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Sales tax on services back on the table in California

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Image courtesy of Adobe Stock.

So you can keep it filed in the back of your mind, a bill has been introduced in California which would level a sales tax on services. This would include all the services provided by CPAs.

CalCPA sent out a note today pointing to the draft legislation:

To keep from getting caught in a jam with your clients, you might consider adding a clause to your engagement letters that says any quoted fees will be adjusted based on any new taxes imposed by the state.

Written by Jim Ulvog

March 21, 2017, 15:44 pm at 3:44 pm

Posted in Other stuff

Ongoing internal investigation and disciplinary actions at Wells Fargo

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October 2016 photo at Wells Fargo’s museum in San Diego by James Ulvog.

The Wells Fargo fake account fiasco doesn’t seem to be generating any more major headlines. Still some notable news if you go several pages into the second section of the WSJ. Also, the WF living trust plan got a failing grade.

2/21/17 – MarketWatch – Wells Fargo fires 4 managers as part of investigation into sales scandal – Titles of fired senior managers shows decent level of seriousness in accountability:

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Written by Jim Ulvog

March 15, 2017, 8:13 am at 8:13 am

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Andersen arises from the grave, again

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Photo doesn’t do justice as a reminder of the fabled AA double doors, but it is a reasonable approximation. Image courtesy of Adobe Stock.

A second firm that proudly claims the Arthur Andersen name is now officially in operation.

3/1 – Stephane Laffont-Reveilhac, AA Global Managing Partner at LinkedIn post – Arthur Andersen restarts with 26 offices in 16 countries on 5 continents – Announcement declares that Arthur Andersen is back. March 1, 2017 marks the official start of the new firm.

I don’t quite understand exactly where the new AA is at in terms of operations. The article uses several verbs that are a bit confusing, such as they “…are setting up…” the firm, and there are five (only 5) offices in the US. Comments from Andersen Tax reinforce my confusion. That all makes sense when I consider the new firm is in start-up mode.

The short article says the firm asserts it is

…the rightful holder of the ‘ARTHUR ANDERSEN” and “ANDERSEN” historical trademarks, logos … at a global level…

There is also a firm called Andersen Tax, which was previously known as WTAS. This firm was founded by 23 former partners of Andersen. They avoid audit work, focusing instead on tax, with legal work also available in two of the European markets.

There is a fight underway between the two firms over the Andersen name. Both claim to have exclusive rights to the name.

If you want a quick survey of the conflict, check out Going Concern on 3/3: Accounting News Roundup: Will the Real Arthur Andersen Please Stand Up?

If you’ve actually read this far in this post, you will certainly want to check out two in-depth articles:

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Written by Jim Ulvog

March 7, 2017, 9:16 am at 9:16 am

Posted in Other stuff

Lessons we can learn from PwC’s Oscars envelope fiasco

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Lessons Learned Text written on notebook page, red pencil on the right. Motivational Concept image

Image courtesy of Adobe Stock.

Okay, everyone has had a week to laugh at Big 4 partners who can’t maintain the level of attention to detail that is normative for all CPAs below the partner level or to laugh at the incompetence of bean counters in general or to laugh at Hollywood embarrassing itself for two different errors in one show. Your choice for amusement depends on your world view.

Okay, give yourself one more chuckle.

Are we all done now?

Good.

It might be time to see what we can learn from this fiasco other than pay attention to details. In my brief blogging career, I’ve learned that studying major news stories while still a bit fresh is a superb way to learn. We are still curious and so will pay attention for just one more moment.

Let’s look at this fiasco from a disaster theory perspective.

Slate has a superb article on March 3 that can help everyone learn: How Disaster Science Explains the Oscars Mix-Up.  The subtitle, which I’ll quote, gives a great summary:  Major errors don’t cause disasters. Banal mistakes and human nature do.

I will describe a number of the ideas in the article and provide by observations.

The author’s contention, along with the point of a specifically cited book, is that massive disasters normally are the result of a series of smaller, quite human mistakes. String together several of those non-serious errors in an unfortunate series and a massive disaster can result.

A key quote in the article says that the typical cause of disasters is banalities and trivialities.

Article suggests a series of minor issues combined into the fiasco we saw last week. Consider a few of the contributing factors in the article.

Contributing errors

The Academy has an outsider tally the results and keep them secret until seconds before each announcement to minimize the risk of a leak. In 1940 the results were released hours before the event. Article says you could have picked up a paper on the way to the show which listed the winners.

Oops.

With the speed of social media today, a leak while the nominees are being announced could be around the world and known by half the television audience while the clips are being played. When every person working on the production and in the live audience has a smart phone with internet access, the risk of leaks today is astronomical.

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Written by Jim Ulvog

March 6, 2017, 8:05 am at 8:05 am

Posted in Other stuff

More news on the Oscars fiasco – a new timeline and why both accountants were banned

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Image courtesy of Adobe Stock

Image courtesy of Adobe Stock

If you are still interested in the fiasco of handing out the wrong card for best picture at the Academy Awards, here is some more info:

  • New time line of the key moments
  • Why neither accountant will be back at the awards – they both froze
  • A few other ripple effects

3/1 – Daily Mail – Fired by the Academy: Bungling PWC (sic) accountants will NOT be back at the Oscars as new photos show bean-counter Brian juggling multiple envelops AND his phone while gawking at Emma Stone – OK, after that headline, you can take a deep breath.

Apparently, there were a lots of pictures taken backstage, enough to reconstruct much of the few minutes around the fiasco, including where Brian Cullinan was standing and where he was looking.

Apart from the photos in the article, here is the time line that Daily Mail put together:

  • 9:03 – Warren Beatty and Fay Dunaway take stage; Mr. Beatty would have been handed the card a few moments before
  • 9:05 – Mr. Beatty opens envelope and pauses, then hands card to Ms. Dunaway
  • 9:05 – timestamp of Twitter post by Brian Cullinan with photo of Emma Stone
  • 9:07 – Ms. Dunaway makes the announcement
  • 9:10 – Mr. Cullinan moves on stage to correct announcement
  • 9:13 – correct winner announced

Two major point from this article and time line.

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Written by Jim Ulvog

March 3, 2017, 12:46 pm at 12:46 pm

Posted in Other stuff

More fallout from the Oscar fiasco

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Image courtesy of Adobe Stock.

Image courtesy of Adobe Stock.

The aftermath from handing out the wrong envelope at the Oscars continues.

On the long shot that you might be interested in the audit and accounting angle of this mess, here are a few articles for more detail:

3/1 – Variety – New Photos Show PWC (sic) Accountant Tweeting, Mixing Envelopes Backstage at Oscars (EXCLUSIVE) Article reconstructs the moment by moment timeline, with photos. Of particular note is the tweet by Brian Cullinan of best actress Emma Stone was taken and posted after Warren Beatty and Faye Dunaway were on stage.

Another photo shows Mr. Cullinan standing behind Mr. Beatty holding two envelopes. At a later time I may explain why it is quite reasonable for that to be the exact number of envelopes that ought to have been in his hand at that instant.

3/2 – Page Six – PwC Oscar accountants received death threats – As is almost expected for our completely messed up culture, the two PwC partners have been receiving death threats.

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Written by Jim Ulvog

March 2, 2017, 9:08 am at 9:08 am

Posted in Other stuff

Credit Suisse under investigation. Again. For money laundering. Again.

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A different type of money laundering. Image courtesy of Adobe Stock.

A different type of money laundering. Image courtesy of Adobe Stock.

Looks like Credit Suisse is in trouble again. The feds and NYDFS have opened another money laundering investigation.

Check out the report on 2/23 at Wall Street Journal – Credit Suisse Probe Opens Old Wounds for the following info.

A retired professor invested $500K in a startup back in 2000. When the company went public in 2008, his shares were worth $80M.

Cool!  Good for him!

He didn’t want to share a lot of that with Uncle Sam, so he got some help from the Israel branch of Credit Suisse to cut his tax bill.

By 2013 he had $200M parked in his accounts in Switzerland.

Well, somehow the revenuers caught up with him.

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Written by Jim Ulvog

February 24, 2017, 6:00 am at 6:00 am

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