Ohio Society of CPAs Foolish Enough to Think That Congress and the President Will Heed Their Call for Bipartisanship

Posted on by Caleb Newquist

It's not just Ohio CPAs, mind you. NosireeBOB. It's primarily Chambers of Commerce from around the country but also the Asian American Hotel Owners Association, the National Beer Wholesalers Association, the Snack Food Association, Turfgrass Producers International, and a host of others asking "Congress and the president to immediately enact legislation that averts America’s impending fiscal cliff." Christ guys, if it wasn't an election year with the worst Congress ever, it might be worth the effort. Congress is awful. Your letter is hollow. Let's just ride off this thing like Thelma and Louise. 

[U.S. Chamber of Commerce via The Hill]

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Cash-strapped Clients Could Force Accounting Firms to Come Up with Creative Cost Savings

Because times weren’t already cheerful enough around GT, they recently released a study which found that businesses are generally pessimistic about raises and bonuses this year.


From the press release:

The firm surveyed 496 U.S. CFOs and senior comptrollers from March 22 through April 5, and found that 53% plan no salary changes in the next 6 months, while 32% plan to decrease and 15% plan to increase. On the bonus front, there is also equal pessimism, 47% plan no change, 44% plan to reduce, and only 8% plan to increase.

Well – that certainly sucks.

We know raises are the last thing on the minds of higher-ups at GT, but come on, really? Imagine being a no-name staffer at GT grinding away on a report about how your clients are a collective group of Negative Nancy’s. With headcount discussions ongoing in several GT offices, one would be – and should be – concerned.

The freezes in salary and bonuses don’t really apply to the accounting firms because – as it has already been discussed here in great length – money should be flowing your way this summer. The underlying concern with this report is this – if your client isn’t giving its own employees a bump in pay, there’s no bloody chance your firm is getting a bump in fees, either.

Any and all resources will be applied to minimizing any talent exoduses from occurring.

So how will the firms find enough cookies in the jar to “support the current pipeline?” I checked in with a Big 4 auditor in New York who had this to share:

During casual conversation with my mentors, word is the firm will be pushing for leaves of absence again this summer for everyone who has not completely passed the CPA. The hope is for a decent percentage of staff members to do this to save on salaries.

Makes sense-ish. Temporarily cut staff salaries during a relatively quiet audit period. Will this be enough to cover raises and bonuses while client fees remain stagnant? Heavens no but it’s a start. As always, let us know if you learn of ways your firm plans to pinch pennies.

Accounting News Roundup: Will E&Y Take the Brunt of Lehman’s Bankruptcy?; Texting Japan Donations; Richard Hatch’s Light Sentence | 03.14.11

Japan Battles Nuclear Meltdown as Millions Without Power, Water [Bloomberg]
Workers battled to prevent a nuclear meltdown after a second blast rocked an atomic plant north of Tokyo, as helicopters and convoys of army trucks headed toward areas worst-hit by Japan’s strongest earthquake. No large release of radiation was detected after the explosion, which didn’t breach Fukushima power station’s No. 3 reactor and followed a build-up of hydrogen gas, Chief Cabinet Secretary Yukio Edano told reporters in Tokyo today. The risk of a large leak is very small, he said.

BOJ Takes Action to Bolster Moneya href=”http://online.wsj.com/article/SB10001424052748704893604576199261875222164.html?mod=WSJ_hp_MIDDLETopStories”>WSJ]
The Bank of Japan jumped into action Monday to temper the economic blow from the earthquake, tsunami and nuclear emergency that hit northern Japan, doubling the size of its asset-purchase program and pouring a record 15 trillion yen ($183.17 billion) into money markets to ease liquidity concerns. “What we were most concerned about was the possibility that increases in anxiety and risk-aversion moves would negatively affect the real economy, so we judged it appropriate to mainly boost purchases of risk assets,” BOJ Gov. Masaaki Shirakawa said after the bank’s policy board meeting, which was cut to one day from two because of the crisis.

Lehman Auditor May Bear The Brunt [WSJ]
Federal investigators have grown increasingly doubtful they can prove Lehman executives violated the law by using an accounting maneuver known as Repo 105, which obscured the amount of risk Lehman held, making the firm’s finances look better than they were, The Wall Street Journal has reported. But Ernst & Young, Lehman’s auditor, is fighting fraud charges filed in December by the New York attorney general for, among other things, allegedly failing to adequately follow up on a whistleblower’s claim that Lehman was misstating the value and size of its assets.

Texting Japan earthquake donations [DMWT]
$10 will be added to your next phone bill for contributions to the following charities: American Red Cross, Salvation Army, Convoy of Hope, GlobalGiving and World Relief.

Big 4 Bias – Can We Ever Overcome It? [BDO/CEO Insights]
BDO Global CEO Jeremy Newman wants some respect!


Nine Months is Not a ‘Severe Punishment’ Fitting Survivor Winner Hatch [Yahoo]
Hatch famously failed to pay the taxes due on the $1 million prize won from the first season of “Survivor” more than 10 years ago. He was convicted of tax evasion and subsequently served more than three years in prison. He also, obviously, was ordered to refile amended tax returns that accurately reflect his 2000 and 2001 income and pay the income taxes due. Though any reasonable person disinterested in spending any more time in federal prison would have immediately filed corrected tax returns and pay the taxes due, Hatch failed to do so, and according to the Hollywood Reporter, he has been sentenced to prison for an additional nine months. Hatch was released from prison in 2009, and since then has been serving a three year term of supervised release.

India’s IFRS Carve-Outs and the Pipedream of Global Accounting Standards [The Accounting Onion]
If IFRS adoption was ever a goal worth pursuing, it has long since vanished, and the political motivations of its remaining supporters are now deprived of any pretense of legitimacy. It’s time to let the rest of the world “countdown to IFRS” if they want to, but If the SEC were really serious about protecting investors, it would scrap the IFRS roadmap. In it’s place, there should be a new plan for making U.S. GAAP unquestionably the pre-eminent financial reporting system in the world.

AIG Adopts Poison Pill to Preserve $65 Billion NOL [TaxProf Blog]
AIG, like GM and Citigroup before it, has adopted a poison pill to preserve its $65 billion NOL by ensuring that no investor acquires a 5% stake and triggers the change of ownership rules.

It’s Ridiculous to Think That Enterprise Financial Dismissed KPMG Because of the Restatements

KPMG has been kicked to the curb by Enterprise Financial according to an 8-K that was filed on Friday by the company. The ubiquitous claim of “no disagreements with [insert firm]” was there along with a mention of a material weakness that was related to the restatements issued for both 2008 and 2007 but that couldn’t possibly have anything to do with the dismissal of the auditors:

In connection with the identification of the loan participation accounting error described in Item 7, Management Discussion & Analysis and in Item 8, Note 2 of the consolidated financial statements and elsewhere in the Form 10K dated March 16, 2010, the Company also determined that a material weakness in its internal controls over financial reporting existed during the periods affected by the error, including as of December 31, 2008. The Company’s management concluded that the material weakness was the Company’s lack of a formal process to periodically review existing contracts and agreements with continuing accounting significance. To remediate this material weakness, during the fourth quarter of 2009 the Company implemented a formal process to review all contracts and agreements with continuing accounting significance on an annual basis. As a result of the review conducted in the fourth quarter, management did not identify any other errors in its previous accounting for such contracts or agreements. Management believes that this new process has remediated the material weakness in the Company’s internal control over financial reporting.

So in other words, “Yeah, maybe we should have been looking at these contracts but we weren’t and so some material misstatements slid through. We’ve slapped some duct tape on it and it’ll be fine from here on it. End of story.”

The esteemed pleasure of auditing Enterprise now belongs to Deloitte who has now snagged three clients from KPMG this year (by our count) – picking up Jefferies and Select Comfort back in March.

Enterprise Bank parent dismisses KPMG [St. Louis Business Journal]