Author: Caleb Newquist

Founding editor, Going Concern.

Accounting News Roundup: Di Piazza Joins Citi; Salzberg Has Job Marriage Advice; Koss Settles Suit Against Directors | 05.23.11

Lagarde is Front-Runner to Head IMF [Bloomberg]
Support mounted for French Finance Minister Christine Lagarde to head the International Monetary Fund as Mexico offered its central bank governor as an emerging- market candidate, challenging Europe’s 65-year hold on the job. U.K. Chancellor of the Exchequer George Osborne said in a May 21 statement his nation will back Lagarde to become the first woman to head the Washington-based lender. German Chancellor Angela Merkel said consensus was emerging in Europe for her to get the post, Deutsche Presse-Agentur reported two days ago.

Citi Hiresmuel Di Piazza As Senior Banker [Dow Jones]
Samuel Di Piazza Jr., the former Chief Executive of PricewaterhouseCoopers International LLP, joined the growing group of rainmakers Di Piazza, who left PwC in 2009, joined Citi as vice chairman of the bank’s “institutional clients group,” the bank’s name for its investment banking division, and as a member of the senior strategic advisory group. He is one of several prominent executives and politicians hired to help Citi get and maintain a seat at the table when multinational corporations and governments seek strategic advice for deals and issue securities.

The Right Job? It’s Much Like the Right Spouse [NYT]
Barry Salzberg’s interview with the Times features a lot of the same anecdotes as his speech at Wharton and he throws in a marriage metaphor for good measure.

House Arrest Starts for Strauss-Kahn [WSJ]
Dominique Strauss-Kahn is out of jail, but the experience of others who have faced house-arrest arrangements as tight as his suggests the former International Monetary Fund chief faces a trying time. Mr. Strauss-Kahn, accused of sexually assaulting a hotel maid earlier this month, will be forbidden to leave a New York City apartment for all but a few situations. The arrangement calls for at least one armed guard to keep him under close surveillance 24 hours a day, seven-days a week—all at Mr. Strauss-Kahn’s expense.

Sears CFO Departs, Company Taps Controller Phelan [WSJ]
Sears Holdings Corp. (SHLD) said Chief Financial Officer Michael D. Collins resigned Friday and appointed William K. Phelan, a senior vice president and controller at the department-store operator, as his temporary replacement. In a filing with the Securities and Exchange Commission, Sears said Collins resigned “to pursue another opportunity,” but said he would remain at the company until June 10 to ensure a smooth transition.

Koss settles suit against directors in embezzlement case [MJS]
Koss Corp. has reached an agreement to settle a shareholder lawsuit filed against the Milwaukee stereophone manufacturer last year in connection with the $34 million embezzlement by a former executive. The company said Friday that the agreement in Milwaukee County Circuit Court calls for the dismissal with prejudice of claims against individual Koss directors. Claims against former Koss auditors Grant Thornton and Sujata Sachdeva, Koss’ former executive vice president of finance, would be dismissed without prejudice, meaning they could be refiled.

SEC Asks Wipro to Prove KPMG Independence [WSJ]
Wipro Ltd. said it has received a notice from the U.S. Securities and Exchange Commission, asking the company to prove the independence of its financial auditor, KPMG India Pvt. Ltd., failing which the software exporter will have to appoint a new auditor. In an SEC filing dated April 20, Wipro said it is cooperating with the U.S. regulator’s request and that the outcome of the SEC’s review on the matter is uncertain.

IRS Filings Show This Whole ‘Rapture’ Thing Might Prove Quite Lucrative

According to their most recent IRS filings, Family Radio is almost entirely funded by donations, and brought in $18 million in contributions in 2009 alone. According to those financial documents, accountants put the total worth of Family Radio (referred to as Family Stations on its official forms) at $72 million. With those kind of financials — and controversial beliefs — it’s no wonder skeptics have accused the group of running a scam. [CNN via NetNet]

Should a Content Big 4 Associate Jump Ship for a Controller Role?

Welcome to the Rapture fire sale edition of Accounting Career Emergencies. In today’s edition, a perfectly happy Big 4 associate has the opportunity to land a controller position with a small company. Should he leave the friendly confines of Big 4 and take a pay cut for the growth potential?

Looking for semi-sound career advice? Need to deflect some blame? Dealing with crazies in your office? Email us at advice@goingconcern.com and we’ll make sure you’re ready for whatever might (but 100% sure won’t) happen.

Meanwhile, back to opportunity knocking:

I’m in a great spot with a Big 4 firm on a large client in a growing market. I’ve “exceeded expectations” on all my performance reviews the last two years and am up for promotion in July to Sr. Associate. Pay is good, I’m not actively searching to leave, but I don’t feel I’m on the partner track (I’d like to see my family and raise children while staying involved in their lives). At some point I’d love to have my own business – CPA firm or other small business partner.

That said, I’ve also been offered a job with a former small business employer which I interned and worked at for 2 years. They’d like me to come back in a Controller role, with ongoing career development in the position. The position also comes with a potential grooming track to CFO.

What are the pluses and minuses of leaving now for the opportunity? There is a salary sacrifice and I have job security where I’m at with my firm. There’s great growth potential at the small firm and it allows for a great (proverbial) work/life balance.

Thoughts?

Sincerely,
Tough Spot

Dear Tough Spot,

You wanna tough spot? Try finding a couch on the Upper East Side when you’re accused of rape. You’ve simply got simply have to make a choice about where you want your career to go. And in your case, the decision is easy: take the controller gig.

Here’s the thing – opportunities like this don’t come around every day. You have the good fortune to already be familiar with the company that is making you the offer. If you had little or no idea what this company was about, I’d say this would be a riskier move, especially since you’re being offered a controller position. But because you know the ins, the outs, the whathaveyous, that makes this an easier decision, in my opinion.

I will warn you, however – you will not have a “work-life balance.” You will work. A lot. If the “controller role” is a true controller role, you’re going to quickly find out what that means. You’re going to be in charge of the accounting department; you’re going to have people working for you; you’re going to be answering the C-level execs of the company. That’s not typically conducive to work-life balance. I’ve known people that have taken controller roles at your experience level and there is, without fail, a big learning curve that involves putting in tons of hours. Even people that have triple the experience that you have, realize that running the show involves way more work than they anticipated when they left Big 4. And you’re going to a company with “great growth potential.” Since when does “growth potential” equate “really don’t work that much”?

But from the sounds of it, you’re up for, and capable of, handling this type of challenge. Go for it like there’s no tomorrow.

Jeremy Newman Would Prefer if the Big 4 Would Just ‘Allow Real Competition’ But Regulatory Action Will Do Just Fine, Thank You

Perpetual fusspot and BDO Global CEO Jeremy Newman has not been shy about how unfair he thinks the dominance of the Big 4 is. The majority of his blog posts are tagged “Global Accounting” and several consist of bellyaching about Big 4 this and the Big 4 that. Of course, since the mainstream media has finally picked up on the idea that the concentration of auditors could be a bit of a problem, Newman has lots of articles to jump from and since the UK’s Office of Fair Trade has said something needs to be done about this, he had another opportunity this week:

Under the headline “Antitrust watchdog urges reform to break audit grip of Big Four” the FT states:

“Regulatory action may be required to break the dominant grip of the Big Four accounting firms on UK audits of leading companies…”

The only word I would challenge is “may” – it should say “will”.

Presumably this article was in the print edition because Newman doesn’t link to it but suffice to say he’s concluded that the government needs to either break up the Fab 4 like Yoko Ono or put some laws in place that mandates non-Big 4 firm inclusion. Either way, Newman laments to the Big 4 that it doesn’t have to be this way:

At long last it seems that something might now be done to open up the audit market. It is a shame it has taken so long and that it will require regulatory intervention – though it is not too late for my colleagues in the Big Four, and others, to act on a voluntary basis to create the environment necessary to allow real competition.

Judging by the statements from the firms, they seem more or less going along with it but these firms aren’t conscientious objectors. Don’t expect them to play nice.

I Hate it When People Say “I Told You So” But… [BDO]

BREAKING: Big 4 Firms Compete for Talent

For those not previously aware:

A talent war is among the top concerns for both the accounting profession and their corporate clients, says Jim Henry, managing partner at PricewaterhouseCoopers in San Francisco. Even as the nation struggles with persistently high unemployment, those with the right skills and credentials are in demand. “We’re seeing a hot market for those with the relevant skills,” said Henry. “It’s a sign of the economy improving over the last 18 months.”

Since this is a BizJournal publication we hit the paywall but can presume that Diego discussed PwC’s successful competitive poaching campaign (which included picking up James Draper in San Fran).

Accounting firms battle to attract the best talent [SFBJ]

Legislation We Can All Get Behind: The BEER Act

Tax assassin Grover Norquist and Americans for Tax Reform have thrown their support behind some important legislation that was introduced to mark American Craft Brew Week – The Brewer’s Employment and Excise Relief Act of 2011 or BEER Act.

While we’re certain that Grover & Co. regularly quaff craft brews, ATR’s support is also grounded in fiscal policy. Here’s Grover in his letter to Senators Mike Crapo (R-WY) and John Kerry (D-MA), the sponsors of the bill:

The BEER Act would reduce from $7 to $3.50 the tax paid per barrel on the first 60,000 barrels produced by small brewers. This is estimated to generate $19.9 million in capital for small beer producers, an enormous resource to promote job growth in the craft brewing industry.

Currently, brewers large and small pay the same tax on any production over 60,000 barrels. Set at an astounding $18-a-barrel tax, this represents a crushing weight on small brewers. This onerous tax penalizes production and disincentivizes industry growth, unnecessarily handicapping an industry that provides 100,000 jobs in the United States alone.

Your bill addresses this discrepancy by lowering the excise tax from $18 to $16 per barrel for production from 60,000 barrels up to 2 million barrels. This will provide an estimated $27.1 million for craft brewers to create jobs and spur economic growth.

Now, you don’t have to be a craft brew fan (like me) and you don’t have live in a state that produces many of these craft brews (like me) to get behind something as common sense as this. Unless, of course, all you drink is Bud Light™, which just means you’re a loser with no taste.

Cheers! ATR Supports the BEER Act [ATR]

End of Busy Season Giveaway Winners

After an exhaustive exercise of pulling names out of a hat, we’re happy to announce the winners of this year’s End of Busy Giveaway, so that you may direct your envy appropriately.


iPad2 – Lisa Ginn

Airline Giftcard – Misty Bowman

Best Buy Giftcard – Annie Flanagan, Rachel Clupper

There were also 20 winners of priceless GC swag but we’ve withheld their names to protect them from being taken hostage for the loot. If you’ve been declared a winner in error or otherwise have a beef with the results, you can email us but expect to be ignored with extreme prejudice.

Accounting News Roundup: Deloitte China’s Hiring Spree; Coburn to Newt: Shut It!; Handicapping Corporate Tax Reform | 05.20.11

Deloitte Aims To Nearly Double China Staff By 2015 [Dow Jones]
Deloitte Touche Tohmatsu International plans to nearly double its China staff by 2015 to support its business expansion in one of the world’s fastest-growing markets, a senior executive said Friday. China is now Deloitte’s fourth-largest market in terms of employees, with more than 8,000 people in 14 cities across mainland China, Hong Kong and Macau.

China Unicom Uncovers Improper Accounting But Says No Impact On Results [Dow Jones]
China Unicom [,,,] Ltd. (CHU) said Friday a national audit conducted last year found improper accounting procedures at the telecom operator, but it has rectified the issues and doesn’t anticipate any material impact on its past earnings.

Secret Donors Multiply in U.S. Election Spending [Bloomberg]
Commission on Hope and four other Republican-leaning groups spent at least $4.05 million attacking candidates in the run-up to the November voting, according to Campaign Media estimates and TV station records obtained by Bloomberg News. None of that spending can be found searching the public database of the Federal Election Commission, and FEC spokeswoman Mary Brandenberger said the commission has no record of it.

Tax overhaul should begin with (second) home-related tax breaks [DMWT]
Gotta start somewhere.

Christine Lagarde Is Favored to Head IMF [Bloomberg]
French Finance Minister Christine Lagarde emerged as the leading contender to replace Dominique Strauss-Kahn at the International Monetary Fund as developing nations failed to unite behind a candidate. U.S. Treasury Secretary Timothy F. Geithner called for the quick appointment of a new managing director yesterday while the Obama administration avoided backing any one person.

Coburn: Newt Needs to “Keep His Mouth Shut” [ABC News]
Senator Tom Coburn says Gingrich needs “keep his mouth shut” about Paul Ryan’s Medicare plan until he has his own plan to deal with skyrocketing entitlement spending. “If you haven’t put a plan on the table, you need to keep your mouth shut because the problem hasn’t gone away,” Coburn told ABC news in an interview on the Capitol subway. “You’re elevating yourself by being critical of someone else.”

Is Corporate Tax Reform Realistic? [TaxVox]
A panel of veteran international tax experts tried to put the U.S. struggle to fix its corporate tax system in broader perspective. Unfortunately, they concluded that the U.S. is lagging well behind the rest of the world in corporate reform and, worse, the odds of any serious progress anytime soon are slim.

How Are Accountants Dealing with Their Co-workers Who Are Planning for the Rapture?

Today in Brits worry about the strangest things news, an AccountingWEB UK reader has Rapture fever and wonders if anyone else still down here is going to call it quits come Monday.

The Rapture is upon us (according to a man in the US) so, as shown in the Simpsons, I will soon be ‘left below’, as will, I imagine, many of my fellow board users.

Anyone else have a sudden urge not to do any of their accounts/tax backlogs, given the world as we know it won’t exist on Monday?

For starters, there are plenty of men, women, children and family pets (not just “a man in the US”) that believe that the Son of God will be gracing us with his presence this Saturday and judging by what people are paying for one share of LinkedIn stock, the odds have narrowed that it’s going to happen. That said, I overheared the Big Guy himself say that Saturday ain’t the day. The question is, how do you handle the crazy accountants in your office that are planning for the Rapture? Do you:

A) Mock them openly first thing Monday morning.

B) Claim to know who the identity of the Antichrist (it’s me!).

C) Ask politely, that in the event that the person’s significant other happens to be left behind, if you can hit that.

D) Start digging through their drawers for supplies.

E) Convince them to wait it out in a JIT.

F) Your ideas.

Area Man Who Probably Cut Out His Own Tongue, Allegedly Murdered His Neighbor, Adds Tax Evasion to Dubious Behavior

Great find by Joe Kristan who would have no problem jumping on the New York Post’s headline desk.

This could only happen in the South:

A murder suspect accused of cutting out his own tongue has been arrested for tax evasion.

The Mobile County District Attorney’s office says Michael Crocker and his wife, Donna, didn’t pay taxes on $1 million they earned from their waste burning plant in Mount Vernon.

[…]

Investigators learned about the tax evaision while investigating Crocker for the murder of Stephen O’Neal Perret. Perret was found shot to death in a work truck near his Citronelle home on August 17, 2007. Perret was Crocker’s neighbor and the plant manager at Vulcan Industrial Services, Crocker’s company.

One day after Perret’s funeral, Crocker called 911 and said someone cut out his tongue, but police believe Crocker cut out his own tongue.

Accused Tongue Cutter Arrested Again [WKRG via Tax Update Blog]

Tom Coburn: The Gang of Six’s Abysmal Failure Is Not The Gang of Six’s Fault

I understand the disappointment, and real danger, associated with our impasse. The question, though, is not how we tried and failed but why the Senate has not even tried. Commissions and “gangs” form when members lose confidence in the institutions in which they serve. Working groups have their place — but they should support, not replace, the open work of the full Senate. The truth is that we already have a permanent standing debt commission. It’s called Congress. [WaPo]

(UPDATE) Promotion Watch ’11: KPMG Managers-in-waiting

From the mailbag:

The last few years KPMG announced manager promotions by this time, but I haven’t heard a peep from anyone so far. Have they changed the timing?

Digging through the archives, it’s true that around this time last year, chatter around the announcements of promotions at KPMG had begun but as our tipster said, so far it’s been strict Radio Station silence. Last year, details were rolling out through early June, so it could be that they’re dragging it out for effect.

Anyway, one rumor that we just heard is that in some KPMG offices, SAs up for manager are being asked to interview for their promotions. Personally, I’ve never heard of this but considering the need at SA, it would be a strategic way to hold some people back, chalking it up to “he/she didn’t interview well” versus the cryptic “he/she isn’t ready.”

If you’ve recently gotten word on promotions in your office, heard anything about these interviews or are simply in the know, email us the details and discuss below.

UPDATE:This just in:

PA leadership told us manager promotions would be approved on 5/20/11, with announcements in the following weeks after the approvals. haven’t heard anything about the ‘interviewing’ but i’m not up for Manager promotion so i guess i wouldn’t know.

Nice. Just in time for the end of the world.

UPDATE, May 26th, circa 12:35 pm:
According to a Klynveldian close to the situation in New York, “they seem to be making calls to those up for manager.”