Bottle Caps: Coca-Cola outtakes and highlights from AAA Ethics Symposium
I was also in D.C to teach our KPMG-PCAOB case again and got to meet an Olympic medal winner!
Freedom tends to be confused with the idea of having no restrictions, whereas the exercise of freedom consists in having the power to choose between what is right and what is wrong. Octavio Paz, The Labyrinth of Solitude
Last Monday — between a trip to Washington, D.C. for the American Accounting Association's Ethics Research Symposium on last Sunday and a return trip for the rest of the AAA Annual Conference and guest teaching our KPMG-PCAOB data theft scandal case to University of Michigan MAccs last Tuesday — Olga Usvyatsky and I jointly published a new piece on Coca-Cola here and on her site, Deep Quarry.
Our goal was to explain how, as described in a Financial Times piece from the prior Friday, Coca-Cola was going to pay $6 billion cash in back U.S. Federal taxes and, yet, insist there would be no P&L impact.
There was a lot more to explain, but I hope we were able to shed a bit more light on something Coca-Cola wants to stubbornly pretend will go away.
Coca-Cola Faces $16 Billion Tax Battle: Ongoing Dispute with IRS Puts Profit and Liquidity at Risk
All over the world people have their own memories of Coca-Cola because it has been a truly iconic global brand for more than 100 years. I was reminded of that when I attended a cocktail reception in D.C. Saturday night hosted by Stephani Mason of DePaul University. There was an open bar, and it was a very hot and humid night in the D.C. swamp. I don't drink alcohol much anymore, and I certainly avoid sugary carbonated sodas almost totally, but the Bacardi rum and Coke called me by my name.
When I was working in Latin America, in particular Mexico, for KPMG Consulting then BearingPoint in the late 90's and early 2000's, a "Cuba Libre" was my cocktail of choice when I was not drinking tequila. Coca-Cola Femsa was my client. We were building a digital marketplace for them with Ariba software, then independent, now part of SAP.
Coca-Cola FEMSA, S.A.B. de C.V., known as Coca-Cola FEMSA or KOF, is a Mexican multinational beverage company headquartered in Mexico City, Mexico. It is a subsidiary of FEMSA which owns 47.8% of its stock, with 27.8% held by wholly owned subsidiaries of The Coca-Cola Company and the remaining 25% listed publicly on the Mexican Stock Exchange (since 1993) and the New York Stock Exchange (since 1998). It is the largest franchise Coca-Cola bottler in the world, the company has operations in Latin America, although its largest and most profitable market is in Mexico.
What's great about Mexican Coca-Cola is that it is made with cane sugar, not high fructose corn syrup, a bit of native protectionism of the Mexican corn farmers. As a result, it is the sweetest thing!
Before I started working full-time in Latin America in 1997, I spent three months in Chiapas, Mexico improving my Spanish and teaching English. The indigenous Mayan there are very fond of Coca-Cola. In fact, when I went out to see churches in San Juan Chamula and Zinancantan, for example, they told stories about the priests, in a mix of Mayan and Catholic rituals, who used Coke in their ceremonies. Something about the burps from the carbonation was spiritually inspiring.
Before I went to Mexico and then Latin America, I was under the mentorship of some "work hard, play hard" partners at KPMG Consulting — Vince Neton, Anne Sullivan, Jerry Blaesing, Jim Blankenheim, Pat Bauer, Tom Wilde, Tom Pankey... Their drink of choice was Jack Daniels and Coke. There were a lot of long nights with Jack at the Swiss Hotel in Chicago, in Michigan, and in Indianapolis, in particular, when we were on tight deadlines for "big bang" software rollouts on January 1.
There were more than a few outtakes for the Coke transfer pricing story, bits and pieces that did not make it to the piece we published last Monday. After the jump, I'll say more about Coke, about my presentation for the Ethics Research Symposium, and about a few more presentations and papers of note from that conference.
I will also say more about the time I spent with the University of Michigan MAccs. I've taught our KPMG-PCAOB scandal case five times in the last year - at Ohio State, at Vanderbilt University, at University of Miami, and now twice for University of Michigan MAccs.
Many wonder why we are seeing fewer who want to study accounting, fewer still who want to take the CPA exam, and why the largest firms are having trouble recruiting. Well, my informal poll after teaching this case to graduate students who have already committed to become licensed and work at the top firms has produced some pretty consistent answers.
All that additional reporting is for paid subscribers, only. Won't you consider a paid subscription, preferably an annual one so you can stick around with me for a while?