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Bramwell's Lunch Beat: PCAOB Bars CPA, Dodd-Frank Rules, OECD and Taxes

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Oct 6th 2015
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PCAOB extracts first admission of guilt from public company audit firm
The Public Company Accounting Oversight Board (PCAOB) introduced its new policy of requiring admissions of guilt in selected disciplinary settlements on Oct. 2 by using an enforcement case against a public accounting firm that repeatedly violated auditor independence and audit quality standards, Francine McKenna wrote for MarketWatch. The PCAOB permanently revoked the registration of David A. Aronson, CPA, and his firm, David A. Aronson, CPA P.A., and permanently barred Aronson from ever working at a PCAOB-registered public accounting firm. The case is the first where a PCAOB-registered audit firm and auditor admitted to a disciplinary order's facts, findings, and violations. Three of Aronson's audit clients hired his son's bookkeeping firm because Aronson recommended him to those clients. Aronson's son's firm served as the primary bookkeeper and preparer of the financial statements for those clients and then Aronson audited them and signed clean audit opinions.

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Dodd-Frank rules: 20% remaining
Maxwell Murphy of CFO Journal wrote that five years in, the Dodd-Frank financial reforms remain only about 64 percent completed, according to a study by law firm Davis Polk & Wardwell LLP. As of the end of September, 271 rulemaking deadlines have passed, and regulators have yet to even propose rules for 33 of those. Meanwhile, 45 others are still awaiting final passage, the firm found. In total, the 2010 Dodd-Frank law prescribed 390 rulemaking requirements and 249 have finalized rules, while another 58 have rule proposals. Another 83 still await proposed rules, and regulators missed the law's deadline on 33 of those. The US Securities and Exchange Commission finished two thirds of its 94 assigned rules under Dodd-Frank. The Commodity Futures Trading Commission has come closest to finalizing its share of the Dodd-Frank regulatory burden. The agency finalized 50 of 59 rules that fall under its aegis.

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Global tech firms brace for tax rules
Multinational companies are girding for new rules designed to force them to pay greater corporate income taxes in more countries where they operate, setting up potential clashes between Silicon Valley giants and European governments angling for tax revenue, wrote Sam Schechner of the Wall Street Journal. The Organization for Economic Cooperation and Development (OECD) on Monday issued a series of recommendations aimed at stopping large companies in many industries from avoiding paying hundreds of billions of dollars in taxes every year through baroque structures that are legal, but have come under increasing political pressure. The rules could hasten structural change at some of the world's biggest technology companies. Executives at several tech companies say they are already considering relying less on some offshore tax havens, while declaring more income in countries such as France, Germany, and the United Kingdom.

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US firms pan international tax proposal
Bernie Becker of The Hill wrote that GOP lawmakers and business lobbyists have openly worried that other countries will latch onto the OECD's Base Erosion and Profit Shifting (BEPS) plan as a way to build up their own treasuries at the expense of US multinationals. But in rolling out their plan, OECD officials said both Congress and the US business community have nothing to worry about on that front. Grace Perez-Navarro, the deputy director of the OECD tax policy center, said “we would expect all countries to follow” the new rules. And speaking directly about the concerns in the United States, Perez-Navarro said: “While we've heard that comment, I think the reality will be otherwise.” However, the current GOP-dominated Congress is unlikely to enact the OECD recommendations. But the US Treasury Department does have discretion to implement some BEPS recommendations on its own.

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Quick Links

  • Eugene Freedman, 83; overhauled, energized accounting field (Boston Globe)
  • Grant Thornton announces record revenue for fiscal year 2015 (Grant Thornton)
  • Debate rages as ‘Cadillac tax' gets closer (Minnesota Public Radio News)
  • Elvis and a big hunk o' tax breaks (Wall Street Journal)
  • A tax boon for working women (Wall Street Journal)
  • Tax Geek Tuesday: A buyer's best friend – understanding the Section 338(h)(10) election (Forbes)
  • Human jobs under attack by tax code favoring robots over people (Forbes)
  • Medical device makers see opening in repeal of Obamacare tax (Forbes)
  • Reigniting US competitiveness through corporate tax reform (Forbes)
  • Many companies not ready for global tax reform (Forbes)
  • Ireland corks tax benefits, but 12.5% rate is still alluring (Forbes)
  • EU to share data on multinational companies' tax deals (New York Times)
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