Accounting & Auditing Highlights Week Ending January 5, 2017

Accounting Highlights:   


January 2: PricewaterhouseCoopers LLP was negligent in its audit of an Alabama bank that failed during the financial crisis in 2009, leading to losses of between $1.2 billion and about $2 billion, a U.S. district court ruled. The Federal Deposit Insurance Corporation won the negligence claim in its lawsuit against PwC. Click here to see the full story (Subscription required). 

Tax Reform

January 2: Goldman Sachs Group Inc. said the U.S. tax reform will cut profit this year by about $5 billion, mainly because of a tax targeting earnings held abroad. About two-thirds of the hit comes from the repatriation tax, while writing down U.S. deferred tax assets also contributed, the company said in a filing. Click here to see the full story (Subscription required).   

January 3: A provision in the new tax law, intended to prevent American companies from shifting profits abroad to benefit from a lower overseas rate, might also hit the largest foreign banks with significant U.S. operations. Click here to see the full story (Subscription required).   

January 3: The Internal Revenue Service released its first major guidance under the new tax law, addressing calls from U.S. multinationals for help with a one-time tax on the accumulated offshore earnings and profits they have to bring home. Click here to see the full story (Subscription required).   

January 4: Tax practitioners have several questions about the newly minted tax law and are awaiting guidance on how to interpret many of its provisions. The IRS and Treasury Department have a short runway to release regulations and other guidance implementing the law (Pub. L. No. 115-97). Click here to see the full story (Subscription required).

January 5: The new tax reform law's anti-base erosion measures are aimed at helping to move the U.S. to a territorial system and to capture a greater share of tax revenue. The corporate provisions of the law (Pub. L. No. 115-97), in addition to cutting the corporate tax rate to 21 percent from 35 percent, take aim at base erosion—the shifting of profits to low- or no-tax jurisdictions. Click here to see the full story (Subscription required).


January 3: Employers that violate federal employee benefits law procedural requirements in 2018 will be facing slightly higher civil penalties. The Labor Department announced in a final rule that the civil penalties it assesses on employers that violate Employee Retirement Income Security Act procedural mandates will increase about 2 percent across the board in 2018. Click here to see the full story (Subscription required).    


January 4: William Duhnke III has been seated as the new chairman of the U.S. Public Company Accounting Oversight Board, part of a remake of the audit watchdog panel by the Securities and Exchange Commission. Duhnke replaces James Doty. Click here to see the full story (Subscription required).  

Pension Funds  

January 5: Two regulated exchanges have been trading bitcoin futures since mid-December. Bitcoin futures allow institutional investors to get exposure while avoiding the operational risks in holding bitcoins directly. But it may be some time before defined benefit pension funds adapt to the new asset class because of its volatility, the fiduciary risks, and potential price manipulations, sources told Bloomberg Law. Click here to see the full story (Subscription required).

Initial Public Offering  

January 5: Spotify filed to go public on the New York Stock Exchange, according to a person familiar with the matter, in the highest-profile test yet of a technique that lets companies list shares without raising money through a traditional stock offering. Click here to see the full story (Subscription required).

International Accounting Highlights:  


January 2: A job action by Brazilian tax auditors seeking higher performance bonuses is wreaking havoc for hundreds of importers and exporters. In mid-November, auditors employed by Brazil's federal revenue service (RFB) launched a slowdown operation at airports and seaports where they are responsible for clearing goods coming into and leaving the country. Click here to see the full story (Subscription required). 

European Commission

January 4: Medium and small-sized companies in Europe might find it easier—and cheaper—to attract investors in coming years under a European Commission effort to attract buyers for their stocks and bonds. Click here to see the full story (Subscription required). 

Composed and Compiled by Gery Brownholtz, Accounting Editor, Bloomberg BNA

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