Supreme Court to Consider Honest Services Convictions

John Merchant, CPA, CFE

A federal fraud statute known as the “honest services” statute, enacted in 1988, establishes that it is a crime for officers of a corporation to cause losses for shareholders by depriving them of their right to honest services by those officers.  Defense attorneys have argued that prosecutors have obtained convictions under this statute because it is too vague and, therefore, easy to charge and hard to defend.

Earlier this year, the former CEO of Enron, Jeffrey Skilling, […]

November 9, 2009 Accounting, Forensic Accounting Read more...

Judge Jed Rakoff – Protector of the People?

John Merchant, CPA, CFE

In August 2009, the SEC sued Bank of America, claiming that Bank management had lied to its shareholders in order to complete a $50 billion acquisition of Merrill Lynch, an investment company that was nearly bankrupt, while secretly paying several billion dollars in bonuses to Merrill Lynch executives.  In short, the Commission contended that the shareholders of Bank of America were the victims of fraud. The SEC action appeared to be an effort to enforce the […]

November 2, 2009 Accounting, Forensic Accounting Read more...

Lack of Cooperation by the Employer

Posting by Larry Beebe, CPA

Most of the time employers cooperate fully when selected for a payroll audit.  A small minority of employees, however, refuse to cooperate.  The lack of cooperation can occur in many ways.  Here is a list of ways in which employers fail to cooperate:

1. Cannot be reached to schedule the audit
2. Refused to allow the audit in the time period selected by the auditor
3. Tries to schedule the audit at an inconvenient time and/or location
4. Calls and reschedules
5. Calls and cancels […]

October 30, 2009 Payroll Audit Read more...

Success Comes Before Succession in the Dictionary: Honoring the Family Business Leader

Posting by Geoffrey D. Brown, CPA, Principal

At the recent Family Firm Institute (FFI) conference in New York, the first session I attended did not quite live up to the hype in the title, so I decided to change my tactic and instead of attending sessions that sounded like they would be the most interesting, I decided to attend those focusing on being conducted by people with authority and credentials in the field of family business advising.

One of those sessions […]

October 28, 2009 Accounting, Family Owned Businesses Read more...

Why We Don’t Do Payroll Audits – Reason 9

Posting by Larry Beebe, CPA

“All of Our Employers are Honest”

How could any trustee make that statement with certainty?  Let us assume that statement is correct.  How do you know that all or your “honest employers” have reported their obligations accurately under the collective bargaining agreement (CBA).  An employer may not be interpreting the CBA terms correctly.  For example, the employer may only be reporting up to 40 hours a week in a situation where the CBA clearly obligates the […]

October 27, 2009 Payroll Audit Read more...

Armani and Dangerous: When the Family Business is Really About One Person

Posting by Joel C. Susco, CPA, Principal

When the product or service of a business is primarily the creativity itself, as in fashion design, the differentiator and the branding is that creative mind.  Such is the case with Giorgio Armani SpA, where anyone in the capitalist world knows what is meant when an Armani suit is worn.  Because up to this point, it’s been all about Giorgio, his designs, his presence, his business decisions.  Although this is a family business, […]

October 22, 2009 Accounting, Family Owned Businesses Read more...

Private Equity Giant Berkshire Partners Goes Shopping for Family Business Grocery Retailer

Posting by Joel C. Susco, CPA, Principal

It isn’t every family business owner’s dream to grow their company huge; sometimes the desire is to be successful, manageable by the family, and perhaps to consistently continue on for some generations, producing a great reputation from the family name.  But of course many family businesses aim high and get there, like Grocery Outlet, Inc., a third-generation “extreme value” grocery retailer.

Many family-owned supermarket chains stay relatively local, with a dozen or so locations, […]

October 16, 2009 Accounting, Family Owned Businesses Read more...

IFEBP Annual Conference and Collection Procedures Institute

Posting by Larry Beebe, CPA

The International Foundation’s 55th Annual Benefits Conference in Orlando, Florida on November 8-11, 2009 is rapidly approaching.  The annual conference covers a wide breadth of topics including fiduciary responsibility, pension, health & welfare, investments, general topics and specific topics for accountants, attorneys and others.  Specific sessions dealing with collection employer contributions include:
Session 108 – Fiduciary Responsibility in Collections
Session 408 – What’s New in Collections

I will be there as an instructor and also as an attendee.  […]

October 13, 2009 Benefit Plan Accounting, Firm News & Events Read more...

OFF WITH THEIR HEADS! Does White Collar Crime Warrant Execution?

Lawrence R. Beebe, CPA, Principal

Even though Al Capone was known to have perpetrated many heinous, violent crimes, in addition to what we today would consider white collar crimes, he was finally nabbed by a forensic accountant , and sent to prison (for years, but not for the rest of his life).  But in some parts of the world, those in power who bilk others out of their money may be incarcerated for life, or even executed.

Think Twice Before Any […]

October 9, 2009 Accounting, Forensic Accounting Read more...

To the Family Business Born: What are the Rights of Passage?

Posting by Joel C. Susco, CPA, Principal

Being born into a family business does not necessarily grant one all the rights and privileges of becoming an owner of that business at birth.  All too often young family members look upon themselves as heirs of entitlement without the thought of the management obligations that must go along with the rights of ownership.

It is important for families to invest a considerable amount of time and effort in educating these young potential shareholders, […]

October 2, 2009 Family Owned Businesses Read more...