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lunch beat

Bramwell's Lunch Beat: Is It Time to Do Away with Quarterly Reports?

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Aug 20th 2015
Staff Writer and Editor AccountingWEB
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Time to end quarterly reports, law firm says
Influential law firm Wachtell, Lipton, Rosen & Katz called on the US Securities and Exchange Commission (SEC) to consider allowing US companies to do away with quarterly earnings reports, suggesting that they distract executives from long-term goals, wrote David Benoit of the Wall Street Journal. In a memo to clients, Wachtell co-founder Martin Lipton and activist defense attorney Sabastian Niles wrote that the SEC should be “pursuing disclosure reform initiatives and otherwise acting to promote, rather than undermine, the ability of companies to pursue long-term strategies.” But the idea of ending quarterly reports would likely receive stiff resistance from shareholders and analysts who depend on them. It could also make it more difficult for companies to communicate with their investors, given the need to avoid sharing information selectively.

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SEC says felon defied ban, prepared financial statements for companies
The SEC says Stephen P. Corso, an accountant convicted of wire fraud and attempted tax evasion, resurfaced from a short jail stint by changing his name slightly to prepare financial statements for companies, even though he told a federal judge six years ago that he would “never, ever” practice as a licensed accountant again, wrote Daniel Huang of the Wall Street Journal. In a court filing this week, the SEC called for Corso to cease his accounting work and surrender all compensation received for such services since April 2009. The agency said Corso has been preparing and filing financial statements on behalf of companies for years under a new name: Steven John Corso. The agency said Corso brandished fabricated credentials and worked under the cover of a fictitious business, “Corso & Company,” in which he described himself as an “SEC consultant and attorney.”

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Pohlad tax case resolved at a fraction of original IRS claim
A $255.8 million government claim on the estate of the late billionaire banker Carl Pohlad has been quietly settled for a fraction of the initial amount the IRS demanded, wrote David Phelps of the Minneapolis Star Tribune. The Pohlad family resolved the IRS case for $36 million, including a penalty of $1.8 million and interest of $5.3 million, according to documents filed in US Tax Court earlier this summer. The settlement appears to validate the family's contention for the past two years that the IRS greatly overvalued Carl Pohlad's interest in the Minnesota Twins. Before his death in 2009, he had transferred the bulk of ownership to his three sons – Jim, Bob, and Bill. The Tax Court document outlining terms of the agreement between the Pohlad estate and the IRS offers no details on how the final numbers were reached.

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Global CEOs foresee more hiring in next three years
Seventy-eight percent of global CEOs expect to hire more workers in the next three years, and the chief executives mostly are upbeat about growth prospects for their own countries, according to a new survey, wrote Neil Amato of CGMA Magazine. KPMG's Global CEO Outlook shows optimism but also highlights challenges facing businesses worldwide. A strong majority (86 percent) are concerned about customer loyalty, while 74 percent are concerned about new market entrants' disrupting their business models, and 72 percent are concerned about keeping pace with new technology. Regarding three-year growth projections, 62 percent of CEOs are more confident than they were a year ago, and 6 percent are less confident than a year ago. Three percent expect to decrease staffing numbers in the next three years, and 19 percent expect headcount to remain unchanged.

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Black Chamber comes out against Obama's financial advisor regs
The National Black Chamber of Commerce (NBCC) is coming out swinging against President Obama's “harmful” regulatory proposal for financial advisors, wrote Kevin Cirilli of The Hill. The administration says the new disclosure rules are needed for financial advisors to better protect consumers, who could be unaware that their financial advisor might be earning commissions off selling them financial advice – even if that advice isn't in the consumers' best interest. However, the NBCC, which represents 100,000 black-owned businesses and has more than 140 nationwide chapters, argued that the proposal would raise costs for low-income Americans seeking financial advice and create a regulatory burden for small businesses. NBCC President and CEO Harry Alford urged US Labor Department officials “to evaluate the economic impact of this proposal on small businesses and re-propose this harmful regulation.”

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