Author: Caleb Newquist

Founding editor, Going Concern.

WeiserMazars Moves into Chicago as Part of Acquisition of LECG Units

Earlier this week, we told you about the fire sale that was going down at LECG Corp. LECG was selling off various units to FTI Consulting, Grant Thornton and WeiserMazars to try and pay down a portion of the $27 or so million that they owed on their credit facility. After speaking with Doug Phillips, the managing partner at WeiserMazars, we have learned that the deal has officially closed and few more details about the units they acquired in the deal, including their move into the Chicago market.


As we reported on Monday, WM is picking up five partners and approximately 40 staff from LECG. Mr Phillips told us that “we are very excited” about the transaction and these professionals will join the commercial and insurance audit practices as well as business advisory services. The majority of the new professionals will be located in the firm’s Horsham, PA location while one partner and approximately ten staff will be located in Chicago.

Mr Phillips told GC that this acquisition strengthens WeiserMazars’s “insurance, commercial and business advisory services, as well as solidifies our presence in the Philadelphia market.” Perhaps more importantly, however, is that “[WeiserMazars] now has a presence in the Chicago marketplace,” Mr Phillips aid. This will mark the 9th location for the firm in a key market for a firm that appears to have some wind in its sails after last year’s combination of Weiser and Mazars. We’ll be keeping an eye on them as things progress after this latest move.

UPDATE:
Check out the WeiserMazars press release for more details.

Former Deloitte Partner Jeff Farber Lands Deputy CFO Gig at AIG

Not only is Mr Farber a Deloitte audit alum, he also had stints as the controller at Bear Stearns and CFO at Gamco Investors. Today came the announcement that he is still winning, now as the new sidekick to David Herzog.

In this new position, Mr. Farber will provide global leadership and coordination for AIG’s Controllership and Accounting Policy functions, as well as the AIG Global Tax Department. He reports to David L. Herzog, AIG Executive Vice President and Chief Financial Officer.

It’s worth noting that as the a leader and coordinator for global tax department, Farber alone will encompass more oversight than all of Weatherford International.

ANYWAY, back to the boilerplate:

“Jeff Farber is well prepared to help take these key AIG finance functions to an even higher level,” said Mr. Herzog. “Over the past several years the finance team has worked diligently through an extraordinarily complex restructuring, and this new role provides Jeff with an opportunity to lead a great team and work closely with the finance transformation team as we roll out our new financial platform.”

Sounds like a hoot. Best of luck to Mr Farber.

Accounting News Roundup: Twitter Saying No to IPO (For Now); Ken Starr’s Sentence; Wesley Snipes Wants a SCOTUS Review | 03.03.11

BP Spill Chiefs Miss Out on Bonuses [WSJ]
Former Chief Executive Tony Hayward, former head of Exploration and Production Andy Inglis and current Chief Executive Robert Dudley will receive no cash bonus for 2010 and no shares under the long-term remuneration plan running from 2008 to 2010, BP said in its annual report to shareholders. Head of Refining Iain Conn and Chief Financial Officer Byron Grote will receive cash bonuses of £104,000 ($169,800) and $207,000 respectively for meeting targets within their own division. This is around 10% of the cash bonuses they received in 2009.

Twitter’s Stone: No IPO or funding talks [Reuters]
Asked about a Financial Times report last week that said a technology fund from JPMorgan was in talks to buy 10 percent of Twitter, Stone said: “(The report is) made up.”

Taxpayers Beat Wall Street as Top Lenders to Clean Energy [Bloomberg]
Government-backed development banks in Europe, Brazil and the U.S. arranged the most funding for clean energy projects in 2010, taking up the slack left by commercial lenders during the credit crisis. The European Investment Bank furnished $5.41 billion of debt for renewable energy projects last year followed by $3.16 billion from Brazil’s state development bank, BNDES, and $2.12 billion from the U.S. Federal Financing Bank, according to an annual survey by Bloomberg New Energy Finance.

Robert Half Professional Employment Report [RHI]
Nine percent plan to increase staff, while 4 percent anticipate declines. The net 5 percent projected increase is unchanged from the first-quarter survey, with most respondents, 86 percent, expecting to maintain current personnel levels.

Starr Gets 7 1/2-Year Prison Sentence for Defrauding His Celebrity Clients [Bloomberg]
Kenneth I. Starr, the money manager whose clients included actors Sylvester Stallone and Wesley Snipes, was sentenced to 7 1/2 years in prison after pleading guilty to defrauding nine celebrities out of $33.3 million.


Ryan Donmoyer Leaves for Ernst & Young [FoC]
Donmoyer covered tax news for Bloomberg out of DC.

Wesley Snipes Seeks Supreme Court Review of His Tax Convictions [TaxProf Blog]
Um…okay.

Going through the motions: Only 1/3 of workers are engaged in their jobs [AW]
But far more are married to their jobs. Strange.

Apparently Lance Armstrong (aka ‘an annoying little man in tights’) Retired from Cycling to Lobby for Higher Taxes

I will not apologize for loving the snark coming from Americans for Tax Reform today:

California is one of the most heavily taxed jurisdictions in the world. If that weren’t bad enough, for the next few months Golden State residents will have to deal with an annoying little man in tights pedaling around the state to stump for even higher taxes. Lance Armstrong, who recently retired from professional cycling to lobby full time for higher taxes, was in Los Angeles earlier this week for a press event with California state Senator Don Perata to announce the launch of a campaign to raise the state tobacco tax.

I have to give credit to ATR, they are nothing if not consistent. After all, they are lumping in a cancer survivor with a cancer-fighting nonprofit for being lovers of higher taxes on cigarettes.

Senators Introduce Bill That Would Require IRS to Produce 310 Million (or so) Receipts

Plenty of horrendous ideas get introduced inside the hallowed walls of Congress but the latest submission from Bill Nelson (D-FL) and Scott Brown (R-MA) ranks right up there:

Sens. Bill Nelson (D-Fla.), chairman of the Senate Finance subcommittee on Fiscal Responsibility and Economic Growth, and Scott Brown (R-Mass.) introduced the measure Wednesday that would require the IRS to provide each taxpayer with an itemized list, similar to a grocery store receipt, that shows where their payroll and income taxes are spent. “Taxpayers have a right to know where their money goes, how much Uncle Sam is borrowing on their behalf, and what they get in return for it,” Nelson said.

Yeah, no problem. New responsibilities under healthcare reform, chasing offshore accounts, not to mention your everyday tax compliance and enforcement. This will be a piece of cake since the the Service’s budget is getting slashed.

Senators introduce bill that would provide detailed tax receipt [The Hill]

Weatherford CFO Not Taking $500 Million Accounting Error Well; CEO Slightly More Upbeat

WTF WFT CFO Andrew Becnel needs a hug:

Weatherford International Ltd. Chief Financial Officer Andrew Becnel called a $500 million accounting error disclosed by the oilfield-service company late Tuesday an “embarrassment,” the damage of which is “impossible to quantify.”

But you know who’s taking this whole snafu in stride? CEO Bernard Duroc-Danner that’s who! BDD told investors on a conference call today that nothing is fucked and that this will all be yesterday’s news in no time:

Chief Executive Bernard Duroc-Danner said there is no risk of a U.S. government investigation or of any tax penalties or fines related to what he characterized as a mistake in calculating the tax rates on dividends moved from one subsidiary to another.

Geez. Give the SEC some credit wouldja? Just because they missed a few things here and there doesn’t mean they won’t ask any questions about your material weaknesses.

Weatherford Finance Chief Calls Accounting Error an ‘Embarrassment’ [WSJ]

WFT’s Material Weaknesses Led to Giant Tax WTF

It’s bad enough that 3% of Weatherford International’s revenues come from Libya, Egypt, Tunisia, Yemen and Bahrain but the company also revealed in a their NT 10-K filed yesterday that they aren’t so good at staying top of their taxes:

The Company’s Annual Report on Form 10-K (the “Form 10-K”) for the year ended December 31, 2010 cannot be filed within the prescribed time period because the Company has identified a material weakness in internal controls over financial reporting for income taxes and requires additional time to perform additional testing on, and reconciliation, of the tax accounts to be included in the annual financial statements to be presented in the Form 10-K. The Company expects to file the Form 10-K on or before the 15th calendar day following the prescribed due date.


FuelFix has the gory details:

Oil field services firm Weatherford International goes by the stock ticker is WFT, but analyst reaction to the company reporting more than $500 million in tax errors is more likely drawing the reaction of “WTF?” from investors.

The company said it will have to restate its earnings going back to 2007 due to “material weaknesses” in its internal controls, namely:

1. inadequate staffing and technical expertise within the company related to taxes,
2. ineffective review and approval practices relating to taxes,
3. inadequate processes to effectively reconcile income tax accounts and
4. inadequate controls over the preparation of quarterly tax provisions.

So in other words, Weatherford has no tax experts in their accounting department, no one to supervise or review the work of those experts and no checks or balances over the tax provision process as a whole. Was the Ernst & Young audit team aware of this? Last year’s 10-K had a clean opinion, in case you were wondering. Oh, and Weatherford moved its HQ to Switzerland back in ’08. So there’s that.

Oops: Weatherford reports $500M tax error [FuelFix]

BREAKING: Tax Reform Will Be a Long Process

Yesterday in a Senate Finance Committee hearing, Senator Max Baucus (D-MT) said that he would like a “weekly set of get-togethers” to address reforming our tax code. You see, Baucus was having similar weekly hearings for two years leading up to the healthcare reform bill that was passed last year. And since those were such a hoot, he figures attacking a equally polarizing issue like tax reform will demand a similar strategy. However, witnesses before the committee – all former assistant Treasury secretaries for tax policy – warned that this debate will likely haunt our dreams and news cycles for a long time:

Fred Goldberg, Jonathan Talisman, Mark Weinberger, Pamela Olson and Eric Solomon discussed, among other issues, the difficulties in crafting a revenue-neutral tax reform plan; problems with the alternative minimum tax and the tax exclusion for employer-provided healthcare; and issues with double taxation in the corporate code.

The former Treasury officials also declared that any successful overhaul of the tax code could take several years and would require leadership from the Oval Office.

Now for the older crowd, the long arduous process of tax reform harkens you back to days of when Charlie Sheen was winning by dodging…er, Charlie in Platoon. For many of the Millennials, well, you were all a lot cuter back then.

“We saw that in 1986,” Weinberger said. “President Reagan at the time made it his No. 1 domestic policy initiative and it still took over two years and failed three times before it was ultimately enacted into law.”

Baucus wants weekly tax reform hearings [On the Money/The Hill]

Accounting News Roundup: IRS Commish: Budget Cuts Will Help Tax Cheats; Date Set for International CPA Exam; The 16th Turns 98 | 03.02.11

IRS Chief Tells U.S. Lawmakers House’s Spending Cuts Would Help Tax Cheats [Bloomberg]
The House spending bill for the rest of fiscal 2011, which is opposed by Senate Democrats and President Barack Obama, would cut $603 million from the IRS’s fiscal 2010 spending level of $12.1 billion, Shulman said. Those cuts would cost the government $4 billion in collected revenue, Shulman said. The hearing highlighted the conflict between the House Republican majority’s push to reduce spending and the Obama administration’s proposed funding increases for some agencies, including the IRS.

Gregg Clark rejoins Ernst & Young LLP as Americas Consumer Products Leader for Advisory Services [PR Newswire]
“We are thrilled that Gregg has decided to re-join the firm in this new role,” says Bryan Segedi, Vice Chair of Advisory Services at Ernst & Young LLP. “His experience in the areas of M&A, business and IT strategy, e-business and supply chain management make him a vital asset to the Advisory Services Practice and allows us to expand on the services already offered to our consumer products clients.”

CPA Exam Slated for International Debut in August [JofA]
Japan, Bahrain, Kuwait, Lebanon and the UAE join the fun.

Charlie Sheen And Public Company Disclosure [Forbes]
CBS and TimeWarner don’t appear to be winning. Should they be disclosing?


Big Four domination creates dearth of expert witnesses [Accountancy Age]
A lack of non-conflicted expert accounting witnesses could impact on the ability to bring litigation against the biggest firms. The Joint Disciplinary Scheme, the accountants’ watchdog that has issued its last annual report after completing its caseload, warned that the “near monopoly” of Big Four audits of the FTSE 350 meant it was difficult to find expert accounting witnesses to help in tribunals.

HMV lenders set to appoint Deloitte over debt talks [FT]
Lenders to HMV Group, including state-backed banks Royal Bank of Scotland and Lloyds Banking Group, are about to appoint Deloitte to advise them in talks over the group’s debts, according to people familiar with the situation. The decision to appoint financial advisers came as the embattled music and entertainment retailer warned on Tuesday that it would miss analysts’ expectations for full-year pre-tax profits of £45m because of a continued “challenging” trading conditions.

Happy Tax Day (er, Sort Of) [Tax Girl]
Memo to Tax Deniers: The 16th Amendment turned 98 yesterday.

Does Hollywood Always Portray Accountants as ‘Pathetic’ or ‘Despicable’?

That’s the question put forth by a reader across the pond to the group and since the Academy Awards have come and gone with nothing more than the cliché PwC jokes, it seems worth discussing.

But first, the Brit with the beef:

I watched the brillant [sic] Untouchables yesterday. This triggered the point about portryal [sic] of accountants by Holloywood [sic]. It is very poor in comparision [sic] to other professions.

Most accountants in the movies are either pathetic (think Rick Moranis in Ghostbusters) or despicable (Ed Begley Jr. as the sleazeball accountant who crosses a vengeful Roseanne Barr in She-Devil).

Other professions like, firefighters, doctors, and lawyers (Julia Roberts in the Oscar-winning Erin Brockovich), get their fair share of heroic roles. But when it comes to accountants we are pushed aside.

Well, for starters, comparing the work of firefighters and doctors to accountants makes as much sense as sending a team of interns into an audit committee meeting. If you’re looking for heroics, there are few opportunities for accountants in Hollywood; even a crook-turned-crime-fighter like Sam Antar would be a anti-hero at best. One exception would be Ben Kingsley as Itzhak Stern in Schindler’s List.

As for Morris in Ghostbusters, he scores with Annie Potts in Ghostbusters 2, so that hardly qualifies as pathetic. As for motive behind the unflattering portrayals, maybe enough people working in Hollywood have been ripped off by their own accountants that a slight vein of villainy is always written into their characters. The most recent muse being Ken Starr.

Despite that possibility, there are plenty of accountants in film that we like:

• Thandie Newton as Stella in RocknRolla

• Leo Bloom in The Producers (Wilder or Broderick, take your pick)

• Danny Glover as Henry Sherman in The Royal Tenenbaums

• It’s on the small screen but George Wendt as Norm Peterson on Cheers

Whether you see these characters as flattering or not, is your call but their awesomeness is not in question (I’m partial to Stella, frankly). We’re missing some, surely, so feel free to chime in with others.

Man Arrested for Threatening to Bomb IRS Building Would Erect Monument to Austin Plane-crasher ‘If He Had Any Extra Money’

And what’s the reason 64 year-old Leonard Mackey doesn’t have the dough to put up a statue of domestic terrorist, Joseph Stack? It’s not entirely clear but you can bet the IRS has something to do with it:

Leonard C. Mackey, of 1025 W. Wilkes-Barre St., went to the IRS office at 3 W. Broad St. around 3 p.m. saying he was “sick and tired of the IRS harassing him.” He demanded a copy of a 2008 letter indicating he no longer had money, a news release from police said. […] Mackey went on to say he would erect a monument to the guy who blew up the IRS building in Texas. That is, if he had any extra money. As he left the office, he said to the security guard who had asked him on the way in if he had a firearm that “you didn’t ask me about bombs. We have them downstairs.”

It’s sort of cute that he sabotaged himself like that.

Bethlehem: Tax dispute erupts with bomb threat, evacuation and arrest [The Morning Call]

Do I Stay in Public Accounting Until Manager? Part XXXIII

Welcome to but-what-does-Emilio-think? edition of Accounting Career Emergencies. In today’s edition we revisit the age-old debate of a senior associate wondering if they should stick with their firm until they get the bump to manager. It’s been awhile since I’ve addressed this, so it’s about time we went for another go-round.

Getting bad career advice? Trying to patch things up with the boss? Trying to land some goddesses at your firm? Email us at advice@goingconcern.com and we’ll get you back to WINNING.

Back to our SA:

Hey Going Concern,

I’m an S2 working for a 2nd tier accounting firm. I’m contemplating looking for a new job once this busy season is over, but am also considering working 1 more year and making manager before moving on. What do you think? Is it worth leaving now when I’m so close to manager or should I stick it out 1 more year? Will I have more/less or better/worse job opportunities after I make manager?

Thanks.


Dear Maybe Manager,

As I alluded, your plight is common amongst many in the world of public accounting. And as you can imagine, there are two divergent camps in this debate: those who think you should stay and those who think you should jump ship. I’ll do my best to tackle both arguments, running down the pros of each first.

PROS

Stay until promoted – Staying until manager means you get a title, a nice bump in salary (historically) and if you’re lucky, a little bonus. You’ve either mastered the art of navigating the political waters of your firm or you’re such a superstar at your job that TPTB had no choice but to recognize your talents with a promotion. Now that you’ve reached this crucial level in your firm, clients, recruiters and others view you slightly differently. You’ve got experience (obviously), management skills (presumably), are smarter than the average accountant (sometimes a BIG assumption). This will – right or wrong – give you the opportunity to get into similar more senior positions when you are ready to leave public.

Leaving prior to promotion – Jumping ship now allows you to move into a company where you’ll get the opportunity to learn what it’s like to be on the client side of the equation. Whether you’ll actually interact with your public counterparts will be determined by what kind of job you take (that may be a good thing). Regardless, you’ll learn a lot in your new job that you won’t in a public firm. This is ideal if you see yourself working in-house somewhere as opposed to making a career in public.

CONS

Stay until promoted – Simply put: managers have it bad in public accounting. They get shit from partners; they get shit from seniors; they get shit from staff; they get shit from clients. Managers are swimming in shit. As a senior, you definitely have to deal with a lot of the same people but the pressure from partners and clients, as a manger is different. You’re expected to be able to deal with all of it well. Mediocrity isn’t really an option. The only way to get around your mediocrity is to get really, really, really good at throwing people under the bus. If you’ve found yourself in that situation, you can probably count the people who think you’re a “good manager” on one hand and none of them work with you. Also as a manager, you’re so caught up managing, there’s very little time leftover for professional development. Granted, you’ll have the opportunity to learn more things but will you want to? You’re already overweight or severely sleep-deprived. Are you really the type to spend your precious spare time boning up on the latest developments in accounting rules or tax law? Probably not but the catch is, you’re expected to. Lastly, once you move outside the firm, your perspectives on audit/tax/consulting will largely be formulated and lots of employers are looking for people that still a tad impressionable. Prospective employers aren’t crazy about 30-something know-it-alls that just want a CFO/controller title and a salary.

Leaving prior to promotion – The biggest risk here is that you’ll end up making a move that feels lateral. You may get a nice bump in salary but you’ll probably feel like you’re still in the same spot on the pecking order. Most SAs – regardless of practice – have self-inflated their own professional value and finding out that your experience is pretty unexceptional can be a shock. Sure, there are some opportunities for vertical move when you leave public but the odds are against you.

So there you have it. And to answer your question directly – I’m a believer that you’ll have more and better career opportunities if you leave your firm prior to being promoted to manager. Your experience will be more diverse, you’re hopefully still open to seeing how other companies do things and your brain won’t be watered down with “managing” so much. That will come later.

I’m sure I missed some things, so jump in people. I still haven’t watch the GMA interview.