Thursday 31 January 2013

Top Ten Famous Accountants

The first true written evidence of accounting come from a man named Luca Pacioli, a Franciscan monk and contemporary of Columbus. His seminal work, Summa de Arithmetica, Geometrica, Propotioni et Proportionalite, published in 1494, contained a section, "Particularis de Computis et Scripturis" (Details of Accounting and Recording) that described "the system used in Venice".
But history aside, there are many famous folks today who started out in accounting. You’ll find a few surprises on this list.
1. John Grisham. While this red-hot novelist is well known for being a lawyer prior to his writing career, what is less well known is the fact that his first degree was in Accounting from Mississippi State University. It wasn’t until later that he went to law school and watched a 12-year-old rape victim testify and inspire his first novel.
2. Kenny G. The famous soprano saxophone player graduated Magna Cum Laude from the University of Washington with a degree in accounting. Although he’d already been playing semi-professionally since high school, he wasn’t sure he’d make in the music world so accounting seemed like a much safer bet.
3. Bob Newhart. This funny man got his first job out of the army working as an accountant in downtown Chicago. He claims to have invented his own system for balancing the petty cash—when the drawer was short, he replaced any missing money from his own pocket. When his boss accused him of not using sound accounting practices, he decided to try something else. Ironically, it was while he was working as an accountant that he began doing his famous telephone routines.
4. Gibby Haynes. It might be hard to believe, but this outrageous lead singer of the hot punk band The Butthole Surfers went to Trinity University and earned his degree in accounting. In fact, he was captain of the basketball team, president of his fraternity, and was voted Accounting Student of the Year. After graduating, he worked for over a year at an accounting firm before starting the band.
5. Tim DuBois. You might not know this name right off the bat, but he’s known as The Singing Accountant. He’s written many a hit country song, including “Love In The First Degree”, “She Got the Goldmine, I Got The Shaft” and the Vince Gill hit “When I Call Your Name.” While currently the head of Arista Records, he taught accounting at Owen University for many years.
6. Walter Diemer. Another name you might not recognize, he worked as an accountant for the Fleer Corporation in the 1920’s. But in his spare time he tinkered with recipes until he invented a little something we know today as Bubble Gum.
7. J. P. Morgan. This famous financier and banker began his early career as an accountant on Wall Street. But after his father died and left him the family business, J.P. Morgan went on to become a banking and corporate pioneer. He began buying distressed businesses, in particular railroads, and merging them—a common business practice still today.
8. Walter L. Morgan. A name well known in the business world, Walter L. Morgan was a CPA—and is considered the father of the mutual fund industry. His fund—The Wellington Fund—became the flagship fund of the Vanguard Group, the second largest mutual fund company in the world. When he died in 2000 at the age of 102, he was the oldest living accountant and CPA.
9. Arthur Blank. Today best known for owning the Atlanta Falcons football team, he started his early career as an accountant. But he worked part-time in a hardware store and along with another employee went on to found Home Depot, the famous chain of hardware stores. This little company made him a billionaire—and his accounting know-how taught him how to spend it.
10. Josiah Wedgewood. Yes, that Wedgewood, the famous potter—he invented what we now call Cost Accounting. Thanks to a lucky combination of an embezzling clerk and a depression, Josiah was forced to come up with a system of tracking bottom line costs and profit. He used this system to determine the costs of his product, and was only one of hundreds of potters to survive the depression.

Source: www.topaccountingdegrees.com

Saturday 26 January 2013

The Best-Paying Tech Companies for Interns

Most tech industry internship-seekers would do anything to work at Facebook, Google, Amazon or Apple. In fact, they’d probably even do it for free.
But as it turns out, all of these companies offer paid internships. And they compensate remarkably well.
Facebook interns earn an average monthly base pay of $6,056, according to Glassdoor. Interns at Google rake in $5,678 per month, on average—while those at Amazon and Apple make $5,366 and $4,914 per month, respectively.
“It’s no secret that the war for tech talent continues to be fierce, and this even includes the internship level,” says Glassdoor spokesperson Samantha Zupan. “Companies are fighting for the best and brightest tech minds coming out of college, and handsome compensation packages during an internship are just one way to entice a talented young tech employee to potentially stay with the company upon graduation.”
While interns at the Internet’s “Fantastic Four” are bringing home heaps of cash each month–those at VMware are making even more. The Palo Alto-based software giant pays its interns a base salary of $6,536 per month, on average, making it the best-paying tech company for interns.
One former VMware technical staff intern wrote on the Glassdoor site: “I was making more than any of my classmates.”
A software engineering intern at Facebook, the second hightest-paying tech company, said: “The benefits and pay are obviously great, and since it’s a well-known company it’s a good place to start if you’re looking to get recognized at other tech companies and startups.”
Microsoft rounds out the top three. Interns there earn $5,936 per month, on average.

“The process varies from company to company–but generally, it’s not easy to land a coveted internship at a major tech company where interns earn a higher monthly base pay,” Zupan says. “On Glassdoor, interns at several of these companies talk about an interview process that can include three different interviews, technical problem solving questions, and in some cases, personality tests. Because internships can often translate to job opportunities, several of these companies tend to treat the intern interview process similar to any other job candidate. HR’s goal is to always identify the very best talent at all levels.”
If you’re interested in one of these positions, you’ll want to start by doing some research to find which company is the best fit for you, Zupan says. “Also, it’s never too early to network,” she adds. “Check out who you already know at the company, who your friends, parents and professors might know, and see if there is an inside connection to help get your résumé noticed.”
If you’re not offered an internship position the first time around, keep applying and stay in contact with the intern coordinator. “It just might pay off and set you apart if you show that you’re really serious about contributing to the company,” she concludes.

Here are the top 10 highest-paying tech companies for interns:
 VMware
Average monthly base pay: $6,536
Facebook
Average monthly base pay: $6,056
Microsoft
Average monthly base pay: $5,936
LinkedIn
Average monthly base pay: $5,808
Adobe
Average monthly base pay: $5,757
Google
Average monthly base pay: $5,678
Amazon
Average monthly base pay: $5,366
NVIDIA
Average monthly base pay: $5,215
Yahoo
Average monthly base pay: $5,191
Apple
Average monthly base pay: $4,914


Source: www.forbes.com by Jacquelyn Smith

Sunday 20 January 2013

Notable Accounting Scandals And Outcomes

NOTABLE ACCOUNTING SCANDALS


Company Year Audit Firm Country Notes

Lockheed Corporation 1976
United States

Nugan Hand Bank 1980
Australia

ZZZZ Best 1986
United States Ponzi scheme run by Barry Minkow

Barlow Clowes 1988
United Kingdom Gilts management service. £110 million missing

MiniScribe 1989
United States

Polly Peck 1990
United Kingdom

Bank of Credit and Commerce International 1991
United Kingdom

Phar-Mor 1992 Coopers & Lybrand United States mail fraud, wire fraud, bank fraud, and transportation of funds obtained by theft or fraud

Informix Corporation 1996 Ernst & Young United States

Sybase 1997 Ernst & Young United States

Cendant 1998 Ernst & Young United States

Waste Management, Inc. 1999 Arthur Andersen United States Financial mistatements

MicroStrategy 2000 PricewaterhouseCoopers United States Michael Saylor

Unify Corporation 2000 Deloitte & Touche United States

Computer Associates 2000 KPMG United States Sanjay Kumar

Lernout & Hauspie 2000 KPMG Belgium Fictitious transactions in Korea and improper accounting methodologies elsewhere

Xerox 2000 KPMG United States Falsifying financial results

One.Tel 2001 Ernst & Young Australia

Enron 2001 Arthur Andersen United States Jeffrey Skilling, Kenneth Lay, Andrew Fastow

Swissair 2001 McKinsey & Company Switzerland

Adelphia 2002 Deloitte & Touche United States John Rigas

AOL 2002 Ernst & Young United States Inflated sales

Bristol-Myers Squibb 2002 PricewaterhouseCoopers United States Inflated revenues

CMS Energy 2002 Arthur Andersen United States Round trip trades

Duke Energy 2002 Deloitte & Touche United States Round trip trades

Dynegy 2002 Arthur Andersen United States Round trip trades

El Paso Corporation 2002 Deloitte & Touche United States Round trip trades

Freddie Mac 2002 PricewaterhouseCoopers United States Understated earnings

Global Crossing 2002 Arthur Andersen Bermuda Network capacity swaps to inflate revenues

Halliburton 2002 Arthur Andersen United States Improper booking of cost overruns

Homestore.com 2002 PricewaterhouseCoopers United States Improper booking of sales

ImClone Systems 2002 KPMG United States Samuel D. Waksal

Kmart 2002 PricewaterhouseCoopers United States Misleading accounting practices

Merck & Co. 2002 Pricewaterhouse Coopers United States Recorded co-payments that were not collected

Merrill Lynch 2002 Deloitte & Touche United States Conflict of interest

Mirant 2002 KPMG United States Overstated assets and liabilities

Nicor 2002 Arthur Andersen United States Overstated assets, understated liabilities

Peregrine Systems 2002 KPMG United States Overstated sales

Qwest Communications 2002 1999, 2000, 2001 Arthur Andersen 2002 October KPMG United States Inflated revenues

Reliant Energy 2002 Deloitte & Touche United States Round trip trades

Sunbeam 2002 Arthur Andersen United States

Tyco International 2002 PricewaterhouseCoopers Bermuda Improper accounting, Dennis Kozlowski

WorldCom 2002 Arthur Andersen United States Overstated cash flows, Bernard Ebbers

Royal Ahold 2003 Deloitte & Touche United States Inflating promotional allowances

Parmalat 2003 Grant Thornton SpA Italy Falsified accounting documents, Calisto Tanzi

HealthSouth Corporation 2003 Ernst & Young United States Richard M. Scrushy

Nortel 2003 Deloitte & Touche Canada Distributed ill advised corporate bonuses to top 43 managers

Chiquita Brands International 2004 Ernst & Young United States Illegal payments

AIG 2004 PricewaterhouseCoopers United States Accounting of structured financial deals

Bernard L. Madoff Investment Securities LLC 2008 Friehling & Horowitz United States Massive Ponzi scheme.

Anglo Irish Bank 2008 Ernst & Young Ireland Anglo Irish Bank hidden loans controversy

Satyam Computer Services 2009 PricewaterhouseCoopers India Falsified accounts

Lehman Brothers 2010 Ernst & Young United States Failure to disclose Repo 105 transactions to investors

Sino-Forest Corporation 2011 Ernst & Young Canada-China

Olympus Corporation 2011 Ernst & Young Japan tobashi using acquisitions

Autonomy Corporation 2012 Deloitte & Touche United States Subsidiary of HP.

 

NOTABLE OUTCOMES

The Enron scandal turned in the indictment and criminal conviction of one of the Big Five auditor Arthur Andersen on June 15, 2002. Although the conviction was overturned on May 31, 2005 by the Supreme Court of the United States, the firm ceased performing audits and is currently unwinding its business operations. The Enron scandal was defined as being one of the biggest audit failures. The scandal included utilizing loopholes that were found within the GAAP (General Accepted Accounting Principles). For auditing a big sized company such as Enron, the auditors were criticized for having a brief meeting few times a year that covered lots of material. By January 17, 2002 Enron decided to discontinue its business with Arthur Andersen claiming they had failed in accounting advice and related documents. Arthur Andersen was judged guilty of obstruction of justice for getting rid of many emails and documents that were related to auditing Enron. From this incident little less than 100,000 employees lost their jobs. Although later the ruling was overturned by the U.S. Supreme Court, the image of the auditing firm have been damaged beyond repair, and was never able to come back to its full operation capacity.
On July 9, 2002 George W. Bush gave a speech about recent accounting scandals that had been uncovered. In spite of its stern tone, the speech did not focus on establishing new policy, but instead focused on actually enforcing current laws, which include holding CEOs and directors personally responsible for accountancy fraud.
In July, 2002, WorldCom filed for bankruptcy protection, in what was considered the largest corporate insolvency ever at the time.
These scandals reignited the debate over the relative merits of US GAAP, which takes a "rules-based" approach to accounting, versus International Accounting Standards and UK GAAP, which takes a "principles-based" approach. The Financial Accounting Standards Board announced that it intends to introduce more principles-based standards. More radical means of accounting reform have been proposed, but so far have very little support. The debate itself, however, overlooks the difficulties of classifying any system of knowledge, including accounting, as rules-based or principles-based.This also led to the establishment of Sarbanes-Oxley.
On a lighter note, the 2002 Ig Nobel Prize in Economics went to the CEOs of those companies involved in the corporate accounting scandals of that year for "adapting the mathematical concept of imaginary numbers for use in the business world".
In 2003, Nortel made a big contribution to this list of scandals by incorrectly reporting a one cent per share earnings directly after their massive layoff period. They used this money to pay the top 43 managers of the company. The SEC and the Ontario securities commission eventually settled civil action with Nortel. However, a separate civil action will be taken up against top Nortel executives including former CEO Frank A. Dunn, Douglas C. Beatty, Michael J. Gollogly and MaryAnne E. Pahapill and Hamilton. These proceedings have been postponed pending criminal proceedings in Canada, which opened in Toronto on January 12, 2012. Crown lawyers at this fraud trial of three former Nortel Networks executives say the men defrauded the shareholders of Nortel of more than $5 million. According to the prosecutor this was accomplished by engineering a financial loss in 2002, and a profit in 2003 thereby triggering Return to Profit bonuses of $70 million for top executives.
In 2005, after a scandal on insurance and mutual funds the year before, AIG was investigated for accounting fraud. The company already lost over 45 billion US dollars worth of market capitalisation because of the scandal. Investigations also discovered over a billion US dollars worth of errors in accounting transactions. The New York Attorney General's investigation led to a $1.6 billion fine for AIG and criminal charges for some of its executives. CEO Maurice R. "Hank" Greenberg was forced to step down and is still fighting civil charges being pursued by New York state.

 Source: www.wikipedia.org



Saturday 19 January 2013

Neat Trick? Attorney-Client Privilege From An Accountant


 

Thanks to attorney-client privilege, if you tell your lawyer you are hiding money offshore, the IRS can’t make your lawyer talk. The IRS generally can’t even make your lawyer produce documents. See Latest Foreign Account Prosecution Fuels Fears. The privilege is strong so clients (in both civil and criminal cases) will be forthcoming with their lawyers.
Accountants, however, don’t have this privilege. If you make statements or provide documents to your accountant, he can be compelled to divulge them no matter how incriminating. Although a statutory “tax preparation” privilege was added in 1998 (IRC Section 7525(a)(1)), it is inapplicable to criminal tax cases so is of little value.
In sensitive tax matters, the answer to this quandary is the Kovel letter, named after United States v. Kovel. Your tax lawyer hires an accountant. In effect, the accountant is doing your tax accounting and return preparation, but reporting as a subcontractor to your lawyer.
Properly executed, it imports attorney-client privilege to the accountant’s work and communications. However, recent IRS lawsuits are eroding it. For example, in United States v. Richey, the Ninth Circuit refused to protect an appraisal that a taxpayer, lawyer and accountant were trying to keep from the IRS. In United States v. Hatfield, the court forced disclosure of discussions between the lawyer and accountant.
Pre-existing relationships between the accountant and the ultimate client are especially prickly. A Kovel arrangement is premised on the notion that the accountant’s communications were “made in confidence for the purpose of obtaining legal advice from the lawyer.” See United States v. Adlman. The attorney is the client in a Kovel engagement so the accountant should address all correspondence to the lawyer.
That means information acquired by an accountant under a Kovel agreement should be distinguished from information collected by the accountant as an auditor or in some other capacity. Keep things as separate and well-documented as you can. That may include using a different accounting firm for the audit or other work where possible.
Attorney-client privilege is rarely tested in this context. However, you don’t want to end up having to fight about disclosure before a judge, especially where the communications may be very revealing.

Source: www.forbes.com by Robert Wood
Robert W. Wood practices law with Wood LLP, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009 with 2012 Supplement, Tax Institute), he can be reached at Wood@WoodLLP.com. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.