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Accounting News Roundup: KPMG Fired Over Going Concern and How Not to Deal with the IRS | 02.24.16

Ceres fires KPMG over financial report [PBT]
Going concern opinions in audit reports are becoming more rare and situations like this one might — MIGHT! — have something to do with it:

Ceres fired KPMG because of a disagreement over issues concerning language in its past two yearly reports.

“KPMG’s reports contained a paragraph stating that ‘The Company incurred recurring losses and expects the current level of cash and cash equivalents will only be sufficient to fund operations until January 2016 which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty,’” Cere’s Feb. 23 filing said.

KPMG’s conclusion appeared several times in Ceres’ 2014 and 2015 annual reports. Ceres officials did not agree with KPMG’s conclusion and decided to make a change.

It never ceases to amaze me when a client fires an audit firm over a going concern opinion. "Um, guys, we know you're supposed to be objective and independent and whatever, but we both know that's nonsense, so just give us the clean opinion and we'll pay you this ridiculous sum of money we agreed to." And it just so happens they have an audit partner who says, "Um, sorry, can't do that. There really is doubt."

In the case of Ceres, they swallowed that for a couple of years but now decided they were tired of agreeing to disagree. None of that makes it into the 8-K, of course, which is a shame.   
 

Man to face charges after telling IRS to ‘Go f–k yourself’ [NYP]
If you and your nephew have the same name and live at the same address, I'll bet the mail would get mixed up every once in a while. Such was the case of a letter from the IRS for Enrique Santiago: 

The IRS was trying to collect $3,032.57 in unpaid taxes from Santiago’s nephew — named Enrique A. Santiago — who had moved out a month earlier after a “physical altercation” with his uncle.

The uncle returned the letter to sender, but not before adding a flurry of his own X-rated messages under the guise of his nephew.

“I do not live at this address anymore so go f–k yourself,” Santiago allegedly scrawled on the first page of the IRS notice.

Although I'm sure the IRS receives correspondence like this frequently, most of those don't include a white powder, which Mr. Santiago's did. He's in a bit of trouble now.

Previously, on Going Concern…
I wrote about startup CFOs. And in Open Items, someone wants to know about being paid overtime.

In other news: