Slight decline in new claims and continuing claims for unemployment for week ending 11/28/20.

Leave a Comment / Economics /

The number of new claims for unemployment for week ending 11/28/20 declined for two weeks in a row. New claims are 712K, a 75K drop for the week.

In September the new claims were in the 800Ks. Since 10/17/20 the new claims have been under 800K.

For contrast, remember that before the government induced shutdown of the economy the new claims averaged about 220K per week so we are still running more than three times the previous norm.

When a person exhausts the state level coverage, they become eligible for the extended federal benefits, called the Pandemic Emergency Unemployment Compensation program.

The number of continuing claims for unemployment is continuing to drop. Some portion of the drop is people going back to work. Looks like for the lasts four weeks the drop in state-level continuing claims has been offset by rising number of people in the federal program.

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Slight decline in new claims and continuing claims for unemployment for week ending 11/28/20.Read More »

Slight decline in new claims and continuing claims for unemployment for week ending 11/28/20. Read More »

Wells Fargo update.

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Instructions on how to seal a bag of gold and gold dust for shipping, from the days when Wells Fargo was the gold standard of integrity. Photo by James Ulvog.

There are still a few enforcement actions ongoing over the Wells Fargo fake account fiasco, primarily individual cases against senior officials from a few agencies who haven’t previously settled the charges.

11/13/20 – Wall Street Journal – Wells Fargo Ex-CEO Settles SEC Claims, Former Consumer-Unit Head Faces Fraud Case –  The former CEO settled up with the SEC, agreeing to pay a $2.5 penalty for his role in the fake account scandal. As is typical, he neither admitted nor denied the claims.

Article reminds us he previously paid $17.5M penalty to OCC and was also banned from working in the banking industry.

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Wells Fargo update.Read More »

Wells Fargo update. Read More »

New claims for unemployment continue slow decline for week ending 11/7/20; continuing claims dropping quickly.

Leave a Comment / Economics, Other stuff /

The number of new claims for unemployment for week ending 11/7/20 again declined. This is the fourth weekly decline, with drops in eight of the last fifteen weeks.  New claims are 709K, a 48K drop for the week.

Starting 8/29/20 the new claims have been in the mid- to high 800 thousands. Since 10/17/20 the new claims have been under 800K.

Remember that before the government induced shutdown of the economy the new claims averaged about 220K per week so we are still running more than three times the previous norm.

The number of continuing claims for unemployment is continuing to drop. Large part of the drop is people going back to work. Part of it is people dropping off the state-level unemployment rolls exhausting coverage.

On 11/12/20, the Wall Street Journal reported U.S. Unemployment Claims Slip but Hold at High Levels. Article asserts the declining new claims and drop in ongoing claims indicates the economy is in a good recovery. Consensus of economists spoken to for the article indicate economy is on a better tract recovery now then the expectations were a few months ago. Current expectation is the GDP will drop 2.7% for the year which is better than the 3.6% expected just last month.

Article suggests that recovery is better than expected.

Tally of people who are now in the extended 13 weeks covered at the federal level is rising rapidly. Here is a recap:

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New claims for unemployment continue slow decline for week ending 11/7/20; continuing claims dropping quickly.Read More »

New claims for unemployment continue slow decline for week ending 11/7/20; continuing claims dropping quickly. Read More »

On this Veterans Day, it is fitting and proper to honor the sacrifice of Sergeant Alwyn Cashe.

2 Comments / Other stuff /
Sergeant First Class Alwyn Cashe. Photo courtesy of U.S. Army.

While his clothes were on fire after an improved explosive device blew up the vehicle he was riding in, Army Sergeant First Class Alwyn Cashe returned to the burning vehicle, pulling out a soldier, then another, then another.

Ultimately he pulled six Americans and one national translator from the burning vehicle. Did I mention that his clothing was on fire as he removed each of the soldiers?

Sgt. Cashe is credited with saving the lives of six American soldiers. The national translator, working to free his people, died from the attack. Ten American soldiers were injured, seven seriously.

With 2nd and 3rd burns spread over 72% of his body, Sgt. Cashe died from his wounds a few weeks later.

America is so blessed that we keep finding men like Sergeant First Class Alwyn Cashe.

 

He was awarded the Silver Star. It took a while for the chain of command to fully understand the depth of his heroism. He will now finally get an even more appropriate award.

UPI reports on 11/11/20 that the Senate approved awarding Medal of Honor for Sgt. Alwyn Cashe.

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On this Veterans Day, it is fitting and proper to honor the sacrifice of Sergeant Alwyn Cashe.Read More »

On this Veterans Day, it is fitting and proper to honor the sacrifice of Sergeant Alwyn Cashe. Read More »

Restrictions on holiday celebrations in California. This is not a spoof. You will think it is a joke, but it is not.

Leave a Comment / Other stuff, Pondering /
No fun allowed sign. Image courtesy of Adobe Stock.

The California Department of Public Health has listed their specific restrictions on holiday gatherings. There are serious limits on what you can do for your Thanksgiving and Christmas and New Year celebration.

I’m not making this up.

Check out for yourself the Guidance for Private Gatherings published on 10/9/20.

In case you think I imagined all this, I will quote select portions of the guidance.

So, if you happen to be one of the people who have not yet moved out of California, or you are waiting for the moving van to arrive, here are the requirements for your holiday celebrations –

(Again, this is not a spoof.)

You may not gather with friends inside your home. You are still allowed to let guests use your bathroom, assuming you scrub down the bathroom quite frequently:

“All gatherings must be held outside. Attendees may go inside to use restrooms as long as the restrooms are frequently sanitized.”

No more than three households may gather together.

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Restrictions on holiday celebrations in California. This is not a spoof. You will think it is a joke, but it is not.Read More »

Restrictions on holiday celebrations in California. This is not a spoof. You will think it is a joke, but it is not. Read More »

Recap of fines for major banking fiascos.

Leave a Comment / Fraud, Other stuff /
Image doing that to seventy billion dollars. Intentionally. Image courtesy of Adobe Stock.

It is so sad to say, but a reality never-the-less, there are so many major banking fiascos with such a wide range of willing participants that it is impossible to keep straight the players and disasters and fines based just on memory.

So, that means I have a spreadsheet to track the willful disasters I’ve been following.

My tally does not include all the billions of dollars paid to settle mortgage issues arising from the Great Recession. That is another massive set of disasters all by itself.

Here is my running tally of the amount of stockholder equity wasted for a range of different debacles. Amounts in millions of dollars:

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Recap of fines for major banking fiascos.Read More »

Recap of fines for major banking fiascos. Read More »

Yet another banking fiasco. This time Goldman Sachs

Leave a Comment / Fraud /
Image courtesy of Adobe Stock.

There is a long list of banking scandals in the last decade or so with a long list of banks choosing to play in each of the fiascos.  Plenty of banks have joined multiple schemes.

The time I’ve allocated to watching the apparently unending disasters has been concentrated on the money laundering and interest rate / exchange rate / pricing manipulation messes, along with the unending variations of cheat-your-customer plans at Wells Fargo.

Until now I’ve not been focused on the bribery disaster involving 1MDB’s shenanigans in Malaysia. If you’ve not tuned in, you can categorize this mess in the international corruption and bribery sector of bank fiascos.

Goldman Sachs was apparently full-in with the bribes and corruption. Wall Street Journal on 10/22/20 summarizes the mess:  Goldman Pays Billions – And Takes Millions From Top Execs – To End 1MDB Scandal.

On 10/23/20 Goldman settled up with the U.S. and several other national governments. The bank agreed to clawback $174M from several executives.

They also admitted breaking U.S. corruption laws, specifically with a plea of guilty to charges of conspiring to violate antibribery laws. To keep the parent company in business it was actually a subsidiary of Goldman who entered a guilty plea. Only two executives have been hit with criminal charges.

The feds say billions were stolen from 1MDB and bribes aggregating $1.6B were paid to various government officials around the world.

Financial penalties paid by Goldman:

  • $2.9B – US Department of Justice and other regulators around the world
  • $2.5B – government of Malaysia
  • $0.154B – Federal Reserve Bank
  • $5.545B – total of above

From browsing headlines it looks like there are a few other fines but those are in the mere $50M or so range. Chump change for the big banks.

So, five and a half billion dollars of stockholder money burned by bribery and corruption. The irritated populists will loudly remind us that only two executives, merely two, have drawn criminal charges in the U.S.

Yet another banking fiasco. This time Goldman Sachs Read More »

New audit report under SAS 134.

Leave a Comment / Audits /
Image courtesy of Adobe Stock.

In May 2019, the Auditing Standards Board issued Statement on Auditing Standards Number 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements.

SAS 134 will make a lot of changes to auditing standards. The most visible impact likely will be complete revision of the audit report.

You can download a copy of SAS 134 at this link

SASs 135 through 140 also make lots of changes in audit procedures. A lot.

All of the documents are interrelated and will be effective at the same time.

Over the next year or two I will probably write more posts talking about the changes. For the meantime here’s an illustration of what the new report will look like.

Effective date

As issued initially, the effective date would have been for audits of years ending on or after December 15, 2020. First financial statements affected would be December 31, 2020.

Then the pandemic hit.

In May 2020, the ASB issued SAS #141, Amendment to the Effective Dates of SAS Nos. 134-140.

You can download a copy here. This pronouncement defers effective dates of SAS 134 through 140 by one year.

All of them will now be effective for years ending on or after December 15, 2021. That means the long series of SASs will first be required for audits of December 31, 2021 financial statements.

Another change made by SAS 141 is the series of SAS may now be early implemented. This allows firms who were well underway towards implementation on 12/31/20 audits to continue their transition.

Sample of revised audit report

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New audit report under SAS 134.Read More »

New audit report under SAS 134. Read More »

Economic destruction from the shutdown is expanding.

Leave a Comment / Economics, Other stuff, Pondering /
Image courtesy of Adobe Stock.

Economic damage from the shutdown is becoming more obvious as more reporters spend time covering the destruction. Here are two articles each on the overall economic impact, specific impact on individuals, and concentrated impact on two cities:

  • GDP in Italy expected to shrink to the level it was 23 years ago
  • Airline CEOs expect it will take years for the airlines to recover
  • Additional 8 million Americans drop below the poverty level, joining the 55 million who were there before the pandemic
  • All 1,600 orchestras in the country have gone dark; their 160K musicians are unemployed
  • San Francisco has 14% vacancy rate in commercial office space
  • Impact on employment in New York City is more severe than the national average

How long will we let this go on?

 

Broad indication of the damage:

10/11/20 – India Today – Italy’s GDP in 2022 shrink back to the same level as 23 years ago: Report – …

Economic destruction from the shutdown is expanding.Read More »

Economic destruction from the shutdown is expanding. Read More »

Why I talk about economic indicators so often.

2 Comments / Economics /
Image courtesy of Adobe Stock.

One of the frustrations I have experienced as an auditor is the statistical information made visible by the AICPA and publications from others is the economic data lags behind two or three quarters.  Another trade association reports giving trends in the religious communities, but the survey information usually is provided late in the year for the prior calendar year.

Long time ago I came across a comment that CPAs ought to start tracking key economic indicators on their own.

What a great idea!

(Cross-post from my other blog, Nonprofit Update.)

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Why I talk about economic indicators so often.Read More »

Why I talk about economic indicators so often. Read More »

Status of players in KPMG fiasco from leaked PCAOB inspection lists.

1 Comment / Audits, Fraud /
Image courtesy of Adobe Stock.

As refresher, some time back senior level staff from KPMG worked to illegitimately gain access to the list of engagements which were going to be subject to inspection by PCAOB. You can catch up on the news by reading my posts with tag of Big 4.

This is old news at this point. Those of us interested in the ethical failure still want to monitor the status of the players. Previous list, found here, has been reworked since it was getting a bit cumbersome to update and confusing to read.

The five KPMG staff and one PCAOB staff who were charged are listed below with their status at various times. Updates will be mentioned as time passes and this page updated with new status.

Overall status:

  • 10/19/20 – 1 released from prison, 1 sentenced & awaiting deportation, 2 awaiting sentencing, 2 convictions on appeal.
  • 12/13/20 – 4 sentenced (of whom 1 released from prison, 1 to serve house arrest after deportation, 2 on probation/supervised release) and 2 convictions on appeal.

Updates:

  • 10/18/20 update – David Britt was sentenced to six months home confinement to be served from his new home in Australia after he is deported from the United States.
  • 12/13/20 update – Thomas Whittle sentenced to two years supervised release and Brian Sweet sentenced to time serviced, three years probation, and to-be-determined restitution.
  • 1/4/22 – Brian Sweet and David Britt surrendered their CPA license to the California Board of Accountancy in 11/21 and 8/21, respectively.

Participants and their status:

=============== …

Status of players in KPMG fiasco from leaked PCAOB inspection lists.Read More »

Status of players in KPMG fiasco from leaked PCAOB inspection lists. Read More »

Increased disclosures for gifts-in-kind required by new accounting rule.

Leave a Comment / Accounting, Audits /
Image courtesy of Adobe Stock.

In September 2020 the Financial Accounting Standard Board issued ASU 2020-07.  Formal title for the document is Not-for-Profit Entities (Topic 958) – Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets.

Contributed nonfinancial assets means gifts-in-kind. The ASU does not apply to donated services or donated financial assets such as stocks and bonds.

ASU 2020-07 will only change the presentation of GIK on the statement of activity and require additional disclosures in the notes. It will not require any change to the valuation of donated pharmaceuticals (accountants call that recognition).

You can get your own copy of ASU 2020-07 here.

(Cross-posted from my other blog, Nonprofit Update, since this issue is of interest to auditors of charities.)

Statement of activity

The total of GIK will need to be presented as a separate line within the revenue & contribution section of the statement of activity, separate from donated cash and any donated financial assets.

Note disclosures

There are a number of new note disclosures which will be required for gifts-in-kind:

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Increased disclosures for gifts-in-kind required by new accounting rule.Read More »

Increased disclosures for gifts-in-kind required by new accounting rule. Read More »

New claims for unemployment rise for week of 10/10/20.

Leave a Comment / Economics /

The number of new claims for unemployment for week ending 10/10/20 increased, which offset net declines of the preceding five weeks. New claims are 898K, a 53K increase over the revised tally for previous week of 845K.

Since 8/29/20 the new claims have been in the mid- to high 800 thousands. Change in the last six weeks, starting with 9/5/20 are +9K, -27K, +7K, -24K, -4K, +53K.

Keep in mind before the government induced shutdown of the economy new claims averaged about 220K per week so we are still running about four times the previous norm.

The number of continuing claims for unemployment is continuing to drop. I’m not sure why this is. Part is due to people going back to work. Part of it is people dropping off the state-level unemployment rolls after the 13 weeks of coverage.

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New claims for unemployment rise for week of 10/10/20.Read More »

New claims for unemployment rise for week of 10/10/20. Read More »

Health damage caused by the shutdown is becoming more visible.

Leave a Comment / Other stuff, Pondering /
There are consequences from the shutdown. Image courtesy of Adobe Stock.

The damage to health caused by the lockdown is becoming more visible. The damage has been there from the beginning of the shutdown; it is just becoming more obvious. A growing number of news articles are describing the deteriorating health outcomes. A growing number of reporters are noticing the devastation.

A few recent articles for your consideration:

  • ‘Years of life lost’ caused by the shutdown is calculated in one analysis to be seven times the number of ‘years of life lost’ which are prevented by the shutdown
  • Frightening increase in suicide ideation by young adults
  • Mental health services pulled off line because of the shutdown
  • Seniors at one nursing home protest the shutdown and the loneliness it causes

Make a mental note that a large number of governors, state-level health officials, federal health officials, and county health officials are forcefully, willfully continuing the lockdowns.

5/5/20 – Washington Examiner – Stress from virus response will destroy 7 times more years of life than lockdowns save: study – Several studies are cited by the article.

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Health damage caused by the shutdown is becoming more visible.Read More »

Health damage caused by the shutdown is becoming more visible. Read More »

Economic damage from shutdown continues to spread.

Leave a Comment / Economics, Pondering /
Image courtesy of Adobe Stock.

Summarized below are a few of the recent articles pointing to expanding economic damage from the shutdown. Destruction in the movie business is noticeable in recent days:

  • Second largest movie chain in the US closes all its theaters
  • Wonder Woman director worried the entire theater industry may die
  • Disney restructures in order to increase focus toward direct-to-consumer distribution channel and away from theatrical release
  • Sales tax collections in San Francisco collapse
  • Passenger cruise ships are getting scrapped

10/5/20 – Wall Street Journal – Regal Cinemas Suspending Operations at All US Locations – The chain with the second largest number of theaters in the U.S. has closed all of its US theaters after having reopened only two months ago. Article does not indicate when any of the theaters will be reopened.

Article says release dates for a dozen movies have been postponed.

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Economic damage from shutdown continues to spread.Read More »

Economic damage from shutdown continues to spread. Read More »