Author: Caleb Newquist

Founding editor, Going Concern.

Survey: Young Accountants Think Big 4 Is Overrated

Most people choosing the art of debits and credits as a career path, likely had aspirations for working for one of the illustrious Big 4. Fame, prestige, working with only the finest accountants that Omaha Steaks can buy, are all par for the course. This has been accepted as truth for many years.

But now – if you can believe this – this truth is being called into question in the UK – a part of the world that you might not expect.

Accountancy Age reports that a recent survey has found that young accountants (less than three years experience) are not as hung up on working at a Big 4 firm:

Only 40% of accountants with less than three years’ experience surveyed by recruiter Marks Sattin said it was important to work for a big firm — compared to an average of 67% for all of the 450 accountants surveyed in practice and industry.

“We are entering a new era in financial services…in which candidates want to sell themselves not by reeling off lists of FTSE 100 clients, but on their experience on smaller accounts providing higher levels of responsibility,” said Laura Wilson, associate director of the professional services division at Marks Sattin.

Granted, this is the pulse of the UK but there’s always been a large firm vs. small firm debate and this a trend that makes its way to the States (if it hasn’t already).

The reason for young accountants’ attitude, it turns out, is that they don’t care if they are working on prestigious clients; they are looking for more expansive professional experience:

“Whether it’s true or not, candidates think they’ll be doing work that is more involved at an early stage in their careers by joining a smaller firm. The perception is counting against the Big Four because candidates think that smaller firms offer more variety and more autonomy – and candidates are increasingly willing to sacrifice exposure to the FTSE 100 to get it.”

According to one person quoted in the article, part of this is a generational attitude but we’re not convinced that’s entirely the case. Sure, Gen Y wants to have more responsibility as quickly as possible but it’s not as though the Big 4 are taking on the same number of new recruits each year. As a result, a competitive recruiting process has made smaller firms a very good option. Plus, news about layoffs and a slow climb up the corporate ladder at the largest firms might have some students looking for opportunities.

Make no mistake, working at a Big 4 firm will always be goal number one for a lot of students and young CPAs. Regardless of what any survey says, many still have ambitions to be a partner in one of the largest firms or to work in some of the world’s prestigious companies. But the more informed students and young professionals are about career options, the perceived need for Big 4 experience on your résumé will be less compulsory.

Young accountants shun Big Four firms [Accountancy Age]

(UPDATE) Grant Thornton Employees Prohibited From Accessing WikiLeaks, Even in Their Spare Time

~ Update includes email sent to all KPMG employees and further details on communication within PwC.

Confirming some chatter in last Friday’s post on the banishment of WikiLeaks at Deloitte, notification at Grant Thornton was sent out late on Friday.

So not even after a long, hard day doing Stephen Chipman’slowed to read catty messages between diplomats or war logs on your personal computer. What’s next? Firmwide emails instructing lonely accountants not to visit Fleshbot (NSFW)?

Personal time aside, judging by the conversation on the Deloitte post, it appears that KPMG has also communicated ‘no peeky at wiki’ but we haven’t seen the official communiqué. And since all the major firms have contracts with the Feds, we decided to call around to see find out the scoop. So far, a source at PwC did inform us that the WikiLeaks website is accessible but no official policy on accessing the site has been communicated to the firm at large.

[UPDATE: We have learned that PwC’s Washington Federal Practice did receive communication prohibiting access, downloading, etc. etc. to WikiLeaks, however, as we’ve updated above, a firm-wide communication was not sent.]

Messages with E&Y and KPMG were not immediately returned. If there has been official lines have been drawn in the cyber-sand, kindly email us with any communication.

Earlier:
What if Accounting Firms Had Their Own Version of WikiLeaks?

UPDATE: The message from KPMG, courtesy of the sagacious Judge Sven Erik Holmes:

Date:December 10, 2010
To:All KPMG Personnel
From: Sven Erik Holmes, Vice Chair, Legal and Compliance
Subject:Government Notice Regarding Web site Access

PLEASE DO NOT DELETE THIS E-MAIL WITHOUT READING

In response to the recent well-publicized release of government documents on the WikiLeaks Web site, the federal government has begun notifying its contractors regarding restrictions on accessing classified documents included in that release. As a provider of services to several federal agencies, KPMG is a federal government contractor and has begun receiving such notices from its federal agency clients. This e-mail contains important instructions regarding access to such classified information, which are applicable to all firm personnel.

KPMG personnel should not access information marked or labeled as classified (including material publicly available on the WikiLeaks Web site or other Web sites) using government or KPMG computers or other devices that access the Web (such as PDAs or Smartphones) as doing so risks placing material that is still classified on non-classified systems. This restriction does not limit employee or contractor access to nonclassified, publicly available news reports (and other nonclassified material) that in turn reference classified material, as opposed to the underlying classified material itself (whether or not in the public domain).

The government’s notices remind us that federal contractors are obligated to protect classified information pursuant to all applicable federal laws, and to use government information systems, whether classified or unclassified, appropriately. Unauthorized disclosures of classified documents (whether in print, on a blog, or on a Web site) do not alter the documents’ classified status or automatically result in declassification of the documents. To the contrary, classified information, whether or not already posted on public Web sites or disclosed to the media, remains classified, and must be treated as such by federal employees and contractors, until it is declassified by an appropriate U.S. government authority.

If you believe that you may have downloaded classified information to a government or KPMG computer or other device that accesses the Web (such as a PDA or Smartphone), please contact [a KPMG lawyer who will ask you a ton of questions and probably scold you] in OGC at [lawyer’sname]@kpmg.com.

KPMG personnel are also reminded that firm policy requires personnel to maintain the confidentiality of any information that they obtain from a client in connection with a client engagement. It is important that the confidentiality of any such information be maintained.

Accounting News Roundup: Tax Compromise Ready to Pass Senate; Carlyle CFO Jumps Ship Pre-IPO; Exclusive Club Founder Owes Millions in Taxes | 12.13.10

Tax Deal Set to Pass Senate [WSJ]
Democrats are predicting that a much-debated tax agreement will clear a crucial hurdle comfortably in the Senate on Monday, with a margin that they hope will add momentum to the deal in the House. But even with President Barack Obama, former President Bill Clinton and a growing number of Senate Democrats backing the deal, House Democrats remained eager to test whether they could push Republicans to raise the proposed tax rate on estates.

Seven Things You Should Not Do Online at Work [FINS]
A quick refresher for anyone that has already forgotten PwC Email Hottiegate 2010 (Ireland edition).

Carlyle Finance Chief Nachtwey Leaves in Setback to IPO Plans [Bloomberg BusinessWeek]
Peter Nachtwey, a Deloitte alum, is leaving Carlyle ‘to pursue a great new opportunity’ shortly before the firm’s planned IPO, “Carlyle plans to file IPO papers late in 2011, people with knowledge of the matter said earlier this month. The stock sale may not occur until the following year, said the people, who asked not to be identified because the plans are private.”

Internal auditors next to give evidence in the Lords [Accountancy Age]
Internal auditors will take centre stage tomorrow when they appear before a House of Lords committee to give evidence on the role of auditors during the financial crisis.

The Lords are expected to probe the relationship between internal auditors and audit committees, on the one hand, and external auditors on the other. The current chief executive of the Institute of Internal Auditors, Dr Ian Peters, will appear as will Sarh Blackburn, a former president and current member of the institute.


IRS: Exclusive Montana Resort Founder Owes $15.4M [ABC News]
The co-founders of the millionaires-only Yellowstone Club also has to settle up with the state of Montana, “Tim and Edra Blixseth also owe Montana $57 million in taxes on money taken out of the Yellowstone Club and spent on luxury jets, cars and yachts that they wrote off as business expenses, according to state officials. With Edra Blixseth bankrupt, state officials have filed a warrant to go after Tim Blixseth’s assets to cover the debt.”

Firm will review auditor that overlooked Bell corruption [Los Angeles Times]
California Controller John Chiang is expected to release his review next month of the work of auditing firm Mayer Hoffman McCann, which gave the municipality a clean bill of health. The case has highlighted questions over firms that audit troubled government entities. Chiang already has issued several reports on Bell’s finances that found numerous shortcomings and red flags pointing to excessive salaries, illegal taxes and fees.

No WikiLeaks for Deloitte Peeps

Funny how slow TPTB were to react this (message is dated today). Assange isn’t even haunting our dreams any more. Nevertheless, NO. PEEKY. And if you’ve already taken a look, you need to report yourself, ASAP.

ALERT: New federal government guidance on accessing or downloading classified information

Published: 10-Dec-10

The following is a message from [redacted], chief quality officer.

In the wake of the recent WikiLeaks disclosures of U.S. classified information, the U.S. Office of Management & Budget (OMB) and the Department of Defense (DoD) published guidance that prohibits federal government employees and federal contractor personnel from accessing the WikiLeaks website to view or download classified information. As federal contractors, the Deloitte U.S. Firms and their professionals are obligated to protect the integrity of classified information.

This notice is designed to facilitate compliance with the OMB and DoD guidance. All personnel should note the following:

Despite the unauthorized public disclosure by WikiLeaks, the information disclosed retains its classified status. The decision to remove classified status must be rendered by a government classification authority. In short, the information remains classified in spite of any public disclosure.

The access or download of classified information could be determined to be a security violation that requires immediate remediation, including removal of such information from our systems. A security violation could pose risks to the operations of Deloitte’s Federal practice and could negatively affect our client service capabilities.

You should not attempt to access the classified information on the WikiLeaks website or any related website. If you previously visited the WikiLeaks site or any related website to view or download classified information, you should immediately report a “Federal DOS Incident” via 1 800 Deloitte (option 5).

If you possess a security clearance, keep in mind that you are personally obligated to uphold the requirements for appropriate handling and dissemination of classified information, as outlined in your respective Classified Information Non-Disclosure Statement.

If you have any questions, please send them by e-mail to [redacted: presumably someone inside Deloitte who is familiar with these sorts of things].

[redacted]
Chief Quality Officer
Deloitte LLP

What if Accounting Firms Had Their Own Version of WikiLeaks?

We were a little surprised to learn that both KPMG and PwC had brief mentions in the WikiLeaks cables, however it is far less surprising that they were quite humdrum and didn’t bring anything new to light.


From the Swiss site, inAte>Wikileaks published cable referenced 09MOSCOW3144, created December 30, 2009, classified as confidential and originating from U.S. Embassy in Moscow, on alleged pressure that the Russian government has exerted on PwC to disavow its “clean opinion” audits in the Yukos Oil, aided by the reported raids on PwC office in Russia and threats to recall Russian audit license of PwC, closing this market for the Firm.

[…]

Wikileaks also published (09LONDON2598, for official use only, originating from U.S. Embassy in London, created November 11, 2009) KPMG’s sceptical reaction on the Queen’s opening speech in Parliament on November 18, 2009, where Her Majesty sets out one of the priorities for new legislative session – to develop a new Financial Services Bill, requiring form systemically important banks to establish plans for recovery and resolution, that ensure banks’ financial continuity, later called by journalists “living wills”.

Like we said – meh.

Now, what happens within a Big 4 or other large accounting firm is rarely a matter of national security (Francine may disagree with us) but there’s little doubt that firm CEOs, partners and other notables have said things that would range from the slightly embarrassing to the absolutely mortifying. Consequently, reactions to those statements would also range widely from mere chuckles to ”OH NO YOU DI’INT!” Because our imagination has a tendency to run wild, we’ll dispel a few of our own scenarios that we imagine being in the Big 4/mid-tier version of WikiLeaks:

• Prior to the unveiling, Bob Moritz emails Tim Ryan, “Between you and me, the new logo looks like a half-finished Lego™ project.”

• Barry Salzberg and Jim Quigley are known inside some Deloitte circles as “Team Propecia.”

• After the OT loss to Michigan State, John Veihmeyer is so upset that he sends an email to Henry Keizer stating, “THAT’S IT! NO RAISES THIS YEAR.” Keizer responds to JV, reminding him that ‘if that punk Jimmy Clausen had stuck around’ they wouldn’t be in this situation and he shouldn’t take it out on the firm’s employees.

• Emails between two Ernst & Young partners in Jericho, reveal that they’ve been hoarding the extra bathroom keys because they can’t stand asking the receptionist.

• Various Deloitte partners are quaking because it is common knowledge that Arnie and Annabel McClellan have an elaborate spreadsheet detailing their various fetishes.

• In numerous exchanges Stephen Chipman begs Ed Nusbaum to let him ‘drop this ridiculous accent’ just like Ross did on Friends.

• High-level executives at McGladrey considered putting ecstasy in the punch so people would be happier but ultimately decided against it (Phoenix/Vegas went their own way) because it would have resulted in too many accountants dancing for no apparent reason.

• Jack Weisbaum = The Most Interesting Man in the World. (Just like several actual WikiLeaks, everyone knew this to be true but it was not discussed openly.)

Perhaps you have your own theories or documentation regarding other exchanges. Please share with the group at this time or email us.

(UPDATE) Bernie Sanders Is Getting His Filibuster On

NPR reports that the Vermont Senator has been going for over 90 minutes to delay the vote on the tax deal President Obama made with Republicans and judging by the live feed from CSPAN2, he’s not showing any sign of stopping. NPR quotes Berns:

“You can call what I am doing today whatever you want, you it call it a filibuster, you can call it a very long speech. I’m not here to set any great records or to make a spectacle. I am simply here today to take as long as I can to explain to the American people the fact that we have got to do a lot better than this agreement provides.”

Here’s a snip from feed the (a pie chart!):


And a bar chart!

He’s doing you proud Green Mountain Staters!

UPDATE: Entering hour six! It’s like he’s got an IV of pure Green Mountain joe!

The IRS May Want to Stock Up on Shotguns

The IRS is not the most popular government agency. This is not news. What is a developing problem is more and more people feel that reacting to the Service through with violence is somehow an acceptable option. Can we expect another lunatic to fly a plane into a building? Hard to say. But Joe Kristan did warn us about this.

And now the Treasury Inspector General has informed Tim Geithner that this will be one of the “challenges” the Service can expect in the new year:

In addition to safeguarding a vast amount of sensitive financial and personal data, the IRS must also protect approximately 100,000 employees and more than 700 facilities throughout the country. Attacks and threats against IRS employees and facilities have risen steadily in recent years.

The February 2010 attack on an IRS facility in Austin, Texas, is a stark reminder of the dangers that IRS employees face every day in trying to perform their jobs. Animosity towards the tax collection process is nothing new, but the Austin incident and other recent events point to a surge of hostility towards the Federal Government. According to the Anti-Defamation League, the militia movement has almost quadrupled in size in the past two years, growing to more than 200 groups across the country. The Southern Poverty Law Center has reported that anti-government and hate groups have grown from 149 groups in 2008 to 512 groups in 2009, a 244 percent increase. The ongoing public debate regarding the recently enacted health care legislation may also lead to increased threats against IRS employees and facilities, underscoring the need for continuing vigilance in the area of physical security.

It’s good to know that our country is filled with so many level-headed folks that creating hate groups has become a relatively popular thing to do.

Deloitte’s Sharon Allen Will Be Having a ‘Big Party’ to Celebrate Her Retirement

Sharon Allen has spent 38 years at Deloitte. Doing the math on that, it probably feels more like a millennia. Accordingly, Ms. Allen has decided to hang up her green dot and chillax in Pasadena (Q&A with Accounting Today and we’ve picked out some of the highlights, including yes, a par-tay.


For starters, Sharon is a closer!

It’s a good time to leave when you’re on a high. I feel very confident in future leadership and the direction of our organization, and I think it’s just absolutely the right time to turn the reins over to others and proudly watch them continue to lead the firm in a good direction.

There will be a retirement rager, natch.

I’m going to have a big party. Yes.

Retirement will involve quality time with the hubby (but not so much that he goes nuts) and leading the Village People.

First of all I plan to spend a lot more time with my husband, family and friends, but of course there will probably be a limit on how much togetherness he can stand.[…] I have already committed to becoming the chairman of the board of the national YMCA board, which is an organization I’ve been involved with for over 25 years. I’m sure I will find ways to keep productively busy.

In case you weren’t aware, she doesn’t have a Y chromosome.

I am proud of many firsts that are in front of the titles I have carried. I was fortunate to be the first woman to become an office managing partner, the first woman to become a regional managing partner, the first woman to be elected to the board at Deloitte, and that’s been some years ago now. But I have to say my proudest accomplishment, I believe, was to have been elected as the first independent chairman of Deloitte’s board of directors. We separated our chairman and CEO role and created a full-time independent executive chairman of the board. It is an elected position by our partners, and I was very proud to be elected to that role. I always say, “Oh, by the way, I’m a woman.” It’s a very important distinction for me.

She’s more like you than you think – she got passed up for a manager promotion because her supervisor was clueless!

[P]erhaps one of the most important challenges that I had as I was coming up through my career also turned out to be one of my best lessons. That was when I was about four years into the firm and I expected an early promotion to manager, and I was passed over for that promotion. Interestingly, as I walked into my supervisor’s office and clicked off all the reasons why I thought I should have had the promotion and had earned it, he kind of sat back in his chair and looked at me and said, “I didn’t even know you did all those things.”

What about this boys club mentality?

I do think that there still is an underrepresentation of women in senior leadership in business generally and certainly in the board room of corporate organizations today. I do believe that organizations need to examine how they are recruiting, how they assure women are proportionally given the best assignments.

You know, back in the day, we basically had to come to work in drag.

There is a very big difference between today’s women and women of my era when I started in the profession because, in those days, honestly, you almost had to pretend there were no differences. I came up in the business world of wearing a suit and a little bow tie and trying to dress like the men and, of course, fortunately, men and women both can acknowledge the difference and benefit from that.

Leave Sharon your well wishes (or food and entertainment requests) below and if you get invited to this party, email us the pictures.

Accounting News Roundup: Americans Want Their Cake; Raise Request Timing; Taxpayer Amnesty 2.0 | 12.10.10

Americans in Poll Want Deficit Cut With Entitlements Secured [Bloomberg]
If anyone has a problem with the following, please speak up: “Americans want Congress to bring down a federal budget deficit that many believe is “dangerously out of control,” only under two conditions: minimize the pain and make the rich pay.

The public wants Congress to keep its hands off entitlements such as Medicare, Medicaid and Social Security, a Bloomberg National Poll shows. They oppose cuts in most other major domestic programs and defense. They want to maintain subsidies for farmers and tax breaks like the mortgage-interesy’re against an increase in the gasoline tax.”

Will the Auditors’ Real Clients Please Stand Up? You’re Lost Among the Mixed Messages [Re:Balance]
Who does auditor number 2 work for?

CFOs Expect to Hire Finance Staff in Q1 2011 [FINS]
Financial staff and accountants will be in demand in the first quarter of 2011, according to Bank of America’s annual CFO Outlook and a recent hiring index report from Robert Half.

PwC Announces $500,000 Contribution to Michigan State University Accounting Program in Memory of Al Arens [PR Newswire]
PwC US is contributing $500,000 over five years to the Michigan State University Accounting and Information Systems department in the Eli Broad College of Business. The gift to the Al Arens Teaching Excellence Fund will help provide teaching assistants and other resources for introductory accounting classes. Arens, the former PwC Endowed Professor at Michigan State, taught such classes for 40 years and dedicated his professional life to helping students.

When to Ask for a Raise in a Downturn [Bucks/NYT]
Try to resist the urge to ask right after layoffs.

Accounting for Public Pensions [Floyd Norris/NYT]
A generation ago, when Ronald Reagan was president, the accounting rule makers forced American companies to come clean on the cost of the pension plans they were promising to employees. That decision, perhaps more than any other, heralded the eventual demise of defined-benefit pensions for employees of American companies.

Now something very similar may be in store for public sector employees, thanks in part to the Republican victories in last month’s Congressional elections.

Marcum LLP and Bernstein & Pinchuk LLP Merge China Practice [PR Newsire]
Marcum and Bernstein & Pinchuk have merged their China practices, effective January 1st.

Auditors Should Be Able to Do Consulting, Tax Work, U.K. Says [Bloomberg]
A ban on such non-audit services, proposed in October by the 27-nation EU, would upset investors and fail to address problems behind the crisis, the U.K.’s Financial Reporting Council said today on its website. The watchdog said it supports a “tightening of the rules” on such services.

“There is no evidence that the provision of non-audit services by auditors was a factor in the financial crisis,” the FRC said in the paper. “There is no support from any group of stakeholders for such a prohibition” and investors “were generally hostile to the idea.”


IRS Considers Taxpayer Amnesty Program [WSJ]
U.S. Internal Revenue Service Commissioner Doug Shulman Thursday said the IRS is considering another amnesty program for taxpayers who voluntarily reveal their previously undisclosed offshore bank accounts. “We are seriously considering another special offshore Voluntary Disclosure program,” he said in a speech in Washington.

Accounting Students Can Apply Online for Illinois CPA Society Scholarships [PR Newswire]
For students pursuing an accounting degree with plans to become a Certified Public Accountant (CPA), financial help is available through the Illinois CPA Society. Scholarships of up to $4,000 are funded by the CPA Endowment Fund of Illinois. Eligible students must be U.S. citizens or permanent residents currently living in Illinois and enrolled in an Illinois College or University.

IRS Commish: There’s a Big Difference Between Hiding Money Offshore and Sophisticated International Tax Planning

In a speech before the 23rd Annual Institute on Current Issues in International Taxation, Washington, DC, Doug Shulman (link not yet available on the website) explained how rich dudes schlepping money to Switzerland (but not any more!) or Hong Kong is not even close to the same thing as “Google’s Irrationally Exuberant Tax Strategy.”

As I have said before, I draw a sharp distinction between rooting out individuals hiding their money in foreign tax havens and the IRS and Treasury creating ground rules for multinational corporations operating in a global environment.

It’s no secret that multinational corporations engage in sophisticated international tax planning. We recognize that much of this is perfectly legal and many businesses are trying to get it right. Of course, some are pushing the envelope too far and it’s here that we have issues. Our goal is to differentiate between the two; to be on top of our game in this analysis; and to ensure corporations are compliant with the tax law and stay compliant.