July 16, 2018

Contingencies

Accounting News Roundup: Bankruptcy Examiner to Investigate WaMu Failure; Ex-KPMG Tax Principal Pleads Guilty; UK Inspector Says Audits Need ‘Significant Improvement’ | 07.21.10

WaMu Shareholders Win Court Investigation of Biggest U.S. Bank Failure [Bloomberg]
WaMu gets their very own Anton Valukas! Colorful claims to come? “Shareholders of Washington Mutual Inc. won court approval of a new investigation of the biggest U.S. bank failure, further delaying the company’s effort to reorganize in bankruptcy.

U.S. Bankruptcy Judge Mary F. Walrath in Wilmington, Delaware, agreed that an examiner should be appointed to review WaMu’s assets, including the value of a potential lawsuit against JPMorgan Chase & Co. and the Federal Deposit Insurance Corp. for their role in the 2008 collapse of Washington Mutual Bank.”

Ex-IRS agent pleads guilty [WaPo]
John Venuti was also with KPMG from 2002 to until this past January. WaPo reports that he was a “tax consultant and principal.”

“According to the plea agreement, Venuti did not file federal tax returns from 2001 to 2006. Each year, though, he requested and was granted a six-month extension, and made a total of $97,060 in payments along with the extension requests. Authorities said he owes more than $789,000 in back taxes.”

Reckitt to Buy Durex Maker SSL [WSJ]
“Pushing further into the lucrative over-the-counter medical market, U.K. consumer-goods firm Reckitt Benckiser PLC agreed on Wednesday to acquire health-care-product company SSL International PLC, in a deal that values the world’s biggest condom maker at £2.54 billion ($3.88 billion).”

FASB Reveals Second Attempt at Standard on Contingencies [Compliance Week]
“The standard differs from one the FASB published in June 2008, which called on companies to use some conjecture and provide estimates of possible outcomes. Corporate counsel in particular buried FASB with objections that the proposed approach would force disclosure of privileged information, especially by giving legal adversaries access to information that would compromise the outcome of disputes. The current proposal steers clear of any requirement for companies to make any predictions or estimates about possible outcomes.”


FTSE 100 audits require “significant improvement”, inspectors find [Accountancy Age]
“Auditors have also been accused of altering documents before handing them to regulators and putting cost savings ahead of quality, in the review by the Audit Inspection Unit (AIU).

The report raised a number of concerns following its inspection of 109 audits from AIM and the FTSE 350.

The report also found some cases where partners signed audit reports before the audit was complete and one instance when an auditor tried to alter an internal file after the AIU requested it. Auditors had also changed internal materiality thresholds, which effectively reduced their workload, and had also not applied enough scepticism to internal asset valuations.”