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The Morning Ledger: For GE, Dropping KPMG Won’t Be Easy
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GE says it is trying to eliminate at least some conflicts of interests to ensure it can switch auditors if it decides to do so. PHOTO: VINCENT KESSLER/REUTERS
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Hello. A new auditor often means more work for the finance chief. But while General Electric Co. has signaled it may want to switch auditors after more than a century with KPMG LLP, that won’t be easy, The Wall Street Journal’s Michael Rapoport reports.
Conflicts of interest. The only other firms big enough to take GE’s massive audit all have potential conflicts of interest that could block them from doing so. PricewaterhouseCoopers LLP does GE’s tax work, and GE’s 600-employee tax-services team is now housed at PwC. Ernst & Young LLP is one of GE’s biggest lobbyists in Washington. Deloitte & Touche LLP has business ties to GE that a GE unit has said would pose conflict-of-interest concerns.
[Continued below…]
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By the rules. Any new auditor would have to follow U.S. Securities and Exchange Commission rules that a company’s auditor be “independent”—free of any relationships that could compromise its ability to perform a tough, impartial audit of the company’s finances. Auditors aren’t allowed to provide many types of consulting services to their audit clients, for instance. “If you want a choice, you need to be careful about the connections and the relationships you have,” said Steve Glover, a Brigham Young University accounting professor.
Lucrative prize. GE paid KPMG $133.3 million in 2018 for its audit and other services, the most by any U.S.-traded company, according to consulting firm Audit Analytics. Over the past decade, GE’s fees to KPMG have totaled nearly $1.1 billion.
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Logistics Firm Ryder System Names New CFO
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Ryder System Inc. appointed a new finance chief on Wednesday, a move that comes as the truck leasing and fleet management company zeroes in on costs while growing its supply chain services businesses.
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Scott Parker will join Miami, Fla.-based Ryder as executive vice president and chief financial officer on April 5, the company said. He replaces current CFO Art Garcia, who is retiring. Mr. Parker takes on the new role after more than three years as CFO of OneMain Financial Holdings Inc., a consumer finance company, CFO Journal’s Nina Trentmann reports.
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Magellan Midstream Partners Appoints New Finance Chief
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Oil pipeline company Magellan Midstream Partners LP on Wednesday said it will promote Jeff Holman to finance chief, effective May 1.
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Mr. Holman currently serves as vice president of finance and treasurer for the Tulsa, Okla.-based company, and has held a variety of finance leadership positions since joining the company in 2004.
Mr. Holman succeeds Aaron Milford, who was also promoted to the newly created role of chief operating officer, effective May 1. Mr. Milford had served as CFO since May 2015, and was vice president, crude oil business development from 2014 to 2015. Mr. Milford also joined Magellan in 2004.
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The Commerce Department is scheduled to release its final reading of U.S. gross domestic product for the fourth quarter at 8:30 a.m. ET. Economists surveyed by the WSJ expect the report to show the economy expanded by 2.2%, compared with the initial fourth-quarter reading of 2.6%.
U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin will take part in another round of negotiations with their Chinese counterparts in Beijing in an attempt to resolve the trade dispute between the two countries, the Financial Times reports.
Movado Group Inc. and Accenture PLC are among the companies scheduled to report earnings today.
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A Smart EQ compact electric car is on display during the Daimler shareholder meeting in Berlin, in April 2018. PHOTO: KRISZTIAN BOCSI/BLOOMBERG NEWS
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Daimler AG and Chinese auto maker Zhejiang Geely Holding Group have agreed to create a joint venture in China to transform Daimler’s struggling Smart compact city car into a global all-electric brand, the companies said Thursday.
Swedbank AB’s board sacked Chief Executive Birgitte Bonnesen on Thursday, as the fallout from the money-laundering scandal further engulfs the bank. Chief Financial Officer Anders Karlsson has been named acting chief executive and will hold both roles until further notice.
Health insurer Centene Corp. agreed to buy competitor WellCare Health Plans Inc. for around $15.3 billion, creating a giant in the business of managing government health programs.
AT&T Inc.’s WarnerMedia took steps to reduce head count at its Turner unit, which was essentially dissolved as a result of a wide-ranging restructuring announced earlier this month.
ZTE Corp., the Chinese telecommunications company whose brush with death last year thrust it to the center of the trade war between the U.S. and China, posted a net loss of more than $1 billion in 2018.
Saudi Arabian Oil Co. has agreed to buy a 70% stake in Saudi Basic Industries Corp., the kingdom’s petrochemicals firm, for $69.1 billion, giving Crown Prince Mohammed bin Salman’s agenda a massive jolt of cash. Saudi Aramco plans to issue a $10 billion bond as early as next week to help fund its acquisition.
Nissan Motor Co. needs to overhaul its corporate governance structure to curtail the power of its most senior executives, a committee of advisers appointed by the car maker said.
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The IFRS Foundation, which oversees the setter of International Financial Reporting Standards, on Wednesday published its 2019 taxonomy.
This year’s changes to the taxonomy include the disclosure of fair value measurement under IFRS 13 and other, general improvements, the IFRS Foundation said in a statement.
The taxonomy enables corporates to report financial information prepared under observance of IFRS standards electronically.
—Nina Trentmann
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A Huawei smartphone launch event in London in 2016. PHOTO: CHRIS RATCLIFFE/BLOOMBERG NEWS
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British officials accused Huawei Technologies Co. of repeatedly failing to address security flaws in its products and said the company hasn’t demonstrated a commitment to fixing them.
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U.S. national-security officials have ordered a Chinese company to sell gay-dating app Grindr, signaling that a range of social-media companies and apps is now off limits to Chinese buyers.
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Pressure on Facebook Inc. is mounting following a live stream of the New Zealand mosque massacre, with the nation’s leader calling for an overhaul of the country’s social-media laws and her Australian counterpart proposing criminal penalties for companies that are slow to remove such content.
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U.S. Transportation Secretary Elaine Chao told lawmakers it was “troubling” that certain safety features were available as options rather than standard equipment on Boeing Co.’s 737 MAX, the new airliner that has suffered two fatal crashes in five months.
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New Jersey state officials sued chemicals makers DowDuPont Inc., Chemours Co. and 3M Co. to pay to clean up years of industrial contamination.
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A jury Wednesday awarded over $80 million in damages to a California resident the jurors found contracted cancer from exposure to Bayer AG’s Roundup weedkillers.
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An Italian court ruled in favor of Parmalat’s owner in a long-standing dispute with Citigroup Inc., which has argued that it was a victim of the Italian dairy company’s massive fraud, which is still reverberating 15 years later.
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Brazilian prosecutors plan to use the country’s anticorruption law to pursue penalties against German certifications group TÜV SÜD for its role in the collapse of a mine-waste dam in January that killed about 300 people.
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Workers unloading boxes of flowers from a cargo jet that arrived from Colombia at Miami International Airport in February. PHOTO: WILFREDO LEE/ASSOCIATED PRESS
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The U.S. trade deficit shrank 15% in January, reflecting a slowing domestic economy and volatile trade dynamics with China amid the Trump administration’s tariff negotiations.
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U.S. companies more than quadrupled the amount of foreign earnings they sent home in 2018 following enactment of a tax-law overhaul in late 2017, though the size of so-called repatriations declined after an initial spike.
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China is slashing subsidies for electric vehicles, which will test the resilience of a fast-growing EV market that government support helped create.
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