In case you forgot, Sir David Tweedie is retiring next week as the head of the IASB. It’s been quite a run for Tweeds and good money says his friends at the Board will send him off in style worthy of a knighted Scotsman (read: getting him blind drunk and some hooliganism). He’s had many accomplishments in his time running the IASB but there’s one goal that will ultimately elude him when he hangs up the eyeshade. That is the dream of converged accounting standards. It certainly has been a noble quest worthy of his accounting “rock star” status but you can’t help but imagine that you might happen across SDT in a pub muttering to himself over a pint about “the one that got away.”
Sir David’s biggest project has been convergence of IASB’s rules with those of America’s Financial Accounting Standards Board (FASB). The two had set a June deadline, timed to coincide with Sir David’s retirement, to iron out their differences. That won’t be met.
But you can’t do it all. So now the task of accounting rule copulation will now fall to Dutchman Hans Hoogevorst but if Sir David is feeling a little like a failure, he should know that there are people out there still think he’s pretty badass since he got the SEC to come to the table:
Sir David should not be too disappointed that convergence is not complete. That the process has come as far as it has—and that America’s Securities and Exchange Commission might decide later this year to adopt IASB’s standards—is something no one could have predicted ten years ago, says Nigel Sleigh-Johnson of the Institute of Chartered Accountants of England and Wales.
So enjoy your retirement, oh knighted one. Your double-entry immortality is secure.
The balladeer of the balance-sheet [The Economist]
Speaking at The Wall Street Journal’s annual CFO Network meeting in Washington D.C., Schapiro readily admitted that there isn’t a big push from either multinationals or shareholders to move to international financial reporting standards.
In response to a question from Bank of America’s CFO, Chuck Noski, Schapiro said, “We have not heard from a lot of shareholders that we have to go (to IFRS). We’ve heard the contrary… ‘Why would we take this step toward international accounting standards?’” [CFOJ]
He may be on his way out the door but still IASB chair David “that’s Sir David to you” Tweedie is still sick of all our heel-dragging on IFRS in the U.S. He hasn’t gone so far as to say we’ll be left in the capital market dust if we don’t adopt tomorrow but he’s clearly fed up with our procrastination.
If they put off a commitment to international financial reporting standards beyond 2011, U.S. accounting rulemakers and standard-setters would impose “unnecessary costs and risks on U.S. companies,” Sir David Tweedie, chairman of the International Accounting Standards Board, said Wednesday at a U.S. Chamber of Commerce gathering on the future of financial reporting.
The major risks are competitive ones, said Tweedie. U.S.-based multinationals already must fill numerous sets of accounting books. Many must file their financials under U.S. generally accepted accounting principles even as they report on the activities of their overseas subsidiaries under IFRS or the standards crafted by individual nations, he pointed out. At the same time, their foreign competitors can use IFRS for all purposes, even for filing with the Securities and Exchange Commission, he added.
As is, the transition to IFRS is estimated to cost American companies $35 million per year (remember 3 years of restatements will be required). We’re not sure if he has access to different estimates that somehow make qualified IFRS monkey restatements more expensive in 2012 and beyond than they would be by the end of this year but it seems painfully clear that he means business.
I’m not sure if he missed the memo but we don’t seem as enthusiastic about convergence as we did when we delayed the release of a roadmap in 2008. Three years later, we don’t appear to be any more prepared for the transition than we were then and still have three (or make that four) more good years to drag our heels according to recent statements by the SEC.
How much clearer does Tweeds need it? We’re just not that into your standards.
As you probably remember, head knight of the double-entry accounting round table, Sir David Tweedie, is retiring in a few months to be replaced by this guy. Until then, however, the wily Scotsman will be running the show and he’s still pitching IFRS as if the life of the financial reporting universe depended on it. Just like Bob Herz, he’s in this thing until the very end.
CFO has a brief Q&A with SDT and despite the USA’s pussyfooting around the issue, he manages to rush to our defense at the suggestion of haters that the IASB should give us the “throw the bums out” treatment:
Some critics grumble that if the United States does not adopt IFRS, it should be ousted from the IASB and the board of trustees. What’s your opinion?
I get quite angry at some of the comments we get insisting that the United States be ousted. People say that America would have to come around because the U.S. share of global-market capitalization is falling all the time. The complaint is, “We’re not having [the United States] tell us what to do if they don’t use international standards.” I can understand that, and you can have international standards without the United States. But you can’t have global standards without the United States. So there is more work to be done on that issue.
So in other words, suck it world! You can keep your international standards. We’ve got a knighted Scotsman who even said you’ll make due without us. Call it whatever you like, just don’t call it “global” without us. Because you can’t spell “global” without “A”… which stands for…er….”America.” BASTARDS.
[BREATHE] Never mind that. The most interesting bit is that Tweeds appears to blow the lid of the Big 4 omertá:
What’s been your experience with professional judgment? Many U.S. practitioners say a heavy reliance on judgment won’t work in America’s litigious environment.
As a technical partner at KPMG, I was always being asked to evaluate situations that were outside of issued guidance. It’s the same in the United States — you get questions you’ve never thought about before, and there’s nothing in the standards addressing it. So you kick it around with the client, the client partners, and other senior partners in the firm. You come up with a position.
[My approach was to] ring up Deloitte, for example, and say, “Have you had one of these [situations]?” There is sort of a technical-partner mafia that gets together and says, “Yeah, we had one of these.” So, in a way, the profession fixes the problems.
So whether this is happening under the nose of the brass or with their full and unmitigated support can’t be determined, although we won’t be surprised if the old man ends up “retiring” early.
Tweedie Takes a Bow [CFO]
This means you PricewaterhouseCoopers. You’re acting like this convergence/IFRS adoption is just happening too fast, well, Tweeds isn’t having it.
As for you companies out there that actually have to keep their books in tiptop shape, Sir Tweeds isn’t so amused by your bellyaching either. And for the love of God, would everyone quit playing dumb:
“Let’s look at what we’ve got out there at the moment – leases, revenue recognition and insurance. If you’re not an insurance company you’ve got two. Big deal,” he said.
“I’m not terribly sympathetic. It’s not as thought these have sprung out of no where, we’ve been working on these, they’ve seen the drafts coming, they know what we’re doing.
Furthermore, maybe if you got some of your people on this instead of writing a comment letter every two seconds, this wouldn’t seem like such monumental task.
“It’s tough, but goodness it’s tough for us too. We can’t keep getting all this advice. We always get conflicting advice. ‘You must have these done by June 2011, but don’t give them to us all at once’,” he said.
Tweedie “not terribly sympathetic” to concerns of standard-overload [Accountancy Age]
Some of you might think that Sir David Tweedie is trying evangelize IFRS all over this great U.S. GAAP land because A) he’s a wily Scotsman who isn’t afraid to wear a kilt to the office and sure as hell isn’t going to let a bunch of know-nothings tell him what’s best and B) he’s trying to throw his title.
Or maybe you just think he doesn’t care if the US of A is down with the financial reporting Kumbaya. Well Tweeds is Stateside putting everyone on notice that if that’s what you believe, you would be wrong. DEAD WRONG.
“The world is moving to a single set of high-quality global accounting standards, and this is too important an area for the U.S. not to be involved…After almost a decade of work to improve IFRS and U.S. GAAP and to seek their convergence, it’s time to finish the job.”
That’s the best he can do. And don’t bother asking him for the title, he can’t give it to you.
Every knight lays down his sword at some point and Tweeds is no exception. The IASB Chairman will hang up his 10-key when his current term ends in June 2011.
According to Emily Chasan at Reuters, DT thought about calling it quits last year after the pols torpedoed mark-to-market in the name of bank lobbyists. Sensing that the true Holy Grail was within reach, Tweedie stayed on:
[H]e has said he stayed because he wanted to continue the convergence process, which is beginning to reach its goal of having a single set of high quality accounting standards used around the globe. The U.S. Financial Accounting Standards Board and the IASB have redoubled efforts to complete their major convergence projects by a June 2011 deadline set by the G20 group of leading countries.
Now the International Accounting Standards Committee Foundation, which oversees the board, is on the search for the next bean counter in shining armor. Since Tweeds gave plenty of notice, it won’t likely be the shitshow search like Bank of America has on its hands (until very recently perhaps) but the IASCF is searching all the corners of the world for the replacement and they need to come up with somebody good.
If they put some empty suit in there, the likes of Silvio Berlusconi will be writing the revised contingent liabilities standard. Lord knows we don’t need that. We need someone that doesn’t mind telling pols to BTFO of accounting biznass. Pols like Eddy “If you had just involved us in the monitoring of the IASB we wouldn’t be in this mess” Wymeersch, who probably couldn’t tell the difference between his ass and the basic accounting equation. Feel me, IASCF?
Now since that’s clear, if you’ve got any suggestions or purely want to speculate on who you will be in the big chair next (Tim Flynn? Mary Schapiro? Phil Mickelson? that smug guy in the cube next to you that got a 98 on FARE?) drop them in the comments.
IASB’s Tweedie to retire when term ends in 2011 [Emily Chasan/Reuters]
Trustees seek nominations for Chairman of the IASB from 2011 [Press Release]
See also: Kroeker Stresses Importance of Investors in IFRS Decision; Search Is On For Next Chairman Of IASB When Tweedie Retires in 2011 [FEI Financial Reporting Blog]
Ed. note: AG here, kids. Colin is once again shirking his duties for a couple days to go ride around exotic farmers' markets on his bicycle in Calcutta or something so you and I will be spending today and Monday together in one another's warm embrace. Get excited now, it's going to be a long […]
Source's Cover Blown by SEC [WSJ]Federal securities regulators, in a sensitive breach, inadvertently revealed the identity of a whistleblower during a probe of a firm that ran a stock trading platform. The gaffe by the Securities and Exchange Commission occurred during an investigation of Pipeline Trading Systems LLC when an SEC lawyer showed an executive who […]
Accounting chief says last chance for global system [Reuters]
Efforts to create a single global accounting system will be set back a generation if they do not succeed within 12 to 15 months, the chairman of a global accounting rule-setting board said on Thursday.
“This is our last chance really,” said Sir David Tweedie, chairman of the International Accounting Standards Board, which sets accounting rules used in over 100 countries.
“The next year is critical, this is it,” he told a New York Society of Security Analysts conference. “We can’t kick this tin down the road much longer.”
Cloud misconceptions: security tops the list [AccMan]
This is an important finding because it lends credence to the notion that once adopters have tasted what the cloud offers, then many of the issues raised by naysayers start to evaporate.
As accounting industry shifts, Reznick Group beefs up staff [Baltimore Business Journal]
Twelve positions in the Baltimore area now available.
Time for a New Set of Return Deadlines? [Tax Update Blog]
Joe Kristan thinks moving the partnership deadline up to 3/15 makes sense.
Clifton Gunderson acquires Rockford, Ill., accounting firm [MJS]
Farrell & Associates becomes the latest to join the CG stable.
Verizon to pay $25 million settlement for overcharging [Reuters]
The top U.S. mobile service, Verizon Wireless, has agreed to pay the U.S. Treasury $25 million on top of more than $52 million in refunds to consumers for overcharging them, the U.S. regulator said.
The venture of Verizon Communications Inc and Vodafone Group Plc said earlier this month it would pay refunds to 15 million cellphone customers erroneously charged for mobile Internet use.
Former Dutch minister picked as IASB chairman [FT]
“The head of the Dutch financial markets regulator has been given the po job of running the body that sets the accounting rules followed in the European Union and an increasing number of other countries.
Hans Hoogervorst, a former Dutch finance minister, was on Tuesday named chairman of the London-based International Accounting Standards Board, which sets the IFRS accounting norms.
He will take on the job at the end of June 2011, succeeding Sir David Tweedie, the Scot who has occupied the post for a decade.
Mr Hoogervorst, chairman of the executive board of the Netherlands Authority for the Financial Markets, is not an accountant.”
I Can Afford Higher Taxes. But They’ll Make Me Work Less. [NYT]
Wherein we discover one more example of how tax cuts (or lack thereof) will affect someone.
Gap scraps new logo after online outcry [Reuters]
“GAP Inc scrapped a new logo on Monday just a week after launching it following an “outpouring of comments” online and from customers in support of the original blue box design it’s had for more than 20 years.
Gap rolled out an updated version of the logo last Monday on its website and planned to include it in its holiday marketing, a spokeswoman said.
But the company saw more than 2,000 comments on its Facebook page on the issue, with many people railing against the new logo and calling for a return to the old.”
Friday Is the Drop-Dead Date for Small Charities Wanting to Stay Tax-Exempt [Tax Update Blog]
You’ve been warned.
One Step Closer to Little GAAP [CFO]
“A blue-ribbon panel has recommended that a new set of accounting standards be drawn up for private companies based on U.S. generally accepted accounting principles. The panel also recommended that a private-company rulemaking board be established, separate from the Financial Accounting Standards Board, which currently writes and revises U.S. GAAP.
The details of how the rules will be developed — and how FASB and its parent organization, the Financial Accounting Foundation (FAF), will be involved in the process — will be outlined in a report issued in December, said panel chair Rick Anderson, chairman and CEO of accounting firm Moss Adams, during the panel’s fourth and final public meeting on Friday. The final product, often dubbed “little GAAP,” will be a pared-down version of the full set of rules, requiring fewer disclosures and less-detailed measurements of some assets and liabilities.”
Wal-Mart Lands Agreement to Sell iPad [WSJ]
“Wal-Mart Stores Inc. said it will start selling Apple Inc.’s iPad on Friday at hundreds of stores throughout the U.S.
Wal-Mart landed the tablet computer a little later than two of its largest retail rivals: Best Buy Co., which has been selling the iPad since its launch in April, and Target Corp., which began carrying it this month.
The Bentonville, Ark., retail giant said that what it lacked in timeliness it will make up for in sales heft. It vowed to slowly ramp up the number of U.S. stores carrying the iPad to more than 2,300 by the height of the holiday season in mid-November.
There will also be no Wal-Mart “rollback” price cut on the iPad: The tablets will sell for Apple’s suggested retail price, which starts at $499 for the cheapest version with 16 gigabytes of storage and wireless internet access but no 3G mobile connection.”
Goldman CFO Viniar Gets $4.5 Million Options Windfall [Dow Jones]
“Goldman Sachs Group (GS) Chief Financial Officer David Viniar received $4.5 million by exercising more than 67,000 options as part of the investment bank’s disclosure Friday with the Securities and Exchange Commission.
According to the filing, Viniar was among six top executives who have converted s ing stock options into a windfall of $24 million, cashing in on benefits they received years before the government’s 2008 rescue of the nation’s biggest financial firms.”
Tweedie faces greatest challenge in last days [FT]
“Sir David Tweedie says his staff are concerned about what he might do in his last months as head of the International Accounting Standards Board, the powerful global rule setter that he has chaired for a decade.
‘I think people are quite worried about how I might do in my last six months here, with all my vendettas and all these grudges I’ve been storing up . . . I think they are worried that I might let them go,’ he says with a laugh.”
Rulemakers Plan Global Overhaul of Lease Accounting [Reuters]
“U.S. and international accounting rule makers are planning to propose an overhaul of lease accounting as soon as Tuesday, in a move expected to affect some $1.2 trillion in leased assets.
Traditionally, accounting rules have given companies a lot of leeway in how they record leases for assets ranging from store locations and restaurant equipment to airplanes and machinery. As a result, only certain types of leases appear on the balance sheet, while a majority of a company’s leases can often be kept off the balance sheet and hidden from an investors’ view.
But the Financial Accounting Standards Board, which sets U.S. accounting rules, and the London-based International Accounting Standards Board, which writes accounting rules for more than 100 countries, will aim to change all that this week by proposing to bring many of these assets onto corporate balance sheets.
‘It’s something that needs to be done,’ said John Hepp, a partner in accounting firm Grant Thornton’s professional standards group. ‘Lease accounting is broken.’ ”
Hunt for IASB head hits hurdle [FT]
“The search for a successor to Sir David Tweedie, chairman of the International Accounting Standards Board, which sets accounting rules for most of the world outside the US, has hit difficulty in the face of opposition in Europe to how the process has been conducted.
Sir David has presided over deteriorating relations since the financial crisis, with some senior European officials raising concerns about the transparency of his decision-making amid criticism that he has prioritised an effort to get the US to adopt international rules at the expense of European interests.”
PricewaterhouseCoopers taps Kevin Kelly to head Birmingham office [Birmingham News]
Kevin Kelly is new the managing partner for PwC’s Birmingham office. He replaces David Pickett who is the new OMP in Nashville.
UCF accounting student killed [Central Florida Future]
“Orange County Sheriff’s officials have released the names of the two people who died Saturday in an apparent murder-suicide, after a woman was found dead in an apartment about five miles south of UCF, and a man was found dead at a local shooting range.
Jennifer Lynn Roqueta, an accounting major at UCF who had just turned 21 in May and a server at Buffalo Wild Wings in Waterford Lakes, was identified as the victim on Sunday.
The suspect, who was identified as Ryan Ray Scurlock, 24, was found at the Shooting Gallery gun range located at 2911 39th St. in Orlando.
The investigation stems from Saturday’s incident in which the OCSO received several calls from Scurlock’s acquaintances requesting they check on his well-being because they had received alarming text messages from him that indicated he was distraught.”
Former Fed official joins KPMG [WaPo]
Jon Greenlee is joining the Tyson’s Corner office as a managing director in KPMG’s financial services regulatory practice. He previously worked as an associate director of risk management in the Fed’s division of banking supervision and regulation.
Satyam auditors to face Sebi probe [Hindustan Times]
“Accounting firm PricewaterhouseCoopers (PwC) will have to face an inquiry by the Securities and Exchange Board of India (Sebi). The Bombay High Court on Friday dismissed PwC’s petition challenging Sebi’s show-cause notice dated June 30, 2009 seeking to prohibit PWC from auditing accounts of listed companies.”
That’s not a tax bill, THIS is a tax bill: Crocodile Dundee star Paul Hogan hit with £8m in charges [Daily Mail]
“But in a American TV interview last year, Hogan, 70, vowed that the taxman would not get a penny more of his money and added: ‘Come and get me, you miserable b******s.’ ”
Eide Bailly merges with R T Higgins [Denver Business Journal]
Top 25 firm Eide Bailly’s merger with RT Higgins brings the the firm’s total staff to over 1,200 in nine states.
We’ll be posting on a lighter schedule today. Hopefully many of you are enjoying a long weekend.
• Dell says several former staff may face SEC action [Reuters]
Some former Dell employees are facing possible SEC actions related to the company’s accounting. The Commission started its inquiry back in 2005 and Dell disclosed that the U.S. Attorney for the Southern District of New York had subpoenaed documents shortly after in 2006. This all led to the Accounting Code of Conduct that the Company implemented last fall. The company stated that it believes ‘monetary penalties’ will be part of the settlement but otherwise they’re keeping a lid on it.
• FASB Chairman Robert H. Herz and IASB Chairman Sir David Tweedie to Discuss Global Accounting Issues at The George Washington University [FASB]
Herz and Tweeds will be at G Dubs on Wednesday, April 7th kicking around global accounting issues. “Greater Global Transparency in Financial Reporting: Lighting the Path for Investors” starts at 6 pm and is free and open to the public, so you best get there early before the groupies overrun the joint.
• NASBA Takes Back (Some) Passing CPA Exam Scores for March [JDA]
In what could amount to the worst April Fool’s joke in history, Adrienne is reporting over at JDA that NASBA is taking back some of the scores for March after extending the test dates in the third month:
[F]rom a reliable source within the Big 87654 that test-takers outside of the blizzard-affected areas have actually gotten their scores taken away and thrown out. Yes, that means all of you who put it off until the very last minute and rescheduled for the March extension are pretty much screwed unless you also got snowed in on top of it. Yes, those of you who paid for and passed the exam in March.
Huh. We’re checking into this. We’ll get back to you if we learn more.
On the day of Sir David Tweedie’s retirement, no less.
Japan is considering postponing the mandatory introduction of global accounting standards for all listed companies beyond the original target date of 2015, amid strong opposition to the change from the country’s business community. Japan’s financial services minister, Shozaburo Jimi, said Thursday at a Business Accounting Council meeting, hosted by the Financial Services Agency, that making Japanese companies adopt the rule—known as the International Financial Reporting Standard—within a few years could be a big burden and costly for businesses. “If Japanese firms are required to move to IFRS, we will need enough time, five to seven years, for preparation,” Mr. Jimi said, adding that discussions over the matter will take time.
Because, god, wouldn’t that be awkward?
The International Accounting Standards Board (IASB) and the US-based Financial Accounting Standards Board (FASB) agreed today to re-expose their revised proposals for a common revenue recognition standard. Re-exposing the revised proposals will provide interested parties with an opportunity to comment on revisions the boards have undertaken since the publication of an exposure draft on revenue recognition in June 2010.
It was the unanimous view of the boards that while there was no formal due process requirement to re-expose the proposals it was appropriate to go beyond established due process given the importance of the revenue number to all companies and the need to take all possible steps to avoid unintended consequences.
Sir David Tweedie admits that, “It is important that we get this right, first time,” and “the boards and staff have undertaken an unprecedented level of outreach to get us to this point, and why we are keen to treble-check that our conclusions are robust and can be implemented with minimal disruption.”
Maybe I’m reading too much into that statement but it sounds as though the Boards may be trying to stave off more nasty letters.
[via FAF/IFRS Foundation]
The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) today issued new guidance on fair value measurement and disclosure requirements for International Financial Reporting Standards (IFRSs) and US generally accepted accounting principles (GAAP).
The guidance, set out in IFRS 13 Fair Value Measurement and an update to Topic 820 in the FASB’s Accounting Standards Codification® (formerly referred to as SFAS 157), completes a major project of the boards’ joint work to improve IFRSs and US GAAP and to bring about their convergence.
The harmonisation of fair value measurement and disclosure requirements internationally also forms an important element of the boards’ response to the global financial crisis.
Of course what’s most important is that wily Scotsman and knight of the double-entry roundtable Sir David Tweedie will be able to call it a career knowing that he saw this thing through. He sounds pretty pleased with the effort saying, “The finalisation of this project marks the completion of a major convergence project and is a fundamentally important element of our joint response to the global financial crisis. The result is clearer and more consistent guidance on measuring fair value, where its use is already required.” Hans, you can take it from here.
We’re sure all of you have been anxious for an update since the last FASB/IASB progress report last November, wait no longer.
• Completed five projects: In the next few weeks the IASB will issue new standards on consolidated financial statements (including disclosure of interests in other entities), joint arrangements and post-employment benefits and both boards will issue new requirements in relation to fair value measurement and the presentation of other comprehensive income.
• Given priority to the three remaining Memorandum of Understanding projects, as well as insurance accounting: The Boards have made substantial progress towards completion of the three remaining MoU projects covering financial instruments accounting, leasing and revenue recognition, as well as their joint project to improve and align US and international insurance accounting standards.
• Provided for further time to finalise their convergence work: The boards have agreed to extend the timetable for the remaining priority convergence projects beyond June 2011 to permit further work and consultation with stakeholders in a manner consistent with an open and inclusive due process. The convergence projects are targeted for completion in then second half of 2011 (however, the U.S. insurance standard, which has not yet been exposed, is targeted for the first half of 2012).
Wait a second, did they really say that putting off more convergence work is an accomplishment? That’s our kind of work right there. IASB Chair Sir David Tweedie and FASB Chair Leslie Seidman didn’t let that little detail deter them from patting themselves on the back for a job well done. Said Sir David, “the convergence programme continues to raise the standard of financial reporting worldwide, delivering much-needed improvements in key areas and providing a solid platform for global high quality standards.” What is that even supposed to mean? Sounds like the same pro-convergence gibberish we’ve been hearing all along.
Someone come get us when this actually means something.
Rule makers concluded this week that “we all could benefit from a few more months to develop these standards, some of which really go to the core issues of many companies,” said Leslie Seidman, chairman of FASB, in a podcast issued Thursday. Sir David Tweedie, chairman of the IASB, said rule makers still intend to finish their convergence work by year’s end. The delay, he said in the podcast, will “enable us to check whether our conclusions will last the test of time. … We would never release a standard before it is ready and ultimately it must be a high-quality standard or you just can’t issue it.” [WSJ]
BOJ Pledges Liquidity on Japan Quake as Toyota Shuts Plants [Bloomberg]
Japan’s central bank pledged to ensure financial stability after the strongest earthquake in at least a century forced Toyota Motor Corp. to shut some plants, knocked out oil refineries and sparked a plunge in stocks. The magnitude 8.9 earthquake struck off the coast of Sendai, a city of 1 million in the northeast, unleashing a tsunami as high as 10 meters (33 feet) that engulfed towns along the coast. The Tohoku region, which includes Sendai, accounts for about 8 percent of the country’s gross domestic product, according to Macquarie S ong>IASB urges US to adopt new accounting rules [FT]
Speaking in Washington DC on Thursday, Sir David Tweedie sought to reassure the US that it would not be ceding control of its accounting system to foreign politicians if it adopted the IASB’s rules. The plea by Sir David comes at the same time as a push by the European Commission to secure a greater say for public authorities in the oversight of his organisation. The US Securities and Exchange Commission is due to decide this year whether to jettison US accounting rules in favour of adopting the IASB’s international financial reporting standards (IFRS), which are followed in the European Union and a number of other countries.
Has India Abandoned IFRS? [The Accounting Onion]
Paging Sir David…
Medical marijuana subject to new LA tax [DMWT]
If only it were that simple.
3 Accounting Associations Merge to Form IGAF Polaris [AT]
Three international accounting associations—Polaris International, Fidunion and IGAF Worldwide—are merging together to create one of the largest associations of independent accounting firms in the world. The merged association, which will operate under the name IGAF Polaris, will contain 385 member firms with combined annual revenue of over $1.82 billion. The association will include a combined total of 2,402 partners, 16,304 professional staff operating out of 846 offices in 88 countries around the globe.
Pentagon accounting problems ‘serious’: Treasury [AFP]
Essentially the DoD is unauditable.
Ford truck crashes into public accountant’s office in Dodge City [Dodge City Daily Globe]
Yes, that Dodge City.
Deloitte Announces Alliance Agreement with MicroStrategy to Deliver Business Intelligence and Analytic Solutions [PR Newswire]
Under the agreement, Deloitte will combine MicroStrategy’s advanced business intelligence (BI) technology with its broad array of consulting, advisory and implementation services to assist their mutual clients in meeting information, business intelligence and analytic needs. The alliance includes collaboration on solution, service and market development, education, training, sales and delivery.
Auditors reject lack of scepticism concerns [Accountancy Age]
Auditors have rejected the suggestion that there [sic] work requires more scepticism. Following the release of a discussion paper from regulators on whether auditor scepticism needs to be increased, firms defended their attitude and working processes to provide audits. Some noted that the application of international financial reporting standards (IFRS), which can provide a range of potential outcomes, is confused by regulators as a lack of scepticism.
Auditors Face Fraud Charge [WSJ]
New York prosecutors are poised to file civil fraud charges against Ernst & Young for its alleged role in the collapse of Lehman Brothers, saying the Big Four accounting firm stood by while the investment bank misled investors about its financial health, people familiar with the matter said.
State Attorney General Andrew Cuomo is close to filing the case, which would mark the first time a major accounting firm was targeted for its role in the financial crisis. The suit stems from transactions Lehman allegedly carried out to make its risk appear lower than it actually was.
Petters’ schemes drew in $36 billion, report says [MST]
This makes for lots of paper cuts, “PwC said it obtained financial data that would fill more than 560,000 bankers boxes. It said it found 87 accounts in 21 different banks that were part of the investment scheme.”
IRS Agent Accused of Stealing Tax Refunds [NBCNY]
Fern Stephens, a revenue officer at the Internal Revenue Service, is being charged by the U.S. Attorney’s office for stealing more than $160,000 in unclaimed tax funds from 12 taxpayers, according to federal court documents.
Former ECB Member Padoa-Schioppa Dies [WSJ]
Since July, Mr. Padoa-Schioppa chaired the board of trustees of the IFRS Foundation, which oversees the International Accounting Standards Board and helped promulgate the move toward a single set of accounting rules used worldwide. Sir David Tweedie, the IASB’s chairman, said in a statement Sunday that Mr. Padoa-Schioppa “possessed a rare combination of intellect and vision, delivered with a wry smile. He was a friend and colleague and will be missed by many, many people.”
Icelandic Bank Fails in $2 Billion Bid to Sue Former Execs, Auditor in New York [The American Lawyer]
A judge refused to hear Glitnir Banki’s suit against PwC and former execs.
Estate Tax Will Return Next Year, but Few Will Pay It [NYT]
Almost no one will have to worry about paying the estate tax under the tax legislation just [signed into law]. By one estimate, from Alan Rothschild, the chairman of the American Bar Association’s real property, trust and estate law section, less than one-half of 1 percent of people who die in 2011 will be hit by the estate tax. In contrast, 10.5 percent paid the estate tax in 1977.
“They will help investors to better understand off-balance sheet risks, and to alert them to the possibility of so-called window dressing transactions occurring at the end of a reporting period.”
~ Sir David Tweedie talking up the new rules that were published by the IASB today.
AIG to Convert Preferred Shares Into Common to Repay U.S. [Bloomberg]
“American International Group Inc. agreed with U.S. regulators to repay its bailout by converting the government’s holdings into common shares for sale, a step toward independence for the insurer whose near collapse two years ago threatened the global economy.
The U.S. Treasury Department will convert its preferred stake of about $49.1 billion for 1.66 billion shares of common stock and then sell the holdings in the open market, AIG said today in a statement. Common shareholders, who hold about 20 percent of the company, will have their stake dilut ent, the insurer said. Those investors will receive as many as 75 million warrants with a strike price of $45.”
Spain loses AAA status, stands firm on austerity [Reuters]
“Spain lost its final top-line debt rating on Thursday as the government sought backing from lawmakers for a budget it hopes will be austere enough to convince markets it can slash the deficit at a time of economic weakness.
Moody’s become the third and last rating agency to cut Spain out of the highest AAA category which has helped it finance its debt relatively cheaply. The one-notch cut had been expected and the agency said it hoped not to have to cut again soon, bolstering Spanish debt markets.
But the agency also said a poor growth outlook meant Madrid would have to take further steps to meet its deficit targets in years to come. The Bank of Spain said a sluggish recovery would slow further in the third quarter.”
IASB head knows all about cross-channel frictions [FT]
“In a decade spent overseeing international accounting standards, Sir David Tweedie has become an amateur student of French psychology.
The Scot has locked horns with France several times as head of the International Accounting Standards Board, the body that sets the International Financial Reporting Standards rules followed in the European Union and other countries.
His fascination for his adversary is such that he recently thrust into my hands an academic paper entitled “France and the ‘Anglo-Saxon’ Model: Contemporary and Historical Perspectives”. The article explores the hostility often felt in France towards the British and American way of doing business.”
McDonald’s May Drop Health Plan [WSJ]
“While many restaurants don’t offer health coverage, McDonald’s provides mini-med plans for workers at 10,500 U.S. locations, most of them franchised. A single worker can pay $14 a week for a plan that caps annual benefits at $2,000, or about $32 a week to get coverage up to $10,000 a year.
Last week, a senior McDonald’s official informed the Department of Health and Human Services that the restaurant chain’s insurer won’t meet a 2011 requirement to spend at least 80% to 85% of its premium revenue on medical care.”
Wal-Mart picks successor to longtime CFO [Reuters]
“Wal-Mart Stores Inc (WMT.N) named Charles Holley to succeed Chief Financial Officer Tom Schoewe, who will retire on November 30.
The world’s biggest retailer said on Wednesday that Schoewe, 57, will stay at Wal-Mart until January 31 to help with the transition.
Holley, 54, joined Wal-Mart in 1994 and is treasurer and executive vice president of finance.
Those credentials should make him a capable CFO, said Wall Street Strategies analyst Brian Sozzi, though Wall Street could view the transition negatively since it adds uncertainty.”
All We Are Saying Is Give Dick Fuld a Chance [Jonathan Weil/Bloomberg]
Names being floated to replace Larry Summers as the National Economic Council include Citigroup Chairman Dick Parsons and Xerox CEO Anne Mulcahy. Jonathan Weil sees where Obama is going with this:
“There’s much we can learn about the kind of person the president is looking for by studying these two contenders’ credentials. In addition to CEO chops, it seems Obama is seeking someone who also has served on the board of directors of at least one company that either had a massive accounting scandal, blew up so spectacularly that it threatened to take down the global financial system, or both.”
…and doesn’t think he’s aiming high enough. He has some of his own suggestions.
Sharpton faced with fresh tax woe [Tax Watchdog]
The Rev. owes around $538k to the IRS for 2009. His lawyer is a tad confused by the whole thing and says everything will paid up by Oct. 15th.
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.’ ”