When accounting goes unaccounted for
“The Big 4 don’t even like being called AUDITORS. Rather they provide ‘ASSURANCE Services,’ and act as ‘TRUSTED ADVISORS.’ This isn’t just rhetorical. It’s a cynical PR move and an effort to limit their liability.”
~ Francine McKenna, who will be on a panel with Lehman Brothers Bankruptcy Examiner Anton Valukas, NYT Chief Financial Correspondent Floyd Norris and others, discussing the financial crisis.
…which is never good.
IRS agents searched Vic’s Food and Spirits, which is owned by Vic Center, at about 9 a.m. Tuesday as well as two other properties owned by Center, said an employee.
“We had a visit,” said Warren Oliver, the tavern’s bartender. “They took all of our lists, numbers and papers — everything, with them.”
Young Buck feels your pain, Warren Oliver.
IRS agents search area tavern [Dayton Daily News]
That, or Robert Marcus needs a little training in positive spin:
The environment for cable television subscribers is “very, very weak,” according to Time Warner Cable Inc. (TWC) Chief Financial Officer Robert Marcus, and the company may actually see the total number of subscribers to its television, Internet and telephone services shrink during the current quarter.
The statement, made Wednesday at a Bank of America Merrill Lynch conference in California, caused Time Warner Cable stock to lose as much as 5.3% in Wednesday afternoon trading immediately after Marcus delivered his opening remarks.
Marcus said August saw the “usual uptick in subscriber performance,” as children went back to college, but unemployment, high vacancy rates in housing and “really anemic new home formation” are “resulting in some pretty weak subscriber numbers.”
Time Warner Cable Stock Sinks After CFO’s Downbeat Remarks [Dow Jones]
Yesterday the Journal got into the ranking act with their list of colleges based on recruiters’ preferences. The accounting program rankings aren’t too surprising but we called in the friendly HR professional and recruiting maven Dan Braddock to discuss the rankings. First things first however – the pecking order:
1. BYU
2. Wisconsin-Madison
3. Illinois-Champaign
4. Minnesota
5. Penn State
6. Michigan
7. Maryland
8. Cal-Berkley
9. UCLA
10. Ohio State
11. NYU
What follows is my chat with Dan-o as he tries to break this do rong>: Okay, let’s kick this off. You sent me a link to some WSJ article about the school rankings based on recruiter opinions.
CJN: I did. Personally, I find it hard to take the list too seriously without Texas-Austin or Notre Dame on it.
DWB: It makes perfect sense as to why they’re not on the list.
CJN: Explain, that sounds like crazy talk.
DWB: This isn’t based on caliber of program; it’s a list of what recruiters find to be the “best” schools. Take a look at the list of Best Accounting Schools. First, those schools are huge; many of them are state schools. Recruiters get the most “bang for the buck” out of schools like this. Second, if you mapped these out, they’re schools that can can service as feeder programs for multiple offices. For example, Deloitte can visit UCLA and find potential candidates for their California and west coast offices. This removes the necessity to visit several smaller schools across the same geogrpahic region. Penn State services Philly, Pittsburgh, D.C., Baltimore, New Jersey, and New York City. Lehigh University in eastern PA is a much better accounting program than Penn State, but has a smaller geographic reach and a smaller pool of students.
CJN: But doesn’t the #1 school, BYU, buck that idea completely? Their enrollment is small by comparison and Salt Lake City is a relatively small market
DWB: BYU has more than 25,000 undergrads from every state in the country – again, national reach.
CJN: Fine but why no UT? The Texas market is huge and has national reach.
DWB: I admit, Texas is the one school that I was shocked not to see on the list – on the surface, it is large in size, has a well respected business program, and is nationally known. But dig deeper and it makes sense. Of their 38,000 undergraduates, only 8.5% are from outside the state of Texas. So applying that same percentage to the number of undergrads in the business school (4,500) that’s about 380 students. How many of them study accounting? My guess is not many. That said, accounting students interested in offices elsewhere (Chicago, LA, NYC) should have no problem landing interviews, as the local Texas recruiters from the Big4 blanket UT at Austin.
CJN: And Notre Dame? Why are they MIA? John Veihmeyer has to be pissed. And not just about the choke against Michigan.
DWB: Hahaha. I’m sure he voiced his frustration about both. He’s probably having nightmares about the most recent flop in South Bend. Again, it’s all about size of program. National name, yes, but when your business program is ~2,500 students in total…Also, remember that these rankings for best accounting programs is not just by Big 4 recruiters. This is everyone. Johnson&Johnson, regional mortgage firms, Disney, etc.
CJN: Interesting
DWB: Obviously there is some kind of balance in play here. As a whole, all of these schools are nationally known and well respected in the industry; there are no schleps on the list. For recruiters, it’s all about efficiency of time and finances. A hotel room and flight to visit a school where hundreds of accounting students are salivating at the opportunity to work for you is impossible to pass up.
CJN: So everyone on this list belongs on it or are there other schools that are missing that should be in the top…11 (?)
DWB: Considering their proximity to one another I was suprised to see both the U of Minnesota and U of Wisconsin on the list but no, nothing too surprising. Since it is college football season, the Big Ten definitely has the SEC beat when it comes to accountants (6 v. 0 on the list). Maybe that’s why they’re better on the gridiron.
CJN: OR maybe it’s because it’s the SOUTH. My guess is that people don’t go to Vandy to get an accounting degree.
DWB: I am surprised not to see a school from the South – no UNC Chapel Hill
CJN: Fair point.
DWB: In closing, I think it goes to show that US News & World Report rankings are not the end all be all for recruiters. Nationally known names, established programs, and large alumni bases go a long way.
CJN: Right. And a good football team doesn’t mean shit (read: Alabama).
DWB: Below the belt, CN.
CJN: Whatevs. Can you explain the pachyderm? B/c I sure as hell can’t.
You may or may not be aware that U.S. News & World Report is the shot caller when it comes to ranking law schools (much to the chagrin of some) and now (to even more chagrin) the magazine is delving into extensive law firm rankings and the Big 4 will enjoy a little bit of perceived prestige that comes along with these rankings.
Christ. We’re barely into rankings/list season and they’ve already chalked up working moms and consulting rankings and U.S. News is now throwing around its weight with this new list.
Granted, virtually no accounting firms will even get a whiff of this list but something tells us that because U.S. News has decided to dive head first into ranking law firms by practice are the Big 4 will be jockeying to make the tax list, even though it is a sliver of a much larger and broader ranking that they won’t be included on at all.
Excuse us while we choke down the vomit that we caught making it’s way out.
Why the hell not?!? U.S. News figured that the world couldn’t do without it’s rankings-for-hire in one more area for the legal field but this time the Big 4 will enjoy a bit of a ride on this wave.
Right. The list. The two of Big Four of course, make their way on the ranking for tax firms: Ernst & Young falls into the coveted Tier 1 (includes 36 firms) and KPMG drops on Tier 2 (47 firms). There were a total out of 119 firms across three tiers.
Admittedly, this is an opportunity for both KPMG and E&Y to boast their tax practice prowess over Deloitte and PwC who don’t appear on the list at all. That being said, Deloitte and PwC enjoy higher spots on the consulting rankings so they’re probably not overly concerned although no one turns down a notch on the bedpost if they can get it.
What this new ranking ultimately will be is one more marketing tool for the firms to use on the impressionable recruits and experienced hires who want to work in top notch – TOP NOTCH! – tax practice. Be it lawyers or CPAs, the firms will tout this ranking to their tax professionals (if not firm-wide) to throw around ONE. MORE. LIST. to impress the trousers off the masses but now people will be saying, “Oh, this is a U.S. News ranking.”
So for the Big 4 to be included in this “prestigious” ranking is a little bit, as Elie Mystal states, like “Christmas morning – if only Santa were a jolly red prestige whore.”
U.S. News Tax Firm Rankings [TaxProf Blog]
Best Law Firms [U.S. News & World Report]
U.S. News Launches First Official Law Firm Rankings [ATL]
Yesterday we told you about Extreme Big 4 Makeover: PwC Edition. Today we’ve learned that KPMG is getting into the act, although the House of Klynveld had the sense to avoid changing their team colors to match the autumnal palette (Braddock says it reminds him of Pizza Hut).
But more on colors later. We feel that the motivation for the rebranding is likely twofold: 1) They got wind of PwC sexing themselves up and 2) They’re pissed about Dick Bové playing dumb and they’re trying to get the old girl’s attention.
Naturally, it makes the Masters Champ who, after coming of his video extravaganza on Phil Mickelson’s KPMG website, is appearing in this ad in Golf Magazine (or so we’re told, we don’t have a subscription):
In addition to His Leftness being included in the campaign (reminiscent of T. Dubs with Accenture) apparently the firm took out an ad in today’s Financial Times that rocks their new slogan, Cutting Through Complexity™:
KPMGCuttingThroughComplexityprintadvertising
Last but not least, the firm rolled out this internal Brand Book that tells you everything you don’t want to know about the rebranding including the firm’s commitment to it’s favorite hue, ” To bring our brand to life we have a refreshed visual identity and tone of voice which reinforces the essence of our brand. It builds on our current brand equity and the strong ownership we have of the color blue, while placing greater emphasis on the warmth of our wider color palette.”
One of sources already weighed in saying, “I’m so excited about the opportunities that will be generated by these HUGE changes I don’t know how I will contain myself.” We invite you to share your own thoughts on blue, Phil or whatever you think about KPMG’s new do.
Whether this marks the end of your tax season for 2010 or is just a pit stop on the way to October 15th, it’s certainly a day that gets marked on the calendar of many a tax sage.
In case you’re completely oblivious to the significance of this day, it marks the extended filing deadline for corporations, partnerships and trusts. That amounts to metric asston of returns and there’s probably more than a few people that suffer nervous breakdowns on the road to this annual deadline.
Whether or not you’ll be drinking your lunch today, it’s a nice reminder (or an excruciating one) that all things – including CFOs and Lindsay Lohan (what’s taking so long?) – eventually pass.
You can express joy or resentment about your successful completion of tax season 2010. It was your last, right? Sure. We’ve heard that before. Anyway, if this marks end, go enjoy yourself this evening.
But of course, we haven’t forgotten that there are plenty of you that have 30 days to go. Feel free to bitch and moan and then get back to work.
Despite ethics cloud, Rangel easily wins primary [WaPo]
“Facing ethics charges in Washington and upstart challengers at home, Rep. Charles B. Rangel (D-N.Y.) won a resounding victory Tuesday to keep the Harlem-based House seat that he has easily controlled for 40 years.
Rangel, the ousted Ways and Means Committee chairman who has been charged with 13 counts of violating House rules, ran an aggressive campaign for the Democratic nomination, betting that the people who have known him longest – voters in the 15th Congressional District – would send him back to Capitol Hill with a political victory before the House ethics committee tries him later next year.”
Deloitte Will Hire 250,000 over Five Years: Across All Regions, Businesses and Levels of Experience [FINS]
Jim Quigley is still making the rounds since Deloitte announced their revenues for FY 2010 on Monday but more surprisingly, the 250k jobs over the next five years number hasn’t been corrected. Call us party poopers but adding the entire city of Lexington, Kentucky to your workforce in half a decade seems a tad ambitious but whatevs.
Anyway, FINS ran Quigs down and Julie Steinberg informs us “Deloitte is looking to hire in all regions, but it expects growth in priority markets like China and India,” which means you might think about picking up some Rosetta Stone. JQ is also quoted saying those that are “internationally-oriented, diverse in background and skill sets, and have strong teamwork skills,” will make the best candidates.
Obviously Chris Dodd Didn’t Realize He Was Referring To Himself At The Time [JDA]
“Apparently Chris Dodd is a little butthurt about the idea of an Elizabeth Warren-led consumer protection bureau, as he well should be. Who exactly do you think she would be there to protect the consumer from? Scandalous pricks like Dodd who think backdoor deals are notches in the belt of a good political career. What scares him? Warren doing more than terrorizing small financial institutions like a good little consumer protection bitch would? Surely he’s smart enough to wipe his own bloody footprints off the floor before slinking off, why is he so afraid of this suggestion and why wasn’t he smart enough to write his fucking bill so it couldn’t?”
ICAEW chief says audit quality remains strong [Accountancy Age]
The Brits are pretty pleased with how the auditing is going, despite what the Audit Inspection Unit’s report says. So much so, ICAEW Chief Michael Izza blogged about it, “The most important message to be taken from the work of the AIU is that there are no systemic problems with the quality of audit of UK listed companies, nor in the processes followed by the firms who carry out these audits.”
Wallace book about IRS office coming out April 15 [AP]
The next novel, “The Pale King,” from late David Foster Wallace will bet set in an IRS office and will be released April 15, 2010.
Why Congress Shouldn’t Tax 1099s [The Atlantic via Tax Update Blog]
“[N]o one is suggesting that this law will do much of anything to close America’s ‘tax gap’ (the gap between what the IRS thinks taxpayers should pay, and what they actually do). The tax gap is almost $300 billion; the new law would reduce that by perhaps a half a percent. “
If you’re the partner on an engagement and you know, deep down in your plums, that the numbers are fine, you probably get pretty anxious to sign off on this bad boy. You want to go on vacation or a golf date with Phil or – if they’re lucky – spend some time with the family. With that in mind, it’s not so unusual that he/she might jump the gun a little and slap down the Johnnie Hancock before all the work gets done.
Unfortunately, as anyone studying for the audit section of the CPA exam will tell you, this is against the rules.
But hey! If the numbers are hunky-dory, there’s not much cause for concern and everyone has a good laugh:
In the case of KPMG, the FRC’s Audit Inspection Unit looked at 15 audits and found that in three cases the auditor’s report had been signed too soon. Significant changes were subsequently made to the accounts in one case.
Paul George, director of auditing at the FRC’s Professional Oversight Board, which includes the AIU, said the early sign-off problem was not limited to KPMG: “It is a profession-wide challenge to some degree.”
KPMG said it accepted the AIU’s comments. “We are pleased to note that in no case did they think that the audit opinion we issued was incorrect,” said Oliver Tant, head of its UK audit arm.
See? It happens everywhere! Plus, it’s not like accounting and auditing are based on rules that anyone takes that seriously, anyway.
Okay, sure signing off early on 20% of the audits sampled sorta looks bad but at least the numbers weren’t wrong. It would be really awkward to explain that.
If the GOP took the “think of all the trees you’re killing” angle, maybe they could have convinced more Democrats to kill the 1099 free-for-all. Unfortunately, they stuck to the usual “red tape is un-American and stealing our freedom” narrative and it didn’t impress.
Senate Democrats defeated an attempt by Republicans to lift a tax-reporting requirement that small businesses face in a move that would have stripped away $17 billion earmarked to help pay for the sweeping health-care law.
In a 46-52 vote, the majority overcame an effort by Senate Republicans to scrap the reporting requirement which was inserted to the health-care legislation that was signed into law by President Barack Obama earlier this year.
The Republicans would have needed 60 ‘yes’ votes to be successful. Seven Democrats sided with the Republicans to support removing the requirement.
The Republican effort was led by Sen. Mike Johanns (R., Neb.), who has argued it is simply piling on unnecessary red tape on small-business owners at the same time as the federal government looks to them to lead the job-creation recovery.
The rule requires businesses to report to the Internal Revenue Service payments to suppliers and service providers that exceed $600 in a single year. It is set to be implemented in 2012.
Today in accounting firm musical chairs, a SA3 who got passed over for promotion at GT has an offer to joining soon-to-be rebranded PwC as an SA1/2. WHAT TO DO?!?
Have a question about your career? Worried that you’re too hot for the Big 4 and your hot brain will be overlooked? Trying to decide if you should give it all up and join the circus? Email us at advice@goingconcern.com and we’ll let you know if you should consider becoming the next human cannonball.
Back to our accountant in peril:
I’m a recurring S3 (financial) who was passed up on the manager position because of internal politics [Ed. note: reader admits that this is their opinion]. I have a offer with PWC to join their asset management group as a S1/S2.
Is this career suicide? I have until today to tell GT if i’m leaving or tell PWC that i have to rescind the offer.
I’ve had it with GT and although they said there is a good chance next [year] to make manager, i dont believe the hype.
Timing if of the essence, so we’re on this – Looking forward to a promotion to manager and getting passed over is a tough pill to swallow. All of your hard work that you’ve put in over the last five or so years (that feel like ten) no feels wasted. As you say, you’re not buying the hype any more and we don’t blame you. However, succumbing to your frustration and allowing PwC to knock you down a notch (or two) on the ladder is the last thing we think you should do.
You shouldn’t let any firm take advantage of your vulnerability and devalue your experience just because you were in Casa de Chipman. If you were an associate, the situation might be different but if you’re on the throes of making manager and now it might be at least another year before you’re even being considered for manager, feels like a disservice.
That being said, it doesn’t sound like you’re happy at GT. And being miserable at work sucks. If you’re crawling out of bed, hating your commute and the faces of your co-workers make you want to projectile vomit on their laptops, that’s a serious sign that you need to GTFO.
Luckily, you’ve got options, friend. If you trust your performance coach/counselor, ask them if there are possibilities within GT that you can explore (possibly a practice rotation?).
But if you’re truly burned out on GT, don’t do something rash like take the first offer thrown in front of you. Take your time and make the next career move that’s perfect for you. Don’t settle for the glitz of PwC just because they make it sound like the best shit since paperless audits (they aren’t that cool anyway). Your experience is valuable, go find a company that will reward you for it.
This morning we received an anonymous tip pointing us to a URL that appears be a new look for PricewaterhouseCoopers. The image below is what is can be found over at brand.pwc.com.
It almost looks as if PwC is dropping the “PricewaterhouseCoopers” in favor of simply “PwC,” but that’s just us thinking out loud. If this is, in fact, a rebranding, we have a few questions:
1. When is going down? Just in time for the holidays?
2. Who voted on these Halloween colors? And why all lowercase letters?
3. Why no more PricewaterhouseCoopers? Too big of a mouthful for clients, spouses, kids, etc.?
PwC spokesman Kelly Howard declined to comment. But if you’ve got questions, comments, concerns, chapped hides and so on and so forth with regard to any of this, discuss below.
UPDATE: It’s our understanding that the branding will go “official” internally on Monday and be live October 4th (subject to change?) for the rest of us. Also, it sounds like “PricewaterhouseCoopers” will be used in some “certain cases.” The re-branding is apparently an attempt to create a more “consistent brand.” If you know more, get in touch.
UPDATE 2, September 15th: We’ve got it on good authority that TPTB rolled out the new look today, however it’s not entirely clear whether that’s due to us spoiling the surprise.