Author: Adrienne Gonzalez

Adrienne is a 15-year veteran of the accounting industry, if by "veteran" you mean "vulture prowling the periphery of the profession waiting for something exciting to happen." She has been spewing vitriol on Going Concern since the site was founded in 2009. A former CPA review employee, she has sat through more FAR classes than any CPA exam candidate ever could -- even one who has failed FAR seven times -- and can still recall most of the mnemonics all these years later.

The CPA Exam Goes International Without a Hitch

The AICPA, NASBA and Prometric yesterday announced the successful launch of the U.S, CPA Examination in international locations – the first time in history it has been administered outside of the United States and its territories.

On August 1, the first candidates took the exam in Japan, Bahrain, Kuwait, Lebanon and the United Arab Emirates. Throughout the remainder of the month, 1,165 candidates will sit for 2,065 examination sections. Future month-long testing windows will take place in November, February, May, and every third month thereafter.

The U.S. CPA exam is offered internationally as a service to foreign nationals in response to escalating international demand for U.S. CPA licensure. In 2010, more than 10,000 international candidates traveled to the U.S. to take the U.S. CPA exam, a 22 percent increase from 2009. Nearly one-third of international candidates came from Japan.

The international exam, offered in English, is the same as the U.S. exam administered by the AICPA, NASBA, and Prometric in the United States. Licensure requirements for international candidates are the same as for U.S. CPA candidates, meaning candidates must meet the qualifications of the jurisdiction in which they apply.. Along with passing the Uniform CPA Examination, international candidates must meet educational and experience requirements as mandated by U.S. state boards of accountancy.

In the United States, state boards have the governmental legal authority to award the U.S. CPA license. Applications may be made through certain U.S. state boards of accountancy offering eligibility for international candidates. A list of participating state boards and information about fees is posted on the NASBA website at www.nasba.org.

Testing in the new international locations is open to citizens and long-term residents of the countries in which the exam is being administered. In the Middle East, citizens of Egypt, Jordan, Oman, Qatar and Saudi Arabia may take the exam in one of the Middle East locations. U.S. citizens living abroad are eligible to test at any location.

Help the NJ Society of CPAs Win $10,000 For Its Scholarship Fund

Contrary to what some might claim, we actually enjoy helping when we can, especially if it means money not out of our own pockets for future capital market servants. Therefore, we’re asking you to take two seconds out of your day to help the NJSCPA win a contest.

From NJSCPA Director of Communications Don Meyer:

In our never-ending effort to convince the world that CPAs aren’t dull, and hopefully to win $10,000, the NJSCPA entered a photo in the “Great Event Photo Contest” on Facebook – http://bit.ly/rkJPdE.

If our photo (a Society member salsa dancing at the 2011 NJSCPA Convention & Expo in Atlantic City) gets enough votes we could win $10,000 for the NJSCPA Scholarship Fund, which provides scholarships to high school and college students.

We’ll be encouraging (or nagging if you prefer) our members to vote for us by promoting the contest on Facebook, Twitter, NJSCPA Connect (www.njscpa.org/Connect), through email and by whatever other means we can think of.

We’re up against some big competition so we’re looking for whatever exposure we can get (hint, hint). Thanks.

Who says CPAs are dull?

You have until August 22nd to vote and can vote once a day using your Facebook profile.

Get on it!

Royal Caribbean Sued Over “False and Misleading Statements”

Last month, Royal Caribbean revealed a pretty significant accounting error related to its amortization of some financing fees (interest expense) that forced it to revise its earlier financial statements. This drove second quarter EPS of 47 cents to 43 cents. As a result, Royal Caribbean shares fell 13% on the day it made the “boo boo” announcement to below $31 a share on high volume of over 11.32 million shares.

As a result, Royal Caribbean and certain of its officers and directors are charged with making a series of materially false and misleading statements related to the Company’s business and operations in violation of the Securities Exchange Act of 1934.

RC Chairman Richard Fain said last week he was “embarrassed” by the error, which was made  in 2009 and discovered by the company’s internal accounting team. The company said though it revised its past financial statements, it did not restate its prior earnings, and claimed the statements could still be relied upon. Uh huh.

Law firm Kahn Swick & Foti, LLC has filed the class action suit against Royal Caribbean on behalf of purchasers of the securities of Royal Caribbean between January 27, 2011 and July 28, 2011 in a Miami court as of last week.

Young, Soon-To-Be CPA (Or HR Spy) Wants To Know What Your Recruiting Events Are Like

Call me crazy but this feels more like an email from a curious recruiter researching the competition than a junior trying to find out what other firms are up to. But hey, that’s just paranoid ole me.

If you have a question for our crack team of snark distributors, feel free to get in touch.

Hi GC,

I’m a young, aspiring CPA entering my junior year of undergrad. As a new target age group of recruiting, I recently attended a leadership conference with one of the Big 4. Sadly, I only applied for one such event, only to meet other students my age attending multiple events held by different firms. In an effort to always compare firms, I was wondering if you could open this up for discussion. Who had the lamest activities? Who had the most people? Which company threw it together at the last minute and had no clue what they were doing?

Thanks so much,

Bi(g 4) curious

Just wondering, did you try to talk to any of these “students your age” about the multiple events they were heading to? What did they have to say?

Why do you care? If you are interested in a particular firm, have you tried searching their tag on this website to see who gets the most “hoo-rah!” staff on here telling other firms’ employees how much they suck? I’m not 100% sure what it is you’re trying to glean from hearing about the recruiting events that you didn’t sign up for but let me save you a whole bunch of research: all recruiting events are pretty much the same. A bunch of awkward people stand around telling bad stories, sometimes crappy snacks are served, every now and then there are cocktails and at the end of it, some people come out of it with a job. End. These events have been going on for thousands of years (well, OK, maybe only the last several decades) and they’ve all pretty much ended the same.

But hey, let’s just say you are for real and just curious how other events went down… have you considered senior year? You have plenty of time to figure out what everyone else is doing.

That said, if anyone has some great stories to share (I’m talking drunk recruiters, moron accounting students making fools of themselves, hot chicks getting hit on by sleazy managers… whatever you kids got), by all means, please let us know.

Groupon Will File a New S-1 to Pretend Like ACSOI Never Existed

All Things D has reported that Groupon will amend its S-1 public offering filing to remove references to its controversial ACSOI accounting treatment, which we discussed previously here.

In a June 2, 2011 SEC filing, Groupon admitted the metric was creative to say the least. “Our use of Adjusted CSOI has limitations as an analytical tool, and you should not consider this measure in isolation or as a substitute for analysis of our results as reported under GAAP,” they said. Some of the die-hard tin foil hat anti-IFRS brigade (I count myself as one of them) might feel the same way about other “alternative,” non-GAAP accounting methods but I digress.

ACSOI did wonders for Groupon’s numbers. It turned a 2010 operating loss of $420,344,000 into a positive $60,553,000, turning Groupon’s luck in its favor to the tune of $481 million. All well and good if investors can actually rely on those statements but didn’t the very idea of ACSOI self-proclaim that it was not to be relied upon? So how the hell did it end up in Groupon’s S-1?

All Things D elaborates on Groupon’s trouble since introducing the idea of ACSOI:

Hence, a furious debate — along with much internal tension — within Groupon about what to do. At first, in another S-1 amendment, the company backed away from using ACSOI as a “valuation metric.”

But that was apparently not enough for the SEC or anyone else, so Groupon’s top managers finally thought it best to rid itself of the term entirely. That will happen next week, sources said.

And, in coming weeks, sources added, the company will be filing additional financial information about both its growth and costs, which will undoubtedly also be put under a microscope by the media, investors and regulators.

Probably good for everyone involved. Things are complicated enough using metrics we all pretty much agree upon, no reason to start pulling accounting tricks out of our hats.

Accounting News Roundup: The IRS Hates On Gay Marriage; Damon Dash in Tax Trouble; Small Businesses Complain About Accounting Fees | 08.09.11

China, U.S. vow to step up audit oversight cooperation [Xinhua]
Officials from China and United States have pledged to increase cooperation on cross-border audit oversight, China’s securities regulator said Monday, in the wake of a string of accounting scandals of U.S.-listed Chinese companies. The two parties aimed to improve the quality of auditing and accounting information of public companies, protect the rights of investors and assist in safeguarding of financial markets in both countries, the China Securities Regulatory Commission (CSRC) said in a statement on its website.

Damon Dash Talks $3 Million Tax Debt [MTV]
The once-flamboyant Roc-A-Fella Records co-founder Damon Dash is now in debt. In July, The Detroit News reported that the music mogul and Jay-Z’s former business partner owes almost $3 million in back taxes, according to a tax lien filed June 30. On Friday, Dash visited the “Sway in the Morning” radio show on Shade 45 and spoke to host and MTV News correspondent Sway Calloway about his recent troubles with the IRS. After being asked about owing “$2 million,” Dash quickly set the record straight: “I owe way more than $2 million in taxes. That must’ve just been the IRS,” Dash said, laughing, before admitting that he was in a bad space financially. “Nah, nah, I’m f—ed up.”

Rich say wealth managers not worth as much as accountants [Citywire]
Wealth managers and advisers might be dismayed to hear that 60% of high net worth clients would expect to pay an adviser less than their accountant, and do not believe investment management is good value for money. The findings form part of management consulting firm MDRC’s 2011 UK High Net Worth Report, which is based on contributions from more than 4,000 high net worth individuals and 600 ultra high net worths. The report also found that nearly 90% of respondents would expect to pay their financial adviser less than their lawyer.

IRS shows newly married gay couples no love [MSNBC]
For all those same-sex newlyweds in New York, Lawrence S. Jacobs has a message: Enjoy the Champagne and the honeymoon, but expect no gifts from the IRS. Jacobs, a lawyer in Washington, specializes in estate planning for same-sex couples — and in delivering the bad news that their unions aren’t legal in the eyes of the IRS, a policy that will cost them time and money during tax season. Same-sex couples in Washington, which last year legalized gay marriage, must fill out a federal return to make calculations required for their D.C. joint return. But then they must set that work aside and fill out separate federal returns because the IRS doesn’t regard their union as legal, Jacobs says. “You just spent decades getting your marriage recognized, and now the feds say, ‘No, you’re not,’” says Jacobs, who as a partner in a same-sex marriage has firsthand experience of the problem.

Small firms not happy with rising accountancy fees [Fresh Business Thinking]
According to new research 15% of small businesses say that rising fees is their biggest accounting gripe. The survey of 269 businesses by Crunch.co.uk, which questioned attitudes to and experiences of accountants, was carried out in July. Other top gripes were jargon, or ‘accountant-speak’, and charging for communication such as phone calls and emails — 18% combined agreed these were pet hates.

The IRS’ Amnesty Program for Foreign Account Holders: What You Need to Know [Reuters]
In case you have missed the recent press coverage on unreported foreign bank and other financial accounts, the IRS announced a second amnesty initiative earlier this year. The good news, if you have not already disclosed your foreign financial accounts, is that under the amnesty you can avoid criminal prosecution and get back into the system at a relatively low cost.

Almost 1,500 Millionaires Do Not Pay Income Tax [ABC]
At a time when America is borrowing about 40 cents of every dollar it spends because tax revenues cannot keep up with government spending, hundreds of America’s wealthiest households are paying no income tax at all. According to a recently released IRS report, almost 1,500 of America’s 230,000 millionaires avoided paying any federal income tax in 2009.

Cantor urges GOP to resist tax hike pressure after S&P downgrade [The Hill]
House Majority Leader Eric Cantor (R-Va.) told Republican lawmakers to expect — and resist — increased pressure to raise taxes following the downgrade of the U.S. credit rating by Standard and Poor’s. “Over the next several months, there will be tremendous pressure on Congress to prove that S&P’s analysis of the inability of the political parties to bridge our differences is wrong,” Cantor wrote Monday in a memo to House Republicans. “In short, there will be pressure to compromise on tax increases. We will be told that there is no other way forward. I respectfully disagree.”

China Calls For a New International Reserve Currency That Isn’t the Dollar (Again)

Dean Baker of the Center for Economic and Policy Research writes via Business Insider:

The NYT told readers that:

“Beijing has few options other than to continue to purchase United States Treasury bonds, Chinese officials are clearly concerned that China’s substantial holdings of American debt, worth at least $1.1 trillion, is being devalued.”

Both parts of this statement are wrong. Beijing has the option to stop buying dollars from its exporters. The reason that the government accumulates dollars and other foreign currencies is that it buys the currency from the companies who are exporting to the United States and other countries.

If Chinese officials were that concerned about it, they wouldn’t keep selling us their useless crap, thereby continuing the vicious cycle of being forced to “cash out” in Treasurys on the difference. If we as Americans were that concerned about it, we’d stop buying the useless crap. Like the “Presidents of the United States” mugs I bought this weekend, which happened to have “Made in China” stickers slapped on the bottom.

On Saturday, after S&P downgraded the U.S. credit rating to AA+ (pretty sure you guys heard about that), Chinese officials said Washington needed to “cure its addiction to debts” and “live within its means,” harsh words considering our living beyond our means has been the main driver of China’s explosive growth in the last decade. ““The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone,” read the statement, released by state-run Xinhua news.

“China, the largest creditor of the world’s sole superpower, has every right now to demand the United States address its structural debt problems and ensure the safety of China’s dollar assets,” it said.

Wrong. The Federal Reserve is the largest creditor of the world’s former superpower (that’s us), and according to them, we can’t inflate fast enough.

“International supervision over the issue of U.S. dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country,” Xinhua said.

Notice a pattern here yet? GAAP isn’t good enough, we need the IASB to tell us how to recognize leases. Now the dollar isn’t good enough. Not that it ever was, at least not in my lifetime or yours.

Better learn Chinese, people.

Can Someone Help This Guy Know What It Feels Like To Be Wanted?

I am pretty sure some of you have some sage advice for this poor lost little sheep who can’t seem to elbow his way into the Big 4.

I have a question. I go to a small college where I am an accounting major. I hold a high GPA, several internships, involved in campus activity and in the community and a member of a fraternity. I understand that your resume is not going to get you an interview with one of the big 4. However, since I do not attend a school that the big 4 recruit from I am not able to gain any face time. I cannot get the time of day from any recruiter because I am not in their “pipleline” and I am always told that they willl keep it for consideration come time to recruit in the fall. I have networked like crazy through alumni of my school, my fraternity, my friends, my church, and my community. I am always referred to the recruiter and then I am always told that I will be considered. If you can shed any advice on how to obtain an interview from the big 4 that does not recruit your school I would appreciate it. I am I just out of luck and should of went to a bigger university?

Ahem. “Should have gone to a bigger university” for starters. This particular OP also attached a resume which I obviously won’t share and didn’t even open. I didn’t need to. And I’m a no-CPA-having, pissed off blogger, imagine what Big 4 recruiters would think reading a submission like the one above.

When you say you’ve “networked,” what exactly does that mean? “Networking” with your fraternity usually doesn’t have anything to do with work, and unless you are a member of the St H&R Block congregation, I’m unclear as to how your church is helping you get in at the Big 4. It’s good that you are making the rounds to get advice and support on this but the best thing you can do is evaluate your own way of approaching this because something obviously isn’t working.

In any correspondence with the firm, double-check this list to make sure you aren’t making any of these. I wouldn’t dare say working at the Big 4 is like rocket science or that you need to write a perfectly-worded dissertation to get in but maybe your fraternity experience is better expressed in person than written. You’d probably do great at a recruiting event if you had the opportunity to go to one.

There is a back door you can take by attending other professional events to see if you can meet someone who knows someone that likes your __________ (knowledge; ability to be molded into whatever they need; desire to please people whose job it is to bullshit you into one more busy season) and get you in. I don’t think writing to these people is going to help you.

In short, your fast track to the “pipeline” is to make yourself marketable and desirable to these bloodthirsty sharks. Slit your wrists in the water if you have to knowwhatI’msayin.

In a followup email to the OP, I asked “How are you approaching these recruiters? ‘Hey I kinda want a job with you guys’ or ‘I have x to offer and will take y assrape in exchange for it’ ?”

“I am pretty assertive so I am probably approaching it the second way you mentioned it. I am not sure if I would want to stay forever but, I want the name on my resume and I am willing to put in the time while I am young and single,” he wrote. I’d have to see his communications with recruiters or HR shlubs to confirm if he is being explicit about the level of assrape he’s willing to endure and for how long.

They can smell it, you know.

Small Pennsylvania Town Sues the Fire Department Over Shady Accounting

I would expect more and more items like these in the news in the months and years ahead but that’s just my humble opinion.

Apparently commissioners in Lawrence Park Township, Pennsylvania are sick of messing around and would like an Erie County judge to appoint a custodian to handle the volunteer Lawrence Park Fire Department. On Friday, the township filed a petition, after a July 12th vote of 3-2 to go to court.

Via Firehouse.com:

The three commissioners are claiming the Fire Department is violating a township ordinance by not providing an accounting of how the department is spending township money. The commissioners are arguing a custodian should be in place long enough to bring the department in compliance with the law.

The commissioners and the Fire Department have been feuding over the department’s finances since 2009. The firefighters have said the department is fiscally sound.

The funny part of all this is that the fire department claimed part of the reason why their finances were so jacked up was the Form 990 they “never knew existed” according to department president Maureen Crotty. Apparently the township commissioners felt the lack of a 990 (which reveals any non-profit organization’s expenses and revenues and is required for all non-profits above $250,000) was one of many good reasons not to give the department more money.

So back in April, almost a year after the IRS said all required 990s better be in or else, the fire department was still waiting to get a completed 990 back from its newly hired accountant, who didn’t have time to fill out the simple form while also auditing the department’s financial records by request of the stingy township commissioners.

Back then, Crotty stated she hoped the finished 990 and audit would help repair the strained relationship between the fire department and the five-member board of commissioners. Guess that didn’t happen.

How To Make Yourself More Marketable In This Economy

Lately, it feels like a lot of you are trying to jump ship, rally against “The Man” or trap a firm into poaching you like a 19-year-old actress catches a predator. Maybe you guys have always been like that and it only feels like it’s happening more often now that we email each other about it but I’m sensing a pattern here.

Anyway, there are a few things you can do (and a couple you absolutely shouldn’t) that can help you on that road. Maybe these are obvious to you; if so, congratulations. Let’s just go over them again anyway, not everyone is as good at this as you.

1. Learn IFRS. Or at least have a baseline knowledge extensive enough to fake it when you have to talk to people who actually care and/or know more than you. What this means is that you can either take a class, some CPE, maybe get a “free” masters on your firm’s dime or read a damn book. Whatever you do, remember that unless you are at an IFRS conference, chances are you don’t have to be an expert on the matter, just knowledgeable enough to appear as though you have some idea what you are talking about. If you have the opportunity to actually work on IFRS financial statements at work, do it. It’ll be an awesome item on your resume.

2. Don’t get a useless degree. “Useless” is, of course, defined by how far you want to go and where. Please take inventory of your personal situation to define “useless degree” for your own circumstances. For some of you, this is a MAcc. For some, it is an MBA from a for-profit. For others, it is a bachelors in philosophy. Whatever it is, avoid it at all costs, even if you can afford it. Get by on your merits and don’t waste your time pursuing education you don’t need. If you’re that bored, find a hobby.

3. Learn how to play the game. You can’t negotiate a better salary if you are spending half the day on the Internet interrogating strangers about their salaries in our comment section. We don’t care either way but if you are trying to elbow your way into a better salary, you may have to actually try to set yourself apart from your slacker colleagues.

4. Pass the CPA exam. Before some troll shows up and asks me why I haven’t done #4, I’m not trying to market myself as a CPA, writing about this and helping actual CPAs have a single “water cooler” to sit around is much more fulfilling. For people who actually want to work in this industry, this one is pretty necessary. If you actually focus on getting it done sooner rather than later, you’ll save yourself a lot of pain later down the road. As for me, I’m sure I’ll be deflecting this same troll 5 years from now when you’re making way more money than I am writing these articles. Feel free to rub it in.

5. Know your enemy. Some of you are vicious, money-grubbing pricks and I really love that about you. If you believe it when partners say “you really have potential” and tossed a few extra back at your recruiting events to “loosen up a bit,” you’re going to have to understand what it is you want and how best to get it. For some of you, more money is enough until you want more money after that. For others, you just want to experience the thrill of being wanted by several firms at once. Whatever your vice, you need to analyze your own strengths and weaknesses before you try to get three firms to bitchfight over who gets to have you. You can’t negotiate if you’re delusional about what you offer to any of them.

Comp Watch ’11: A Detailed Explanation of Uncle Ernie’s Complicated “Metrics”

… and it promises that if you just stick around for 12 years, you could be an executive, director, partner or principal.

Warning: the propaganda is absolutely raging in this piece of HR gold, dive into it accordingly (and turn your head to be able to read it).

EY Curve

Accounting News Roundup: BofA Gets Sued For ‘Massive Fraud’; U.S. and China Try To Get Along on Audits; Groupon Dumps ACSOI | 08.08.11

AIG sues BofA for $10 billion over “massive fraud” [Reuters]
The insurer American International Group Inc (AIG.N) is suing Bank of America Corp (BAC.N) to recover more than $10 billion of losses from a “massive fraud” on mortgage debt, deepening the morass of litigation faced by the largest U.S. bank. AIG, still largely owned by taxpayers after $182.3 billion of government bailouts, is the latest of a growing number of investors filing lawsuits seeking to hold banks responsible for losses on troubled mortgages that contributed to the financial crisis.

US and China Fail to Agree on Cross-Border Auditing Standards [Business Insider]
On July 11-12, US regulators flew to Beijing in part to address the series of financial scandals of Chinese companies listed in America, but failed to agree upon a standard set of cross-border auditing standards with their Chinese counterparts. In an alphabet soup of acronyms, a U.S. delegation from the Securities and Exchange Commission (SEC) and The Public Company Accounting Oversight Board (PCAOB) and Securities and Exchange Commission (SEC) met with Chinese counterparts at the Ministry of Finance and the China Securities Regulatory Commission (CSRC).

Exclusive: Groupon Will Dump Controversial ACSOI Accounting in Amended IPO Filing [All Things D]
According to numerous sources close to the situation and after regulatory pressure, Groupon will amend its S-1 public offering filing to remove references to an unusual accounting treatment that has attracted controversy. Sources said the new filing by the social buying company, which is helmed by CEO and co-founder Andrew Mason (pictured above), will likely occur as early as Monday.

Less than zero: How companies can end up with negative revenues [Globe and Mail]
Even savvy investors are often puzzled at how some companies arrive at the bottom lines on their income statements. Now, as a result of ever more elaborate new accounting standards and complex corporate structures, the top line can be just as bewildering.

IRS auditing Louisville high school booster club [AP via Fox19.com]
The Internal Revenue Service is auditing a high school booster club’s books to find out why it has as much as $480,000 in funds that are unaccounted for.

MetLife Says 30 Jurisdictions Are Auditing Unpaid Benefits [Bloomberg via the SF Chronicle]
MetLife Inc., the largest U.S. life insurer, said more than 30 U.S. jurisdictions are auditing its practices in a review of whether the industry is holding unclaimed funds owed to policyholders, beneficiaries or states. The audits may lead to more payments to beneficiaries, administrative penalties or changes in procedures, New York- based MetLife said today in its quarterly filing with the U.S. Securities and Exchange Commission.

Google App Engine now officially secure [ZDnet]
The announcement got lost in the pre-weekend shuffle, but Google has announced that both the Google Apps cloud productivity and collaboration suite and the Google App Engine application platform have received the SSAE-16 security certification. If you can get past the alphabet soup, this news could open a lot of doors for Google in the enterprise.

SEC, Rajat Gupta Drop Their Cases, for Now [WSJ]
The Securities and Exchange Commission dropped its civil administrative proceeding against former Goldman Sachs Group Inc. director Rajat Gupta, but left the door open to pursue insider-trading charges against him in a civil lawsuit. The agency “is fully committed to the case and will proceed as appropriate,” a spokesman said Thursday. Specifically, the agency said that “it is in the public interest” to dismiss the administrative case but that “dismissing these proceedings will not prevent the Commission from filing an action against Mr. Gupta in United States District Court.”