Author: Caleb Newquist

Founding editor, Going Concern.

Accounting News Roundup: Better Brown-nosing; Study: More Than One-third of Clients Are Looking for a New CPA; Fed Gas Tax Hike on the Table | 11.09.10

Annual Bean Counters Contest [The Summa]
Jump over to the The Summa for the chance to win fabulous prizes!

Kissing up Like a Pro: A New Study Says How to Do It Right [FINS]
Brown-nosing is just as much about science as it is about art, says a study on the matter.

Sex Tops Salary in Quest to Unravel Last Taboo [Bloomberg]
Matthew Lynn would like to know how much you make. And while we’re at it, you might as well throw your credit card debt balances in there too, “In reality, we’d all be better off if we revealed our finances. We would get a fairer deal, feel more secure, and be less likely to run up crazy debts. If we’re comfortable talking about sex or death with everyone, we should be able to talk about money.”

Corn Mafia Henchmen at Cargill Gobble Up Crap Bank Assets [JDA]
Maize, and the companies that are getting filthy rich from it, are quickly becoming Adrienne’s new obsession.

36% of Clients Are Dissatisfied and Already Shopping for Another Accounting Firm [CPA Trendlines]
A CCH report suggests you best put those aforementioned brown-nosing (aka client service) skills to work.

Former Ernst & Young XBRL leader joins Deloitte [Accountancy Age]
Josef Macdonald joins as a director from E&Y. Macdonald was previously XBRL leader for E&Y – a computer language for tagging tax information on reports. He also led the International Accounting Standards Board’s (IASB) XBRL team from 2003 – 2007. Macdonald continues to sit on the IASB’s advisory panel and the XBRL International Steering Committee.

Mobile phone kits to diagnose STDs [Guardian]
An app for the clap.


Two senators eye gas tax hike to pay for highways and bridges [On the Money]
Sens. Tom Carper (D-Del.) and George Voinovich (R-Ohio) have written to the chairmen of the National Commission on Fiscal Responsibility and Reform advocating for a 25-cent per gallon tax increase.

“We suggest that the commission include an increase in the federal tax on gasoline and diesel as part of your report to the president,” they wrote. “We suggest that the taxes be increased by one cent per month for 25 months — a total of 25 cents over a three-year period.”

New Jersey Should Send a ‘Thank You’ Note to California and New York

“In the recently-released 2011 State Business Tax Climate Index, New Jersey finally moved out of its last-place ranking on that list, in part due to Christie’s veto of the millionaires’ tax he mentioned during his interview. While it still ranks a pretty dismal 48 out of 50, it proves that improvement is possible, even in a state with a tax policy legacy as historically abysmal as New Jersey’s.” [Tax Foundation]

Keyshawn Johnson Successfully Withstands the Fox Business Tax Policy Rhetoric

Dare we say, Keyshawn is being pragmatic here?


A few favorite moments:

Keyshawn: That’s what I’m being told. I don’t know any better. [Every Fox employee is laughing hysterically]

Charles Payne: If there was only 30% of what you made there. When do you say, “You know what? Who’s the Republican running for office?”

Keyshawn: Let’s not always make it about money. [If you listen carefully you can hear Charles Payne soiling himself.]

Payne: Even the guy that is 3rd string?

Keyshawn: Some of those New York Jets guys, as we know, are that responsible when they drink? [Sanchez?]

Any other takeaways? Discuss.

[via TaxProf]

There’s Still Some Confusion About the BDO/Grant Thornton Situation in Hong Kong

The Wall St. Journal’s China Real Time Report stumbled upon the BDO/Grant Thornton poaching exodus merger situation (some may say, “clusterfuck”) in Hong Kong and we have no choice but to take issue with it.

The headline reads, “Missed It? Hong Kong’s Big Accounting Merger” and they mention the original report from the South China Morning Post. They manage to tone down the narrative but more or less tell the same story, full with quotes from BDO Hong Kong’s CEO Albert Au Siu-cheung:

On Wednesday, about a month after the joint press release, the South China Morning Post featured a front-page article describing the merger as a mass poaching of staff by BDO, “the biggest such raid in the city’s accounting sector.”

“It’s a bit sensational,” Au said, adding there was no raid. “Poaching is I pick a few heads here and there,” he said. “What you’re seeing here is the whole firm, meaning the partners and staff, coming to join us in BDO.”

In other words, “Sure it sounded bad but really it was just people making a choice”:

“There is no goodwill payment of any kind,” Au said. “I like to think they are voting with their feet. By that, I mean they think they’re joining a platform they have commitment to and believe in.” Clients were informed of the change and had the option to find another accounting firm. All clients have stayed with Grant Thornton for this merger.

Of course if someone at the Journal had rang up Grant Thornton International they would have likely gotten the story that we reported on last Friday which is that GTI booted the affiliate firm in Hong Kong and that BDO is kinda, sorta misrepresenting the situation:

They did not choose to leave, they were told to leave…[I]t is disingenous, or possibly wishful thinking, on the part of BDO to suggest that Grant Thornton is pulling out of Hong Kong. Many partners and staff from the former Hong Kong firm have already contacted the new Grant Thornton firm and clients will, of course, decide for themselves whether to move to BDO, which operates in the region as a loose affiliation, or remain with the more integrated, ‘one firm’ approach of Grant Thornton.

And of course there are the opposing press releases. The joint one issued by the BDO/GT firm dated October 7th that states:

Leading accounting firms BDO and Grant Thornton are pleased to announce that their firms have agreed in principle to merge their businesses and practise in the name of BDO Limited.

And the one from GTI, also dated October 7th that states something quite different:

Grant Thornton International gave its Hong Kong member firm notice on 20 September to leave the global organisation by March 2011.

With that mandate and probably few options, it appears that GTHK ran into the arms of BDOHK. BDO is using the Journal to disseminate a story that makes them look proactive and ambitious when in reality, none of this would even be happening if GTI hadn’t told their HK firm to get lost. The Journal – like the South China Morning Post – doesn’t mention that. Some people might consider that a major piece of the story.

We’ve put out a warning in the past about wandering into our corner of the sandbox without knowing what the hell you’re doing (or at least checking with us first) and you can consider this a friendly reminder about that. We’re more than happy to help because this accounting/accounting firm stuff is tricky when you don’t spend every single day reading and writing about it.

What’s With All the Hating on Rothstein Kass?

Welcome to the post-marathon Monday edition of Accounting Career Couch. Today, an experienced industry accountant is looking to go jump into public and has an interview with Rothstein Kass’s Family Office group. Unfortunately, he has heard horror stories about R to the K’s financial services division and wants to know if it’s contagious to the rest of the firm.

Having problems at work and need a sage’s advice? Curious if using a sick day for your missing toenails is ethical? In a bit of trouble with the law and need an excuse that makes your better half look like a lunatic? ”mailto:advice@goingconcern.com”>advice@goingconcern.com and we’ll put your mind (or feet) at ease.

Back to our potential Kass Kounter:

My question is if you’ve received any recent news about Rothstein Kass lately. I’m up for an interview in their Family Office group as an entry level tax staff, but let’s face it – they haven’t had the best things said about them over their other divisions. Fortunately I’ve heard nothing about the FO group; everything sad/horrible/depressing has been about their FS division, for the most part.

I want to make sure I do my due diligence of this firm, first. A few years ago I was offered to start my career in accounting there under a summer internship in their audit group, but I turned it down for corporate opportunities instead. Now as I want to make the jump into public for the first time, I’m naturally looking back at RKCO…

Any idea as to why everyone seems to have only negative things to say about them? Whiners are always the loudest, I’m aware, but it does concern me a little that there’s so much taint over this firm’s internal reputation on the interwebs…

To directly answer the question, the most recent news we’ve received about Rothstein Kass was related to their ubiquity on the Vault rankings including landing at the #3 spot on their featured ranking.

Prior to the rankings, we reported on a few pre-Labor Day layoffs that occurred at the firm and the admission of new partners to the firm for 2010.

In the layoffs post, our tipster mentioned the following:

FS practice is getting demolished in NY and NJ appears to be getting more antsy with every move that management makes.

Not many details on “demolished,” as you can see but someone thought enough havoc was going down to contact us. However, another source told us that the context of the tip was not accurate and that things within the firm were fine. What other Kass Kounters actually think is unknown because the post had a grand total of zero comments and RK declined to comment for our article.

So, the long/short of it is – RK has a very good reputation by virtue of their lofty perch among the Vault Rankings but it appears the reputation in some corners of “the interwebs” might be “tainted” as you say. We haven’t seen any of this tainting first-hand so we don’t know why RK is getting a bad rap.

To help you with your particular dilemma – if you were interviewing with Deloitte or PwC (the only two firms that ranked above RK on Vault’s list) would you be concerned about what was said about them on the web? If your answer is no, then you should have the same attitude about Rothstein. If you answer is yes, then you’ll never get a job anywhere, ever.

People in the know are invited to enlighten everyone below. If you’d rather communicate with us directly, email us at tips@goingconcern.com.

Accountant Addicted to Love Has Been Located; First Date To Be Determined

It was just last week that Victor the Spartan was on the hunt for Lauren, an accountant addicted to love (presumably in the Robert Palmer sense).

The picture at right represented Victor’s preferred method of stalking tracking down Lauren.

And despite the odds and the skeptics, the Spartan has reported that the hunt was a success:

Found her! We have not had a chance to get together but I am excited for it to happen. You always have to try if you want something. I’m glad i did.

Now, we’d like to think we were partially responsible for this happening but there’s no indication that is the case. Anyway, best of luck and all that. We’re sure this just the beginning of a great love story that will become a best seller – “Accountants like double entry” – or something.

Accounting News Roundup: Short-term Compromise on Estate Tax Possible; Where Do Big 4 Political Contributions Go?; Shrinks for CFOs | 11.08.10

Battles Loom Over Tax Breaks, Spending Cuts [WSJ]
House GOP Whip Eric Cantor and other lawmakers suggested that Republicans in the coming lame-duck session would press for a long-term extension of current tax levels for all earners, despite Democratic opposition. The Bush-era tax cuts expire Jan. 1 unless Congress acts before then.

“I am not for sending any signal to small businesses in this country that they’re going to have their tax rates go up,” Mr. Cantor said on “Fox News Sunday.” Republicans say raising tax rates on higher earners would hit about half of all small-business income. Democrats say that figure is inflasinesses that are structured as small businesses.

Can a Republican House Stop Farm Subsidy Nonsense? Yeah Right [JDA]
Archer Daniels Midland. Have we mentioned how they’re part of the problem? Adrienne reminds us.

Put Your Money Where Your Money Is: The Auditors and the US Midterm Elections [Re: The Auditors]
Francine McKenna goes with the hockey metaphor, “The audit firms put their money more often where the puck is rather than where it’s going and hardly ever chase the puck for strictly ideological reasons.”

Is Internal Audit Meeting the Challenge? Perhaps Not! [Marks on Governance/IIA]
Or, perhaps yes?

Business Groups Back Quick Compromise On Estate Tax [Dow Jones]
Business groups that oppose the federal estate tax say they are willing to back a short-term compromise with congressional Democrats, in order to avoid the tax returning to its highest level in 10 years.

However, Republicans in Congress aren’t ready to back down from their demands for an estate tax rate of 35%, setting up one of the more unpredictable tax battles in Congress’s lame-duck session.

Bloomberg to America: Lay Off The Chinese [Metropolis/WSJ]
“If you look at the U.S., you look at who we’re electing to Congress, to the Senate—they can’t read,” [Hizzoner] said. “I’ll bet you a bunch of these people don’t have passports. We’re about to start a trade war with China if we’re not careful here,” he warned, “only because nobody knows where China is. Nobody knows what China is.”


How Would CFOs Fare on the Couch? [CFO]
“The upside of people who are CFOs is that they’re generally effective communicators, deliberate, prudent. They weigh alternatives, they’re stabilizing, objective, rational, analytical,” says [Dr. Barrie Sanford] Greiff. “But for every upside, when you turn up the intensity, you can find these descriptions, too: overcautious, overanalytic, very controlling, and lacking in a certain degree of flexibility.”

UGA accounting school receives $1 million [AJC]
Thanks, Ernst & Young.

The World’s Most Powerful People [Forbes]
Behind every powerful person is an accountant that is sick of putting up with his/her shit.

‘Tax Lady’ Roni Lynn Deutch unfazed by state fraud suit [Sacramento Bee]
And now that Jerry Brown is going to Governor (again), he actually has bigger problems.

Accountant Successfully Uses “I’ll have to answer to the wife” Defense to Avoid Driving Ban

In the Old Empire, if you’re busted driving over 100 mph, you’re supposed to lose your license. Apparently there is an unwritten exception to this rule that says if you’re soon-to-be married and the bride WILL NOT STAND FOR IT, you get a pass.

Exhibit A: Christopher Bidgood, 32 an accountant from “Martham near Great Yarmouth” was stopped after going 110 and “weaving in and out of traffic.” Not the first time he had a run-in over his lead foot:

Bidgood of Martham near Great Yarmouth had faced a driving ban of up to 56 days after he admitted breaking the 70mph limit at 7.47pm on September 3.

Right, then. Bidgood’s attorney, knowing full well that his client is dumber than a sack of hammers, pulled the only card he thought he could play:

Tim Carey, defending, said Bidgood, had already faced the “displeasure” of his bride Amanda due to the risk of a ban ruining their honeymoon.

Describing his client’s behaviour behind the wheel, Mr Carey told the bench: “Sir, he has been a complete idiot – an idiot of the first order.”

But a “hardworking and honest” idiot, according to his co-workers, which may have helped his case as well.

This Is as Good as It Gets for Sarbanes-Oxley 404 Compliance

Six years and everyone pretty much has this down. Arthur Andersen (the man, not the firm) would be so proud.

Just don’t get lazy.

In the sixth year of compliance with Sarbanes-Oxley Section 404 requirements, companies with a public float greater than $75 million reduced their rate of adverse opinions from 5 percent in the fifth year to only 2.4 percent in the most recent year. Even if companies that have missed their filing deadlines turn in adverse opinions, it would bump the rate to only 2.8 percent, said Don Whalen, director of research for Audit Analytics.

Over the six reporting years that public companies have been filing the reports, adverse opinions have steadily fallen from a high of 16.9 percent for fiscal years ending after Nov. 15, 2004, to the current low of 2.4 percent, said Whalen. “It’s getting to the point where you wonder if it can even be reduced any more,” he said.

Garden Stater Needs Help Choosing Between Ernst & Young and Deloitte

Welcome to the “Thank Tim Flynn It’s Friday” edition of Accounting Career Couch. In today’s post, we have soon-to-be Big 4 employee wringing her hands over which firm to choose in New Jersey – Ernst & Young or Deloitte. Will the wrong decision put her career on the path to ruin? [effect]

Looking for career advice? Is your integrity being challenged? Need ideas on how to woo an unresponsive accountant addicted to love? Email us at advice@goingconcern.com and we’ll help you chase down the love of your life (or recommend a good lawyer).

Back to our Garden State go-getter:

I have received an offer for a full time position at both Ernst & Young and Deloitte, NJ offices. I am coming right out of college and would like to get input on which one to choose. Both of them are really great and I like the people at both places- although I can say that I felt better taken care of with Ernst & Young (they had partners calling to extend the offers and made many follow up calls to make sure they get all your questions answered.

I have been going through some company reviews for both, and it seems to be that the major complaint for EY is the salary raises and the limited opportunities for career advancement (I would like to know if this is accurate information). As per Deloitte, the main complaint seem to be the long hours- which is expected for a Big 4, however career advancement seems to be very good. – once again I would like to know if this is accurate and if it is true that career advancement is better at Deloitte than it is at EY.

I would really appreciate your help as I need to get back to these companies within a month and it is a very large decision to make.

Dear Jersey Girl,

Our knowledge about the Garden State amounts to a just a few things:

1. Medford and Byram Township seem like nice places to be from.

2. The Nets suck.

3. Pretty much anything from The Sopranos.

4. No matter how convenient it is in reality, we don’t like taking the PATH.

None of these points help you. What we can tell you is that effort made by the E&Y partners may be the tie-breaker. If everything between the two firms seem the same and the E&Y partners won big points with you, that’s who you should choose.

Now. Your concerns in the other two areas are a little unfounded. First – Ernst & Young’s most recent salary increases were better than Deloitte’s until the recent mea culpa by the Green Dot Gang so if nothing else, they’re staying competitive.

Secondly – we’re not sure what you mean by “limited opportunities for advancement” but E&Y is a huge firm with plenty of opportunities. Plus, if you want something to happen, you’ll make it happen. Doors don’t slam shut just because you choose one firm over another. Plus, the path to partner is long with a big parking lot right in front of it.

As far a long hours are concerned – this has been covered ad nauseam. You’re working lots of hours no matter what. This should not be a decision point.

As far as the specifics about the offices across the Hudson, we’ll leave that up to the peanut gallery. Help the girl out.

Let’s Speculate About Why Deloitte and KPMG Aren’t on the America’s Largest Private Companies List

Riddle me this, oh wise Going Concern readers – Forbes’s list du jour is America’s Largest Private Companies and its Top 10 has two familiar names: PwC and Ernst & Young but Deloitte and KPMG are nowhere to be found.

Here’s a rundown of companies, their revenues in billions and # of employees:

1. Cargill – $109.84, 130k
2. Koch – 100.00, 70k
3. Bechtel – $30.8, 49k
4. HCA – 30.05, 190k
5. Mars – 28, 65k
6. Chrysler – 27.90, 41.2k
7. PwC – 26.57, 161k
8. Publix – 24.32, 142k
9. E&Y – 21.26, 141k
10. C&S – 20.4, 16.6k

Just for the sake of not opening a bigger canner of worms we’ll ignore the enormous drop in revenues from #2 to #3.

Both firms have over $20 billion in revenues – Deloitte’s the biggest of the Big 4 for crissakes – so that puts them in the top ten easily, yet they’re completely MIA.

If you look at the methodology, you’ll find that both firms should easily qualify to make the list:

In addition to our $2 billion revenue requirement, the companies on our list have either too few shareholders to be required to file financial statements with the Securities and Exchange Commission, or have shares whose ownership is restricted to some group, such as employees or family members. We exclude foreign companies, companies that don’t pay income tax (like Mohegan Tribal Gaming Authority), mutually owned companies (like State Farm Insurance), cooperatives ( like Central Grocers), companies with fewer than 100 employees, and companies that are more than 50% owned by another public, private or foreign company. We also leave out companies whose primary business is auto dealerships or real estate investment and/or management.

If you take a hard line here, “companies that don’t pay income tax” should probably disqualify all the firms but obviously Forbes made at least two exceptions. As for the rest of requirements, nothing really jumps out so it’s anyone’s guess.

Perhaps Deloitte and KPMG just got their applications in late? Maybe they were “meh” on the whole list? Maybe they don’t support the flat tax so Teve Torbes just said “To hell with them.” ? The editors for the piece don’t have emails included in their bios but we’re pretty curious as to how this whole thing came together, so please get in touch.

Theories (DWB is going with “because they both suck”) on the alleged oversight/snub are welcome.