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.

Utah Accountant Who Filed $393 Million in Fake Tax Refunds Can Never Ever Ever Do Taxes Again

Dick Jenkins is a bad, bad tax accountant; the Justice Department says so.

“Given the sheer brazenness of Jenkins’s conduct, he is essentially stealing … from the U.S. Treasury,” said U.S. District Judge Dale A. Kimball, who entered the civil injuction against him last week. Jenkins was accused of filing $393 million in fraudulent tax refunds, including a single $210 million dollar refund for one customer and $402,920 for himself that he didn’t have coming (I don’t care how good you think you are at deductions, that’s BS).


Jenkins was not barred by the court from doing taxes forever because he screwed his clients (they received $294,292 in fake refunds) but because “Jenkins’s conduct results in irreparable harm to the United States.” You heard right, the Salt Lake Federal Court is pissed because he tried to remove $393 million from the Treasury through tax fraud, who cares about the clients?

Maybe this is what the PCAOB was talking about when they mentioned unusual transactions without giving specifics. I’d say it qualifies.

Salt Lake Federal Court Bars CPA from Preparing Tax Returns for Others [Media Newswire]

Wednesday Addams’ $180,000 Tax Trouble

Go figure, Christina Ricci has been hit with an IRS lien to the tune of $179,568.30 for unpaid 2008 taxes. Though the lien news seems to have taken her quite by surprise, Ricci’s rep told TMZ that she is taking “immediate action to address it in a responsible manner.”

That’s funny, I thought a responsible manner would have meant paying the IRS $179,568.30 before April 15th, 2009 when it was due but maybe that’s just me.


Oddly enough, if you’ve ever been hit with an IRS lien (hello, Nic Cage) you know that the Service doesn’t just one day decide to slap a lien on you without first attempting to give you a hint that the proverbial shit is preparing to hit the fan. Generally this comes in the form of correspondence (lots of it) indicating that there is an issue.

Helpful bunch that they are, the IRS will almost always work with tax delinquents as long as said delinquents return their letters and get in touch to say “Hey, sorry, totally forgot to give you that $180,000 that I owe you.” In the case of Christina Ricci, we’re pretty sure her IRS letters must have gotten lost in the fan mail and creepy stalker packages. Yeah, that must it.

Christina Ricci — Ya Got $179k Layin’ Around? [TMZ]

John Veihmeyer Gets a Little Mysterio About His Path to the Top of KPMG

New KPMG Chairman (and US CEO since 2008) John Veihmeyer told the Washington Post about growing up to ascend the public accounting ladder and if that’s something you’re looking to do with your life, be sure to check it out.

Since some of us would rather sip on Molotov cocktails and scratch our eyeballs out with sharpened #2 pencils, we can merely press our faces to the glass to see how public accounting really works. According to J Veihm, it’s something like this: once you’re jumped in, there’s no getting out.

One of the very best pieces of mentoring advice I ever received was to “view a challenge as an opportunity” and then “take it on and do it better than anybody else.” I recall one specific moment, when KPMG’s leadership asked me to consider accepting a particular position that, at the time, I thought would be something of a roadblock to achieving one of the goals I had set for my career in public accounting. I shared my concerns with a trusted colleague, who I have long considered to be my professional mentor, and his response has stayed with me over the course of my 33 years with KPMG. He said, “look at this challenge as an opportunity, accept it, and then do it better than anybody before you ever has.” I took his advice, and he was right. In hindsight, the experience I gained in that role did more to prepare me for the rest of my career than anything else I could have done.

Translating that, if you express concerns about the gang shoving you up the corporate ladder by sending you on your own drive-bys or whathaveyou, one of the higher officers will reassuringly pat you on the shoulder and remind you that there’s one way to go and that’s up. Accept it, there is only one way out (for gang members, that usually means getting shot to death; in public accounting, it might mean a heart attack at 45). Creepy.

KPMG knows all about challenges so it’s probably a good thing that Johnny V was groomed in advance for his duties as KPMG Chair.

Britain’s Singing Accountant Got Bullied Big Time

There’s finally some video of the new Britain’s Got Talent star, 28 year-old Christopher Stone. An accountant, Stone showed up at his audition with his Mom and Dad who sold their house to pay for music lessons when Chris was little.


Tortured as a kid for his love of music (they apparently called him a “poof” though we aren’t sure what that translates into over on this side of the pond), Stone suffered through beatings and taunting for much of his young life. “Bruises heal but the pain from mental bullying doesn’t just go away,” he said, later giving Simon Cowell a reason to criticize for the sort of nervous hand-wringing that can only come from someone who spent half their life getting chided by bullies.

The roar from the crowd when Stone admits to being an accountant pretty much sums it all up but he knocked Maria out of the park and boasts 12:1 odds to win the show (that’s some sweet action).

Hey E&Y, we’re sure you are desperate for IFRS experts AND singing talent for your excellent videos, how’s about a Visa for this dude?”

School bully torment of singing accountant [The Sun]

All About the Audit Section of the CPA Exam

Editor’s note: Since I’m guest editing this week, we decided to do a 5-part feature on – what else – the CPA exam. I’ll be covering tips and tricks for each section and ethics on Friday so check in with us this week for the full breakdown. – JDA

So you’re taking Audit? Great.

Good news: traditionally, Audit tends to have a higher national pass rate than the other sections (only by a half a percentage point or so on average so don’t go getting excited that you can pass this one if you don’t study at all) and doesn’t require nearly as much effort as, say, FAR.

Bad news: chances are you didn’t take Auditing in college unless you’re planning on being an auditor so you have no idea what any of this stuff is about but like the rest of the exam, you don’t need to be an expert, you just need to know enough to get a 75. Yay!


Audit is the most expensive section as it is the longest at 4.5 hours and Prometric charges by the minute. Despite its length, you will still probably run out of time so time management is especially important with AUD. Do not spend more than 2 minutes on each MCQ, you’ve got 90 of them to get through and will need at least 45 minutes for each simulation.

The AICPA BoE has set the following target weights for skills testing:

Communication (10% – 20%)
Research (6% – 16%)
Analysis (12% – 22%)
Judgment (12% – 22%)
Understanding (35% – 45%)

Based on the Content Specification Outlines, Audit covers the following areas:

Planning the engagement (22% – 28%) Determine scope and nature of engagement, Generally Accepted Audit Standards, assessing engagement risk, communications, formulating audit objectives, etc.

Internal controls (12% – 18%) Understanding of business processes and information flows, limitations of internal control, tests of controls and control risk.

Obtain and document information (32% – 38%) Performing planned procedures, audit sampling, substantive tests, contingencies, identifying control deficiencies, attestation engagements.

Review engagement and evaluate information (8% – 12%) Performing analytical procedures, evaluation of audit evidences, work reviews and reasonable assurance.

Prepare communications (12% – 18%) Reports, reports, reports! This section covers all kinds of reports, footnotes, disclosures, as well as required communications based on discovery of illegal acts, errors and fraud, and communications with audit committees.

Studying for AUD should take between 60 and 90 hours depending on what review course you are using and whether or not you have experience in this area. Obviously if you took Auditing in school you will need less time to review some of these areas.

Good luck and see you tomorrow with Regulation!

Help the IRS Improve Its Service on the Taxpayer Advocacy Panel

If you are some kind of tax activist, not a felon and ready to serve your country, we may have the volunteer opportunity of a lifetime for you: Serving on the IRS’ Taxpayer Advocacy Panel (TAP). The deadline for applications is this Friday and we’re pretty sure the Service has been swamped with would-be heroes vying for a chance to provide a voice to the poor, abused little taxpayer.


“TAP members represent the typical taxpayer and provide the IRS with invaluable insights that are crucial to sound tax administration,” said IRS Commissioner Doug Shulman.

To qualify, you must pass an FBI fingerprint check (sorry, Lone Wolves, you’re pretty much disqualified right off the bat and will have to stick to crashing planes into IRS buildings if you want your voice to be heard), not be a lobbyist, and of course be caught up on your own tax bills.

Think of it like a focus group for taxes except unlike traditional focus groups, you won’t be getting $75 for an hour’s worth of opinions. TAP members serve a 3 year term and are expected to commit 300 – 500 hours per year serving the Service taxpayer. Members are required to attend a yearly meeting in Washington, DC each fall, at least one face-to-face subcommittee meeting with other members in their region and must participate in a monthly conference call.

So go on, little taxpayers, give the IRS a piece of your mind. And 500 hours of your time, of course.

Three Social Media Trends That Will Never Catch on with Accountants

CPAs have pretty much dominated social media and infested the blogosphere to the point that when I tell people that I cover accounting news for a living, I don’t have to explain just what on Earth accounting news is. That’s a step in the right direction but the reality is, some web and/or social media trends may never catch on with accountants. I’m suggesting three but fairly sure there are plenty more; if you know of one, do share.


Foursquare Paranoid stoners and anti-Big Brother types aren’t hip on it either but I guarantee you Foursquare will not catch on among CPAs. Who is dumb enough to track their own billable hours where everyone (and the boss) can see? What fun is checking in at the office day in and day out?

Get Satisfaction Listen, I know the smaller firms and personal, hometown CPAs are all about client satisfaction. Some of the mid-tier firms might also give some type of shit about the level of service they provide to their clients and how effective they are in doing it. But as a general rule (and especially for the larger firms), they really don’t actually want to know if they are delivering it or not in the direct manner that Get Satisfaction provides. If you aren’t familiar with how the site works, check out Comcast (several Comcast agents, actually) against the pissed off subscribers who lost their digital channels after the 2009 conversion but as a direct result of Comcast’s decisions. Can CPAs handle that sort of brutal, misspelled, angry honesty? Doubt it.

Blippy Though most CPAs love to hear the promise of yet another tool meant to make their lives easier, the remote chance that their credit card information may accidentally, kinda sorta end up on Google might make them a tad Blippy-adverse. And hey, while you’re at it, see what your friends are buying (while exposing what you are at the same time), what fun! I think they’ll pass. Hell, who would want Facebook for their bank statement, CPA or not?

KPMG Resigns as TierOne Bank Auditor

In a bizarre piece of auditing news released late on a Sunday night, KPMG has verbally resigned as Nebraska-based TierOne Bank’s independent auditor, withdrawn its audit opinion for 2008 and taken back its review of TierOne’s financials for the quarter ended March 31, 2009.

Well damn, we’re fairly sure it couldn’t get any worse than that for TierOne, could it?


Citing risk of material misstatement, KPMG has also warned the audit committee that TierOne’s financials are not to be relied upon by investors. Even Overstock.com doesn’t get that kind of treatment.

Last month the Office of Thrift Supervision – TierOne’s primary regulator – gave it until April 30th to merge with or sell its assets to a healthier financial institution so we’re going to go out on a limb here by assuming that they aren’t going to have good news come Friday and KPMG is just doing the responsible thing by backing away from the mess with a week left.

Five Questions with MACPA’s Bill Sheridan

If you don’t know the MACPA and their quality content machine Bill Sheridan, you’re probably not in accounting, have never used Twitter, and most definitely wouldn’t have any clue what Second Life is. When it comes to social media, the Maryland Association of CPAs was on it long before a certain cable company figured it out and Bill has been just one of the organization’s main “faces” as far back as I can remember.

Bill speaks of using CPA Success as a tool to reach the MACPA’s members in ways they never thought they could and speaks as someone who truly enjoys what he does for a living. He likes posts he’s written in airports (who doesn’t love travel blogging? *cough*) while his co-blogger Tom Hood (I believe you all are familiar with his work as MACPA CEO and CPA) prefers tackling the topic of leadership. Whatever your accounting poison, CPA Success covers it all.

Bill was hard to pin down but finally found a moment to get to our five questions, enjoy.


Why do you blog?
It’s yet another way of connecting with our members. Our blog allows us to present news and analyses much more quickly than we ever could before. It allows us to communicate with members in ways we never had before. We’ve had an opportunity to carve out a niche as a thought leader in the CPA space that we never could have established without blogging.

A good accountant is…
A good CPA is a trusted advisor, strategic thinker and confidant, someone who sees beyond the numbers and helps companies grow and clients understand how their finances impact their personal and professional lives. And at all times, honest and ethical.

A good blogger is…
… observant, and a good story-teller.

What is the biggest benefit you’ve gotten from starting your blog?
Notoriety. But the biggest benefit is this: CPAs have really worked hard to carve out a place for themselves in the social arena. When we first started playing around with this stuff three years ago, there weren’t a lot of accounting and finance folks in there with us; it seemed like we were working in a void. Since then, though CPAs have really taken the social bull by the horns. They’re blogging, they’re using things like Twitter and LinkedIn and Facebook, and they’re figuring out to put these tools to use in ways that benefit their businesses and their clients. It’s been fun and extremely rewarding to see CPAs make the leap and work with them to figure all of this out.

The biggest issue facing accountants today is…
… complexity. The profession is facing numerous legislative and regulatory changes these days, and that’s in addition to the many changes in accounting standards and other technical rules that have been enacted recently. Keeping up with all of these changes is a monumental task for CPAs, who are busy enough simply serving their clients.

Three Ways Soon-to-be Accounting Grads Can Get Ready for the CPA Exam

With May graduation season nearly upon us, handfuls of future CPAs around the country are preparing to tackle one of the most important events of their careers: the CPA exam. Unlucky for them, few colleges adequately prepare accounting grads to enter the real world and though you may have the knowledge necessary to practice the art of accounting, chances are you’re completely lost on how to get started on the CPA exam.

Don’t worry, that’s why we’re here. Just a reminder that if you have a CPA exam question for us, do feel free to get in touch and we’ll do our best to help you along.

Anyway, soon-to-be grads, here’s what you need to be thinking about:


Confirm when your degree is posted – As with most things CPA exam, the rules and procedures vary depending on the state you will be sitting in. Few states allow you to sit with less than 150 semester units and even fewer allow you to sit without your degree posted to your transcripts so the first thing to do now is find out how long your school takes to post your degree. Some schools will let you pay an extra fee to expedite this process so if you are in a rush, inquire at your school if you can move this along.

Apply to sit for the exam with your state’s board of accountancy – Once you have your degree, you’ll need your school to send your transcripts to the board of accountancy to which you are applying (NASBA if you’re in a NASBA state, or CPAES – authorized provider of CPA exam qualification services for some states). You cannot send them in yourself (even sealed, official ones) and should submit any application fees and forms in at the same time as requesting your transcripts be sent.

The Board will match your application (and likely cash your check before doing anything else) with your transcripts and like magic, you’re authorized to sit for the exam. If you meet your state’s requirements, that is. It’s usually a good idea to look these up before leaving school just in case you need to sneak in Federal Taxation or Advanced Accounting to please your State Board.

Start studying for the exam when you apply to sit – Though it’s probably wise to focus on finals for now if you are graduating this spring, you can get a jump on studying by starting your CPA exam review around the same time you submit your application. Always check with your state to see how long this might take (generally 4 – 6 weeks) as you don’t want to start studying for BEC 4 months before you will actually be able to sit. Keep in mind that just because you are authorized to sit for the exam you will not necessarily begin testing immediately and will still have to factor in wait times for your payment coupons (NASBA wants their money) and Notice to Schedule (NTS). Generally these take 10 business days each to arrive.

So start the application process as soon as you qualify. A summer off can turn into 2 or 3 years of procrastination and next thing you know you are trying to remember which side debits go on and still no closer to your goal of CPA licensure.

Hope that helps and good luck to all of the soon-to-be new grads!

Deloitte Playing Superhero to Group Hoping to Buy Manchester United

Let’s stop digging E&Y for five minutes and talk about Deloitte trying to sex itself up as tax advisory coaches to the group hoping to purchase Manchester United.


Guardian:

Deloitte, which has worked hard to build up its sporting credentials with its annual audits of football’s finances and consultancy work for a host of clubs, is understood to have become the latest big financial hitter to become associated with the Red Knights, the would-be buyers of Manchester United, in an advisory capacity.

Alongside Freshfields, which is supplying legal expertise, and Nomura, the Japanese investment bank that has been responsible for contacting all the 40 or so wealthy individuals who expressed concrete interest in the plan, Deloitte is believed to have been supplying advice on tax structures and how to structure any bid most efficiently.

Yeeeeeeeeeeah I can see it now, “casual football Friday” memos circulated around Deloitte’s UK offices about appropriate garb for the field and some hokey “We Are the World” sing-a-long at the end when Manchester United kicks whomever’s ass (I don’t watch the stuff). Excellent.

In the spirit of not discriminating when ripping on the Big 4, this Deloitte flick nearly brought me to tears. Maybe it was the faux hawk or the overgrown baby beard. Perhaps it was the fucking cape. You decide.

The Green Dot FTW!

Cuomo: Espada’s Looting of Nonprofit ‘Reprehensible’

In the largest nonprofit fraud case we’ve ever seen, State Senator Pedro Espada, Jr is getting it from NY Attorney General Andrew Cuomo for perpetrating a $14 million scam using his non-profit as an ATM. Ouch.

Soundview Comprehensive Community Development Corp., a Bronx-based health care non-profit, appears to be little more than a vehicle for Espada’s extravagant lifestyle and Cuomo doesn’t find any of it to be entertainment.


“Siphoning money from a charity would be egregious under any circumstances, but the fact that this was orchestrated by the State Senate Majority Leader makes it especially reprehensible,” Cuomo said in a statement.

Espada’s charity allegedly paid $100,000 for campaign literature, $80,000 on meals for Espada (including $20,000 for sushi – one of JDA’s weaknesses but hey, at least I pay for my own), vacations for the family and $2,500 a month for a co-op rental in the Bronx in which Espada supposedly lives. Double ouch.

If you’re into that sort of thing, you can check out the summons from the AG’s office here.

To date, Cuomo’s complaint is merely a civil one but he has left the door wide open for criminal charges against Espada and 19 others, including family members installed on the charity’s board. Taking a page from the Crazy Eddie fraud handbook, I see.

Espada also allegedly used the nonprofit’s corporate credit card to cover up to $450,000 in expenses that he’s now admitted may have been personal. Snicker snicker, everyone knows the corporate card should only be used for personal expenses if one is trying to fund an affair and hoping the wife doesn’t find out. Duh.

Because being a nonprofit looting Senate majority leader is hard work, Espada took the first 14 weeks of the year off and charged the paid leave to – you guessed it – Soundview. Since its board is packed with friends and family, they approved a $75,000 payout for personal expenses associated with this respite in a lump-sum payment at the beginning of the year.

Espada has responded by claiming Cuomo’s accusations amount to little more than a “witch hunt” meant to advance the AG’s political career. Whatevs.

Meanwhile, Espada’s Senate homies are praying for him. For $14 million bucks, he needs all the Hail Marys he can get, especially since the FBI and IRS raided the clinic this morning. Good luck with that.