NEWS HIGHLIGHTS FOR FRIDAY - 9.16.16

By:
Maya Lindsay
Published Date:
Sep 16, 2016

Accounting and Financial News Stories

House Calls Off Vote to Impeach I.R.S. Chief in Favor of Formal Hearing
New York Times
Fearing an embarrassing spectacle — or a defeat — eight weeks before Election Day, House conservatives and the leaders of the House Judiciary Committee agreed to call off a vote Thursday to impeach the Internal Revenue Service commissioner in exchange for formal impeachment hearings next week before the committee. The last-minute deal struck Wednesday night may merely postpone the unprecedented step of formally accusing John A. Koskinen, 77, the head of the I.R.S., of “high crimes and misdemeanors.”

Deutsche Bank Is Asked to Pay $14 Billion to Resolve U.S. Probe Into Mortgage Securities
Wall Street Journal
The U.S. Justice Department proposed that Deutsche Bank AG pay $14 billion to settle a set of high-profile mortgage-securities probes stemming from the financial crisis, according to people familiar with the matter, a number that would rank among the largest of what other banks have paid to resolve similar claims and is well above what investors have been expecting. The figure is described by people close to the negotiations between Deutsche Bank and the government as preliminary, and they said it came up in discussions between the bank and government lawyers in recent days.

Amid Apple's $14.5B Tax Avoidance Fine, Treasury Clamps Down on Loopholes
NBC News
Apple and other U.S. multinationals will face new curbs on tax loopholes under a rule imposed by Washington on Thursday, part of a scramble among governments worldwide to bolster their corporate tax bases. Acting shortly after a European Union grab for billions of dollars in back taxes from Apple, the U.S. Treasury said it was tightening restrictions on companies' use of foreign tax credits to reduce what they owe in U.S. taxes.

Dollar-Hedging Costs Hit Treasurys
Wall Street JournalYield tourism is getting expensive. For much of the year, strong demand from Japanese and European investors seeking better returns for their money than they could get at home pushed up prices of U.S. Treasurys. Now, the rising cost of borrowing dollars overseas and investing them in the U.S. is amplifying the selloff. The culprit is the cost of hedging against foreign-exchange swings in markets for cross-currency basis swaps and foreign-exchange forwards.

Investors Stick With Assets That Mimic Hedge Funds
New York Times
Mutual funds that mimic hedge fund strategies — the so-called liquid alternatives sector — were among the hottest investments just a few years ago. Despite lagging returns and setbacks at several noteworthy funds, retail investors until recently have stuck with them even as they have pulled billions of dollars out of other funds. There may be early warning signs that that is about to change. The current market leader is a trend-following financial futures fund called the AQR Managed Futures Strategy Fund, which has ridden the downturn in oil prices and interest rates to a recent peak of $14.3 billion of assets.

How CPAs Can Add Value Through Integrated Reports
AccountingWEB
Integrated financial reporting has become increasingly high profile in recent years, with the number of publications in both academic and practitioner circles increasing at a rapid rate. Experts, scholars, and practitioners in the field of integrated reporting hail from academia and the accounting workforce, but despite such coverage, there remains some confusion as to what exactly an integrated report contains. Financial reporting in the traditional sense of publicly disclosed financial statements, filed with the US Securities and Exchange Commission for organizations traded in the United States, is not typically an area of excitement or of interest to many users.

A New Plan to Solve The Fed’s Inflation Problem
Wall Street Journal
If you can’t raise the floor, why not just lift the ceiling? Inflation remains stubbornly low, having undershot the Federal Reserve’s 2% annual target for more than four years. The longer that it stays low, the more likely it will keep weighing on inflation expectations, creating a feedback loop that is tough to break. Friday’s inflation data aren’t likely to break that trend, further complicating matters as the debate rages over the timing of the Fed’s next interest-rate increase. Economists polled by The Wall Street Journal estimate that consumer prices in August were 1% higher than a year earlier and 2.3% higher excluding food and energy.

IRS Probed for Taxpayer Info Disclosures in FOIA Requests
Accounting Today
The Internal Revenue Service may have inadvertently disclosed sensitive taxpayer information in response to Freedom of Information Act requests in violation of taxpayer rights, according to a new report. The report, from the Treasury Inspector General for Tax Administration, is issued annually to examine whether the IRS is responding properly to FOIA requests. However, the issue has taken on greater importance this year in light of the presidential election, with a Democratic super PAC filing a FOIA request last month with the IRS for copies of Donald Trump’s tax correspondence.

By One Measure, Health Care Law Is a Record Success
New York Times
Included among the many uplifting economic numbers released by the Census Bureau on Tuesday was a remarkable one about health insurance in the United States: Only 9.1 percent of Americans do not have coverage, the lowest level ever recorded by the agency. That figure is down from 13.3 percent in 2013, before the major provisions of the health care law signed by President Obama went into effect. Another government study, released last week, looked at the first part of 2016 and found that the uninsured rate had fallen even further, to 8.6 percent.

Selling Again Hits Long-Term U.S. Government Bonds
Wall Street Journal
Prices of long-dated U.S. government debt fell again on Thursday after a brief respite, underscoring investors’ uneasiness amid lofty bond valuations and worries over less monetary stimulus support from major central banks overseas. The latest trigger: a round of tepid releases including retail sales and industrial production cemented expectation that the Federal Reserve is unlikely to raise interest rates next week. That view drove investors to sell long-term debt and buy short-term notes as the latter’s yields are more sensitive to the central bank’s policy outlook.

Click here to see more of the latest news from the NYSSCPA.