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.

Former Deloitte Partner’s Wife Faces Prison After Pleading Guilty to Insider Trading

For those not in the know, San Francisco is already an overpriced third world toilet but Pacific Heights is the go-to for wanna-bes, socialities and trust fund babies who can afford the pricey rents and even pricier home values. According to earlier reports, Annabel McClellan fell in the “wanna-be” category, though we aren’t sure if the fact that her husband worked at the Deloitte had anything to do with that.

The Bay Citizen has the latest update in this sordid tale:

A Pacific Heights housewife will be heading to prison after pleading guilty Tuesday to insider trading and obstruction of justice charges.

In her plea agreement, Annabel McClellan says she gleaned confidential information about publicly traded companies by overhearing her husband, Arnold McClellan, then a partner at Deloitte Tax LLC, discussing details of deals he was working on. She then passed the information on to her sister, Miranda Sanders, and brother-in-law, James Sanders, who was involved in a trading business in London, according to the document.

James Sanders made money from the tips, including about £396,851 (about $648,000 at current exchange rates) from information about Getty Images, according to McClellan.

McClellan also says in the agreement that she obstructed justice by lying to the Securities and Exchange Commission about having obtained and passed on the information.

Both Arnold and Annabel McClellan had been named in a civil suit filed in November by the SEC, but Annabel alone faced U.S. criminal charges.

We’re not sure where this puts McClellan’s sex app – My Nookie – but we’re pretty sure she won’t be needing it behind bars; her only sex position in the years ahead will likely be Don’t Drop the Soap, or maybe Reverse Don’t Drop the Soap if she’s feeling particularly randy.

Meanwhile, let this serve as a lesson to partners: keep your trap shut in front of the Mrs., lest she act on anything she overhears you talking about and later get taken down by the authorities for sharing that information with the girlfriends and in-laws.

McClellan will be sentenced on September 20th. She faces a maximum prison sentence of five years and fines of up to $250,000. That’s 83,612 copies of My Nookie (priced at $2.99) if you are playing along at home.

Earlier: Insider Trading Charges Throw a Wrench into Former Deloitte Employee’s Plans for Sexy Mobile App

CORRECTION: The AICPA Will Now Answer Your Last Minute Tax Questions

Correction: We regret to inform readers that no such assistance actually exists, the following is only meant for tax-stumped reporters who need help figuring out tricky tax rules.

Have no fear, little taxpayer, the AICPA is here to help you out if you’re stumped as to how to add up items H, K, L minus M x .412.

This year’s April 18 tax filing deadline is 13 days away, but approximately 59 million taxpayers still have to file their returns, the Internal Revenue Service said on April 4. These taxpayers are still collecting records, wrestling with forms and struggling to get answers to their last minute tax questions.

Edward Karl, vice president of taxation for the American Institute of Certified Public Accountants, and other members of the AICPA tax staff are available to answer questions for end of tax filing season stories about credits, deductions, errors to avoid, what to do if you can’t pay the taxes you owe and what to consider if you need to file for an extension. Taxpayers should be sure to remember that their tax bill is due and must be paid on April 18, even if they file an extension; otherwise penalty and interest fees apply.

The IRS said about 58 percent of the approximately 141 million returns it expects to be filed this year have been filed. About 20 to 25 percent of returns are filed in the last two weeks and about 7 percent of taxpayers will file for an extension. The IRS’s numbers are based on filing statistics as of March 25.

If you are a taxpayer who needs helpyou’re more of the self-service type and prefer interacting with a website over an actual human being, check out the AICPA’s 360 Degrees of Taxes for tax tips and suggestions. We found the Help! I can’t pay my tax bill article to be especially helpful for those who are in the delicate position of owing a bunch of money to the IRS but not actually having any to pay the piper. While the suggestion to take out a loan or borrow from family to pay a due tax bill seems offensive at first, it’s reasonable given that a bank loan will probably carry a smaller interest rate than fees and penalties associated with not paying the IRS promptly.

Before You Quit Your Job, You Should Do a Little Tech Housekeeping

Since apparently accounting is still booming and jobs are everywhere according to CNN, chances are you might be considering walking away from your awesome 70-hour-a-week grudge work for the sweet life of private industry or maybe the lucrative pastures of healthcare. Either way, if you’re going to quit your job, you will probably want to keep your former employer as a reference. The best way to do that is to erase your digital footprint as neatly as possible, just in case a team of nerds will be scoping out your computer and any embarrassing data contained therein post-employment.

Let’s be real, just about everyone uses company PP&E for non-company things; email, Facebook and, if you’re at the SEC, porn. We won’t judge your daytime browsing habits, let’s just get into how to make them go away before your last day.

First, it’s best to start scrubbing your history before you actually let on that you are about to leave. Granted, if you’ve gotten fed up to the point of quitting, it’s likely that no one in your office even realizes how miserable you are and won’t notice when your cube is suddenly devoid of personal items. Regardless, it’s still a good idea to take some of these steps before management is aware you’re running away.

So, you’ve got your final resignation notice saved on your desktop and are ready to send it to your boss. What next?


Erase your web history In Firefox, go to Tools, then Options, and then choose “clear your recent history.” While you’re in there, hit the Security tab and uncheck “remember passwords for sites” which, really, you shouldn’t have turned on at work anyway. Not using Firefox? Here are instructions for deleting your history and cookies in Chrome and Internet Explorer.

Unsubscribe from any newsletters or subscriptions you’ve been getting at work Maybe your firm doesn’t care if you get the Going Concern newsletter but just to be safe, spend some time combing through your work email and unsubscribing from any non-work-related newsletters. This way you can transfer everything to your personal account if you still want to receive it and save yourself some embarrassment when the person your emails are forwarded to after you leave gets your daily Bestiality Hotties email.

Delete any personal files you have on your desktop This could be that annoying photo of you and your boyfriend on vacation, your resignation letter (including the ultra-vulgar first and second drafts) and/or any third-party programs you’ve added to your computer (either with or without management’s permission). You never know how thoroughly IT is going to check out your laptop, so assume they’ll be combing through it and don’t leave anything of yours carelessly lying around. This includes your music collection, no reason to give them free mp3s.

Avoid deleting too much It would be awfully suspicious if you tried to clear out most of your emails and let’s face it, there’s a copy stored on the server anyway if management cares that much. This is about cleaning up after yourself, not looking like a paranoid weirdo. Be diligent but not psychotic.

Empty the recycle bin All of the above are useless if you forget to clean the recycle bin when you’re done.

Did PwC Help the Fed Cook Its Books?

After every Federal Open Market Committee meeting, you can peek into the Fed’s brain in a highly succinct fashion when the statement and minutes are released shortly after it ends but five years must pass before the full transcript of the meetings is released to the public. If you’re playing along at home, that means the FOMC transcripts should be full of all sorts of intriguing info specifically pertaining to the market collapse of 2008 on or around 2013.

But we’re talking about the 1999 minutes today and that’s where Adrian Douglas at Market Force Analysis comes in. He decided to read through some of the now-available minutes (hey, we all need hobbies) and look at what we have here. Did PwC help the Fed brush out a material accounting boo-boo?


Maybe when you actually create the money and the financial accounting handbook to go with your audits you can get away with sort of thing but something about this just doesn’t sit right.

This is System Open Market Account Manager Peter Fisher speaking to the committee:

Last spring, as members of the Committee will recall, we entered into a series of transactions with the ESF to re-balance our euro and yen holdings so we could come to a better split both in terms of total holdings and the currency mix. This involved a number of transfers of ownership of a series of investments and resulted in quite a significant amount of accounting activity. In the course of reviewing that, our own accounting staff identified an error that had been introduced in the prior year in our treatment of the premium on bonds held in the accrual account, overstating the accrual account by about $5 million. In the course of confirming that, they identified an additional $26.6 million overstatement in the accrual account for interest on foreign currency investments. We have had a number of staff members working full time trying to trace the source of that $26.6 million overstatement. They have worked back through the records to December 1994, before which detailed records at the transaction level just no longer exist due to the routine and appropriate destruction of documents.

The Board examiners were at our Bank to conduct an examination of the System Open Market Account in September and PricewaterhouseCoopers also has looked over our methodology to try to trace this overstatement back through time and find its source. PricewaterhouseCoopers is confident that we have traced it back as far as we can. They have tested our work papers and agree with our conclusion that we simply can’t go back any further.

After a quick back and forth over whether or not this could be a diversion involving a few folks within the Fed working together to funnel out the money and shooting that theory down, they present the solution:

The Board’s staff and our accounting function at the New York Fed have worked out an accounting treatment to correct for both the $5 million and the $26.6 million errors. That involves reducing the accrued interest asset account by the entire $31.6 million, with an offsetting reduction in interest income on foreign currency investments. We will make that adjustment before the end of the year and spread it among all the Reserve Banks. Of course, for all of us with responsibilities for SOMA this is an embarrassing, indeed humbling, event. As a technical matter, though, I understand that PricewaterhouseCoopers is comfortable with the conclusion of both our accounting and audit function and the Board staff that this is not a material event for purposes of disclosure for any Reserve Bank.

That’s right, the Fed fudged the numbers to make things add up right and PwC gave it the all clear. Perhaps I’m a bit ignorant on how things work but “working out an accounting treatment” to scrub out over $30 million in errors is no easy feat, maybe friend of GC and former criminal Sam Antar can give us some hints on how to accomplish such a task?

Notice also that no one else gets the privilege of “the routine and appropriate destruction of documents,” leading us to ask the obvious question: how is it they get away with it?

The AICPA Wants Your Thoughts on What the Future Holds for CPAs

Now is your chance to tell the AICPA exactly where you think the industry is headed in the future. CPAs don’t get many chances to be this candid about their chosen profession, so please make it count.

CPA Horizons 2025, coined “the profession’s effort to anticipate and plan for the future,” is a short survey that seeks to get professionals’ opinions on where the industry is going and the challenges it faces to get there. Participants are faced with the following directive:

Growing global competition, rapid technological development and increasing regulation are impacting the CPA profession today and will continue to in the coming years. As a result of the changing environment, how can the profession remain competitive? Will services being requested of the profession change? Will the profession’s core values, core services and core competencies remain the same or need to change to allow the profession to continue to best serve its clients and employers?

CPA Horizons 2025 is about your future and the future of your profession. It’s about forging a path to ensure both remain competitive in a rapidly changing world. Your participation in this profession-wide endeavor is vital in helping shape our collective future.

We are soliciting the thoughts of thousands of CPA’s along with other voices via this interactive survey, online discussion forums, in person forums and direct outreach to AICPA committee members, leaders in the profession and beyond. We ask for 15 minutes to help map out the next 15 years. Your 15 minutes will be on a limited # of questions that is a subset of a larger group of questions which will serve to identify what is on the Horizon impacting the profession. Your participation is important. What may the future hold? Help tell us.

Beyond answering simply yes or no questions based on pre-determined criteria, you will have the opportunity to write in your answers regarding trends, opportunities and challenges facing the profession. You will also get an entire box to fill in what you think the profession should do to remain relevant, a huge opportunity for those of you who feel the current food chain just isn’t doing it for you.

And then you get to watch a video. Frankly I’ve got to say this video was pretty depressing, showing how the U.S. is falling behind in the global scheme of things, continuously getting spanked by India and China when it comes to science, math and the economy. Ouch.

Take the survey here.

NASBA Reaches Out to Japanese CPA Exam Candidates Impacted by March Disaster

By disasters, we don’t mean that thing that happened with scoring.

When Katrina hit in 2004, NASBA granted affected CPA exam candidates an automatic extension. This time around, they are asking Japanese CPA exam candidates directly affected by the earthquake and tsunami disasters to contact them for assistance.

Here’s the official word from NASBA:

Our hearts go out to those in the Japan area who are dealing with rebuilding their lives and communities after the recent earthquake and tsunami disasters in that region. Japanese candidates who are scheduled to test in the near future, (United States or at our Guam Testing Center) and who may not be able to do so now due to the logistical issues that the disaster caused, should know that we are here to assist during this time of uncertainty.

Japanese candidates who may need to request an NTS extension and/or rescheduling, should contact NASBA’s Candidate Care department by emailing candidatecare@nasba.org and we will handle each concern on a case by case basis as we receive requests.

We recommend that all concerns of this type be directed to NASBA’s Candidate Care department. For this particular issue, only those affected by the earthquake/tsunami disaster should email us at candidatecare@nasba.org.

We assume that last line means “please don’t use the Candidate Care department to yell at us about scores” but did not ask to be sure. Let’s just pretend it did just to be safe.

The Doomsayers at Deloitte Have Come Up With a Crisis Management App

By crisis, we don’t mean 70 hour work-weeks and diversity training in the face of that A1 in your office who likes to wear short skirts and low-cut tops just to mess with you.

In the event of a catastrophic emergency like an earthquake, it’s good to know where your co-workers are if you’ve got to evacuate the building. Deloitte Australia has addressed the issue of safety and keeping tabs on the worker bees with Bamboo™, a Business Continuity Management (BCM) smart phone application (so far released for BlackBerry and iPhone only).

How does it work?


The BlackBerry application uses the device’s unique PIN (anyone addicted to BBM knows what that is) as well as voice, SMS and email to keep the team in communication in the event of an emergency. Emergency plans are readily available with Bamboo, eliminating the need to lug along a huge contingency binder stuffed with exit plans and instructions in a crisis situation.

Bamboo automatically logs all usage on each handset and when there is network access, sends these logs to the Bamboo server. The Bamboo Administrator is able to view all logs, from all users to understand its usage, retrace all steps taken and tailor training based on this usage. This data is also valuable in post-incident reviews and audits.

Don’t try to find it in the app store, Bamboo is an enterprise application and as such is deployed by the Company through enterprise application deployment, supported by the local Deloitte office.

Follow Deloitte’s Australian BCM team at @DeloitteBCM and stay tuned, they assure us they’re working to get the kids in America hooked up with their own BCM team.

Check it out in action below:

Comparing CPA Review Courses

We’ve gone over how to choose a CPA review course in the past but it seems we’ve been getting more emails than usual asking about specific review programs. Due to a potential perceived bias (this author was employed in CPA Review for four years), we have avoided covering this subject in detail until now.


The following list of review courses is by no means comprehensive and we do not endorse any of these courses (unless, of course, they would like to get in touch with our advertising folks and set up a sweet deal to be pimped out). CPA exam candidates are highly encouraged to do their own research by checking blogs and forums. Coworkers can also be a good source of info but keep in mind colleagues are less likely than strangers on the Internet to be honest about their own performance so take any information you glean from them with a grain of salt.

Many have asked if additional supplemental products are necessary when dropping a big chunk of cash on CPA review. I generally tell candidates to save their pennies, get a $2 pack of index cards and make their own flash cards. Not only do you save money, by writing them out yourself you’ll actually see that you’re understanding the concepts better simply due to the mechanical motion of putting pen to paper.

We’ve included links to CPAnet where appropriate so you can check out actual candidate feedback (the positive and negative) which former students of each of these courses have posted on the forums there.

• Becker: Retail Price: $3,065 (all four parts)
Per part if ordered individually: $990 (CPAnet)

• CPAexcel: Retail price (Gold Medal option): $1690 (four parts) Per part if ordered individually: $580 (CPAnet)

• Kaplan, Gleim and Bisk: Considered self-study or supplemental, check CPAnet for feedback on these courses.

• Roger: Retail Price: $2095 – $1695 (all four parts) Per part if ordered individually: $595 – $695 (CPAnet)

• Wiley: Price varies based on options. (CPAnet)

• Yaeger: Retail price: $1787 (four parts) Per part if ordered individually: $545 (CPAnet)

This is where our lovely GC readers come in. We know you all are really proud of how you’ve kicked the CPA exam’s ass, so please let us know in the comments what worked for you. If you all can get extra excited about this, we can put together a GC reader CPA review deathmatch based on your input.

Note: prices current as of 3/29/11 based on available information. If you have a correction, please get in touch.

Be Careful What You Tweet, Mary Schapiro Might Be Watching

We’ve considered why your firm might want a social media policy in the past but it’s clear now that it’s not only wise to keep employees in check but to keep the SEC from breathing down everyone’s necks.

Regulation FD (fair disclosure) is meant to prevent selective disclosure by issuers of materialon and insider trading liability in connection with a trader’s “use” or “knowing possession” of material nonpublic information. The rules are designed to promote the full and fair disclosure of information by issuers, and to clarify and enhance existing prohibitions against insider trading.


Without a social media policy, any employee of the company tweeting or blogging about company events could broadly be assumed to be company communications. Whether or not these people are officially representing the company or not is irrelevant; selective disclosure could be as simple as a poorly-timed post about a company secret (i.e. “our awesome new product will be released in two weeks!”) on an employee’s Facebook page, which is public but limited to the employee’s 100 or so family and friends. In theory, an astute friend could take this as a buy signal, knowing X product will cause quite a storm once it hits the market. Welcome to insider trading: social media edition. Notice here that the intention is not what is important but rather the event itself. The SEC doesn’t care if the employee meant to pump up his or her employer’s stock but rather that the employee chose to selectively disclose information not readily available to the public that the employee is privy to to a limited group of people.

How far could the SEC take this?

The SEC’s guidance set forth three considerations to help determine whether information posted on corporate websites is considered “public.”

* Whether a company’s Web site is a recognized channel of distribution;
* Whether information is posted and accessible, and therefore disseminated in a manner calculated to reach investors; and
* Whether information is posted for a reasonable period so that it has been absorbed by investors.

The guidance goes on to clarify that statements made on blogs or other interactive websites are subject to the anti-fraud provisions of the federal securities laws, and companies cannot require investors to waive protections under the federal securities laws as a condition of using such interactive websites.

The only control companies have in this is to have a very clear, intelligent social media policy that either limits or forbids disclosure of non-public information through blogs and social media. This isn’t new (this interpretation was released in August of 2008) but what is new is the rumor that the SEC is beginning to send deficiency letters to registered investment advisers it examines, specifically those who do not have a social media policy in place.

A document request list sent by the SEC to some advisers asks for a broad range of data related to social media use, according to a compliance alert from ACA Compliance Group. Among other things, the SEC is seeking to identify how often advisers use social media websites such as Facebook, Twitter, LinkedIn, YouTube, Flickr, MySpace, Digg, Redditt, as well as any blogs used by, or subscribed to, by the adviser. They are also looking at communications made by, or received by an adviser on any social media website including among others, blog postings, messages, and/or tweets.

According to the WSJ, an SEC spokesman declined to comment on the deficiency letters. However, an SEC official said at a compliance conference last month that misuse of social media is an issue on their radar in SEC examinations and enforcement. Misuse being defined as investment advisers who fake information on their LinkedIn profiles to buff up their appearance to investors.

Let’s Have an Adult Discussion About CPA Exam Scores

Since the last time I dared to bring this issue up I was insulted personally and professionally, I’m going to approach this very carefully. Starting with a few statements of my position:


First, I have the utmost respect for those who first suffer through a college accounting education and then decide to pursue a CPA. It’s not an easy thing to do and the experience only gets worse when you add kids, work and a life to the mix. I get that. I’ve suffered through it at the side of thousands of CPAs in the last four years and, empathetic jerk that I am, I absolutely feel their pain. I’ve been the crying shoulder and the therapist as well as tharing that with CPA exam candidates has been a real joy in my life. Mostly because I’m not the one who actually has to go through it.

Second, I believe 18 months is plenty of time to get through the exam. For those who have struggled 2, 3, even 5 years with this thing, it is not at all unreasonable for me to suggest that perhaps you should find another line of work. That doesn’t mean struggling candidates shouldn’t be offered support but at some point, you have to ask yourself if the Universe is trying to send you a very strong hint. That’s fine, the AICPA is doing their job if not everyone can pass. This isn’t a kindergarten playground exercise in how everyone deserves a trophy no matter how bad their performance, this is a professional license and it is a privilege, not a right.

That being said, I was not expecting the floodgates of CPA exam candidate hell to come bursting forth on Monday when I addressed a note the AICPA wrote to candidates. In trolling NASBA’s Facebook page and getting additional feedback from candidates (beyond the “screw you, AG, you’re not a CPA” comments), it’s clear candidates are livid about this whole scoring thing. There’s no other explanation for otherwise reasonable future CPAs lashing out like they did, since we all know professionals aren’t prone to that kind of behavior out of habit.

So the first thing candidates should be doing instead of snapping at NASBA, the AICPA and me is to write down their thoughts and send them to the AICPA and NASBA. The first three quarters of 2011 are basically practice for a new, improved scoring process the AICPA hopes to debut at the end of the year and if candidates stick to yelling at accounting bloggers, the important people who can really make a change aren’t hearing them. Be clear, be concise and be honest. What would you like to see changed? What do you feel is unfair? How do you feel about this entire process? Try to keep emotion out of it (save that for your therapist, your spouse or your best friend) but be explicit about the stress this has put on you if you feel it is necessary. Remember that complaints are easy but offering solutions or feedback that can help them improve stands the best chance to change things. I assure you all that the AICPA and NASBA are listening, they just might need to block it out if it’s mostly profane vitriol and hardly any common sense. I highly doubt that either agency planned for this to get so ugly, and if they are at all like me, probably didn’t expect it would be the meltdown it was. So keep that in mind when you are yelling at them like the intelligent professional I’m sure you are.

Speaking of which, we caught up with a real live intelligent professional who asked to keep her firm name out of this but wanted to weigh in regardless. A seasoned professional when it comes to the CPA exam from her work as an HR manager for a mid-sized Bay Area accounting firm, she is also a CPA exam candidate and has been vocal in expressing her dissatisfaction with this scoring debacle.

To her, the issue is customer service and communication, or rather lack thereof. She told us:

I advise candidates on everything about licensure (e.g. application process, review courses, changes to the exam, score releases, and serve as the unofficial firm “nag” reminding people they need to get or stay on the licensure path). In both roles, it is my duty to stay informed and I really try my very best to do so. To that end, this is why I felt so frustrated with NASBA’s recent post on Facebook. I didn’t receive the AICPA memo about the delay of scores for Q1-Q3 back in October of 2010. I went through my emails and see I have only received 3 email messages from NASBA and nothing from the AICPA. One was a 11/18/10 email from Prometric and NASBA about adding additional time slots in Q4 of 2010 to accommodate the high volume of candidates scrambling to avoid IFRS, and one on 1/4/11 announcing CBT-e was launched on 1/1/11. The last message contained 6 links, including sample tests, a tutorial, and a link to their October 21, 2010 message [a letter to the state boards that explained the new scoring process]. Obviously, I didn’t click on all the links until today. I was more focused on the tutorials.

Nowhere in the body of the message does it read the scores would be delayed. My bad for not reading the ‘footnotes’ but, in my humble opinion, later scores is a material item that should be separately stated in the ‘financial statements’/email message.

The communications from NASBA need more empathy. These candidates are overachievers who are probably failing at something for the first time in their life; emotions are automatically running high. Candidates are spending a lot of time, money and now even more money because they had to go out and buy brand new materials to be ready for the 2011 exam. We were sold on the idea that these changes would result in faster score reporting – God knows we were already at our wits end that it took so long for a machine to grade the old CBT- and here we are slapped with another round of delays. And they have the audacity to say they told us this back in October. Really?

As of the writing of this post, 9,491 FAR scores and 11,828 REG scores have been released by the AICPA.

The issue continues and we will happily continue covering it here so long as you all care. Any and all input (including gripes and general bellyaching but not insults towards the author or this website) is welcome in the comments.

AICPA Has Released REG Scores to NASBA for the Jan/Feb Testing Window

It’s been two days since they released FAR so at this rate, all scores should be out by Tuesday. Who wants to bet unforeseen circumstances delay BEC a tad longer? Just a guess.

Anyhoo, you’ve waited weeks (or months) for ’em, here they are.

All 32 CPAES states should have scores posted online within 24 hours (though preliminary candidate feedback is that this process is faster than it used to be). The only CPAES states which may take 24-48 hours to release online are Maine, Minnesota, Missouri, Nebraska & Puerto Rico. Check with your state board of accountancy if you are in a non-CPAES state.