Dateline – Seattle, Washington. An accountant makes a new female friend. Seems normal enough. Fast-forward a few days and the woman texts the accountant to tell him "she had been beaten up by her husband and wanted to stop by." [cue music] The woman came by the accountant’s place, bringing two female friends he didn’t […]
According to Reuters, brokerage houses have upset some clients by needing more time to provide 1099s based on a new IRS rule that requires brokerages to report how much their clients spent on equities. Though some houses have informed clients of the delay and recommended extensions, some folks aren't too happy about that, including random […]
Last summer we told you about a lawsuit that was filed by a fired Tyco accounting manager who claimed that he was let go after he refused to sign off on expenses related to an epic party in the Bahamas that had “Mermaid Greeters,” “Costumed Pirates/Wenches” a tatt h “Limbo” and “fire” dancers and other, what some might call, “fun” or “awesome” things. The whole bash was going to run around $350,000 but Jeffrey Wiest wasn’t interested in being connected to another lavish party thrown by Tyco.
This is understandable because, as you well know, the AWESOME party in Tyco’s past was taped and it eventually wound up as evidence in a trial against Tyco Execs Dennis Kozlowski and Mark Swartz. Those two men are currently wards of the state and Tyco is, for AWESOME or worse, simply known as the company that threw the Roman Orgy Party:
Investors footed about half the bill for that affair, which was disguised as a shareholder meeting and is now widely known as the Tyco Roman Orgy.
The party featured such indulgences as an ice sculpture modeled after Michelangelo’s David urinating top-shelf vodka. Against this backdrop in 2008, Jeffrey Wiest said he “refused to process a payment [for] and sent a note to his management questioning the legitimacy of a $350,000 event being held at the Atlantis Resort in the Bahamas.”
“Wiest, as was virtually everyone else at Tyco and in the world, was cognizant of a similar party under Dennis Kozlowski’s management,” according to the manager’s July 2010 suit, first reported by Courthouse News. “He did not want to be any part of a repeat occurrence.”
As we mentioned, Wiest obviously had the foresight to conclude that news of a “Mermaid/Pirate/Wench Rape and Pillage Party” would not go over so well with anyone not in attendance and accordingly, refused to sign off on the expenses. Considering that there was “only one 1.5-hour business meeting during the entire five-day event,” it appears that Wiest made the right choice. However, Wiest claimed that the company started “investigating” him and shortly thereafter was told that his services were no longer needed.
“Mr. Wiest’s communications simply provided information and suggestions to ensure proper tax and accounting treatment of the Atlantis event expenses. As such, then, they did not rise to the level of ‘definitively and specifically’ conveying a reasonable belief that [a Sarbanes-Oxley crime] was taking place, notwithstanding Mr. Wiest’s conclusory assertion in the complaint that he had made ‘protected disclosures relating to fraudulent accounting practice, attempted shareholder fraud, and lack of compliance with United States Generally Accepted Accounting Principles.'”
Definitely a setback for Wiest who, it appears, won’t be recouping any lost income here and will forever have the reputation as a party pooper. And the latter could be a far worse fate.
On Monday, we reported on Longtop Financial Technologies was the latest Chinese company to have their CFO quit, auditor resign and be accused of being a massive fraud. This particular story was interesting as one of the reasons cited by Deloitte for dumping LFT included “the unlawful detention of DTT’s audit files.” These accusations were described in much more detail in Deloitte’s letter to the company’s audit committee that was filed with the SEC and you may even conclude that the staff were thisclose to being hos
We italicized and bolded the best part.
The Audit Committee
Longtop Financial Technologies Limited
No. 61 Wanghai Road, Xiamen Software Park
Xiamen, Fujian Province
People’s Republic of China
Attention: Mr. Thomas Gurnee, Chairman of the Audit Committee
Longtop Financial Technologies Limited (the “Company”) and together with its subsidiaries (the “Group”)
Audit for the Year Ended 31 March 2011
We hereby give you formal notice of our resignation as auditor of the Company.
Background and significant issues encountered by Deloitte Touche Tohmatsu CPA Ltd. (China) (“Deloitte”)
As part of the process for auditing the Company’s financial statements for the year ended 31 March 2011, we determined that, in regard to bank confirmations, it was appropriate to perform follow up visits to certain banks. These audit steps were recently performed and identified a number of very serious defects including: statements by bank staff that their bank had no record of certain transactions; confirmation replies previously received were said to be false; significant differences in deposit balances reported by the bank staff compared with the amounts identified in previously received confirmations (and in the books and records of the Group); and significant bank borrowings reported by bank staff not identified in previously received confirmations (and not recorded in the books and records of the Group).
In the light of this, a formal second round of bank confirmation was initiated on 17 May. Within hours however, as a result of intervention by the Company’s officials including the Chief Operating Officer, the confirmation process was stopped amid serious and troubling new developments including: calls to banks by the Company asserting that Deloitte was not their auditor; seizure by the Company’s staff of second round bank confirmation documentation on bank premises; threats to stop our staff leaving the Company premises unless they allowed the Company to retain our audit files then on the premises; and then seizure by the Company of certain of our working papers.
In that connection, we must insist that you promptly return our documents.
Then on 20 May the Chairman of the Company, Mr. Jia Xiao Gong called our Eastern Region Managing Partner, Mr. Paul Sin, and informed him in the course of their conversation that “there were fake revenue in the past so there were fake cash recorded on the books”. Mr. Jia did not answer when questioned as to the extent and duration of the discrepancies. When asked who was involved, Mr. Jia answered: “senior management”.
We bring these significant issues to your attention in the context of our responsibilities under Statement on Auditing Standards No. 99 “Consideration of Fraud in a Financial Statement Audit” issued by the American Institute of Certified Public Accountants.
Reasons for our resignation
The reasons for our resignation include: 1) the recently identified falsity of the Group’s financial records in relation to cash at bank and loan balances (and also now seemingly in the sales revenue); 2) the deliberate interference by the management in our audit process; and 3) the unlawful detention of our audit files. These recent developments undermine our ability to rely on the representations of the management which is an essential element of the audit process; hence our resignation.
Prior periods’ financial reports and our reports thereon
We have reached the conclusion that we are no longer able to place reliance on management representations in relation to prior period financial reports. Accordingly, we request that the Company take immediate steps to make the necessary 8-K filing to state that continuing reliance should no longer be placed on our audit reports on the previous financial statements and moreover that we decline to be associated with any of the Company’s financial communications during 2010 and 2011.
We hereby consent to a copy of this letter being supplied to the SEC and the succeeding auditor to be appointed.
Section 10A of the Securities Exchange Act of 1934 (U.S.)
In our view, without providing any legal conclusion, the circumstances mentioned above could constitute illegal acts for purposes of Section 10A of the Securities Exchange Act of 1934. Accordingly, we remind the Board of its obligations under Section 10A of the Securities Exchange Act, including the notice requirements to the U.S. Securities and Exchange Commission. You may consider taking legal advice on this.
/s/ Deloitte Touche Tohmatsu CPA Ltd.
c.c.: The Board of Directors
We just got presenting you with some options for dealing with the occasional dick at your job. It goes without saying that 99% of the time, confrontations at the office don’t resort to fisticuffs but as we’ve detailed in these pages, accountant abuse is all too common – both verbal and physical.
Today’s account of bean counter beat downs is actually a positive one, as Bryan Steinhauer – who is starting at KPMG next month – has recently passed his first section of the CPA exam after suffering an assault in 2008, spending three months in coma and “endured thousands of hours of speech and physical therapy.”
We should clarify that Steinhauer was not not beaten because of his aspiring accountant status but because he was “allegedly dancing” with some dude’s girlfriend (which is punishable by death in some countries):
The 2008 assault near Binghamton University left Steinhauer with severe brain injuries. Doctors didn’t know if he would be able to speak again, let alone if he would live.
Now, two years later, as Steinhauer’s attacker Miladin Kovacevic prepares for prison, the resilient Brooklyn man is poised to pick up where he left off.
Steinhauer, 24, is about to start work at the accounting firm KPMG, capping a comeback that hospital officials call “mind-boggling.”
“I’m ready to move on to the next stage of my life, doing what I was meant to do,” a beaming Steinhauer told the Daily News. “It’s the biggest thing for me – to reclaim my life.”
Steinhauer has reason to be confident. Last week, he found out he passed the first part of the notoriously difficult CPA exam – no small feat for someone who suffered brain injuries so severe his memory was erased.
So, in case you don’t think you’re capable of bouncing back from a 74 on FAR, this guy recovered from brain damage and no memory to pass one part of the CPA exam. Normally, we’d suggest Adrienne chime in with some words of encouragement here but we don’t think it’s necessary.
If you piss off a billionaire, there will be repercussions. And Charlie Munger is not a typical billionaire.
He just so happens to be the BFF and business partner of the second richest person in this fair land of ours and since WB is too busy chasing tail with new friends, he recently felt the need to vent at the University of Michigan about, among other things, accountants and how they failed. FAILED US ALL!
The accountants utterly failed us. And by the way, there’s practically no sign of any intelligent reversal of the failure of that profession. I have yet to meet many accountants who are the least bit ashamed for their contribution to our recent troubles. But it was immense. Imagine when Enron comes down to the SEC and says “we want to write a little contract with A, and a little contract with B, and take all the profit we’re going to make from these complicated contracts over the next 20 years into earnings immediately, and put an asset on our balance sheet of $28 billion from signing two pieces of paper.” And the SEC, led by wonderful accountants who studied at great places, [says] “Why, of course you should have that kind of accounting!” What the hell were they thinking? How can anybody have any respectable understanding of human nature without realizing that the kind of people who were going to be tempted by that accounting were not going to be able to resist the temptations? It was disgusting.
Now you might think this is one of those situations where the old man says to you, “I’m not mad, I’m just disappointed.” This is bullshit. Charlie Munger is definitely pissed. He’s not putting all the blame at the doorstep of accountants but you definitely get the impression that if he could, he would.
But why? Why would Mungsy be so pissed? Why would he lump you in with likes of Jimmy Carter, Ryan Leaf and Andy Barker, P.I. (an accountant, no less)? Basically it’s because you people are a bunch of pansies, will politely nod to the whims of the clients you serve and that you’re a bunch of numbers nerds and that you can barely carry on a conversation with another human being let alone understand that greed trumps Debits = Credits:
Partly the establishment accountants want to please the people who are writing the checks. And partly the academic accountants get full of people who overdosed on mathematics. They want everything to be in balance. And they don’t think that that really isn’t rational when creating rules for a human behavioral system. They’re too mathematical and not rational enough when dealing with their fellow humans. You can’t give the average Wall Street CEO really lenient standards of accounting and expect the figures to be good.
Here endeth the lesson.
Charlie Munger on Communism, Botox, and Goldbug Jerks [Motley Fool]
Accountants are a favorite target for blamestorming when your financial situation takes a turn for the worse. Given. However, when a financial ignoramus’s blame manifests itself into physical abuse – especially by faux-celebs – toward his/her accountant (who could also possibly be an ignoramus) that is when an accountant hate crime has occurred, which any functioning society will not tolerate:
Joe Bruner will serve 11 months and 29 days in the county jail for attacking his accountant.
He will also be required to take anger management classes, submit to drug and alcohol evaluation, give up any weapons he has and avoid contact with Wayne Montgomery, the victim.
Circuit Court Judge John Brown imposed the sentence Monday after Bruner, the former owner of Big Kahuna’s water park, spoke at length about his IRS problems, Montgomery’s qualifications as a CPA and a State Attorney’s Office plot against him.
“Mr. Bruner seems to be blaming everyone else for his actions,” prosecutor LaShawn Riggins noted. “He has an excuse for everything.”
Bruner, 57, a former professional football player, was convicted Aug. 20 of felony battery for punching Montgomery several times at a July 21, 2009 business meeting at Bruner’s house.
The conviction was a felony because Bruner had a history of assaulting people. Brown rattled off five other occasions between 2001 and 2010 in which Bruner had faced charges for violence-related incidents.
Bruner gets jail time for assaulting accountant [NWDailyNews]
Because there doesn’t appear to be anything else going on today, we’ll be forced to tell you that Khloe Kardashian should now be at the top of your shit list for reasons none other than she is blaming her accountant for not paying her taxes.
TMZ reported yesterday that K-squared III owed California around $18.5k for ’07. Now the word is that she did pay but the accountant failed to remit the amount owed. Everything is cool though because, by the grace of God, Khloe has found a new accountant and everything should be cleared up shortly.
The only question that remains is, if she paid this twice, what the hell happened to the original $18k? Did the accountant just blow out of town with some Kardash cash? Did it somehow wind up in Reggie Bush’s pockets? Is there a spectacular Ponzi Scheme behind the whole thing that will result in the Kardashians being wiped out of popular culture altogether? God, we can only hope.
Fired Tyco Accountant (and no fan of mermaids or wenches) Jeff Wiest was on Neil Cavuto last night and he attempts to explain his story where he would not approve of some expenses for, what sounds to be, a pretty kick ass party that any one of you would love to attend. Regardless, it wasn’t Jeff’s job to judge the awesomeness of said party but merely to determine if the bash was for legitimate business purposes.
In his opinion, the mermaid greeters, wenches, tattoo artists, so on and so forth were simply too extravagant and no one at Tyco was going to convince him otherwise.
As you can see, Jeff manages to tell his story despite appearing pretty nervous and dealing with several Cavuto outbursts (he has no time for the delicate intricacies of expense approval, get to the mermaids!).
But in part deuce, Jeff gets all accountant-y, discussing intricate details of Sarbanes-Oxley and Cavuto will not stand for it. Neil finally levels with the guy saying that he goes to plenty of Fox Biz shindigs (awesome ones, at that) and it’s NBD. So what the hell man? Are you just not a fun guy?
Stingray feedings! Who wouldn’t want to feed a stingray? And of course Cavuto likes the mermaid greeters (which somehow gets a chuckle out of Jeff) but who doesn’t, amiright?
[caption id="attachment_13953" align="alignright" width="260" caption="Not a legitimate business expense?"][/caption]
Remeber Tyco? Dennis Kozlowski. Mark Swartz. Roman orgy parties. It sounded like a hoot. Too bad the law got in the way.
An accounting manager at Tyco Electronics claims that he was ‘coercively’ fired for taking issue with “Tyco’s exorbitant bashes for its CEO Thomas Lynch and other top executives ‘were almost identical to parties for which Tyco’s former CEO [Dennis Kozlowski] was criminally charged and convicted.’ ”
What kind of party expenses you ask? Run-of-the-mill stuff like ‘mermaid greeters’ and ‘costumed pirates/wenches.’
It doesn’t hurt to have a little eye candy at a company bash, amiright? And maybe Jeffrey Weist was okay with the scantily clad roaming hotties and really just took exception with the $2,350 for the tattoo artist (tatts included!) and limbo and fire dancers, $2,500 for chair covers and sashes and the $1,000 hotel rooms.
Whatever lavish (read: kick-ass) expense it was that turned out to be the straw that broke the stuffy accountant’s back, Jeff Wiest not letting this happen:
The complaint adds: “This requested payment seemed particularly inappropriate from a morale aspect, coming in the midst of continued downsizing pressure, and seemed contradictory in that this one party equated to approximately seven positions for one year in the accounts payable function managed by Wiest,” according to the complaint.
Wiest says that despite his objections, “it was decided to go ahead with the event, to treat the proportionate share of the party as income, and to ‘gross-up’ the bonuses to the employees involved. In other words, the company would pay each highly paid employee an additional amount of cash beyond the value of the trip in order to cover his/her tax liability.”
This approach brought “the total cost of the event to approximately a half million dollars,” according to the complaint.
He claims that each high-ranking Tyco employee was awarded up to $7,500 per person, or $15,000 per couple, as additional “income,” for attending the party. All of the 30 employees who attended were receiving salaries of more than $102,000, Wiest says. He adds that 23 of them took their wives.
And they got paid to go! What is going on at Tyco? Other than it’s the best place to work EVER.
Back to Wiest. For taking high road, Weist alleges that Tyco turned the screws back on him:
In response to his repeated questioning of these extravaganzas, Wiest says, Tyco began an “investigation” of him. This led to bogus accusations that he had made sexually oriented comments, Wiest says.
“Examples given included a comment to an employee going on a honeymoon cruise to not stay on the ship the whole time; a comment about his wife’s hormone issues during her pregnancy being difficult for him, and a comment regarding the uses of improved flexibility from working out. It is noteworthy that the hormone comment would have been several years old, as Wiest’s child was born in 2006,” the complaint states.
He claims Tyco also raised questions about a decade-old brief relationship he had had with a California-based Tyco employee, and baseball tickets that Wiest had been given by a superior.
Jesus. If they would have just invited him to the party, we probably wouldn’t have to go through all this.
Same Old Tricks at Tyco, Accountant Says [Courthouse News Service]
In a major win for D-List celebrities being able to treat regular people like animals, Kerry Katona, who reportedly punched her accountant and threw tea on him, has had the charges against her dropped, according to several reports.
Katona, who’s fame is still a mystery to us, will not face charges and will likely continue to enjoy the ability to abuse shiesty accountants until they are afforded protection under hate crime status.
This is troubling news as global economic conditions continue to stagnate, Mark-Paul Gosselaar-types here in America will likely remain out of work since the masses will only tolerate entertainment from the C-List and up.
The rest of the D-List community will no doubt take this dismissal of charges as a cue that regardless of where they fall on the fame hierarchy, their celebrity status will ensure that they are always right about everything. Including their dire financial situation and how they ARE NOT broke and the IRS cannot be right and everything will be fine just as soon as they catch a break.
No charges for Kerry Katona over accountant attack [Accountancy Age]