady stream of fees than in doing their job.” [Forbes] SEC whistleblower program stricter than IRS bounty which paid $104 million to felon, former official says [Reuters] […]

ANR: KPMG’s 2011 PCAOB Inspection; Private Co. CFOs Keep Numbers To Themselves; Study: Tax Breaks for Organ Donors Don’t Work | 08.31.12

KPMG 2011 Inspection Report: No Change from 2010 [CW]In its first published report from the 2011 inspection cycle, the Public Company Accounting Oversight Board found fault with a dozen KPMG audits, the same number it criticized the year before. The board inspected 52 audits performed by KPMG, plus an additional audit where the firm contributed to […]

ANR: IFRSomeday; Japan Regulator Knocks KPMG, E&Y Over Olympus; Accountant Sues for Infernal Work Environment | 07.06.12

Jobs Data Indicate Slowing Growth [WSJ]Nonfarm payrolls grew by 80,000 last month, the Labor Department said Friday. The politically important unemployment rate, obtained by a separate survey of U.S. households, was unchanged at 8.2%. Delay Seen (Again) For New Rules on Accounting [WSJ]After weighing the issue for nearly 2½ years, the Securities and Exchange Commission's […]

Accounting News Roundup: MLPs for the Greenies; Obama Holds on Tax Cuts While Clinton Backtracks; The Next Hot IPO | 06.07.12

Tweaking tax code could spur green energy: senator [Reuters]Chris Coons will introduce legislation on Thursday that would allow a broad range of renewable power generation and transmission projects to qualify for a tax structure used widely by pipeline and other energy-related companies. The bill is unlikely to be considered until after the November presidential election, but […]

A Warning to CPA Exam Candidates Trying to Sit In States Other Than Their Own

This is simply my perception and sadly I don't have actual numbers to back it up so you'll have to forgive me but it seems like in recent years, CPA exam candidates have been having a difficult time transferring scores between states. Back in my CPA review days, I would tell candidates that it's easier […]

Here Are a Few Ridiculous Things Deloitte’s Punit Renjen Said in a Recent Interview

In the past, we've called attention to some of the brutally boring interviews that Deloitte bigwigs have done with various outlets. Joe Echevarria. Barry Salzberg. Deb DeHaas. We read these so you didn't have to. You're welcome. Today, however, we read an interview with Deloitte Chairman Punit Renjen that wasn't half bad. It was done […]

Accounting News Roundup: Are You Ready for Taxmaggedon?; Accounting Beats Psych; Brown Readies California’s Belt | 05.15.12

John Snow: 'Taxmaggedon' Is a Real Threat [WSJ][W]e face that real prospect, as prominent proposals by the administration would triple the top dividend tax rate to nearly 45%, while doubling the top rate on capital gains to 30%. If one intended to cripple job creation, depress stock prices, and lower the value of retirement savings […]

Somehow, They Figured Out 2011 Elijah Watt Sells Winners Already

Wait just one second… didn't they just announce the Elijah Watt Sells Award winners for 2010? I guess the AICPA wasn't kidding when they said the 2011 exam would be graded faster than ever. Somehow, we've got 2011 Elijah Watt Sells winners in record time. Here they are for your shaming. Of 90,000 candidates who took the […]

Accounting News Roundup: Buffett’s ‘Sacrifice’; Groupon’s Slump; PwC’s German, Dutch Firms Merging | 05.07.12

Buffett Defends His Tax View [WSJ]The meeting was Berkshire's first since Mr. Buffett made headlines by saying those earning more than $1 million a year should pay a tax rate of at least 30%. One questioner asked whether a CEO should keep his political views "muted," prompting Mr. Buffett to respond that he has a duty […]

Accounting News Roundup: In Defense of Apple’s Tax ‘Sidestepping’; COSO Postpones Framework Release; More Tax Dodginess in Florida | 05.02.12

Apple Sidesteps Taxes – What’s Wrong With That? [Chris Bergin/TC]We are currently having a debate in this country about fairness and our tax systems. That’s a good debate to have because our tax systems at the state and federal levels are all almost consistently unfair. But I worry about that debate as well. Insinuating that […]

Congressional Members Seem to Have Their Orders Re: Auditor Rotation

You may remember that last Wednesday I put my grown-up clothes on and attended the PCAOB's open meeting on auditor rotation. It was a good discussion (relatively speaking) and I got chat with some pretty smart people. I can't work a room of old white men like Adrienne (few can), but Chairman James Doty seemed […]

Bloomberg/BusinessWeek’s Top Undergrad Business Schools of 2012 List Doesn’t Do the Top CPA Exam School Justice

Not to burst Wake Forest's bubble but Bloomberg/BusinessWeek just gave them 19th in their list of top undergrad business schools in America for 2012. (Notre Dame was #1) That's really sad but it doesn't change the fact they dominate on the CPA exam. Just for shits and giggles, let's see how Bloomberg's top 5 undergrad […]

The CPA Exam Stats You’ve Been Waiting For: The Best-Performing Accounting Programs of 2011

Because the 2011 NASBA Candidate Performance book is a significant improvement over previous versions, we've got some new data to share and it's pretty exciting. Now, the following stats cover first-time exams across all programs (we'll explain program size in a moment). SHOCK, Wake Forest is #1 yet again. The actual shocking part here is […]

ANR: More Chinese Auditor Resignations Coming?; Four More Years for PwC UK Chairman; Ex-CIMA President Sneers at CGMA | 03.16.12

Deloitte's Boshiwa exit a precursor to more China auditor resignations [Reuters]Deloitte's resignation as auditor of a Hong Kong-listed childrenswear company this week could be the first in a run of accountant departures from Chinese companies in the coming weeks as the audit season draws to an end. Last year's spate of accounting scandals at U.S.-listed Chinese […]

Let’s *Try* to Have a Civil Discussion About Accounting Program Rankings

Every year, U.S. News & World Report bestows their storied list of best Colleges and Universities. It's a great opportunity to show school pride (unless you're a Penn State alum) or to make snide remarks because you went to a TTT and are mad with envy. Because we know that discussing loaded rankings such as […]

ANR: IASB to Address ‘Disclosure Overload’; Women Widen Jobs Lead in Accounting; PCAOB Reopens Comment Period on Auditor Rotation | 03.08.12

Strong solar storm heading for Earth [Reuters]A strong geomagnetic storm is racing from the Sun toward Earth, and its expected arrival on Thursday could affect power grids, airplane routes and space-based satellite navigation systems, U.S. space weather experts said. The storm, a big cloud of charged particles flung from the Sun at about 4.5 million miles […]

This Guy Thinks Your Degree Is Useless As Long As You Got a High Score on the CPA Exam

In a recent article titled "The Dark Side of a Divided White America," The Fiscal Times chatted with Charles Murray, W. H. Brady Scholar at the American Enterprise Institute and the author of books that include Losing Ground and What It Means to Be a Libertarian. Murray apparently upset a few folks with his earlier […]

Rick Santorum Actually Believes That People Care About His Tax Returns

Ha! President of frozen-over hell, Rick Santorum told everyone that he had to get back to Pennsylvania, apparently, to get his tax returns thrown together.  Rick Santorum will follow Mitt Romney’s lead and unveil his tax returns, telling reporters Wednesday that he would head home over the weekend to gather and prepare his tax documents […]

How Do The U.S. News Top Accounting Rankings Compare on CPA Exam Scores?

I'm sorry if you guys are sick of these stats but someone suggested we hit these rankings and last time I dared to write about something other than CPA exam scores, I was essentially laughed right off the Internet. Thanks for supporting my dreams, people, that'll teach me to try to get you all excited […]

Accounting News Roundup: Rick Santorum Fever!; BDO’s NYC Acquisition; Overstock Layoffs | 01.05.12

Rick Santorum's tax plan [CNN]The former conservative senator from Pennsylvania would reduce the number of income tax brackets from six to two (10% and 28%) and triple what his campaign identifies as the personal deduction that parents can claim for their children. Santorum would also eliminate the so-called marriage penalty, which often causes two-earner couples to […]

Accounting News Roundup: More Tax Dodgy Swiss Bankers; The IRS *Will* Take Their Cut of Darryl Strawberry’s Money; Grover Norquist – Tax Person of 2011 | 01.04.12

Romney Ekes Past Santorum to Win Iowa [WSJ]Mitt Romney pulled out a razor-thin victory by just eight votes in the Iowa caucuses, edging out Rick Santorum and opening the Republican primary season with a dose of momentum going into a New Hampshire primary he is heavily favored to win. Mr. Santorum's performance was in some ways more […]

Here Are a Bunch of Opportunities for Accounting Students to Get Free Money

Alright so it isn't hundreds of thousands of dollars but if you're trying to scrape together a few bucks for school, try this super handy list via This Way to CPA. Just some examples of the scholarships listed: Accounting students in Pennsylvania can snag up to $15,000 from the Pennsylvania Institute of CPAs; New Jersey […]

An Underwhelming Majority of State Societies Want a New FASB For Private Companies

Thirty three state CPA societies have reached out to the Financial Accounting Foundation (FAF) or passed regulations urging it to create a new board to write differential financial reporting standards for private companies. Alabama, Arkansas, Colorado, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, Wisconsin and Wyoming all feel FASB’s current standards setting process does not adequately address the needs of the private company sector.


“In today’s business world it is extremely rare to get an overwhelming consensus supporting one idea. However, the responses from the state societies are another example of the CPA profession’s overwhelming support for an independent board to set differential standards for private businesses,” said Barry Melancon, American Institute of Certified Public Accountants (AICPA) president and CEO. “The message is clear; FAF must do this now or run the risk of missing our best opportunity to make GAAP relevant for private companies.” The thirty three states in agreement on this issue represent some 275,000 CPAs.

These state societies basically told FAF that GAAP has become too complex, and the cost associated with GAAP-based financial reporting has become too much of a pain in the assets for private companies, placing an unnecessary burden on these companies with little benefit to financial statement users as a result of this effort. Personally I think the states here are forgetting that the complexity of GAAP and its esoteric intricacies keep a lot of CPAs gainfully employed, as someone actually has to analyze, manipulate, audit and teach that crap. CPA review instructors need to sell FAR videos. Caleb and I need things to make fun of, like SEC Chief Accountant James Kroeker reminding a PACE University IFRS discussion that the P in GAAP stands for principles. Right. Like we forgot.

Anyway, nearly 3,000 letters have been sent to FAF from the private company constituency in support of this separate board for private company reporting standard setting. Maybe FASB has too much to do and too many clever interns to train. Maybe FASB has lost its public company influence and this is just the first step in the coup to overthrow it. I haven’t heard very many pushing for more FASs directly handed down from (mostly) European accounting standard setters but that’s an argument for a different day.

“The boards of more than half of the country’s state CPA societies, representing more than a quarter of a million CPAs, agree that a systemic problem exists,” stated Paul V. Stahlin, chairman of the AICPA. “After over 30 years of research by numerous diverse and independent groups, the only conclusion is that an autonomous standard-setting body under FAF to set differential standards for privately held companies must be created.”

Must be. There’s no way around that.

And for those interested, here’s a tl;dr PwC report tangentially related to private company accounting standards you can read. Perfect for a Friday.

The Greatest Farewell Email We’ve Seen…EVER

Subject: And When I Leave Come Together Like Butt Cheeks

You can figure out where this is going to go based on that alone, I’m sure.

Predictably, this email has been making the rounds since it was sent. If the OP was shocked it went viral in public accounting inboxes up until this point, wait until he sees it here. Names have been changed to protect the innocent, including the OP, who isn’t innocent at all but still deserves that. I think.

Hey Motherfuckers!

Guess who just got the fuck outta Dodge?! This guy! How many people had Craig Douchenozzlestein lasting until August 4, 2011 in the YMP pool?

But seriously, it is NOT easy to get out of these contracts. Im pretty sure it would have been easier to escape from Auschwitz th knew from the second week I start here that this wasn’t going to work out. I mean, working past 7pm cuts significantly into my drinking and foundling women time. So therefore, since October 28, 2008 when I was forced to work until 10pm on my fucking 23rd birthday, these wheels have been in motion.

I feel like it is probably appropriate to go over what got me to this point of release, in case anyone wants to take a similar approach and not have to pay back any tuition money and get a severance package.

The first breaking point for EY was during my staff 2 year when I lost an inventory count and the bitch of a senior manager WOULD NOT stop hassling me about it. Dude, I told you I lost it. No matter how many emails or sametimes you sent me, that sheet isn’t coming back. Get over it. Rose cried less when the Titanic sank. Needless to say, he personally wrote my review. Didn’t go over too well during roundtables.

The next “occurrence” happened in February 2009 during busy season. It was a Friday night and I was newly broken up with [the girlfriend] for the 24th time. That Saturday I had to work on [rando client] in the office because we just received their 10K. However, this was a minor inconvenience because 2 buddies from college were in town and I had a kitchen full of liquor waiting for them. During that night at the bars, I hit it off with one of the girls in our party and, as any guy knows, the first lay after a break up is as necessary as oxygen. So we leave to go back to my apartment only to realize I had given my buddy from college my keys so he could get in later. In a crime of passion and lack of forethought, I punched through our glass window to get into the lobby, only to realize the door to my apartment was still locked. Not letting this stop my teenage sex drive, we hopped a 30 minute cab to her place. The next morning I awoke at 11am realizing I should have been at work 2 hours ago. By the time I got to work it was 1pm, I reeked of booze and was bleeding all over the place because of my hand. AND I had forgotten my badge so called the senior manager to come let me in who greeted me with a “what the hell happened to you?” I also found out I had texted my senior the prior night while in the cab saying “Getting laid in West Randombury, Ill be at work ASAP” at 3am. Needless to say, my year end review mentioned something about “unprofessional” and “this is a career, not some part time job”

Those 2 situations resulted in me being held back for my staff 2 year. After that, there was not much anyone could do that would prevent me from doing what I wanted to do. I worked from home, ignored deadlines, and pretty much didn’t give a shit. I even made up some bullshit excuse that I was stuck travelling back from the Kentucky Derby in Pennsylvania during a 3/31 year-end just so I could catch up on the DVR I missed while away for the weekend.

The final straw that broke Camel Craig’s back resulted from a year-end job at the beginning of January. The Manager was a complete bitch and I spent most of my day exchanging texts with a girl I had met the prior weekend at the bar. She did not take kindly to this. But the breaking point for her was definitely when I didn’t show up til 2pm on that Friday because it was my roommates birthday the night before. Everyone knows Roommates birthday=Your Birthday, right?!?! That’s another thing that gets me about this place, everyone is so caught up in work they forget about enjoying life. Shit, life is so short (especially if you are a raging alcoholic) and is way too short to spend stressing over excel sheets all damn day. Every once in a while enjoy it! Take a sick day to go to the beach. Get hammered on your roommates birthday and come in late, have unprotected se…. well, maybe not too much enjoyment. But you get the message!

But I digress, I truly enjoyed my summers with you guys and the shit we got away with. I hope I was able to have a positive effect on your lives in some way, even if it was just “damn, at least Im not as bad as Craig . Did you see him lick the Backer pole last night?!” I hope you all keep in touch and wish you the best down the road.

If you guys are ever in the Random City area, Im always down to meet up. Just no rioting like we did when Joey and Dan were here.

One Love,

Craig

Good luck to you in your future endeavors, “Craig,” you’ll need it.

Please note, we’re pretty sure this guy is a one-off and not at all reflective of the overall quality of his colleagues. Therefore let’s reserve any judgments for Craig and Craig alone. Judge away, my darlings.

Former BDO Partner Gets Probation For Cheating on His Taxes

Poor BDO, they never get in the news. But hey, they do today!

Former BDO partner George Mark got off easy this week when U.S. District Judge Nora Barry Fischer said he didn’t deserve to go to jail thanks to his “extraordinary” charitable efforts and remorse for his actions. Mark’s tax evasion was uncovered during an investigation into Pennsylvania beverage company Le-Nature’s, who apparently specialized in nepotism, ass water and fraud.

Mark will instead serve two years of probation and pay a fine of $30,000.

A federal jury recently found Le-Nature’s former president Robert B. Lynn guilty of 10 counts of bank fraud, wire fraud and conspiracy. The jury found him not guilty on 10 additional fraud counts and deadlocked on five others, which left Senior U.S. District Judge Alan Bloch Jr. no other choice than to declare a mistrial on the remaining charges. The company’s CEO Gregory Podlucky and other company officers are facing prison for their part of a $37 million fraud.

While investigating Le-Nature’s ugly mess, the IRS found out that Mark declared fake travel expenses on his 2004, 2005 and 2006 tax returns for about $90,000. The IRS determined that Mark was living the gangsta lifestyle out in the Philly ‘burbs, rented an apartment in NYC, traveled a lot and owned a few luxury cars.

The U.S. attorney’s office had hoped the judge would come down with jail time in order to convince would-be tax cheats that this is serious business but the judge felt Mark’s volunteer efforts for Hope International and other charities was sufficient proof that he wasn’t all that bad of a guy, perhaps just a little misguided.

Back in 2008, 74 investors alleged fraud and negligent misrepresentation against Wachovia Capital Markets, Wachovia Securities and two accounting firms, Ernst & Young and BDO Seidman for their respective parts in the Le-Nature’s scam, in which company officers (mostly CEO Podlucky and his kin) would secure loans for business equipment only to turn around and use that money for things like, oh, sapphires and overpriced watches.

E&Y audited Le-Nature’s until BDO took over. “E&Y was aware that Podlucky could single-handedly influence or manipulate the company’s financial results …” charged the lawsuit. The company basically made up $240 million in revenue and BDO auditors declared the company’s financials were free of material misstatements. FAIL.

Anyway, congratulations to the former partner for, uh, being such a model human being. Or something.

(UPDATE 2) Bucknell Accounting Student Accused of Being Serial Flasher

Earlier today I was tipped to this story about a man accused of being a serial flasher in central Pennsylvania. Last week WHTM reported that Jay Patrick Knaub, a “straight-A student at Bucknell University” was accused of “20 counts including unlawful contact with minors, indecent exposure, and open lewdness.”

Right. So you can use your imaginations about what “lewd act” actually is but personally, “jerking off” or “spit-shining the ol’ water pump” comes immediately to mind. Maybe you have other ideas.

ANYWAY, Our tipster informed us that “this gentlemen may, in fact, be a [Big 4 firm] summer intern out of the Philadelphia office.” Right now I cannot confirm the firm in question but did find that a Jay Patrick Knaub who is a junior at Bucknell with a major in accounting. And yes, I also found a Jay Patrick Knaub on the prison list at Dauphin County Prison.

All this dong exposure started a few of weeks ago and fairly crude police sketch was put together before Knaub was arrested. Apparently, Knaub was getting pretty confident in his skills as the third incident allegedly occurred one block from the police department. Knaub was arrested on July 1 thanks to tips, “especially the description of Knaub as a ‘computer geek,'” as the Fox43 anchor put it.

I called Dauphin County Prison to see what I could find out more about the possible internship but the very nice woman who helped said that Mr. Knaub wasn’t interested in speaking with me. I also left a message with his attorney, Mr. Boyle, but have not heard back as of yet. Of course if you’re familiar with Mr. Knaub or worked with him, please get in touch. Updates to come.

UPDATE:
Some have noted in the comments that Jay Knaub hasn’t been found in their respective directories. This is because he isn’t in any directory. From our tipster:

I know that he was an audit intern, and was working on some of our Harrisburg area clients. From what I’ve been able to gather, he was fired a few weeks ago, but nobody was really told why. One of the other interns who went through training with him saw the story online [Monday], and it’s been circulating the office ever since.

Assuming Knaub was fired shortly after his arrest (over two weeks ago), the firm would have wasted no time in removing his name from the directory. I called the Philadelphia office of the firm in question, asked to be connected to Knaub but was told that he was not in the directory.

UPDATE 2:
If you’ve checked the directory lately, looking for Knaub’s name, you’ll find that it’s no longer in the directory. I’ve reached out to the registrar to find out what the story is but have yet to hear back. Will keep you updated.

Accounting News Roundup: What Will Audit Changes Accomplish?; Rangel Dumped Vacation Home; To Catch an Accountant | 06.16.11

Europe Faces ‘Lehman Moment’ as Greece Unravels [Bloomberg]
The European Union’s failure to contain the Greek debt crisis is sending fresh shockwaves through currencies, money markets, equities and derivatives. The euro lost more than 2 percent against the dollar in the past two days and the cost of protecting corporate bonds soared to the highest level since January, with credit-default swaps anticipating about a 78 percent chance that Greece won’t pay its debts. Equities declined around the world, while a measure of fear in fixed-income markets jumped the most since November.

What Should Be Int? Would Users Know When They Saw It? [Re:Balance]
Red flags aren’t very useful if everyone is color blind.

Audit Firm Term Limits: Nothing Else Left to Try [Accounting Onion]
Speaking of things that aren’t proven useful.

Still Writing, Regulators Delay Rules [NYT]
Regulators overseeing financial reform are delaying many of the planned changes in the $600 trillion market for complex securities known as derivatives because they are running drastically behind schedule in writing their new rules. The Securities and Exchange Commission said on Wednesday that market participants would not have to comply with many aspects of derivatives reform scheduled to take effect in mid-July. It declined to specify how long the delay would be in the equity derivatives it oversees.

Rangel Sold Condo, Report Shows [WSJ]
Mr. Rangel, the New York Democrat, sold his condo at the Punta Cana beach villa for somewhere between $250,000 and $500,000 last year. He was censured by the House last year for, among other things, failing to pay taxes on rental income from the resort property over a 17-year period. Mr. Rangel was required to repay those taxes and forced to relinquish his chairmanship of the Ways and Means Committee.

Golfer Goosen’s Tax Court Case Tests Principle That Image Is Everything [Bloomberg]
The international golfers at this week’s U.S. Open in Bethesda, Maryland, will be watching for two-time champion Retief Goosen on the leaderboard. Their lawyers will be studying Goosen’s U.S. Tax Court decision. The South African native challenged the Internal Revenue Service’s analysis of the endorsement income he earned from such companies as Electronic Arts Inc. (ERTS), Adidas AG (ADS) and Rolex Group. The case will affect golfers, tennis players and pop stars from around the world who tour in the U.S., license their images for advertising and hawk perfumes, cars, and jewelry.

‘Convergence’ Hits a Bump [WSJ]
The Financial Accounting Standards Board and International Accounting Standards Board said they will issue a revised proposal to overhaul the rules on revenue recognition, updating a proposal they first made last year. The revised proposal is planned for the third quarter, and companies, investors and other observers will have 120 days to comment on it after it is issued.

Adelphia’s Rigases, Jailed for Fraud, Lose Bid to Block Criminal Tax Case [Bloomberg]
Adelphia Communications Corp. founder John Rigas and his son Timothy, who are in prison for securities fraud, failed to persuade a U.S. judge to dismiss a pending criminal tax case against them. John Rigas, 86, is serving 12 years and Timothy Rigas, 55, 17 years for looting the cable company and lying about its finances. After a federal jury in New York convicted them in 2004, U.S. prosecutors in Pennsylvania charged the two with conspiring to dodge taxes on $1.9 billion they stole from Adelphia, a cable-television company that collapsed in 2002.

Accountant accused of embezzling $392,000 [ArgusLeader]
A Sioux Falls man who recently served as a watchdog for city finances is accused of embezzling almost $400,000 while working as an executive at SDN Communications.

Florham Park accountant indicted in trying to meet two underage girls in Atlantic County [NJSL]
A 56-year-old Florham Park accountant was indicted yesterday in connection with trying to meet with two underage girls earlier this year in an Atlantic County hotel, officials said. Stephen Bubniak, was indicted on 23 counts, including attempted luring, attempted sexual assault and attempted criminal sexual contact, said Atlantic County Prosecutor Ted Housel yesterday. Bubniak had arranged to meet the two girls, ages 13 and 14, on Feb. 3 and 4, after a series of online chats, Housel said.

And Now…CPAs Acting Out a Scene From Casablanca

Following the ingenious reenactment of the beginning of Luke Skywalker’s father issues, the Pennsylvania Institute of CPAs has delved into the classics, bringing us a scene from Casablanca.


Personally, I’m not crazy about this one. It’s bad enough that most of you haven’t seen the film but from an artistic integrity perspective, it really should have filmed it in black and white. However, I have to admit that the overwhelming smoke and horrendous French accent were nice touches. Other commentary is welcome at this time.

More PICPA videos:
And Now…CPAs Acting Out a Scene from the Empire Strikes Back
PICPA: You Need a CPA to Get Your Breathlessly Judgmental Friend to Shut Up
Latest PICPA Video: CPAs Are Like Snuggies
Pennsylvania CPAs Insist Accountants Are Funny in New Videos. Which Are Funny

And Now…CPAs Acting Out a Scene from the Empire Strikes Back

Last year the Pennsylvania Institute of CPAs went on a video production bonanza that incorporated Snuggies, public service announcements from the 1980s and your breathlessly judgmental friends. As impressive as those videos were, putting a CPA spin on a climatic scene from the best film in the Star Wars series takes things to a whole new level.

The breathing at 0:39 and the subsequent scream are priceless, as is the cough at 0:55.

LECG Selling Off Practice Groups to FTI, Grant Thornton, WeiserMazars

LECG Corporation, a global professional services company that specializes in “global litigation; economics; consulting and business advisory; and governance, assurance, and tax expert services” is spinning off five practice groups to help pay off $27.8 million on a credit facility. Two of the expert groups are going to FTI Consulting, Grant Thornton is picking up two groups and also a third that is being split with WeiserMazars. News of this fire sale has given LECG’s stock price a serious case of the Mondays (bolding is ours).

The tenth amendment to the credit agreement is expected to tion several practice groups to other firms and determines the process for similar transactions in the immediate future. The tenth amendment also will limit how LECG may use its cash until it repays its lenders. The facility matures on March 31, 2011 and approximately $27.8 million is outstanding. Absent sufficient proceeds from the transition of practice groups, the company will not have adequate cash resources to repay amounts outstanding under the facility.

The transaction with FTI Consulting, Inc. involves the transition to that firm of LECG’s International Arbitration and Aviation Competition practices and is expected to be effective today, subject to satisfaction of closing conditions, including the consent of its lenders to the release of liens on certain assets to be transferred. Terms were not disclosed.

The company also signed a letter of intent with Grant Thornton LLP to transition the company’s tax and business consulting groups. Simultaneously, the partners of LECG Partners, LLP, which provide attest services under an alternative practice structure, will continue to provide their professional services with either Grant Thornton LLP or WeiserMazars LLP.

The announced transitions will involve approximately 350 employees in Atlanta, Albany, Cambridge, Chicago, Devon, Harrisburg, Houston, New York, Schaumburg and Washington, DC.

Doug Phillips, Managing Partner of WeiserMazars told GC that the firm is “working to close the agreement” and that it is expected to finalized this afternoon or tomorrow morning. WeiserMazars will assume five partners and 40 professionals and they will be based in their Horsham, Pennsylvania office. Messages left with Grant Thornton, FTI Consulting and LECG were not immediately returned.

These spin-offs are occurring less than a year after LECG merged with Smart Business Advisory & Consulting, however a quick glance at their last three income statements shows drastically dropping revenues from $370.43 million in 2007 to $335.68 mil in 2008 and $263.20 mil for 2009. Cash flow from operations was also trending negatively for the last three years and the company’s equity is dwindling. By the count in the LECG/Smart press release, the company will have around 300 employees remaining after the transitioning of these practices groups is finalized. Not too good, man.

Despite all this, Deloitte’s most recent audit opinion was a clean one with no indication that the company was having problems. This fire sale of revenue-producing assets tells a very different story and we can’t say that we’d blame anyone that was thinking about rushing for the exits. If you’re in the know, email us and we’ll update you as we learn more.

UPDATE:
After poking around a little bit, we have a bit more to share (although more questions seem to persist). A source familiar with the consulting industry informed us that FTI Consulting was very interested in LECG’s European locations however, there’s nothing in the press release that indicates that this was part of the deal, despite the fact, our source said, that Paris is major hub for international arbitrage. Our source speculated that LECG would liquidate in the next 60-90 days which confirmed the thoughts shared with us by a source close to LECG.

One other interesting item of note – Grant Thornton continues its expansion, with the pickup of these tax, advisory and attest groups. It’s not entirely clear what areas in advisory GT picked up here but we’re definitely seeing Stephen Chipman’s dreams of my dynamism (yes, it’s a word) in action.

UPDATE 2:
Joseph DiStefano writes over at PhillyDeals that the deal would “[leave] about 1,000 with LECG in its remaining units.” Our previous number was based on the 650 cited in the March 2010 press release which appears to not have included the number of Smart employees that were added to the headcount.

DiStefano also published portions of a letter that LECG Managing Director John B. Stine II sent to clients:

“I am very excited to report that our tax, compensation & benefits, consulting and certain components of the audit practice of LECG (formerly SMART Business Advisory and Consulting) have joined Grant Thornton in its offices in Philadelphia, New York, Chicago, Atlanta, Portland, and London.

“Grant Thornton, the sixth largest firm globally, proved to be the best choice among the 11 accounting firms and 6 consulting firms that pursued our team.

“In only 10 days, Grant Thornton went from an initial one-on-one meeting to Board approval and sign-off of a deal that brings over 300 professionals to the firm…

So based on that it sounds like there were a bunch of firms in the mix and Stine gave clients the reasons behind going with GT: “Grant Thornton was the only firm with a similar roster of clients […] in contrast to the numerous local firms that showed enormous interest in doing transactions that cut out geographies or service lines.”

How Did Citigroup’s Internal Controls Cut the Mustard with KPMG?

Jonathan Weil writes in his column today about Citigroup and their “acceptable group of auditors,” (aka KPMG) and he’s having trouble connecting the dots on a few things. Specifically, how a love letter (it was sent on February 14, 2008, after all) sent by the Office of the Comptroller of the Currency to Citigroup CEO Vikram Pandit:

The gist of the regulator’s findings: Citigroup’s internal controls were a mess. So were its valuation methogage bonds, which had spawned record losses at the bank. Among other things, “weaknesses were noted with model documentation, validation and control group oversight,” the letter said. The main valuation model Citigroup was using “is not in a controlled environment.” In other words, the model wasn’t reliable.

Okay, so the bank’s internal controls weren’t worth the paper they were printed on. Ordinarily, one could reasonably expect management and perhaps their auditors to be aware of such a fact and that they were handling the situation accordingly. We said, “ordinarily”:

Eight days later, on Feb. 22, Citigroup filed its annual report to shareholders, in which it said “management believes that, as of Dec. 31, 2007, the company’s internal control over financial reporting is effective.” Pandit certified the report personally, including the part about Citigroup’s internal controls. So did Citigroup’s chief financial officer at the time, Gary Crittenden.

The annual report also included a Feb. 22 letter from KPMG LLP, Citigroup’s outside auditor, vouching for the effectiveness of the company’s financial-reporting controls. Nowhere did Citigroup or KPMG mention any of the problems cited by the OCC. KPMG, which earned $88.1 million in fees from Citigroup for 2007, should have been aware of them, too. The lead partner on KPMG’s Citigroup audit, William O’Mara, was listed on the “cc” line of the OCC’s Feb. 14 letter.

Huh. There has to be an explanation, right? It’s just one of the largest banks on Earth audited by one of the largest audit firm on Earth. You’d think these guys would be more than willing to stand by their work. Funny thing – no one felt compelled to return JW’s calls. So, he had no choice to piece it together himself:

[S]omehow KPMG and Citigroup’s management decided they didn’t need to mention any of those weaknesses or deficiencies. Maybe in their minds it was all just a difference of opinion. Whatever their rationale, nine months later Citigroup had taken a $45 billion taxpayer bailout, [Ed. note: OH, right. That.] still sporting a balance sheet that made it seem healthy.

Actually, just kidding, he ran it by an expert:

“As I look at the deficiencies cited in the letter, taken as a whole, it appears that Citigroup had a material weakness with respect to valuing these financial instruments,” said Ed Ketz, an accounting professor at Pennsylvania State University, who reviewed the OCC’s letter to Pandit at my request. “It just is overwhelming by the time you get to the end of it.”

What Vikram Pandit Knew, and When He Knew It [Jonathan Weil/Bloomberg]

Accounting News Roundup: The Problem with American Apparel’s non-CPA CFO; Diversity Still Lags in Accounting; Patrick Byrne Denies Insider Trading Accusations | 08.23.10

Potash says in talks for superior deals [Reuters]
“Potash Corp’s board urged shareholders to reject BHP Billiton’s hostile $39 billion offer and said it was in talks with a number of potential suitors for a superior deal.

Potash Corp, the world’s largest producer of potash based in the Canadian province of Saskatchewan, said superior offers or other alternatives are expected to emerge.

Discussions are on with several of these third parties in order to generate superior offers, the company said in a statement.”

How to Shine in a Skype Interview [FINSying across the country for a second round of meetings, you may be asked to interview for a job from the comfort of your living room.

While it might sound less stressful to some than an in-person meeting, such an interview can be filled with landmines for job candidates.”

The Problem With a Non-CPA CFO [FEI Financial Reporting Blog]
Francine McKenna guest-posts over at FEI for the second time, this time discussing the American Apparel situation and noting that 31 year-old CFO might be in over his head.

Goldfarb Branham LLP Investigating Shareholder Claims Against American Apparel, Inc. [Business Wire]
Speaking of APP, investigations are starting, “Goldfarb Branham LLP is investigating American Apparel, Inc. (APP 0.75, 0.00, -0.09%) due to allegations that the company may have issued materially inaccurate statements to investors concerning its 2009 financial results and the circumstances surrounding the replacement of American Apparel’s auditor.”

Movement afoot to increase diversity in accounting industry [Pittsburgh Business Times]
“Sam Stephenson, a partner at ParenteBeard LLC, a Downtown-based certified public accounting firm, brings an interesting perspective to the equation as a black man who has worked in the profession for nearly four decades. During his long tenure, he has seen improvements in efforts to recruit and promote women in the profession, but ethnic diversity still lags behind.

‘We need to bring this issue to the attention of individuals who run local and regional firms because they may not be aware that this is a problem,’ said Stephenson, who serves as a member of the Pennsylvania State Board of Accountancy, which enforces the licensing rules for CPAs. ‘A lack of diversity often means missed opportunities to attract talent and clients.’ ”


Preparer Costs Will Increase Some; Taxpayer Costs Will Increase More [Tax Update Blog]
Joe Kristan responds to fellow practitioner/blogger Robert Flach’s question of how the new tax preparer registration will affect costs for consumers more so than tax preparers.

Gays See Complex, Changing Tax Picture [Dow Jones Adviser]
“Gay couples are taking one step forward, one step back when it comes to their tax rights. Not to mention sideways.

The shifting landscape of new rules and initiatives makes it a big challenge to provide same-sex partners with good tax advice.

In Massachusetts, a successful challenge to a federal law denying gays tax breaks that heterosexual couples get could mean progress, but only if it stands up to an expected government appeal.”

Patrick Byrne Refutes Insider Trading Claims [Forbes]

Accounting News Roundup: EisnerAmper Partner: GM Balance Sheet ‘Stronger’ Ahead of IPO; KPMG Moves on From New Century, Countrywide; No Bookie Needed for Betting on Grades | 08.19.10

GM’s balance sheet draws praise ahead of IPO [MarketWatch]
“Peter Bible, partner-in-charge at accounting firm EisnerAmper LLP, said General Motors is now carrying a much stronger balance sheet than its predecessor, based on the company’s initial public offering filed late Wednesday. ‘Their debt-to-equity ratio looks handsome,’ Bible said in an interview. ‘This thing has gotten restructured quite a bit. GM’s health care liabilities have fallen significantly. As I look at the balance sheet, it is much healthier.’ ”

Move to converge just exported crisis [Re: The Auditors]
KPMG has put two major lawsuits behind them – Countrywide and New Century. One major difference between these two cases was that New Century had a bankruptcy examiner’s report while Countrywide did not.


Judge Denies Online Religious Group’s Bid for Church Status [WSJ]
A virtual “church” gets denied the whole “church” thing.

For the rich, ’tis better to give than wait [Reuters]
“With U.S. taxes almost guaranteed to rise next year, the rich have a rare opportunity to distribute some wealth and preserve their fortunes.

A weak economy has led to razor-thin interest rates and beaten-down valuations, which make giving less costly for and potentially more rewarding to heirs. Moreover, the U.S. government is widely expected to rein in a popular tax-avoidance scheme.

‘This is a golden era for shifting estates and giving assets away,’ said Bill Fleming, a financial planner for PricewaterhouseCoopers in Hartford, Connecticut. ‘If you have an estate plan, keep going: Uncle Sam soon will be back in your pocket.’ ”

Wager 101: Students Bet on Their Grades [WSJ]
“The website attracted wagers by 600 students from two colleges last year, said Mr. Gelbart and co-founder Steven Wolf, graduates of Queens College. This month, the site expanded to let students on 36 campuses—including Harvard, Stanford and Brigham Young University—place bets. More than 1,000 new bettors have signed on.

Lisa Lapin, a Stanford University spokeswoman, said school officials were ‘appalled’ when they learned Stanford students could place bets on their grades, adding, ‘the concept of betting on academic performance is contrary to academic development.’

Lance Miller, a finance major at the University of Pennsylvania, says the criticism misses the mark. Mr. Miller, with a GPA of 3.6, won about $80 on two $40 bets that he would earn A’s in business courses.

‘We’re acing classes to make money—isn’t that what they call a win-win?’ said Mr. Miller, 20.”

Facebook’s Places Feature Lets Users Share Their Whereabouts With Friends [Bloomberg]
“Services that help Web users share their whereabouts and find nearby friends could generate as much as $4.1 billion in annual ad sales by 2015, according to Borrell Associates. The features can help marketers more easily target customers — say, by reaching shoppers when they’re close to making a purchase.”

Accounting News Roundup: More Execs Say Benefits Sarbanes-Oxley Outweigh Costs; New Jersey Millionaire Tax Fails; Has the SEC Learned Anything? | 06.22.10

As Congress Mulls SOX Exemption, Survey Suggests Acceptance [Compliance Week]
Just when Sarbanes-Oxley compliance was about to get torpedoed by the financial reform bill, a new study comes out that shows companies are starting to see benefits from the legislation, “In its 2010 Sarbanes-Oxley compliance survey, Protiviti says 70 percent of executives in at least their fourth year of working to comply with Sarbanes-Oxley say they believe the benefits outweigh the costs. That’s a big swing from the first year the firm asked the same question and heard only 39 percenbenefits greater than the costs.”


Showdown Over Strippers [WSJ]
Some people in the Show Me State are not interested in living up to that name, “Last month, the Republican-controlled legislature passed one of the nation’s toughest state laws aimed at strip clubs and other adult-entertainment venues. It would ban nude dancing and the serving of alcohol in adult cabarets, force strip clubs to close at midnight and forbid seminude dancers to touch patrons.”

The legislation is currently awaiting sign/veto from MO Governor Jay Nixon.

Opponents argue that the state’s very economic recovery is at stake, “Club owners and dancers say that the venues rarely attract crime, and that the new rules would be so strict that hundreds of jobs and millions of dollars in state revenue could be lost at a time when Missouri’s economy is struggling to recover from the recession.”

JP Morgan Names Doug Braunstein CFO in Shake-Up [AP]
“JPMorgan Chase said Tuesday it is shuffling the positions of three executives, including naming a new chief financial officer. The shake up is part of a program JPMorgan Chase has put in place to have executives work across multiple divisions to broaden their experience. Doug Braunstein is taking over as CFO. He was previously head of the bank’s investment banking division in the Americas. Braunstein, 49, replaces Michael Cavanagh, who had served as CFO since 2004. Cavanagh was named head of the bank’s treasury and securities services business.”

Tropical Storm May Pose Threat to BP Spill Cleanup [Bloomberg]
The first storm of the Atlantic hurricane season may enter the Gulf of Mexico as soon as next week, possibly disrupting BP Plc’s efforts to clean up the worst oil spill in U.S. history.

Thunderstorms in the Caribbean may strengthen into a tropical storm this week before heading into the Gulf between Mexico and Cuba, said Jim Rouiller, a senior energy meteorologist at Planalytics Inc. in Berwyn, Pennsylvania.

“The first named tropical storm of the 2010 season appears more likely to form over the northwestern Caribbean late this week and will go on to represent a formidable threat to the Gulf, along with heightening concerns about the oil slick,” Rouiller said in an e-mail yesterday.

Forecasters are predicting this year’s Atlantic hurricane season, which runs from June 1 to Nov. 30, may be among the most active on record and hamper the U.K. oil company’s efforts to plug the leaking well. AccuWeather Inc. forecast at least three storms will move through the region affected by the spill.

New Jersey Democrats fail to extend millionaires tax [Reuters]
Garden State millionaires rejoice!

SEC Crazy Talk [Portfolio/Gary Weiss]
Sam Antar recently turned over 37,000 documents to the Securities and Exchange Commission but not because the SEC was getting nostalgic for the Crazy Eddie days.

The SEC wanted documents, emails etc. from both Antar and Fraud Discovery Institute founder Barry Minkow on companies that have been covered by both men. The information relates mostly from information obtained from short-sellers. However, Gary Weiss writes that the SEC also asked for emails that the two exchanged with two reporters and from Antar’s ex-wife.

Gary thinks that this poking around by the Commission is all too familiar, “Well, I think what we may be seeing is a repeat of the [David] Einhorn fiasco, and then some,” referring to the SEC’s investigation into Einhorn’s criticism and short-selling of companies.

Einhorn was eventually vindicated and the companies – most notably Allied Capital – outed for their shady practices. Why the SEC is digging around the very people trying to help them isn’t quite clear but then again the SEC doesn’t have the greatest track record.

While the World Implodes, Let’s Bicker About Accounting Program Rankings

Despite your 401k taking a deuce and the entire continent of Europe about to sink into the Atlantic, the Bloomberg Businessweek Business School undergraduate speciality rankings are out and the accounting rankings are, shall we say, interesting. Maybe no one is that worried about it but if sports play any part in your like/dislike of a particular school, then there should be a few words:

1 University of Notre Dame (Mendoza)
2 Brigham Young University (Marriott)
3 Emory University (Goizueta)
4 University of North Carolina – Chgler)
5 Wake Forest University
6 Lehigh University
7 Boston College (Carroll)
8 University of California – Berkeley (Haas)
9 University of San Diego
10 Southern Methodist University (Cox)


11 Babson College
12 University of Washington (Foster)
13 University of Richmond (Robins)
14 Villanova University
15 Case Western Reserve University (Weatherhead)
16 University of Texas – Austin (McCombs)
17 University of Virginia (McIntire)
18 Cornell University
19 College of William & Mary (Mason)
20 New York University (Stern)
21 University of Southern California (Marshall)
22 Tulane University (Freeman)
23 Fordham University
24 Georgia Institute of Technology
25 Loyola University – Chicago
26 University of Illinois – Urbana Champaign
27 Ohio University
27 University of Denver (Daniels)
29 University of Texas – Dallas
30 University of South Carolina (Moore)
31 University of Connecticut
32 Boston University
33 Santa Clara University
34 University of Maryland (Smith)
35 Indiana University (Kelley)
36 Syracuse University (Whitman)
37 Washington University – St. Louis (Olin)
38 Binghamton University
39 University of Pennsylvania (Wharton)
40 Texas Christian University (Neeley)
41 University of Miami
42 University of Missouri – Columbia (Trulaske)
43 University of Michigan (Ross)
44 North Carolina State University
45 University of Wisconsin – Madison
46 Texas A&M University (Mays)
47 The College of New Jersey
48 University of Minnesota (Carlson)
49 Miami University (Farmer)
50 University of Georgia (Terry)
51 Massachusetts Institute of Technology (Sloan)
52 University of Delaware (Lerner)
53 Ohio Northern University (Dicke)
54 Seattle University (Albers)
55 Northern Illinois University
56 Michigan State University (Broad)
57 Georgetown University (McDonough)
58 California Polytechnic State University (Orfalea)
59 Loyola College in Maryland (Sellinger)
60 University at Buffalo
61 Bentley University
62 DePaul University
63 University of Iowa (Tippie)
64 Drexel University (LeBow)
65 Northeastern University
66 Marquette University
67 St. Joseph’s University (Haub)
68 University of Pittsburgh
69 University of Utah (Eccles)
70 University of Oregon (Lundquist)
71 Seton Hall University (Stillman)
72 Bowling Green State University
73 Kansas State University
74 Colorado State University
75 Louisiana State University (Ourso)
76 Baylor University (Hankamer)
77 University of Oklahoma (Price)
78 University of Colorado – Boulder (Leeds)
79 University of Massachusetts – Amherst (Isenberg)
80 James Madison University
81 George Washington University
82 University of Tennessee – Chattanooga
83 University of Houston (Bauer)
84 Xavier University (Williams)
85 Florida State University
86 John Carroll University (Boler)
87 University of Hawaii (Shidler)
88 Arizona State University (Carey)
89 Florida International University
90 University of Louisville
91 Bryant University
92 Rensselaer Polytechnic Institute (Lally)
93 Purdue University (Krannert)
94 Illinois State University
95 University of Arizona (Eller)
96 Texas Tech University (Rawls)
97 Hofstra University (Zarb)
98 Ohio State University (Fisher)
99 Clemson University
100 University of Florida (Warrington)
101 University of Akron
102 University of Arkansas – Fayetteville (Walton)
103 Butler University
104 University of Nebraska – Lincoln
105 University of Illinois – Chicago
106 University of Central Florida
107 Virginia Polytechnic Institute and State University (Pamplin)
108 Carnegie Mellon University (Tepper)
109 Temple University (Fox)
110 Pennsylvania State University (Smeal)
111 Clarkson University

Marcum Officially Announces Purchase of UHY New England Locations

Marcum officially announced its take over of the UHY Advisors locations in New England that we mentioned last week.

We can only assume that the 150 employees at new Marcum offices passed the due diligence with flying colors. According to the press release, the new locations will make 15 total for Marcum with over 950 total employees and 117 partners.

Marcum LLP Expands Practice into New England

Members of New England Practices of UHY Advisors and UHY LLP Join Marcum

April 16, 2010, New York, NY- Marcum LLP, one of the largest independent public accounting and advisory services firms in the nation, announced that it has acquired the New England practices of UHY Advisors and UHY LLP effective April 16, 2010. Marcum will now have offices in three of New England’s major business markets – Boston, Massachusetts, and New Haven and Hartford, Connecticut.

The members of the New England practices of UHY Advisors and UHY LLP who are joining Marcum have a 30-year history in the New England market providing audit, tax and business consulting services in the construction, high technology, financial services, healthcare, manufacturing, not-for-profit and higher education arenas. Marcum LLP, with its outstanding reputation at the national and regional levels, has strong service niches in SEC registrants, alternative investment partnerships, family office services, business valuation, bankruptcies and receiverships and services for the government and public sector.

“Expansion into the New England region increases Marcum’s presence in the Northeast and offers our clients greater resources and new areas of expertise,” stated Jeffrey M. Weiner, Managing Partner of Marcum LLP. “The new locations tie in directly with our growth plan and will help us meet the changing accounting, tax and consulting needs of our clients.”

The entire 150 plus team from the New England practices of UHY Advisors and UHY LLP will join Marcum. With this latest development, Marcum now has more than 950 professionals, including 117 partners, in 15 locations throughout New York, New Jersey, Connecticut, Pennsylvania, Florida, Massachusetts and Grand Cayman.

“The members of the New England practices of UHY Advisors and UHY LLP are looking forward to the growth opportunities this transaction will bring in New England and beyond,” stated Anthony Scillia, who will serve as Managing Partner of Marcum’s New England Region. “Marcum’s geographic footprint, devotion to technical excellence and extensive range of professional services will bring added value to our existing clients and increase our ability to serve new clients in the New England area.”

Free Ice Cream Outside the IRS Building Should Briefly Distract Any Protesters

Just when you thought things couldn’t get more exciting in the world of overeating, Dairy Queen has announced that it will be handing out free ice cream in front of the IRS Building in DC tomorrow at 10th St. and Pennsylvania Ave. NW.

According to the Washington Business Journal, the Blizzardmobile will be parked outside and mini blizzards will handed out to “taxpayers and accountants” (why didn’t they just say “everyone”?).


This momentous occasion not only marks the end of the traditional return filing season but it is also marking the Blizzard’s 25th birthday. This might, just might, cajole some Tea Partiers to leave their homes as opposed to marching on the Internet (especially since there doesn’t appear to be a limit per taxpayer/accountant).

However! The window of opportunity is short and you’ll only have from noon to 1 pm to get your miniature cup of refined sugary goodness. One might think that since Doug Shulman might be anti-pizza that he also might have something against blended ice cream confections. But on the other hand, Warren Buffet didn’t get filthy rich by giving away crackalicious deserts for free now, did he?

Free ice cream outside IRS building [Washington Business Journal]

Tax Amnesty Programs: A Gold Mine for States or Bad Policy?

More news out of the land of Quakers, as Pennsylvania has announced a tax amnesty program for delinquent taxpayers. The program allows tax deadbeats to pay their back taxes but all the penalties and half of the interest will be waived. Pennsylvania’s will begin on April 26th and be open for 54 days.

The AP reports that the state could generate an additional $190 million in revenues for the state which, like pretty every state, is in a dire need of revenues.


For those that participate in the amnesty program, they’ll have to be on good behavior going forward, “participants who fall into delinquency again within two years may be required to pay the full penalties and interest that had been waived. Also, once the amnesty period ends, a special, ‘nonparticipation penalty’ of 5 percent will be levied against delinquent taxes, penalties, and interest not paid in full.”

Participants will also not be eligible for future amnesty programs. Sounds like a novel idea right?

Well, maybe not.

Our resident tax guru, Joe Kristan, is not a fan of tax amnesty programs saying, “they become an expectation and they make chumps of compliant taxpayers.”

Joe’s home state of Iowa passed a tax amnesty program back in 2007 and his sentiments haven’t changed since then, “[Iowa is] adding more loopholes targeted tax incentives to its tax law while doing nothing to lower rates or broaden the tax base.”

But Joe, being the silver lining-type, also notes, “those of us who charge for tax work by the hour, it truly helps our economic development during an otherwise slow time of year.” So tax pros will take those new clients despite the bad policy that encouraged them.

Regardless of the bump in off-season revenues, the Tax Policy Blog (who Joe cites) noted that these programs are of little value if reform doesn’t accompany it, “if lawmakers decide to implement tax amnesty programs, they should be accompanied by fundamental tax reform that makes the tax code simpler and easier to comply with.”

So it appears that tax amnesty is nothing more than a duct tape solution from a policy stand point but it certainly makes good pandering fodder in an election year.

Pa. will offer tax amnesty [AP via Philadelphia Inquirer]

PICPA: You Need a CPA to Get Your Breathlessly Judgmental Friend to Shut Up

The latest edition of CPA video marketing, courtesy of the Pennsylvania Institute of CPAs takes another reality TV angle, parodying the show “What Not to Wear”. While our suggestion to incorporate Lady Gaga or the cast of Jersey Shore seems to have been overlooked for the time being, we’ve been assured by the PICPA VP of Communications that our suggestions are being considered. We won’t push the issue, as there may be better ideas.

Like perhaps, “It’s Always Sunny in Philadelphia”??? It’s a natural fit, amiright?

Sorry. We’re done submitting ideas. Here’s the latest:


Our tepid enthusiasm for this particular video is probably due to the fact that we’ve never seen “What Not to Wear” although we did love the “Breathlessly Judgmental Friend”. Seriously, doesn’t everyone have a breathlessly judgmental friend that you just want to punch in face?

While this parody wasn’t our favorite, we understand that there are CPAs in the Keystone State that probably enjoy this particular spin and it still beats anything we’ve seen from an accounting firm. Keep up the good work Team PICPA.

More PICPA Videos:
Latest PICPA Video: CPAs Are Like Snuggies
Pennsylvania CPAs Insist Accountants Are Funny in New Videos. Which Are Funny

Latest PICPA Video: CPAs Are Like Snuggies

The Quaker CPAs have rolled out their latest pitch for “I need a CPA!” and once again, we’re impressed. Fully aware of the Snuggie phenomenon that is still sweeping the nation, the creative team at PAICPA saw an opportunity (even if for just a brief moment):


Like a blanket. With sleeves.

Now that hairy myths, the 1980s drug war, and reality TV/infomercials have been covered, is the next logical step is for the team to incorporate Lady Gaga and/or “The Situation”? Perhaps not but at the very least, it’s worth exploring.

Earlier
: Pennsylvania CPAs Insist Accountants Are Funny in New Videos. Which Are Funny

The Full Text of Joseph Stack’s Manifesto: Details His Struggles With IRS

It would be very easy to use words like “insane” and “rambling” to describe the manifesto/suicide note left by alleged the alleged pilot of the plane that crashed in Austin today. The actions taken by him were undoubtedly insane and the note he left today shows that he was sick of struggling.

The long/short of it is that Joseph Stack was an engineer who was grappling with the IRS over his status as independent contractas denied employee status and was thus subject to taxes on income that he had not previously remitted to the IRS.

When an engineer (or any other consultant for that matter) goes independent they’re not “employees” thus they don’t have tax withheld from their pay (ordinarily via a W-2) and companies/clients report the payment to the IRS via 1099 (often time with nothing withheld). If engineers not careful and report a lot of income and no tax withheld the IRS will come back and say “where the hell is ours?”

The other situation is if they work almost exclusively for one “client” the IRS might say, “you’re really an employee because you don’t have income from other companies.” The Company then gets in trouble because they should be remitting payroll taxes (Social Security/Medicare) and the employee could get in trouble if they aren’t making estimated tax payments.


Engineers often have to face the facts as to whether or not they are truly an independent contractors or not and Stack seems to have struggled with this for many years. The amendment to the tax in 1986 was what haunted him, “The bottom line is that they may as well have put my name right in the text of section (d). Moreover, they could only have been more blunt if they would have came out and directly declared me a criminal and non-citizen slave. Twenty years later, I still can’t believe my eyes.”

Obviously, this was very personal for him.

Without all the facts surrounding his professional situation, it’s impossible to know if Stack’s frustrations were legitimate but his note has brought out the extreme political factions Headlines like this: “Austin Plane Crash Labeled ‘Right-Wing Domestic Terror Attack’ By Obama Supporters” are popping up already and message boards are filling up with comments like:

“YOU need to take an ounce of responsibility. All you repubbers[sic] are complaining about Bush but still putting all the blame for Bush’s errors on Obama or “The Government”. This plane guy decided to attack the Government. Pilot-guy sounds like a thousand posts I have read on thee[sic] boards.”


“There is no point in ‘dialogue’ with you right wingers, you guys are the taliban of america.”

Hell, there’s already a Facebook fan page set up touting the “The philosophy of Joe Stack” which if you read one of his last sentences, shows just how fed up and desperate he had become, “Sadly, though I spent my entire life trying to believe it wasn’t so, but violence not only is the answer, it is the only answer”

If you’re reading this, you’re no doubt asking yourself, “Why did this have to happen?” The simple truth is that it is complicated and has been coming for a long time. The writing process, started many months ago, was intended to be therapy in the face of the looming realization that there isn’t enough therapy in the world that can fix what is really broken. Needless to say, this rant could fill volumes with example after example if I would let it. I find the process of writing it frustrating, tedious, and probably pointless… especially given my gross inability to gracefully articulate my thoughts in light of the storm raging in my head. Exactly what is therapeutic about that I’m not sure, but desperate times call for desperate measures.

We are all taught as children that without laws there would be no society, only anarchy. Sadly, starting at early ages we in this country have been brainwashed to believe that, in return for our dedication and service, our government stands for justice for all. We are further brainwashed to believe that there is freedom in this place, and that we should be ready to lay our lives down for the noble principals represented by its founding fathers. Remember? One of these was “no taxation without representation”. I have spent the total years of my adulthood unlearning that crap from only a few years of my childhood. These days anyone who really stands up for that principal is promptly labeled a “crackpot”, traitor and worse.

While very few working people would say they haven’t had their fair share of taxes (as can I), in my lifetime I can say with a great degree of certainty that there has never been a politician cast a vote on any matter with the likes of me or my interests in mind. Nor, for that matter, are they the least bit interested in me or anything I have to say.

Why is it that a handful of thugs and plunderers can commit unthinkable atrocities (and in the case of the GM executives, for scores of years) and when it’s time for their gravy train to crash under the weight of their gluttony and overwhelming stupidity, the force of the full federal government has no difficulty coming to their aid within days if not hours? Yet at the same time, the joke we call the American medical system, including the drug and insurance companies, are murdering tens of thousands of people a year and stealing from the corpses and victims they cripple, and this country’s leaders don’t see this as important as bailing out a few of their vile, rich cronies. Yet, the political “representatives” (thieves, liars, and self-serving scumbags is far more accurate) have endless time to sit around for year after year and debate the state of the “terrible health care problem”. It’s clear they see no crisis as long as the dead people don’t get in the way of their corporate profits rolling in.

And justice? You’ve got to be kidding!

How can any rational individual explain that white elephant conundrum in the middle of our tax system and, indeed, our entire legal system? Here we have a system that is, by far, too complicated for the brightest of the master scholars to understand. Yet, it mercilessly “holds accountable” its victims, claiming that they’re responsible for fully complying with laws not even the experts understand. The law “requires” a signature on the bottom of a tax filing; yet no one can say truthfully that they understand what they are signing; if that’s not “duress” than what is. If this is not the measure of a totalitarian regime, nothing is.

How did I get here?

My introduction to the real American nightmare starts back in the early ‘80s. Unfortunately after more than 16 years of school, somewhere along the line I picked up the absurd, pompous notion that I could read and understand plain English. Some friends introduced me to a group of people who were having ‘tax code’ readings and discussions. In particular, zeroed in on a section relating to the wonderful “exemptions” that make institutions like the vulgar, corrupt Catholic Church so incredibly wealthy. We carefully studied the law (with the help of some of the “best”, high-paid, experienced tax lawyers in the business), and then began to do exactly what the “big boys” were doing (except that we weren’t steeling from our congregation or lying to the government about our massive profits in the name of God). We took a great deal of care to make it all visible, following all of the rules, exactly the way the law said it was to be done.

The intent of this exercise and our efforts was to bring about a much-needed re-evaluation of the laws that allow the monsters of organized religion to make such a mockery of people who earn an honest living. However, this is where I learned that there are two “interpretations” for every law; one for the very rich, and one for the rest of us… Oh, and the monsters are the very ones making and enforcing the laws; the inquisition is still alive and well today in this country.

That little lesson in patriotism cost me $40,000+, 10 years of my life, and set my retirement plans back to 0. It made me realize for the first time that I live in a country with an ideology that is based on a total and complete lie. It also made me realize, not only how naive I had been, but also the incredible stupidity of the American public; that they buy, hook, line, and sinker, the crap about their “freedom”… and that they continue to do so with eyes closed in the face of overwhelming evidence and all that keeps happening in front of them.

Before even having to make a shaky recovery from the sting of the first lesson on what justice really means in this country (around 1984 after making my way through engineering school and still another five years of “paying my dues”), I felt I finally had to take a chance of launching my dream of becoming an independent engineer.

On the subjects of engineers and dreams of independence, I should digress somewhat to say that I’m sure that I inherited the fascination for creative problem solving from my father. I realized this at a very young age.

The significance of independence, however, came much later during my early years of college; at the age of 18 or 19 when I was living on my own as student in an apartment in Harrisburg, Pennsylvania. My neighbor was an elderly retired woman (80+ seemed ancient to me at that age) who was the widowed wife of a retired steel worker. Her husband had worked all his life in the steel mills of central Pennsylvania with promises from big business and the union that, for his 30 years of service, he would have a pension and medical care to look forward to in his retirement. Instead he was one of the thousands who got nothing because the incompetent mill management and corrupt union (not to mention the government) raided their pension funds and stole their retirement. All she had was social security to live on.

In retrospect, the situation was laughable because here I was living on peanut butter and bread (or Ritz crackers when I could afford to splurge) for months at a time. When I got to know this poor figure and heard her story I felt worse for her plight than for my own (I, after all, I thought I had everything to in front of me). I was genuinely appalled at one point, as we exchanged stories and commiserated with each other over our situations, when she in her grandmotherly fashion tried to convince me that I would be “healthier” eating cat food (like her) rather than trying to get all my substance from peanut butter and bread. I couldn’t quite go there, but the impression was made. I decided that I didn’t trust big business to take care of me, and that I would take responsibility for my own future and myself.

Return to the early ‘80s, and here I was off to a terrifying start as a ‘wet-behind-the-ears’ contract software engineer… and two years later, thanks to the fine backroom, midnight effort by the sleazy executives of Arthur Andersen (the very same folks who later brought us Enron and other such calamities) and an equally sleazy New York Senator (Patrick Moynihan), we saw the passage of 1986 tax reform act with its section 1706.

For you who are unfamiliar, here is the core text of the IRS Section 1706, defining the treatment of workers (such as contract engineers) for tax purposes. Visit this link for a conference committee report (http://www.synergistech.com/1706.shtml#ConferenceCommitteeReport) regarding the intended interpretation of Section 1706 and the relevant parts of Section 530, as amended. For information on how these laws affect technical services workers and their clients, read our discussion here (http://www.synergistech.com/ic-taxlaw.shtml).

SEC. 1706. TREATMENT OF CERTAIN TECHNICAL PERSONNEL.

(a) IN GENERAL – Section 530 of the Revenue Act of 1978 is amended by adding at the end thereof the following new subsection:

(d) EXCEPTION. – This section shall not apply in the case of an individual who pursuant to an arrangement between the taxpayer and another person, provides services for such other person as an engineer, designer, drafter, computer programmer, systems analyst, or other similarly skilled worker engaged in a similar line of work.

(b) EFFECTIVE DATE. – The amendment made by this section shall apply to remuneration paid and services rendered after December 31, 1986.

Note:
• “another person” is the client in the traditional job-shop relationship.
• “taxpayer” is the recruiter, broker, agency, or job shop.
• “individual”, “employee”, or “worker” is you.

Admittedly, you need to read the treatment to understand what it is saying but it’s not very complicated. The bottom line is that they may as well have put my name right in the text of section (d). Moreover, they could only have been more blunt if they would have came out and directly declared me a criminal and non-citizen slave. Twenty years later, I still can’t believe my eyes.

During 1987, I spent close to $5000 of my ‘pocket change’, and at least 1000 hours of my time writing, printing, and mailing to any senator, congressman, governor, or slug that might listen; none did, and they universally treated me as if I was wasting their time. I spent countless hours on the L.A. freeways driving to meetings and any and all of the disorganized professional groups who were attempting to mount a campaign against this atrocity. This, only to discover that our efforts were being easily derailed by a few moles from the brokers who were just beginning to enjoy the windfall from the new declaration of their “freedom”. Oh, and don’t forget, for all of the time I was spending on this, I was loosing income that I couldn’t bill clients.

After months of struggling it had clearly gotten to be a futile exercise. The best we could get for all of our trouble is a pronouncement from an IRS mouthpiece that they weren’t going to enforce that provision (read harass engineers and scientists). This immediately proved to be a lie, and the mere existence of the regulation began to have its impact on my bottom line; this, of course, was the intended effect.

Again, rewind my retirement plans back to 0 and shift them into idle. If I had any sense, I clearly should have left abandoned engineering and never looked back.

Instead I got busy working 100-hour workweeks. Then came the L.A. depression of the early 1990s. Our leaders decided that they didn’t need the all of those extra Air Force bases they had in Southern California, so they were closed; just like that. The result was economic devastation in the region that rivaled the widely publicized Texas S&L fiasco. However, because the government caused it, no one gave a shit about all of the young families who lost their homes or street after street of boarded up houses abandoned to the wealthy loan companies who received government funds to “shore up” their windfall. Again, I lost my retirement.

Years later, after weathering a divorce and the constant struggle trying to build some momentum with my business, I find myself once again beginning to finally pick up some speed. Then came the .COM bust and the 911 nightmare. Our leaders decided that all aircraft were grounded for what seemed like an eternity; and long after that, ‘special’ facilities like San Francisco were on security alert for months. This made access to my customers prohibitively expensive. Ironically, after what they had done the Government came to the aid of the airlines with billions of our tax dollars … as usual they left me to rot and die while they bailed out their rich, incompetent cronies WITH MY MONEY! After these events, there went my business but not quite yet all of my retirement and savings.

By this time, I’m thinking that it might be good for a change. Bye to California, I’ll try Austin for a while. So I moved, only to find out that this is a place with a highly inflated sense of self-importance and where damn little real engineering work is done. I’ve never experienced such a hard time finding work. The rates are 1/3 of what I was earning before the crash, because pay rates here are fixed by the three or four large companies in the area who are in collusion to drive down prices and wages… and this happens because the justice department is all on the take and doesn’t give a fuck about serving anyone or anything but themselves and their rich buddies.

To survive, I was forced to cannibalize my savings and retirement, the last of which was a small IRA. This came in a year with mammoth expenses and not a single dollar of income. I filed no return that year thinking that because I didn’t have any income there was no need. The sleazy government decided that they disagreed. But they didn’t notify me in time for me to launch a legal objection so when I attempted to get a protest filed with the court I was told I was no longer entitled to due process because the time to file ran out. Bend over for another $10,000 helping of justice.

So now we come to the present. After my experience with the CPA world, following the business crash I swore that I’d never enter another accountant’s office again. But here I am with a new marriage and a boatload of undocumented income, not to mention an expensive new business asset, a piano, which I had no idea how to handle. After considerable thought I decided that it would be irresponsible NOT to get professional help; a very big mistake.

When we received the forms back I was very optimistic that they were in order. I had taken all of the years information to Bill Ross, and he came back with results very similar to what I was expecting. Except that he had neglected to include the contents of Sheryl’s unreported income; $12,700 worth of it. To make matters worse, Ross knew all along this was missing and I didn’t have a clue until he pointed it out in the middle of the audit. By that time it had become brutally evident that he was representing himself and not me.

This left me stuck in the middle of this disaster trying to defend transactions that have no relationship to anything tax-related (at least the tax-related transactions were poorly documented). Things I never knew anything about and things my wife had no clue would ever matter to anyone. The end result is… well, just look around.

I remember reading about the stock market crash before the “great” depression and how there were wealthy bankers and businessmen jumping out of windows when they realized they screwed up and lost everything. Isn’t it ironic how far we’ve come in 60 years in this country that they now know how to fix that little economic problem; they just steal from the middle class (who doesn’t have any say in it, elections are a joke) to cover their asses and it’s “business-as-usual”. Now when the wealthy fuck up, the poor get to die for the mistakes… isn’t that a clever, tidy solution.

As government agencies go, the FAA is often justifiably referred to as a tombstone agency, though they are hardly alone. The recent presidential puppet GW Bush and his cronies in their eight years certainly reinforced for all of us that this criticism rings equally true for all of the government. Nothing changes unless there is a body count (unless it is in the interest of the wealthy sows at the government trough). In a government full of hypocrites from top to bottom, life is as cheap as their lies and their self-serving laws.

I know I’m hardly the first one to decide I have had all I can stand. It has always been a myth that people have stopped dying for their freedom in this country, and it isn’t limited to the blacks, and poor immigrants. I know there have been countless before me and there are sure to be as many after. But I also know that by not adding my body to the count, I insure nothing will change. I choose to not keep looking over my shoulder at “big brother” while he strips my carcass, I choose not to ignore what is going on all around me, I choose not to pretend that business as usual won’t continue; I have just had enough.

I can only hope that the numbers quickly get too big to be white washed and ignored that the American zombies wake up and revolt; it will take nothing less. I would only hope that by striking a nerve that stimulates the inevitable double standard, knee-jerk government reaction that results in more stupid draconian restrictions people wake up and begin to see the pompous political thugs and their mindless minions for what they are. Sadly, though I spent my entire life trying to believe it wasn’t so, but violence not only is the answer, it is the only answer. The cruel joke is that the really big chunks of shit at the top have known this all along and have been laughing, at and using this awareness against, fools like me all along.

I saw it written once that the definition of insanity is repeating the same process over and over and expecting the outcome to suddenly be different. I am finally ready to stop this insanity. Well, Mr. Big Brother IRS man, let’s try something different; take my pound of flesh and sleep well.

The communist creed: From each according to his ability, to each according to his need.

The capitalist creed: From each according to his gullibility, to each according to his greed.

Joe Stack (1956-2010)
02/18/2010

Deloitte Tops BusinessWeek’s ‘Best Places to Intern’ List, KPMG Gets the Silver

Thumbnail image for confidence.jpgAll right Deloitte. What are you paying BusinessWeek? Seriously, you take the “Start Your Career” crown and now you’re just getting greedy with the arbitrary magazine list championships. You’re risking backlash if you continue to dominate:

Our ranking of the best U.S.companies for undergraduate internships highlights employers who have put together an outstanding experience for students. Accounting firm Deloitte tops our list, followed by rivals KPMG (No.2) and Ernst & Young (No.3).The last of the Big Four accounting companies, PricewaterhouseCoopers, comes in at No.5, right behind consumer goods giant Procter & Gamble.


This is getting ridiculous BW. Four out of the top five spots go to Big 4? Do they really have an unbreakable stranglehold on your list methodology?

To compile our list, we judged employers based on survey data from 60 career services directors around the country and a separate survey completed by each employer. We also consider how each employer fared in the annual Best Places to Launch a Career, our ranking of top U.S. entry-level employers released in September of each year.

So, the employer’s own surveys are judged and you consider a list previously issued by you? Unless we’ve been misled, those employer might not have gone so well. As for considering your own list to make a new list, does that mean that this is basically the same list but with a different name?
Putting the methodology hocus-pocus aside, we notice that while Deloitte took home the gold medal, KPMG got the big talk up for their global rotations:

Two years ago KPMG realized it had to make a substantial investment in its internship program if it hoped to woo top students from larger consulting and accounting firms. So the company decided to offer interns an opportunity to gain valuable overseas experience. KPMG lets student interns spend four weeks in the U.S. and four weeks abroad. “It’s extremely competitive [to recruit top students], and this is a differentiator,” says Blane Ruschak, executive director of campus recruiting at KPMG.
A chance to work overseas is precisely what appealed to Andrew Fedele, 21, an accounting and economics double major at Pennsylvania State University. “I was sold pretty much when I first read about [KPMG’s] global internship program.” He spent four weeks in Chicago and four weeks in Johannesburg, South Africa. “South Africa has just such an interesting history. To go there and live with the locals and work with them was really exciting.”
What did KPMG get in return? Exactly what it hoped: Fedele accepted a full-time job almost immediately after KPMG made its offer at the end of the summer.

The article does manage to point out that “KPMG…hired nearly 900 fewer entry-level employees this year. But 91% of those full-time hires were former interns, whereas only 71% of new hires in 2008 were interns.”
The trend of fewer non-interns getting hired on at Big 4 (in this case KPMG) firms was something that we touched on in August, although BW doesn’t bother mentioning that it’s most likely due to the slashing of the firm’s hiring budgets.
We can’t give this latest meaningless index any more thought. If you’ve got an opinion on the latest jumble of the Big 4 in a BW list, leave them in the comments.
Best Places to Intern [BBW]

Grant Thornton Names a New COO*

Thumbnail image for Thumbnail image for Grant-thornton-logo.JPGGrant Thornton named Lou Grabowsky as its new Chief Operating Officer today. Grabs starts his new gig the same day as Stephen Chipman and Ed Nusbaum start in theirs so we’re guessing that will be quite the rager to kick off the decade.
LG takes over the day-to-day responsibilities at GT which no doubt includes overseeing the press release elves:

“Lou’s credentials are impeccable, and he will serve the firm with his characteristic commitment to excellence as Chief Operating Officer for Grant Thornton LLP,” says Stephen Chipman, Grant Thornton LLP CEO-elect. “His personal and professional strengths complement my own, and we have already been working on transition issues and other matters of high priority for the U.S. firm.”

Whoa, Steve-o, feeling ignored? We won’t forget that you’ve got strengths buddy. You didn’t get the big chair for nothing.
Back to the real reason for this little post, Grabs is a graduate of The Pennsylvania State University and an Arthur Andersen survivor. He was even the partner in charge of assurance services for the Dallas office from ’91-’97 so he may have known David Duncan. SCANDAL!
Just joshin’ you Lou. Enjoy the new gig.
Lou Grabowsky named Chief Operating Officer of Grant Thornton LLP [Press Release]
*Managed to only mention ‘Global Six Accounting Firm’ once

Deloitte: Your Source for Decision 2010

Thumbnail image for DTa.jpgElection Day isn’t even over and while most of you probably don’t feel bad about not going to the polls, Deloitte is already getting you amped for next year’s state gubernatorial elections:

[The] 2010 election cycles are shaping up some of the most consequential state elections in decades. Many of the nation’s largest states, from California to Pennsylvania to Florida, will see new governors in 2011. All in all, there will be at least 17 open races for governor, the most in years. Control of state legislatures is also expected to be highly competitive.

Because you can never get started too early on diving into dense policy issues, Deloitte lists seven “featured insights” that will be crucial in “regain[ing] the public’s trust” in 2010. Wow, this firm is looking out for you or what? Thanks Deloitte! You’re better than Fox News!
And just in case you didn’t think Deloitte was serious about getting you informed about the issues, the 2010 site is introduced by none other than Tom Ridge, who — unbeknownst to us — is a Senior Advisor to Deloitte.
One would think that it would be impossible for us to be saturated by election coverage for next year prior to it even starting. BY AN ACCOUNTING FIRM. Deloitte, you’ve outdone yourself.
2010 Gubernatorial Elections [Deloitte]

We Are…ParenteBeard

Thumbnail image for quaker_1.jpgWe know you’ve been anticipating the new name of the merged firm of Parente Randolph and Beard Miller like it was the most recent offspring of Bragelina and we’re happy to report that the two Pennsylvania firms have finally made their decision.
The new firm, which was officially born on October 1st, will be known as ParenteBeard, LLC. Sadly, we were pulling for simply “Beard”, if for no other reason, in honor of Ken Lewis’s sporting of facial hair to work, but what the hell do we know about naming firms? Web CPA quotes their reasoning:

“We selected the name ParenteBeard after considering the collective strengths and attributes of both firms and the significance of this combination,” said [CEO, Bob] Ciaruffoli in a statement. “Our new name honors our histories, while positioning the union as one firm, ParenteBeard.”

Still not convinced about the choice but maybe we don’t know the whole story. Perhaps there’s a serious case of pogonophobia among the top brass. If you’ve got better suggestions for the new firm’s name or discuss your own fear of beards, chinstrap or otherwise, discuss in the comments.
Parente Randolph and Beard Miller Merge into ParenteBeard [Web CPA]

Don’t Raise Those Taxes Just Yet, Timmy!

eraserhead_geithner2.jpgEditor’s note: Adrienne Gonzalez is founder and managing editor of Jr Deputy Accountant as well as regular contributor to leading financial/investment sites like Seeking Alpha and GoldmanSachs666. You see all of her posts for GC by going here. By day, she teaches unlicensed accountants to pass the CPA exames in her copious amounts of freetime in the evening is really none of your business. Follow her adventures in Fedbashing and CPA-wrangling on Twitter @adrigonzo but please don’t show up unannounced at her San Francisco office as she’s got a mean streak. Her favorite FASB is 166.
I don’t know about you guys but when I’m trying to avoid spilling the beans, I’ll skirt around the issue as much as possible. God forbid my words come back to haunt me later, it’s so much easier to be as vague as possible.
Turbo Tim Geithner obviously subscribes to this method as well. Skirting around the issue of a tax increase? Our Treasury Secretary has that little song and dance down.
More after the jump


Politico:

Treasury Secretary Timothy Geithner said in an interview aired Sunday that the administration will do “what’s necessary” to revive the economy, and didn’t rule out new taxes as a means to do so.
“We’re going to have to look at – we’re going to have to do what’s necessary,” Geithner told ABC’s George Stephanopoulos, host of “This Week.”
“Remember the critical thing is people understand that when we have recovery established, led by the private sector, then we have to bring these deficits down very dramatically. We have to bring them down to a level where the amount we’re borrowing from the world is stable at a reasonable level. And that’s going to require some very hard choices. And we’re going to have to do that in a way that does not add unfairly to the burdens that the average American already faces.”

Well what the hell is that supposed to mean? Sounds like a tax increase to me. With our Chinese credit card already cut and record-blowing amounts of Treasury auctions flopping week after week, one can only wonder where we’re going to be forced to make those “hard choices” Geithner is talking about.
Well instead of an across the board tax increase, we have some other ideas for raising the United States’ revenue. Hope you’re listening, Timmy!
Obama Cabinet bikini car wash on Pennsylvania Ave. – Listen, no one wants to see Larry Summers in a bikini, so maybe the fundraising will come from paying him to keep his clothes on.
White House yard sale -Taking a cue from California, the White House could put up all those black Secret Service helicopters up for a deep, deep discount. I’m sure they could pull at least $20 a pop for cardboard cutouts of Bill Clinton that have been gathering dust in the basement
Rent out Ben Bernanke’s industrial strength money printing machine by the hour – Listen, we already know the thing works, why not rent it out to other nations engaged in quantitative easing? I’d say rent it out to Zimbabwe but they might not be able to cover the bill
FOMC cage match fights at Fedquarters – We’ve all heard about dissent at FOMC meetings but what if we kill two birds with one stone – bring new transparency to the monetary policy-setting process AND pull in $75 a ticket to see “El Jefe” Jeff Lacker take on “Helicopter Ben” Bernanke in spandex and Luchador masks? I know I would pay to see that.
If you’ve got other ideas, we’re all ears. And if none of these work, I guess there’s always legalized prostitution. Though I’m not quite sure how well Tim “Eraserhead” Geithner would do as a man whore… Oh well. Tax increase here we come!

Review Comments | 07.20.09

ernst_young.jpgLawyer: Ernst auditing helped sink Hinsdale’s Superior Bank – Plaintiff Alan Schein is still claiming conspiracy on E&Y’s part. [Daily Herald]
Securities Lawsuits Plummet in 2009 – Because they’ve all been filed already [CFO.com]
Stanford case spreads its tendrils – For a Ponz that simply offered CD’s with out of this world interest rates, the international law and jurisdictional aspects will turn your head in knots. [FT.com]
TD Ameritrade Settles Securities Case – “TD Ameritrade Inc. agreed to buy back $456 million of auction-rate securities from its clients as part of a settlement with New York Attorney General Andrew Cuomo, the Securities and Exchange Commission and Pennsylvania securities regulators.” [WSJ]

SEC Still Stonewalling, Considering Slowing Down the PCAOB Even More

The SEC gave Congress a little tease about what happened at the Commission re: totally missing the boat on this Madoff thing. But then again, not really.
Inspector General David Kotz made recommendations about ways that the Commission could improve its oversight over the financial industry because, obv, it had nothing to do with the fact that no one there had the background to detect classic Ponzi schemes.
Some recommendations that Kotz made included giving the PCAOB more oversight including jurisdiction over accounting firms that audit investment advisors and broker-dealers. That’s just what the PCAOB needs, more on its docket because it gets things done so quickly.
Kotz would also like to see an amendment to the Securities Act of 1940 that would require investment managers, including hedge funds, to place their securities with custodians that are registered with a national exchange. Kotz claims that this would prevent investment advisers from fraudulently using the proceeds received from new investors to pay old investors (a la Ponzi).
That’s all fine and dandy but Rep. Paul Kanjorski, of Pennsylvania has been asking for details on the Madoff ball dropping for the last two weeks and the Commission has been stalling. Kotz could only state that the Commission is “proceeding ‘in an expeditious manner.'”
Translation: We don’t have any idea how we missed the biggest Ponzi scheme in history.
Best we can expect, Kotz says, is that the report to be issued by the end of August. Which might be enough time to get Kanjorski involved in a sex scandal and maybe this will all just go away for the Commission.

S.E.C. Previews Its Madoff Report
[DealBook/NYT]