Author: Caleb Newquist

Founding editor, Going Concern.

Grant Thornton CFO Survey Reminds Everyone That the Job Market Still Sucks

But don’t just take the CFOs word for it, Stephen Chipman is hearing the same thing from the dynamic companies that GT is rubbing elbows with these days:

In a national survey of U.S. Chief Financial Officers (CFOs) and senior comptrollers conducted by Grant Thornton LLP, the U.S. member firm of Grant Thornton International Ltd, only 29% plan to increase hiring in the next six months, while 21% plan to decrease hiring.

A vast majority (79%) believe that the U.S. economy will not recover until the second half of 2011 or later, and more than half (59%) are concerned with a double-dip recession.

“These findings are consistent with what we have been hearing from our dynamic-organization clients,” said Grant Thornton LLP CEO Stephen Chipman. “Indecision stemming from a weak economy and the unknown impact of governmental tax policy and new regulation on business and individuals is causing paralysis, particularly as it relates to major business decisions, including expansion, expenditures and hiring.”

In related economic shitshow news, Fannie Mae and Freddie Mac are probably going to need more bailout cash. As you were.

KPMG Silicon Valley Office Dangles “November Jeans Month” To Help Boost Poor Employee Survey Response Rate

Last week John Veihmeyer asked everyone at KPMG to share their thoughts on what the firm does well but also what the firm can do to improve its awesomeness.

Well, apparently some of you in the Silicon Valley office didn’t get the hint. Your pathetic response rate of 23% (as of this writing) has some people worried that you’re not taking this shit serious. In order to get you to spring into action, the office honchos have dangled two carrots in the form of five lucky ducks winning a $200 AMEX gift card but the big opportunity here is the possibility (albeit a longshot) for wearing denim EVERY SINGLE DAY in the month of November.

2010 Employee Work Environment Survey & Jeans Month!

INTERNAL USE ONLY

As you know, the 2010 Employee Work Environment Survey is underway and will run through Monday, October 25.

The Silicon Valley Office currently has a 23% response rate.

If you have not already responded, I encourage you to do so as your feedback helps us to identify our strengths and our weaknesses and provides us with ideas on how we can become an even better place to work and a higher performing organization.

On October 11, you received an e-mail from John Veihmeyer and Henry Keizer with personal login information to access the electronic survey. If you haven’t done so, please review that e-mail and access and complete the survey before October 25.

Please note that all participants’ responses will remain confidential, and will go directly to our external survey provider, Kenexa, for tabulation. Kenexa will not report aggregate scores for departments with less than 10 responses.

Remember that all employees who complete the survey have the opportunity to enter a drawing in which five randomly selected respondents will receive a $200 American Express gift card. The survey site will provide instructions to enter. The winner will be announced after October 25.

Last year, the Silicon Valley office’s survey response rate was 70%. In order to establish a wider range of views and suggestions, I’d like to set a goal of 80% this year. So we are giving you an added incentive to respond to the survey. If the Silicon Valley office receives an 80% response rate, then the month of November will be “Jeans Month” and you can wear jeans to the Silicon Valley Office every day next month.

Thank you for participating, and we will share results with you later this year.

So for those of you that are ruining it for everyone else, do you not recognize what is at stake here? Are you not interested in providing exquisite client service in the cool, comfort of denim for 30 straight days? Do you really want to be standing around the water cooler in khakis explaining to someone that you didn’t complete the survey? If so, we hope you can sleep well.

Big 4 Recruit Needs Advice on Table Manners, Office Visits

Today in “I need advice from strange accountants and Going Concern trolls,” a Big 4 recruit needs some insight into the office visit and how to behave when breaking bread with Big 4 professionals.

Need to know what to expect for your first busy season? Looking for pointers on how to subtly attract your rival’s employees? Want ideas that aren’t über-lame for your team’s next happy hour? Email us at advice@goingconcern.com and we’ll put our heads together like the Stooges.

Back to our aspiring Big 4 rube (KIDDING, we know some of you are sensitive):

What should I expect at an office visit for the Big 4? Also, how do I behave at a dinner or lunch?


Simple enough. The Big 4 office visit is standard operating procedure in the recruiting process and we asked our resident Kool-Aid™ mixer, DWB to give his take on these show and tell excursions:

I apologize in advance if my answer comes off as salty; someone must have spit in my Cheerios this morning. But really – what kind of question is this? I’ll remind everyone about my rant the other day about providing Caleb with greater details when submitting questions. So with that, I have some questions for you – are you a college recruit? What practice? What office? Is this a one-off tour or is it part of an official recruiting program?

Because your submitted question was useless, I will make the assumption that you’re going on an official visit. Expect a tour, an interview (I hope – why else would you be going?), and the normal HR run-around of work-life balance, salary growth, etc. I advise you to talk to as many individuals as possible – on the record, off the record, etc. Get business cards, and follow up with questions you might have later. NETWORK your ass off. The people you meet in the “casual” settings have just as much of an influence on whether you receive an offer as your interviewer does.

Well, the bad accountant angle is obviously out, so regarding your behavior at chowtime, some good rules of thumb:

1) No booze. We realize this sucks but you don’t get bonus points for being able to hold your liquor.

2) CHEW WITH YOUR MOUTH CLOSED.

3) Don’t be too chatty or too quiet. Nobody likes someone who talks without breathing throughout the entire meal but you will be noticed if you say nothing.

4) Topics of conversation to avoid: recent campus ragers; office visits that you’ve gone to at other firms; negative news about the firm you’re currently visiting; the hot server’s physical attributes.

These are just a few but in general, if you have to ask yourself, “could this make things awkward?” then avoid the behavior. If that doesn’t clear things up then ask Emily Post.

If we’re way off base here or anything crucial is missing, let us know in the comments.

How Dissatisfied Are Accountants? An Unscientific Poll

On Tuesday we shared with you an article from Crain’s that quoted executive recruiter (and maybe former astronaut?) Buzz Patterson, “I’d say the dissatisfaction index would probably be at a 10-year high, in the high 60s or low 70s,” with respect to the accounting profession.

If this statement is even remotely true, this means those of you just getting your chops are seeing the worst morale in a decade. We’re talking pretty flippin’ epic misery here. For those of you that have been around for years (or even a decade or more) is this really the worst time you remember? If you’re a veteran of the biz, share your perspective in the comments below.

Also, to get things rolling on this second-to-last Thursday of October, we thought it might be interesting to gauge the crowd here at GC. After the jump, pull the lever for your level of satisfaction with your job. Use these explanations as a guide: 5 – “Hand me a cigarette”; 3 – “Take it or leave it”; 1 – “About to go postal.”

Accounting News Roundup: Tax Cut Political Football Goes Flat; Google’s Remarkable Tax Planning; Yes, IRS Agents Are Strapped | 10.21.10

Tax Cuts Slide To Back Burner On Campaign Trail [WSJ]
It’s a sign that a decision by Democratic leaders, to put off a vote on extending the tax cuts until after the Nov. 2 elections, may be paying off politically.

“It’s harder to write an ad portraying a vote that hasn’t happened yet,” said Brian Gaston, a former senior aide to House GOP leaders and now a lobbyist at the Glover Park Group.

Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes [Bloomberg]
Google y $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda.

Google’s income shifting — involving strategies known to lawyers as the “Double Irish” and the “Dutch Sandwich” — helped reduce its overseas tax rate to 2.4 percent, the lowest of the top five U.S. technology companies by market capitalization, according to regulatory filings in six countries.

TUI Travel CFO Quits After Accounting Error [Dow Jones]
In an embarrassing admission, the company said an ongoing audit for the fiscal year ended September 2010 had highlighted the accounting error in the integration of IT systems in its U.K. mainstream business that had accrued over a period of four to five years and which increased its total write-off for 2009 from GBP29 million to GBP117 million.

Chief Executive Peter Long told Dow Jones Newswires that the issue had been identified when it reported its third-quarter results but continued to investigate the matter and “only last night were we able to determine the scale of the problem.”

Banks Clueless on Foreclosure Mess Severity [Jonathan Weil/Bloomberg]
The biggest U.S. mortgage lenders and servicers say they’re putting the foreclosure mess behind them, and that it never was a major problem. The reality is these companies are so big and unmanageable, the people in charge of running them have no way to know if that is true.

One thing that remains unknowable is how many flawed home- mortgage records and foreclosure proceedings are out there waiting to be unearthed. Dozens of federal and state agencies are investigating. It’s anyone’s guess what they might turn up.


NJ man cashes $158G check IRS mistakenly sent him [Asbury Park Press]
He figured no one would notice.

For ‘B-to-B’ Companies, Finding Facebook ‘Friends’ Can Be a Struggle [WSJ]
These days, even small “business-to-business” concerns like Bill.com are experimenting with social media, perceiving the popular online hangouts as low-cost, easy-to-use venues for attracting new customers and retaining existing ones. But unlike their consumer-focused counterparts—retailers that sell smartphones, jeans, games and other personal products—so-called B-to-B businesses seem to be having a harder time connecting with their target audience.

Some IRS agents carry guns, too, agents tell UAB accounting student group [Birmingham News]
“My first day on the job, I thought, ‘Why are they carrying guns?'” said Donald Smith, a UAB graduate and special agent with the IRS-Criminal Investigation unit.

Korea wants G20 to delay accounting standard consolidation [Korea Times]
Apparently they have a say in the matter

Unfounded Rumor of the Afternoon: PwC Courting Deloitte Employees in Chicago, New York

From the mailbag by way of a Deloittian in Rahmville:

[O]ur PPD (Principal, Partner, Direct) group has received word that PWC is going to send recruiting letters to every [Financial Services Industry] senior in the Chicago and New York offices. Apparently the letter states PWC is willing to offer $15,000 more than what Deloitte is paying.

The PPD group had a meeting with all of the FSI managers in Chicago yesterday regarding this situation. On top of that, all Seniors in FSI received a meeting request today from the PPD group. The meeting is schedule for Monday morning and according to the managers, the topic of dicussion is going to be these letters. Now I can’t speak for anyone in New York but in Chicago the PPD group is not taking this lightly. Word as it that one of our senior ranking partners actually called over to PWC. Again this is all a rumor, I have not seen one of these letter but apparently one of our partners said he/she has.

If you happen across this letter, do share it with us.

Earlier:
Experienced Recruiting Amongst The Big 4 Gets Aggressive

Area Man Sentenced to Serve Pizzas in Lieu of Jail for Sales Tax Fraud

Buffalo. City Mission. Tuesdays. For a year. Unless you’re really hard up for some nourishment, we would avoid with extreme prejudice. This will make the Denny’s freebies look like a mess hall at Fort Bragg.

Joseph J. Jacobbi, 57, operator of Casa-Di-Pizza, a popular Elmwood Avenue restaurant, was spared a jail term on his massive sales tax fraud case, but the judge Monday ordered him to deliver 12 sheet pizzas to the City Mission once a week on Tuesdays for the next 52 weeks, beginning [yesterday].

After Jacobbi turned over a check for $25,000 — part of the $104,295.31 court officials said he withheld from the state between March 2004 and the end of May 2008 — the judge ordered the weekly pizza deliveries as a form of community service.

“I will leave the choice of toppings up to you,” he told the nonplussed restaurant owner.

Not that we don’t appreciate the judge’s creative sentence but shouldn’t the people at the mission get to choose the toppings?

Oh, wait…

Tax cheat sentenced to serve … pizzas [Buffalo News via TaxProf]

Former Accountant’s Ability to Make Small Talk, Save Lives Wins Him Doorman of the Year

Residents at 305 E. 86th St. are pretty lucky.

Former Big 4 Employee Has Some Thoughts on the Motivation Behind Becoming a Partner

For many of you in public accounting, the idea of becoming a partner in your firm is either a career aspiration or a thought that borders on lunacy. A few might fall in between those two spectrums but if you ask most people, they’ve got a pretty definitive answer on the “do you want to be a partner?” question.

Awhile back we received a message from a former Big 4 rank and file who had some thoughts on the matter:

When you enter Big 4 as an associate, the assumed goal is to make Partner. This seemed like a great goal at first, kind of like making it to the 12th grade in high school, or getting a degree (or two) from a good college. Or maybe even being voted in as the President of your sorority or fraternity. Take your pick. It’s the culminatied work, dedication, a little luck and a dash of favoritism from the Powers on High. However, the more I worked in B4, and the more I saw the “pyramid” continue to rear its ugly shape, I became appalled that anyone could WANT to be Partner.


We’ll just briefly chime in here to say that equating high school graduation to making partner is a bit of stretch (and we let a lot of things go). We know lots of people that graduated high school that could barely operate velcro sneakers.

Back to the rant:

The obvious reasons why someone would want to make Partner? Money, fame, money, power, money. Let’s be honest, it’s pretty much just for the money. But at the cost of what? More often than not: a tough family life (perhaps divorced, an affair or five, missed family dinners), working on the weekends, hardly seeing your kids due to work (e.g. weekend working, wining and dining clients, etc), and – the part that disturbed me the most – the fact that you are making your money from the “blood, sweat, and tears” of the miserable little minions working til all hours of the day and night for YOUR profit. I honestly don’t think that I could ever, in good conscious, become a partner, knowing the levels of stress I (directly or indirectly) put on my little “worker bees.”

Okay, time to jump in – to insinuate that partners (and aspiring partners) are simply motivated by money is silly. For starters, most partners will never pull down the salaries that the Jim Turleys and T Fly of the world are pulling down. Secondly, there are plenty of people working in public accounting – believe it or not – that really enjoy the auditing/tax/advisory work they do. If this is something an individual is aspiring to do long-term, having some skin in the game (“your profit”) is a worthwhile goal.

As for as personal lives go – more than 50% of human beings that get married end up getting divorced, so that’s weak and most partners (at least in our experience ) are not the lady-killer/man-eaters that you describe.

Continuing on:

Perhaps it is this mentality alone that makes me wholly unfit to ever be a partner or even a C-suite bigwig. Perhaps being a female I see the dog-eat-dog corporate world at a level that is far too emotional and compassionate.

But then again, who knows? Perhaps, hypothetically, by the time I finished the long uphill journey to Partner, clawing my way to the top, I would be so engrossed by the money and power that I wouldn’t have the time or space in my thoughts to think of the “little people” that were making my money-making factory churn. I would be immune to their complaints, responding with, “Stop your whining. We’ve ALL been there before. Just keep putting in your time, and everything will turn out okay.”

“Engrossed by money and power”? Now we’re getting ridiculous. This is public accounting, not an über-competitive hedge fund or the hallowed walls of the U.S. Capitol.

Once you make partner, the struggle is just beginning. Being at the top of the totem pole for an individual team might seem like a powerful spot but it’s anything but. The politics reach a whole new level when you make partner that most of us can’t even imagine. So, while you may think that partners consider staff and managers “little people” many of them probably feel like little people as well. Plus, they have significant (and sometimes grossly unrealistic) expectations placed on them, so any pressure you’re feeling, they’re likely feeling it as well.

Partners are still human and they have to make hard decisions that affect people directly and most of them are consciously aware of this. How each of them handles that responsibility is obviously different but you make them sound like soulless robots and that’s simply not the case.

So what’s the motivation, partners? If our reader is right, then proceed to tell us your stories of fame and fortune (yachts, trips to Monaco, et al.). But if you want to set the record straight then we invite you to level with the haters out there.

Earlier:
The Partner Track: Open Thread

KPMG Survey: Execs Anxious About Reporting Undecipherable Explanations for Uncertain Tax Positions

So you take a position on a tax issue. You don’t really know why or how you got there but your CFO says it’s legit. How does he/she know? “Johnson in the tax department told me.”

Does Johnson understand it? Of course not! It’s an uncertain tax position. It’s a shot in the dark at best.

Naturally, the IRS has gotten all nosy about this sort of thing so you have to formulate something that vaguely resembles an explanation that doesn’t read like Bittker & Eustice.

You can’t simply make it a copy and paste job since we’re guessing the IRS wouldn’t appreciate the bloggy approach. But you’ve got to come up with something. Oh, and try to keep it brief.

Almost half of senior executives polled are most concerned about the prospect of providing a concise description of their uncertain tax positions (UTPs) in order to comply with a new, much-discussed Internal Revenue Service disclosure requirement, according to a survey conducted by KPMG’s Tax Governance Institute (TGI).

This shouldn’t come as much of a surprise since we’re talking about interpreting the INTERNAL REVENUE CODE. But the BSDs out there are worried about explaining why they’re taking a stand on something that don’t understand one iota. Plus, if you’re already pret-tay sure that the IRS is going to call bullshit on you, that warrants an explanation as well [teeth being grit into dust].

According to the survey of 1100 business leaders conducted in early October, 44 percent of respondents said their biggest concern was providing the concise description for a disclosed UTP, defined by the IRS as a federal income tax position for which a taxpayer or related party has recorded a reserve in an audited financial statement (or for which no reserve was recorded because of an expectation to litigate). Other major concerns cited centered on the IRS’s ability to effectively administer the UTP program (20 percent) and on the scope of taxpayers required to file UTPs under the new rule (15 percent).

This could all be avoided if the IRS required companies to use Twitter as a guide for brevity. Just a suggestion.

Executives Anxious About IRS Reporting Requirements for Uncertain Tax Positions Schedule, KPMG Survey Reveals [PR Newswire]

Accounting News Roundup: America’s Fiscal Conundrum; FASB Attempting to Price Convergence; Rent and Healthcare Are Both Too Damn High | 10.20.10

Pledging Our Way to Fiscal Disaster [Tax Vox]
Three-quarters of Americans believe that entitlement programs such as Medicare and Social Security “will create major economic problems” over the next 25 years. But two-thirds are opposed to addressing these challenges by reducing benefits, and 56 percent are against raising taxes.

And congressional candidates, who read the polls, are scrambling to pander to the free-lunch beliefs of their respective bases. As a result, they are locking themselves into opposing both reductions in future benefits and tax increases.

NFIB calls for action on Bush tax cuts [On the Money]
“Increasing the individual rates will mean that business owners have less money for business investment and job creation,” the NFIB stated. “One study found that a 5 percent increase in individual tax rates decreases business investment by 10 percent.”

Democratic leaders have repeatedly promised that rate cuts for all but the top two brackets will be extended into next year, allowing most businesses to avoid a tax increase. The NFIB states their plan will still hit small businesses.

FASB Seeking Input on the Costs of Convergence [JofA]
FASB issued a discussion paper to gather input from stakeholders about the time and effort that will be involved in adapting to several anticipated new accounting and reporting standards and when those standards, which are part of the FASB and International Accounting Standards Board (IASB) convergence projects, should be effective. The board said it will use the input it receives to develop an implementation plan that helps companies and other stakeholders manage both the pace and cost of change.

“We issued this discussion paper to gather the information we need to create a realistic, cost-effective plan for transitioning to the new standards,” Acting FASB Chairman Leslie F. Seidman said in a press release.

Paul V. Stahlin Elected Chairman of the AICPA [PR Newswire]
Stahlin said the United States is emerging from a period of economic turmoil that has “driven demand for new business practices, new regulations, new oversight and new solutions,” in his inaugural speech, titled “Seize the Future.” He said CPAs have been finding solutions for more than 100 years.

“We as CPAs have the unique ability to make sense of a constantly changing complex world,” Stahlin said. “Employers, our clients and our country turn to us to make sense of the most complex developments in business and regulation. We best understand how a business ticks.”

Bob Evans Financial Chief To Depart At Year’s End [Dow Jones]
Tod Spornhauer wants to do something different.


Yahoo 3Q profit doubles, revenue still lackluster [AP]
Bartz and CFO Tim Morse are still in process of turning this thing around.

J&J CFO: Healthcare Spending Growth Is Decelerating [Dow Jones]
Certain medical expenses are simply too damn high.

Jimmy McMillan: Rent is Too Damn High! [CBS]
Speaking of, in case you missed it yesterday (or Monday night):

Some People Aren’t Too Concerned About the Walgreen CFO’s Second DUI

Yesterday we shared with you the unfortunate tale of Walgreen CFO Wade Miquelon picking up his second DUI in just over a year. While Mr. Miquelon is obviously responsible for his own actions, this whole mess could have been avoided if WAG would just splurge a tad and get him 24/7 car service. Sure you might catch some shit from Footnoted but isn’t that better than people getting hurt?

Anyhoo, most of the coverage on this story is in and around Chicago but naturally, analysts that cover the company were asked about the whole ordeal and frankly, since jumping behind the wheel after a few highballs doesn’t seem to have any effect on Wade’s professional capacity, it’s really NBD:

Dereck Leckow with Barrington Research […] sees no reason for investors to be concerned.

“Certainly, it’s rather embarrassing, but he’s not been found guilty of anything at this point,” said Leckow.

“At this point in time, it’s not something to be concerned about,” he concluded. Leckow has an “Outperform” rating on Walgreen shares and a $46 price target.

The risk for investors, if anything serious were to result from the latest charge, is that Miquelon is regarded as key to restructuring that’s been going on at Walgreen.

“Wade has been very valuable for the company’s cost-reduction efforts,” observes Scott Mushkin of Jefferies & Co. “If there were any problem that would take him away from his responsibilities at Walgreen, that would be a negative,” said Mushkin.

As we noted yesterday, WAG isn’t commenting on this “personal matter” but some people are wondering aloud about Wade’s decision-making ability:

Companies have to disclose “events that occurred during the past 10 years and that are material to an evaluation of the ability or integrity” of an officer. This includes whether the person “was convicted in a criminal proceeding … (excluding traffic violations and other minor offenses),” according to the Securities and Exchange Commission.

So the question becomes when does such an issue stops being a “personal matter” and starts becoming a “material” one. And what does it say about a person who makes such repeated mistakes, risking himself and others in the process? Can shareholders trust him with running the finances of their company?

The answer is, it depends.

“Some companies might have disclosed the second arrest right away; some might have said something somewhere,” said Edward Best, a partner at law firm Mayer Brown. “Other companies could reasonably have concluded, ‘Hey, the guy still showed up Monday morning.’ He’s still able to fly to New York to meet with rating agencies, investors and bankers. It’s not a material issue.”

One thing is for certain – Miquelon is losing his license for three years effective November 10th, so Walgreen has a couple of weeks to arrange for that car service.

Walgreen: Street Unperturbed By CFO DUI Arrest [Barron’s]
Walgreen CFO Arrested on Drunk Driving Charges … Again [Daily Finance]
Walgreens CFO charged for 2nd time with DUI [Chicago Breaking Business]