Apparently a grip (a half dozen or so) of them have left the firm in the past two months, says a source familiar with the situation at BDO. At least three are supposedly now with PwC (none worthy of P. Dubs press releases) and another two are off to Deloitte in various markets. If you’ve recently jumped Captain Jack’s ship or know of more details for your office, get in touch.
Author: Caleb Newquist
Founding editor, Going Concern.
Deloitte Associate Who Supports Occupy Wall Street Admits That His Idea of Camping is the W Hotel
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As you know, a number of people in Lower Manhattan have spent the last two months Occupying Wall Street by way of camping out in Zuccotti Park. While September and October proved to be unseasonably warm, thus allowing Occupiers to exercise their 1st Amendment rights in relative comfort, November has brought cooler temps which has caused some relative discomfort among the campers. Oh, and Mayor Bloomberg was sorta sick of the mess and had everyone’s tents forcibly removed.
While many protesters have had to seek less squalid accommodations, other supporters of the movement have been able to find quarters that are more suitable for their tastes. This includes Deloitte associate Brad Spitzer who has been traveling to New York from California for work and has taken the opportunity to get his occupy on. And while he’s enthusiastic about the cause, Spitzer isn’t exactly down for park living:
“Tents are not for me,” he confessed, when confronted in the sleek black lobby of the Washington Street hotel where sources described him as a “repeat” guest.
Spitzer, 24, an associate at financial-services giant Deloitte, which netted $29 billion in revenue last year, admitted he joined the protest at Zuccotti Park several times.
“I’m staying here for work,” said Spitzer, dressed down in a company T-shirt and holding a backpack and his suitcase. “I do finance, but I support it still.”
You guys understand. There are just certain comforts that a Green Dot employee gets accustomed to – a soft mattress, a hot shower, room service – no matter how good of a drum circle you find.
Occupy Wall Street protesters stay at $700-a-night hotel [NYP]
Accounting News Roundup: Supercommittee’s FAIL; Andersen’s Failures; Olympus Employees’ Betrayal | 11.21.11
Debt supercommittee members brace for failure [WaPo]
The congressional “supercommittee” stumbled its way toward failure Sunday, with final staff-level discussions focusing mostly on how the panel should publicly admit that lawmakers could not meet their mandate of shaving $1.2 trillion from the federal debt. Rather than making a final effort at compromise, members of the special deficit-reduction committee spent their final hours casting blame and pointing fingers, bracing for the reaction from financial markets that are already jittery over the European debt crisis.
Kyl, committee divide on taxes [The Hill]
“We are not a tax-cutting committee,” Kerry said. “We’re a deficit-reduction committee.”
U.S. Billionaires Avoid Reporting Gains to IRS [Bloomberg]
When billionaire Billy Joe “Red” McCombs, co-founder of Clear Channel Communications Inc., reported a $9.8 million loss on his tax return, he failed to include about $259 million from a lucrative stock transaction. After an audit, the Internal Revenue Service ordered him to pay $44.7 million in back taxes. McCombs, who is worth an estimated $1.4 billion and is a former owner of the Minnesota Vikings, Denver Nuggets and San Antonio Spurs sports franchises, sued the IRS, settling the case in March for about half the disputed amount.
Enron’s Tenth Anniversary: Arthur Andersen’s Audit Failures at Enron and Elsewhere [GOA]
From the Grumpies: “Arthur Andersen was not a hapless bystander when Enron’s managers committed their accounting frauds, nor was it a duped auditor, nor an innocent victim of the media. Perhaps it was a scapegoat as all the large firms have engaged in audits of less than stellar quality, but that does not excuse its poor performance at Enron.”
Olympus’s $687 Million Takeover Scam Lay Hidden in Cardiff Filing System [Bloomberg]
Olympus on Nov. 8 admitted inflated advisory fees paid in the $2.1 billion acquisition of Gyrus were used to conceal soured investments dating back decades. In a practice known as “tobashi” — loosely translated as “to make fly away” — the company used offshore entities to park assets in the hope that a market recovery would erase losses before they had to be accounted for. A week after Olympus paid $620 million in March 2010 to buy back preference shares given to its advisers as fees, former Chairman Tsuyoshi Kikukawa and two senior aides, who were all serving as Gyrus directors, filed financial statements saying it wasn’t “meaningful to estimate a fair value” for the securities. Gyrus instead booked them at $177 million, the documents show.
Loyal Olympus workers feel betrayal over accounting scandal [Reuters]
“I cried in front of my family when I watched that news conference,” one male employee wrote on Facebook, using the social-networking site to vent his feelings after television news coverage of the president’s revelation of the scandal. A co-worker posted a message to console him, appealing to a sense of loyalty for customers rather than the company, saying they simply had to work hard to regain their trust. But the co-worker was also enraged. “I know it’s deep in the night and everyone has fallen asleep. But I just want to scream out loud ‘idiots!!'” he wrote.
Financial Statement Fraud: Olympus Makes It Look Easy [Fraud Files]
Fraud never gets lost in translation.
US SEC sues ex-Ernst worker in insider trading case [Reuters]
The SEC accused defendant Mark Konyndyk, a Los Angeles resident, of making $9,725 of illegal profit through his purchases of Activision call options before and soon after his Nov. 2, 2007 resignation from Ernst & Young. The combination was announced on Dec. 2 of that year. Konyndyk, who was a manager in Ernst & Young’s transaction advisory services group, made the trades after briefly working on a team conducting due diligence on behalf of Vivendi for the merger, which was code-named Project Sego, the SEC said.
Repo Accounting: After Lehman, another Debacle was Just a Matter of Time [Accounting Onion]
Tom Selling told you so.
Senators Grassley and Reed Would Like to Make Every Bit of PCAOB Wrist Slapping Public
For some time now, quite a few people have been asking for PCAOB disciplinary proceedings to be made public. Since your beloved Board came into existence, the process of slapping around sketchy auditors has been secret much to the chagrin of those people that would like audit firms to take just a little bit [pointer and thumb about an inch apart] of responsibility when they royally screw things up. It’s all for the investors, you see. After some rib jabbing by Board Member Dan Goelzer and Chairman Jim Doty, Chuck Grassley (R-IA) and Jack Reed (D-RI) have picked up the flag by introducing a bill that would make the proceedings public:
The bill would change a provision of the Sarbanes-Oxley Act that requires the Public Company Accounting Oversight Board to keep disciplinary proceedings against auditing firms confidential.
Undoubtedly, this will rankle auditors who would prefer that all the skeletons stay firmly stuffed in closets. Of course what many people forget is that the secretive nature of the PCAOB disciplinary proceedings are the exception rather than the rule:
[Grassley and Reed] argued that the PCAOB’s closed proceedings run counter to the public enforcement proceedings of other regulators. Not only the SEC, but also the Labor Department, the Federal Deposit Insurance Corporation, the U.S. Commodity Futures Trading Commission, and other government agencies use public proceedings, as does the self-regulating Financial Industry Regulatory Authority. Nearly all administrative proceedings brought by the SEC against public companies, brokers, dealers, investment advisers and others are open, public proceedings.
The Reed-Grassley bill would make PCAOB hearings and all related notices, orders and motions, open and available to the public unless otherwise ordered by the board. The PCAOB procedure would then be similar to SEC Rules of Practice for similar matters, where hearings and related notices, orders, and motions are open and available to the public.
This all seems like a pretty good idea. I mean, what makes auditors so special? Exactly. They’re not. They just happened to go from self-regulated to regulated in a flash and had a few K Street types twist in some features to Sarbanes-Oxley that kept things under wraps.
The problem, as a few people have pointed out, is that the Board still isn’t really that tough on auditors. Sure, a few more people might suffer some public embarrassment (which we’re happy to point out), but will investors really be better off? That remains to be seen but at least we’ll all be able to revel in the good fun of mocking the offenders.
Senate Bill Would Make PCAOB Disciplinary Hearings Public [AT]
General Electric Managed to Keep Their Tax Return Under 60,000 Pages
Recently, Congressman Paul Ryan (R-WI) was chattin’ up some citizens at a townhall meeting where he told a little anecdote about asking a GE “tax officer” how long the company’s tax return was for this year. He was told (and the Weekly Standard confirmed) that it was in the nabe of 57,000 pages. Granted, GE filed their return electronically, so there’s no way we can officially know what the count is but the combination of the world’s best tax law firm and a grip of savvy loaned KPMG employees managed to keep it under 60k. Nice job, everyone. [TWS via TaxProf]
Partner Criticizes Subordinate for Dressing Like Peasant, Eating Like a Wild Beast
For the most part, performance reviews are a fairly disappointing affair. You walk in, prepared to explain why you’re such a badass CPA only to be informed that you’re pretty average. It’s nothing personal, it’s just that your auditing/tax/advisory skills could use some improvement and there are many, many other people that deserve more money than you. For whatever reason, occasionally a performance counselor will take the opportunity in the review process to get a little personal. Feedback like, “Personal hygiene needs work,” or “Dresses like a slob,” or “Sucks as a human being,” is hardly constructive but has been known to happen. This morning we have yet another example of someone getting a little nasty.
Here’s our recipient/tipster:
I have gotten some interesting evaluations by the Partner in my office over the last couple of years. I would be curious to know if other public accountants get the same amount of candid feedback that my partner is willing to provide. Here is a sample of what I received on a recent evaluation:
“I have also commented to ___ on his professional dress. It appears he was compliant with firm policy regarding attire without collars, but I must admit that the overall choice was on the very low scale of professional dress. I believe ___ has taken action to correct this matter and I encourage him to “dress for success.” I also encourage ___ to place greater emphasis on proper table manners. In particular, not eating french fries with your hands while with a client at a nice restaurant.
Our tipster explains that his dress “was a nice, crew neck sweater with brown slacks, [the partner] was pissed off that there was no collar. I sent him an email with the firm dress policy to prove that it was within the guidelines.”
But really, our reader admits, “the french fry comment is the best. The restaurant was middle-tier at best.”
As our reader said, he’s looking for similar stories, so if you’ve been admonished for rocking a turtleneck or ignoring your knife and fork, share your stories below. And then you should feel shame. SHAME.
Accounting News Roundup: SEC Close on IFRS Decision; Yelp’s S-1; The Tax Rule of 72? | 11.18.11
SEC Nearing Decision on Accounting Standards [WSJ]
The Securities and Exchange Commission this week cleared the way for a long-awaited decision on whether U.S. companies should switch to using global accounting rules. The SEC chief accountant’s office issued two fact-finding papers Wednesday about the use of the global rules, known as International Financial Reporting Standards. Those papers lay the groundwork for a recommendation from the SEC’s staff to the commissioners, expected by the end of the year, on whether they should move to IFRS and away from U.S. generally accepted accounting principles. The staff’s work “gives me the confidence that lets me know they are moving toward a decision,” said Joel Osnoss, Deloitte Touche Tohmatsu Ltd.’s global leader for IFRS.
Tax Spat Stymies Debt Panel [WSJ]
Days away from a deadline, Congress’s deficit-reduction supercommittee is stymied, stumped in large part by one of Washington’s seemingly unsolvable problems: What to do with the Bush-era tax cuts? Republicans are digging in against any agreement that does not extend current income-tax rates, which are scheduled to expire at the end of 2012.
Yelp Files for I.P.O. [DealBook, S-1]
Yelp, which makes the bulk of its revenue from advertising contracts with local businesses, is not yet profitable. Though revenue rose 79.9 percent, to $58.4 million for the first nine months of this year, the company recorded a loss of $7.4 million.
Fund Transfers Are Focus of MF Global Probe [WSJ]
Regulators have unearthed new details indicating MF Global Holdings Ltd. shifted hundreds of millions of dollars in customer funds to its own brokerage accounts in the days before its bankruptcy filing, according to people familiar with the matter. Such moves could violate regulations stipulating that commodities brokers can’t mix customer funds with brokerage funds. Brokerage funds often are used to back proprietary trading positions. According to MF Global’s internal records, the transactions were as large as hundreds of millions of dollars at a time, these people said.
Rule of 72? [Tax Update]
Please keep filing tax returns after your 72nd birthday.
Barnier’s audit reforms ‘might be delayed’ [Accountancy Age]
You know how things are.
Hiring Watch ’12: Grant Thornton Chicago Looking for Some New Dynamos
Much like E&Y, GT’s Chicago office is looking to get more asses in the seats because business is swell:
Grant Thornton LLP said it intends to add 140 jobs in its Chicago office next year, 80 of them entry level and 60 internships, most of them paid. Similar hiring this year was less than 100. According to a press release and a spokeswoman, the new hires are needed because the firm’s business is growing. The hires will work in “nearly every area” of the firm, including audit, tax and consulting.
Unlike E&Y, Hizzoner was not attendance:
[T]his announcement was not made by Mayor Rahm Emanuel, who has unveiled several somewhat similar moves by other companies in recent months.
Always a bridesmaid, GT. Always a bridesmaid.
Grant Thornton to step up Chicago hiring 40% next year [Crain’s, Earlier]
IRS Commissioner Doug Shulman Puts Tax Preparers’ Job Security Concerns to Rest
“Perhaps the most telling indicator of taxpayer confusion over the code’s complexity is that today, 90% of individual taxpayers pay for professional tax preparation or tax software to prepare their tax returns. IRS research estimates that, over the past 10 years, the burden for the typical taxpayer has increased by about 20% and would likely be even more if they had to prepare returns themselves without any aids or tools. Moreover, we estimate individual taxpayers and businesses spend more than 7 [billion] hours each year complying with filing requirements.” [Tax-News via Tax Foundation]
Grover Norquist Did His Best to Educate the Patriotic Millionaires on How to Pay Their Fair Share of Taxes
Not everyone agrees with tax hit man Grover Norquist’s ideas. While GGN would like nothing better than to see every federal and state levy banished to the darkness, there are a number of people who don’t share this view. A certain group of these people are from the more affluent corners of society and they’ve organized themselves as the “Patriotic Millionaires” in order to make the case that they are sick and tired of being able to afford competent CPAs to legally reduce their tax burden to an unfair amount. Grover, being the big softie that he is, realizes (not from personal experience, mind you) that the burden of not paying your fair of taxes is a heavy one. And because he’s upstanding patriot himself, he went to the Hill yesterday to meet with these troubled folks to help alleviate their pain:
“If you think the federal government can spend your money better than you can, then by all means” pay more in taxes than you owe, said Grover Norquist, of Americans for Tax Reform, a group that has gotten almost all congressional Republicans to pledge to vote against tax hikes. The IRS should have a little line on the form where people can donate money to the government, he suggested, “just like the tip line on a restaurant receipt.”
Tipping! Millionaires know how to do that, don’t they? I mean with all the servants and eating at fancy restaurants and whatnot, this should be an easy way for the wealthy to ease their low tax guilt. But despite all his suggestions and support, some did not receive the message all too well:
One of the millionaires suggested that if Norquist wanted low taxes and less government, “Renounce your American citizenship and move to Somalia where they don’t collect any tax.”
Well! If that’s the thanks Grover gets, don’t expect him to be so forthcoming with the advice next time.
With supercommittee silent, millionaires and others eagerly jump in with their own advice [WaPo]
PwC Sustainability Partner Blames His Dull Job for Not Rocking “Green” Shoes
If you’re a sustainability professional, people might make the assumption that you are a tree hugger. A green weenie. A dirty hippie. A person who has as much need for a pair of wing tips or business appropriate pumps as a fully loaded H2. Well you can put those suspicions to bed my friends.
Above is PUMA CEO Jochen Zeitz along with a couple of guys from environmental consulting firm Trucost and PwC sustainability partner Alan McGill. As you can see, Mr. Zeitz and the Trucost boys opted for some “green” sneakers to go with their Brooks Brothers. Mr. McGill, on the other hand, is in the standard issue Allen Edmonds. The reason for not getting on board with the hip skids? He’s lame:
The firm’s sustainability partner jokingly suggested his job was too dull to warrant a jazzy pair of sneakers.
Sceptic Tank reports that a PwC spokeswoman clarified the meaning of “dull” to be “PwC can’t be seen to be promoting their clients products in any way.” Which probably also explains why McGill wore a tie as well. Can’t be too careful about these things.
PwC and the fashion faux pas [The Sceptic Tank]
Accounting News Roundup: Olympus to Employees: Stay Focused; GOP Supercomittee Members Get Skitzo; Moving in with ‘Rents Hurts Your Country | 11.17.11
Olympus Has Enough Cash to Keep Going Amid Probe, Takayama Tells Employees [Bloomberg]
Olympus Corp. (7733) has enough cash on hand to keep the 92-year-old company in business amid a probe of schemes to hide investment losses, President Shuichi Takayama told employees yesterday. “Continue focusing on your job and responsibilities. Our treasury section will take care of financing issues,” Takayama wrote in a posting on the company’s internal website, a copy of which was given to Bloomberg News. In a posting today, Takayama said hospitals are asking for details of the scandal before they c h one hospital canceling its purchase.
Ex-Olympus boss to meet Japanese police [FT]
Michael Woodford, the former Olympus president whose revelations about suspicious acquisitions by the camera maker precipitated a scandal over improper accounting, will return to Japan next week to speak with authorities investigating the case, the Financial Times has learned. Mr Woodford confirmed to the FT that next Thursday he would meet Japanese police, prosecutors and officials from the Securities and Exchange Surveillance Commission, Japan’s financial markets regulator, in his first trip to Tokyo since Olympus fired him on October 14.
Widespread Protests Planned [WSJ]
The newly homeless Occupy Wall Street activists on Thursday plan a citywide day of demonstrations, an event that will test both the movement’s resilience following its eviction from Zuccotti Park and the city’s ability to deal with the decentralized protests. Protesters plan to start early. At 7 a.m., some say they’ll try to march on Wall Street and disrupt the beginning of the work day. So far, a heavy police presence and a warren of barricades have kept protesters from holding serious protests on Wall Street. Others will gather in Zuccotti Park. In the afternoon, they’re urging people to gather at transit hubs in each of the five boroughs. They’ve also called for student walkouts.
GOP supercommittee members’ tax plan gives party an identity crisis [WaPo]
Growing Republican support for raising taxes to help reduce the deficit has prompted a GOP identity crisis, sparking a clash within the party over whether to abandon its bedrock anti-tax doctrine. Tensions have mounted in recent days as two of the GOP’s most fervent anti-tax stalwarts on Capitol Hill — Sen. Patrick J. Toomey (Pa.) and Rep. Jeb Hensarling (Tex.) — have lobbied party colleagues behind the scenes to forgo their old allegiances and even break campaign promises by embracing hundreds of billions of dollars in tax hikes.
With MF Global Money Still Missing, Suspicions Grow [NYT]
Nearly three weeks after $600 million in customer money went missing from MF Global, the search for the cash has been hampered by the bankrupt brokerage firm’s sloppy record-keeping, an increasingly worrisome situation that has left regulators frustrated and customers in the lurch.
USC Suspends Launch of its Graduate Tax Program [TaxProf]
The University of Southern California Gould School of Law has suspended the launch of its graduate tax program because of declining job prospects for tax LL.M. graduates in the Los Angeles area. USC Dean Robert Rasmussen reports that the school will continue to monitor the employment situation and will begin the program when it is confident that the career prospects of its tax LL.M. graduates would match those of its J.D. graduates. (USC’s business school continues to offer a Masters of Business Taxation.)
Fund-Raiser for Liu Is Accused of Role in Illegal Donations [NYT]
A fund-raiser for the New York City comptroller, John C. Liu, whose campaign finances are under federal investigation, was arrested on Wednesday morning on charges that he helped illegally funnel thousands of dollars into Mr. Liu’s campaign account, according to court papers and people briefed on the case. A criminal complaint unsealed on Wednesday says an undercover agent from the Federal Bureau of Investigation posed as a businessman seeking to donate $16,000 to an unidentified candidate for citywide office in New York. That candidate, the people briefed on the case said, was Mr. Liu.
Former Bowl Official Indicted [AP]
Natalie Wisneski faces charges of filing false tax returns for the Fiesta Bowl.
As New Graduates Return to Nest, Economy Also Feels the Pain [NYT]
You selfish brats need to get out there and stimulate the economy.