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.

Someone Obviously Needs More Billable Hours

Where do you draw the line between a hobby and hoarding? Probably right here, with the young UK accountant so obsessed with ice cream he bought the ice cream truck he used to patronize as a kid:

Chris Copner loves everything to do with ice creams, so much so that he has a house full of memorabilia, including bins, signs, and Matchbox vans.

Chris – who no doubt counts 99 among his favourite numbers – spent £1,400 on the 1976 Ford MKI Transit van after he saw that it was up for sale and recognised its number plate from photos of him as a child.

He has since restored it to its former beauty, complete with all the old-school favourites such as Rocket lollies and Mr Whippy ice cream, at his home in Abergavenny.

The 23-year-old said: “It all started off when I was about five and my friends and I used to wait for the ice cream van to come each day. I just remember being fascinated by it so I started buying little Matchbox cars and vans and my collection just grew and grew from there.

Copner admits to having quite the hoard, including a cabinet full of stuff at his home and boxes upon boxes in his house, as well as a bunch stashed away in the homes of his parents and grandparents. Man, why am I paying $50 a month for my storage unit?

Strangely, the young number-cruncher has no idea why he loves ice cream vans so much. “I don’t really know why I became so fascinated by ice cream vans,” he said. “I think it was the anticipation of waiting for it to come when I was a kid.” Actually reading that makes his love of waiting for something to happen all that much clearer.

Can Any Big 4 Folk in Nashville Help This Young Lady?

A call for action, Nashville market, we know you’ve been dying to have your moment in the spotlight.

I currently work for a Big 4 firm but I’m looking to move to Nashville. I know firms vary from each city and would like to get information on Nashville before deciding to try and transfer or see if there were openings in other firms. I would like to know the sizes of the different office and the clients for each firm. Is there any where that shows this information? I’ve tried searching online and can’t find anything and was hoping I could get input from anyone who has worked in that market.

Nashville, huh? We’re guessing there must be a man involved here but without knowing the specifics, you’re doing the right thing by sniffing the market out first. You probably already know that you’re not going to be making San Francisco or New York money but hopefully we can get some info for you.

If no one is going to speak up, there’s always Glassdoor. It lists Deloitte manager salaries in the $60 – $105k range. You didn’t say what firm you’re looking at (or if you care) but that’s a start.

Say Six Words About Work, Win an iPad (Serious)

Consulting, outsourcing and investment provider Mercer and SMITH Magazine have partnered to launch a new online contest called “Six Words About Work,” and plan to publish a book featuring the best contest submissions. By participating, you could win a fancy new toy!

The free contest, a new edition to SMITH’s Six-Word Memoir® series, is open to the general public and will be conducted in four phases beginning June 29 and ending in late August. Each two-week phase will feature one work-related submission topic for contest submissions. The contest topics include:

  • Why I do what I do
  • What inspires my very best work
  • The best boss I ever had
  • Biggest lesson I learned at work

The contest will be held in the US, UK and Canada. Participants will submit their Six-Word Memoirs via the SMITH website. Each country will have four winners, one for each phase of the contest, selected by a panel of judges. Winners will be chosen based on the submission’s creativity, quality and relevance to the topic. Winners will receive their choice of a new Apple iPad or BlackBerry® PlayBook™. Winners will be notified on or around September 1, 2011.
Complete rules are available at www.smithmag.net/sixwordsaboutwork.

You read that right: you can win an iPad (or PlayBook) by coming up with something clever. What could be easier?

The current challenge is to write six words about bosses (come on now, you guys can do this), of which “Evaluation conducted over vodka on ice.” is a definite front-runner. You have until August 13th to answer this one.

Get on it!

Accounting News Roundup: More Convergence Drama; Washington’s Crackhead Accounting; Twitter’s New Digs in the Heart of San Francisco Dope Fiend Territory for a Tax Break | 08.02.11

Moody’s: IASB, FASB Accounting Standards Proposals Hitting Delays [PropertyCasuality360]
Proposed changes to insurance-contract accounting standards are running into delays amid vocal opposition, but whatever final conclusions ultimately emerge, they are unlikely to have a broad impact on credit ratings since new rules, by themselves, do not alter the economic position of an entity, according to Moody’s.

Official Washington’s Crackhead Accounting [The American Spectator]
There is no evidence that this bizarre deal of questionablee.g. the “Super Congress”) will actually lead to any real cuts. Nor is there any evidence that it will prevent the U.S. government from losing its long held triple-A credit rating. There is a promise of spending cuts, but overall federal spending will continue on its upward trajectory because Official Washington operates in the make-believe world of “baseline budgeting.” According to this crackhead accounting, both a cut and an increase may count as cuts.

State faults Binghamton’s accounting system [Sun-Bulletin]
The City of Binghamton’s accounting system lacks adequate controls to provide an accurate picture of city finances, an audit by the state comptroller’s office found. The 33-page report, released Monday, said the municipality has, among other things, overstated its general fund balance, has a city comptroller that hasn’t properly monitored certain accounts and has more than $13,000 in unaccounted funds from its parking operations.

Barclays to cut 3,000 jobs as profit drops [Reuters]
Barclays is set to cut about 3,000 jobs this year to reduce costs after a drop in bond trading and an insurance mis-selling charge cut first half profits by a third.

Money Funds Have Biggest Redemptions This Year Amid Debt Talks [Bloomberg]
Investors last week pulled more money from money-market mutual funds than any week this year as U.S. lawmakers failed to resolve the impasse over raising the debt ceiling. Withdrawals reached $37.5 billion, with about 70 percent of the redemptions coming from institutional funds that invest in U.S. government securities, according to data from the Investment Company Institute, a Washington-based trade group.

Accounting Departments Drive Demand for Electronic Document Management Solutions to Improve Bottom Line, According to IntelliChief [Benzinga]
IntelliChief LLC, the leading provider of document management and imaging solutions for the IBM i (System i, iSeries, AS/400), reports accounting department personnel are often both primary drivers and first adopters of paperless solutions in their companies. “Because of the cost savings to be gained by going paperless in accounting, and the bottom-line responsibilities that are top-of-mind with financial professionals, it makes sense that the demand for paperless solutions most often originates from within the accounting department,” says Brian Smith, IntelliChief Marketing Director.

No Day in Court for Bank Clients [WSJ]
Some small and regional U.S. banks are prohibiting unhappy customers from taking their complaints to court or joining class-action lawsuits, instead requiring them to resolve disputes through arbitration.

Preparing for New ‘Bottom Line’ on Leases [Memphis Daily News]
Obviously, the more significant a company’s leasehold interests are, the greater the impact of the new guidelines; for example, airlines, manufacturers and retailers. Additionally, regulatory rules will likely be impacted for banks and insurance companies. And, because the new guidelines deal with the accounting for leases on the balance sheet, the greatest impact will be on companies issuing audited financial statements.

Philosophy Major Considering a Big 4 Career Needs a Reality Check, Better Grades

(Acting) Ed. note: if you have a question for our team of highly knowledgeable monkeys, email advice@goingconcern.com and we’ll be happy to make fun of you in front of your peers, superiors and the Internet-at-large, unless it’s a good question, in which case we will do our best to give you awesome information.

Hello!

I found the advice column on your blog so I thought I would ask you this question:

I recently graduated from a state school in the California State University system as a Philosophy major. My original plan was to go to law school, but I am now thinking I may want to go into accounting instead (due to the terrible job market for lawyers and the 150k debt I’d be faced with). Parike to work at a Big 4 firm. Is this change possible? I found a “Post-baccalaureate Accounting Certificate” at Portland State University (I’d like to end up in Portland if possible). Does that program have any chance of helping me land a Big 4 job, or does it lack prestige? If you’d like to suggest the best post-bac/master’s program for me you should know that the only math I’ve taken is statistics 1, and I’ve taken micro econ and macro econ, but aside from that I’d be starting from scratch. My undergrad GPA is 3.13, which I believe is a little low for the Big 4. Could I make up for that with a good post-bac certificate GPA, or perhaps a good master’s GPA if that is the route I should go?

Thank you for your help!

Listen, Ambulance-Chaser-cum-Capital-Market-Hero, you need to slow down and do a little more research on the Big 4 before you even attempt this stunt. The Big 4 don’t want some 3.13er who originally picked a different profession and then just kind of stumbled upon accounting as a more “viable” option due to the long-term (or even short) career opportunities. Sorry the law school plan didn’t work out but no allegedly prestigious firm is going to want you with your “certificate” (unless it is one of these) and low GPA. So if I were you and actually attempting this, I would be sure to spin those particular details into as much gold as possible. Don’t lie but don’t be so upfront about it either.

You admit that you’re new here so I won’t rail on you too but hard I will highly recommend you catch up on some advice columns (and especially their comments) we’ve done before. If we can sniff out your “well looks like you’re the only viable option” attitude via email, I can only imagine which method recruiters will use to avoid your emails and talk about you behind your back.

You still have a chance here if (and that’s a huge if) you actually want to do this, get yourself into a real program and not some funky certificate program, you might as well get a degree from some adult college advertised during Maury Povich for as much good as that will do you. And for Christ’s sake, at least try to pull a 3.8.

Fast track the CPA exam if you can but I get the sneaking suspicion that you are one of the candidates who will end up having to take BEC 7 times based on the fact that accounting is not your background and you don’t seem all that excited about the prospect of ticking and tying your good years away for “The Man,” but are instead focused on making a few bucks in an industry that’s still actually hiring because your first choice is a really awful one. In my experience, those who do best on the CPA exam are those who actually want to do it (shocking, I know). The ones who are forcing themselves because of the economy, their parents, their boss, etc are the ones who fail miserably over and over, usually with infuriating 74s. If you managed 4 years of philosophy, you’re probably too right-brained for the CPA anyway.

Big 4 recruiters do hit Portland State but you’re going to have a hell of a time explaining to them what you did with the last four years of your life and convincing them that you’re in it for the long-term and not just to have a job ’til the economy looks better.

We’re not going to do your job for you and recommend “the best” program for you, but nice try. We recommend Google, it’s a pretty helpful career tool. That’s how you found us, right?

I’m not saying it can’t be done but you need to be realistic here. The industry has already reached its quota of useless, mediocre assholes who don’t know which side debits go on. If you’re OK with being an AP clerk or working at a smaller firm I say go for it but with your “credentials,” I wouldn’t count on having to beat off the Big 4 recruiters with a stick any time soon.

The City of Toronto Pays KPMG $350,000 to Do a Study on the Obvious

To the Klynveldians, it was a pretty decent pay day just to state the obvious: that the city of Toronto could save a few bucks (make that a few loonies) by not putting fluoride in its water supply and a few other cost-saving measures. We find KPMG’s tagline of “cutting through complexity” to be extra appropriately hilarious in this particular context and there is no mention in the report of potential cost savings that could be realized were Toronto never to pay for Big 4 consulting services ever again.

Krupo has the entire story over at A Counting School but here’s the short version for those of you with legitimate ADHD problems: eliminating or reducing some non-core services provided by the Public Works and Infrastructure department could save the city $10 – 15 million (CAD).

KPMG states that ending the forced medication of Toronto’s public water supply by cutting the fluoride could have detrimental effects on the dental well-being of Torontonians, though obviously they haven’t been reading up on their tin foil hat, anti-fluoride research, which clearly shows a higher incidence of tooth decay in areas which use the fertilizer-production byproduct (which is considered toxic waste as long as it isn’t dumped in the water supply). Cut it! (If you think I’m insane, check out this “chemical spill” that burned through the concrete in Illinois. Those guys in Hazmat suits? Cleaning up Hydrofluorosilicic acid, the toxic industry slurry that becomes fluoride)

Anyway, back to the subject at hand. KPMG also advises Toronto that holding itself to a lower level standard could help save some cash. “Over half of the services that report through the Public Works Committee are provided ‘at standard’, which is generally the level required by provincial legislation or the level generally provided by other municipalities,” says the report. “30% of services are provided at slightly above standard offering some opportunities for cost reduction by lowering the service level provided. 17% of services are delivered slightly below or below standard.”

One such “higher standard” service to which KPMG refers in this report is the Toxic Taxi (no, that’s not what you call a bar crawl through Denver with Caleb after yoga and two red bean burritos), a free service that picks up your hazardous household waste like expired medications and batteries if you cannot drop them off at an authorized location yourself. We wonder how much went in to make the high quality “advertisement” of bootleg Canadian Mexicans Chuck and Vince trying to get you to turn in your used paint and batteries.

As Torontoist so astutely pointed out, the report didn’t actually look at how the horribly mismanaged Toronto city government could run more efficiently but instead simply analyzed which services could be cut. “KPMG did not assess the effectiveness or efficiency of City services,” the report states. “Assessment of how services are delivered is envisioned to be conducted through separate efficiency reviews. KPMG did not conduct financial analyses of programs and services to identify potential savings.”

I guess efficiency suggestions are extra.

Comp Watch ’11: Ernst & Young Comp Discussions Start Today

We’ve received several short, anxious emails (presumably all from Uncle Ernie’s nervous camp) tipping us off to the fact that E&Y comp discussions are going down this week, so it must be true. Of course, this post is useless without actual comp numbers, which we’re sure you’ll give us as soon as you have your sit-downs.

Hi Going Concern –

To give you heads up, E&Y comp and promotions dicussions [sic] are happening this week (they’re happening today in my office). Perhaps it’s a good time to open the new thread on the topic.

Cheers,
E&Yer

Great, so does this mean the Ohio and Michigan crews have already packed up and are ready to bail if they get anything less than whatever it was they are holding out for?

Rumors so far are that raises will be in line with last year’s, which were not at all disappointing considering that we are still (not technically) in a recession, not to mention all that Lehman drama the E&Y lawyers are still hashing out. Too soon? Anyway, as usual, you’re welcome to entertain each other with disparaging comments about the size of your, er, comp packages until we hear news on actual numbers.

Update: Looks like some pretty good numbers are rolling in but please, for the sake of your fellow EY brethren, if you want to share your comp info, be sure to at a minimum include where you are (general metro or region is fine), what service line you are in, your rating (hint: this is a number) and, of course, the actual new pay and bonus number (if any).

North Carolina Accountant Convicted of Felony Assault and Kidnapping

32-year-old Timothy David Rickman – accused of breaking into the home of ex-girlfriend Michelle Deak in January 2009, stabbing her in the head, burning her arm with a cigarette lighter and choking her, as well as hitting her 8-year-old daughter – has accepted a plea bargain in his bizarre case. Rickman will serve 60 days in jail, with 120 days of electronic monitoring after and 5 years of probation.

If Rickman violates his probation, he could serve at least four years in prison and up to six and a half years.

Rickman’s lawyer Bernard Condlin insists that accepting the plea does not translate into an admission of guilt for his client but states that Rickman takes responsibility for the charges and their consequences (er, isn’t that an admission of guilt?).

We were unable to find a record of Rickman in the North Carolina Board of Accountancy’s database, so it can be assumed he just wasn’t cut out to be a CPA. I guess that means the integrity of the profession isn’t at all dented by this little aggro freak show’s actions?

Deloitte Goes Partner Crazy

Fresh from the mailbag… well, not fresh, actually, it’s kind of been sitting in there gathering dust all weekend so it’s kind of the moldy gym sock of mail. But I digress.

Prior year they [Deloitte] promoted 101 partners and 136 directors; for this year (actual firm year starts June 1, but partners get promoted in September) there will be 146 partners and 180 directors.
This is for the United States only…

Great news for the new partners and directors, not so great for those of you who are still staring at the Green Dot’s multiplier slides wondering when that 8x bump is going to kick in.

Feel free to commence to discussing how big your yacht will be when you make partner in the comments.

(VIDEO) FEI’s Edith Orenstein and the Singing CPA Present a Love Song to the Pozen Committee

FEI’s Edith Orenstein has dropped a track on YouTube with “The Singing CPA” Steven Zelin called “Hey There Bob Pozen” (as of the date this is posted, we haven’t been able to find a Doctor P remix of the hot track) that really doesn’t need commentary at this moment. But we’ll be back after the jump with a few things to say.

Oh, I didn’t mention it’s to the tune of “Hey There Delilah” did I? Yeah. It totally is.

Anyway, it’s a tribute to the Pozen committee, of which Edith is a huge fan, in honor of its 3rd birthday:

I am a big fan of the Pozen committee, mainly because, like other committees that have fascinated me (such as the EITF , the PCAOB SAG, and the U.S. Treasury Advisory Committee on the Auditing Profession) it has a fascinating cross-section of preparers (issuers), auditors, investors, and others. I loved watching the webcasts where you could see folks discuss things from different vantage points at the same time. I think that kind of broad-based committee has an advantage over committees made up of only one segment of the constituent community, such as preparers, auditors, or investors. I think the standard-setters and rulemakers can receive the most efficient and effective input when the various segments of constituents face off against one another (I mean that in a polite way, I should say, ‘dialogue’ with each other) on issues of mutual interest.

I assume here approximately 6 to 7 percent of you have any clue what the Pozen committee is (unless you regularly read Edith, which you should if you’re into serious financial reporting shit of which we rarely if ever cover), here’s some financial reporting porn (PDF) to groove on. The short version is that the August 2008 report recommends steps to improve the usefulness of financial information to investors.

In case you’ve forgotten, this isn’t Edith’s first venture into the world of YouTube. Surely you remember “If I Were an Auditor,” filmed completely in Second Life with the help of the MACPA and friends.

Could you imagine what would happen if we could get the Maryland Association of CPAs’ dancing flash mob to do a mashup with Edith and Steven? Someone please get on that.

Accounting News Roundup: Much Ado About the Debt Ceiling; The Amazon Tax Problem Heats Up in California; Accounting Professors Storm Denver | 08.01.11

Gone Fishing [Going Concern]
After two years of being chained to my desk and staring at my laptop, I’m taking a few days off (seven to be precise) starting Monday. I know, I know. Unacceptable. But after some arm twisting, TPTB figure that some vacation would give me a chance to relax and it offers them some reprieve from my kvetching about EVERYTHING. Plus when the country defaults on Tuesday I thought it might be safer to be in a Paris bistro while the rest of you fight over scraps in the streets.

Debt-Limit Deal to Get Congress Vote Today [SF Chronicle]
Many Californians ignore the “use tax” – the equivalent of sales tax but remitted by state residents for products bought from out-of-state retailers that did not collect sales tax. The state estimates that $1.1 billion in use tax goes uncollected every year. Cash-strapped California is eager to corral that big chunk of change, most notably through the “Amazon tax” bill that took effect in late June. The new law requires Amazon and other online sellers to collect sales tax, but is being fiercely fought by the e-commerce giant and its brethren.

HSBC to Cut 30,000 Jobs [DealBook]
HSBC, the biggest European bank, said on Monday that it was cutting 30,000 jobs as part of a wide-ranging cost cutting program to improve profitability. The job cuts, which would represent about 10 percent of HSBC’s work force, are part of a strategy to reduce expenses by $2.5 billion to $3.5 billion over the next two years.

Debt Ceiling, Spending Cuts to Rise But No Word on Higher Taxes [taxgirl via Forbes]
The agreement also allows for President Obama to raise the debt ceiling immediately up to $400 billion, heading off the “certain” Armageddon that pundits have been warning about (insert a lot of coughing here). An additional $500 billion in debt ceiling headroom has also been authorized although, as part of the deal, Congress specifically reserves the right to vote against that at a later date so that they can dutifully wag their fingers at the President. And the President has reserved the right to veto that vote so that he can wag a finger at Congress (you can pick the finger). Future increases have also been authorized, with limitations.

2011 AAA Annual Meeting [The Summa]
More than 3,000 accounting professors will be packing up this week, and heading for Denver. The American Accounting Association (AAA), the professional association for accounting professors, is holding its annual meeting, August 6-10.

XBRL: What’s It Good For? [CFO]
On July 12, XBRL US, a nonprofit consortium for XBRL (extensible business reporting language) standards, announced a contest with a $20,000 grand prize to be awarded to whoever submits the “most inventive and useful application leveraging XBRL-formatted data from the U.S. Securities and Exchange Commission (SEC) EDGAR database” for business benefit.

Companies Altering Compensation Plans Over Say-on-Pay [Compliance Week]
Many companies are making changes to their compensation plans, especially those that garnered lukewarm support or lower from shareholders and those that saw proxy advisory firms recommend that shareholders vote against their plans.

Accountants Moving From Hourly Rates To Fixed Fees [PR]
Over half of local accounting practitioners surveyed cite fixed fees as their primary means of pricing services, more than double hourly rate pricing.

LA Judge Rules Crash Producer Engaged in Creative Accounting

I don’t watch movies but coincidentally, I saw Crash and frankly it’s a miracle it made any money at all (not to mention three Academy Awards, but what do I know about movies?). That being said, L.A. Superior Court Judge Daniel Buckley has determined producer Bob Yari engaged in creative accounting, ruling that Yari did so as part of an intentional scheme to withhold money from director Paul Haggis, star Brendan Fraser and co-writer Bobby Moresco.

The plaintiffs’ suit alleged that Yari improperly withheld money owed to them for the 2005 film and while Buckley has ruled in their favor, the judge has not yet set a monetary reward for plaintiffs.

The judge was clear in his ruling (which can be read in its entirety at the Hollywood Reporter), calling out the defendants’ inability to correct blatant accounting mishaps and outright fraudulent practices:

Defendants breached the contracts with the plaintiffs by diverting funds to third parties; adopting bogus contractual interpretations; refusing to correct accounting errors in a timely manner; adopting inappropriate accounting procedures that were contrary to industry standards; and, ultimately, using all of these to avoid paying plaintiffs money due under contracts.

This isn’t the first trip to court for Yari, who was sued for $100,000 by Matt Dillon, who played a dickhead cop in the film. Dillon’s company, Matthias Productions, performed an audit in 2006 and found that executives “deliberately authorized [the production entity] to apply an incorrect formula for the calculation of [Dillon’s] contingent compensation” and therefore owed him a larger piece of the $98 million the film grossed worldwide.

Paul Haggis, Brendan Fraser Win ‘Crash’ Lawsuit Against Producer Bob Yari [THR]