December 2013 archive

An example of a proper expert exclusion under Daubert

In an unpublished opinion in re: Craig Moore vs. International Paint, L.L.C., (No. 13-30281, November 15, 2013) the Fifth Circuit upheld the District Court’s exclusion of an expert witness and the related Summary Judgment Order. The case provides a worthwhile primer on when a Daubert motion should be successful. Too often, judges go beyond the …

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Use an independent service to help protect against California’s new $10,000 penalty for whistleblowers

Employees have protection as whistleblowers from a wide variety of federal and state laws. Effective January 1, 2014, California added SB 486 to this list of legal protections. The new California law broadens an employee’s right to pursue legal action if retaliated against for reporting suspected wrongdoing. Perhaps most importantly, the law creates a civil …

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SEC proposed rules for Regulation A+ filings

Section 401 of the Jumpstart Our Business Startups Act (the “JOBS Act”) added Section 3(b)(2) to the Securities Act. This directs the SEC to adopt rules exempting offerings of up to $50 million of securities annually from the registration requirements of the Securities Act. Last week, the SEC provided proposed rules to implement this portion …

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IRS finalizes delayed start date to start accepting returns

In October the IRS announced that the government shutdown would delay the start of the 2014 tax filing season at least a week and likely more.  According to the IRS announcement: “The government closure came during the peak period for preparing IRS systems for the 2014 filing season. Programming, testing and deployment of more than …

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Update your buy-sell agreement as part of your end-of-year duties

Buy-sell agreements are an important business continuity tool that can assist a business in difficult transition times. Usually, the buy-sell agreement either contains a formula, or requires an annual determination of the price to be employed. All too frequently, the business owners do not revisit the formula to ensure that it remains sensible in light …

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No GAAP yet for Bit Coins

Bit Coins are increasingly in the news.  Denise Lugo of Bloomberg BNA describes “Bit Coins” as: a type of virtual currency, which loosely put, is created when a complex mathematical algorithm is solved using high power computers.  It seems like overnight bit coins have become legitimate.” Ms. Lugo also summarized the FASB’s recent position at a …

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Ernst & Young gets settlement deal of the decade

E&Y just settled the Lehman Brothers class action against them for $99 million. It made little news. The 2008 Lehman Brothers bankruptcy was at least partially caused by accounting malfeasance. This article describes the bankruptcy examiner’s report on this wrongdoing. Arthur Andersen was entirely destroyed for a bad audit of Enron that was no worse …

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Accelerate equipment purchases to preserve an important 2013 tax break

The first-year bonus depreciation law which allows rapid write-off of equipment purchases is expiring at the end of 2013. Companies who can do so are well advised to accelerate their equipment and software purchase(s) before the end of 2013. Combined, the two laws allow 60% of equipment to be written off in the first year. …

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Disgorgement of Profits on Unpaid Benefits Granted in ERISA Long Term Disability Case

In Rochow v. Life Insurance Company of North America (“LINA”), the Appeals Court affirmed a disgorgement remedy of $3.8 million under ERISA in this long term disability case.  In a previous appeal, the Court had determined that LINA had acted in an arbitrary and capricious manner when it continuously denied Daniel Rochow benefits for his long …

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New Guide to Review Engagements

On December 10, 2013 the International Federation of Accountants released its guide for conducting review engagements.  The guidelines are particularly relevant for smaller firms conducting review engagements in compliance with International Standard on Review Engagements (ISRE) 2400 (Revised). The guide includes such helpful information as: illustrative examples relevant extracts from the standard practical points for practitioners’ …

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