Author: Caleb Newquist

Founding editor, Going Concern.

Tim Flynn at Davos: We’re Moving Toward the Green Light of Trust

After wondering aloud if the Big 4 was just going to spend the entire week at Davos chasing blondes and eating chocolate some of the more easily rankled of you pointed out that Tim Flynn was all business and had already given an interview with CNN. Plus, since we saw Dennis Nally this morning it would seem like there is work being done. God forbid the guys do anything fun while they’re over there.

Anyhoo, we finally got around to watching TF’s chat with Richard Quest at Davos and we thought he did a pretty bang-up job. One thing we would have done different — if we were T Fly that is — was ask DQ why we were excluded from the last CNN interview. “What about it CNN? I’m not good enough for APEC piece but you’re happy to include me on this little campout?” Or something to that effect. We imagine that he was asked to keep it cordial.


Back to business: The one thing that threw us off was the red light/green light of trust thing. Trust doesn’t really strike us a color, least of all green. Think about it: Green = money = Goldman Sachs. Plus, has T Fly seen those tea party people? They don’t trust anyone. See why we’re confused? If you get it, please explain, but watch first.

Busy Season 2010: Generous Accountant Thinks About Others; Arranges Gathering

Because busy season is in full swing, we’ve been discussing motivation a fair amount this week. The latest pick-me-up came way of Houston from someone that decided to take matters into their own hands:

So I know everyone is busy, busy, busy, but I was given a free Happy Hour at Howl at the Moon and wanted to share it with all of you!

What: Happy Hour event

Where: Howl at the Moon (midtown)

When: February 5th, 2010

Time: 9pm – 12 am

Hope to see ya there! It should be a good way to brush off all the stress that busy season has brought!

Happy auditing,


Having never come across such generosity in our own professional experience, we tracked down this noble soul to find out the dealio. Well for starters, our hero reminded us that it’s difficult for the firms to arrange shindigs this time of year so our savior just decided to make it happen.

Plus, people haven’t been able to get together and share their Busy Season 2010 war stories and lament on the days and weeks to come. This is the perfect opportunity to get together and do just that. Also, they told us that you’re all so awesome and you deserve a break.

Gosh, this might be the feel good story of the season. Enjoy Houston!

Accounting Salaries Are Dead Even; Is Big 4 Work Experience the Difference?

Last month we opened a thread on your salaries and your response was impressive. Just for fun, we found some poor soul to crunch some of the numbers so that we might share some information on the data we gathered.

We’ll start off with a post facing off the Big 4 salary against non-Big 4 salary. Here are the average salaries for each based on the data we collected:

• Non-Big 4 – $72,136

• Big 4 – $71,166


If you getting worked up over less than a $1,000 difference, then you’re more shrewd than we imagined. For the more reasonable of you, the discussion is, what are the unmentionables here? Both Big 4 and non-Big 4 firms have their advantages and many of you have made the jump from Big 4 to non-Big 4; non-Big 4 to Big 4; Big 4 to non-Big 4 back to Big 4, whatever.

A popular argument is that the Big 4 work experience is irreplaceable on a resumé but is it? Will potential employers really pick someone with a Big 4 background the majority of the time?

Most people would agree that auditing is auditing and the tax law is the same no matter where you work. Smaller firms have just a many unique clients as large firms so there’s experience to be gained everywhere.

Now before you start shouting, “if you want a job at a Fortune 500 company, blah, blah, blah” how many of those jobs are really out there? Enough so that everyone that has left a Big 4 firm will be able to find a job? Let’s not pretend we all have the same ambitions here.

Accounting News Roundup: Obama Talks Taxes in the SOTU; SEC Issues Guidance on Climate Change Disclosures; Video of Dennis Nally in Davos | 01.28.10

• Tax Portions of President Obama’s State of the Union Speech [TaxProf Blog]
The POTUS gave his first State of the Union address last night and he talked about a lot of things over his 70 minute chat. Luckily if you didn’t manage to watch, listen, or were simply screaming at the TV during the whole thing, Paul Caron summed up the tax portions for you, “Let me repeat: We cut taxes. We cut taxes for 95 percent of working families. We cut taxes for small businesses. We cut taxes for first-time homebuyers. We cut taxes for parents trying to care for their children. We cut taxes for 8 million Americans paying for college.”

Whoa, what was that part about small businesses? ” I am also proposing a new small business tax credit — one that will go to over one million small businesses who hire new workers or raise wages. While we’re at it, let’s also eliminate all capital gains taxes on small business investment; and provide a tax incentive for all businesses, large and small, to invest in new plants and equipment.”

Is he talking about — GASP — bonus depreciation? And eliminating capital gains taxes? Maybe! Regardless, the President has his work cut out for him since he’s dealing with an angry populous and negotiating with some resistant players across the aisle (who would likely propose the same ideas).


• SEC Issues Interpretive Guidance on Disclosure Related to Business or Legal Developments Regarding Climate Change [SEC.gov]
Don’t worry, this doesn’t mean that companies will get all Al Gore on you with Climate Change talk but they will have to expand on the existing disclosures. Mary Schapiro isn’t interested in their opinion on the matter anyway; she’d rather that issuers just explain the impact of certain areas that may require disclosure. Pesky regulation, treaties with foreign countries, impacts on their business, you get the idea. Filings aren’t complex enough anyway.

• PwC Chairman Nally Says CEOs Are `Cautiously Optimistic’ [Bloomberg]
Looks a little cold over there in Toblerone land but Dennis looks like he’s enjoying himself. He also isn’t surprised that people aren’t as freaked out as, say, a year ago but dang it, things are still a little hairy.

The IRS Has Gotten Wise to Dead People Seeking Refunds

Pulling off tax fraud is a tough proposition. Hell, even the guys that are good at it get busted.

Plus, despite our low expectations, the IRS has managed to get wise to the filing of tax returns with huge refunds. To try and pull such a stunt will not help your burgeoning criminal career.

Another bad jig (seemingly) would be to attempt filing a tax return seeking a refund for a dead person. Despite what some might consider to be a no-brainer, a couple of guys in California still thought it was worth a shot. Web CPA Reports that Haroon Amin and his partner Ather Ali filed tax returns for 250 dead individuals in 2002 and 2003.

The IRS got wise to some of this but still managed to send out a few checks to addresses controlled by the two men. Mr. Amin pleaded guilty today and faces up to five years in prison where hopefully he can get some help improving his criminal instincts.

Man Pleads Guilty to Filing 250 Tax Returns for Dead People [Web CPA]

Florida CFO to Solve Budget Crisis with Paper Clip Exchange

CFOs have a tough job. Oh sure maybe a select few get to globe-trot with the Fab Four to the likes of Davos but the lion-share of them have to deal with less sexy tasks like, say, saving money.

Or solve a state fiscal crisis! Enter Florida’s CFO, Alex Sink. Ms. Sink is taking cost saving initiatives to levels that the Big 4 either considered and found ridiculous (even for them) or will be implementing them in the near future.


Last year Ms. Sink had her staff count paper clips in order to reduce costs. No, seriously. “Her staff spent untold hours determining the Department of Financial Services has 537 pounds of paper clips, 37,601 binder clips and 17,425 pens.”

The staff that were found to hogging more than a reasonable amount of suppliers were fired on the spot. Okay, not really but yeah, staff were counting counting paper clips. Makes you glad to be working at public accounting, no?

The latest idea from the CFO of the FLA that is the creation of the “CFO Depot”. This will allow employees to swap supplies as needed, as opposed to rummaging through every drawer at the their desk. Presumably this will cut down on violence in the workplace and will save the state money. Ms. Sink is encouraging other state agencies to set up similar systems, as this may save the state $14 million.

Here’s the pitch:

Ladies and Gentlemen, Stephen Chipman’s Blog is Live

As promised, Stephen Chipman has started his blog with the first post going up today.

I am excited to provide this interactive Blog designed to foster thoughtful dialogue and information sharing between you and me. My Blog enables me to share with each of you my personal thoughts about our business and other important matters. I hope you find this Blog informative as well as useful. Please check back every Wednesday for a new post.


Unfortunately for you non-GTers out there, the blog is not public like Jeremy Newman’s so not just anyone can help him with his grammar (which we’re sure is impeccable) or spelling.

Despite being the blog being for GT eyes only, he’s still excited about spreading the good word through this new medium:

I’m delighted to be writing my first blog. One of the aspects of our modern culture is the ease of informal communication. As I noted in the announcement, I have no pre-planned features or stories, I’m just going to blog the way others do — in the moment.

It’s disappointing that Chip didn’t start the blog a little earlier, say, when he got the news about Sue Sachdeva’s shopping sprees. Catching him in the moment of that particular bit of news would have made for a good post, no? Plus, since he’s so close to Milwaukee, he might have run up their to see some of this loot himself in order to tell us what he thought of Suze’s taste in clothes, jewels, etc.

Our one beef with Steve-o’s first post is that it has too much of a journal feeling to it. Personally, we’d prefer he got on his soapbox about how the Big 4 isn’t all that, or why he thinks Davos is overrated. We realize that he’s new at this so we’ll give him a little time to get it together. In the meantime, be sure to inform us about his words of wisdom going forward.

KPMG Haiti Relief Effort Details

We finally nailed down some specifics from a trusted source on KPMG’s efforts to assist with Haiti relief.

The Americas Region (U.S., Canada, Central and South America, and Israel) have contributed $300,000 to the efforts so far, with a total goal of $500,000. These are the combined contributions of the both the firm and its employees. The International firm has pledged $500,000.

All contributions are going to UNICEF and Save the Children.

If you’ve got updates on your firm’s efforts or if you would like to notify us of what your firm is doing to assist the efforts in Haiti, email us at tips@goingconcern.com

Earlier:
We Knew Accounting Firms Were Helping Haiti

Accounting News Roundup: Sam Antar’s Latest Suggestion for KPMG; Is the IRS Getting Soft? Blogging Tips for Accountants | 01.27.10

• Open Letter to KPMG: The Ties That Bind Overstock.com and Patrick Byrne With Deep Capture LLC [White Collar Fraud]
Patrick Byrne’s indirect stalking of his critics on Facebook through the Deep Capture website has now been brought to the attention of KPMG, courtesy of Sam Antar:

You must investigate Overstock.com’s (NASDAQ: OSTK) relationship with Deep Capture LLC as part of your continuing audit of the company and take steps to require management to make disclosures under Statement of Financial Accounting Standards No. 57 (SFAS No. 57) governing “Related Party Disclosures.”

At the direction of Overstock.com CEO Patrick Byrne, the company has used Deep Capture’s resources, such as its web site, as a conduit to intimidate, harass, threaten, smear, and pre-text company critics. For example, Deep Capture Managing Partner Judd Bagley violated Facebook’s Statement of Rights and Responsibilities and deceptively posed as “Larry Bergman” in an effort to gather personal information and spy on Overstock.com ‘s and Patrick Byrne’s critics, including me (See Item 3 Safety and Item 4 Registration and Security).

Altogether, Judd Bagley posted on DeepCapture.com the names of 7,483 “Facebook friends” of Patrick Byrne’s critics and that list included spouses, minor children, and other people that have nothing to do with Overstock.com, Patrick Byrne, or Byrne’s delusional short selling conspiracy theories.


• IRS Plans New Disclosures on Uncertain Tax Positions [Compliance Week]
The IRS, in a surprise move, is now requesting more information from corporate taxpayers when they take uncertain tax positions. Now before you start belly-aching, Doug Shulman would like everyone to know that he could have been a lot harder on you:

“We could have asked for more – a lot more – but chose not to,” Shulman said. “We believe we have crafted a proposal that gives us the information we need to do our job without trying to get in the heads of taxpayers as to the strengths and weaknesses of their positions.”

That almost sounds like an apology, Doug. Are you getting soft on us?

Building a Blog Following [Blogging Suits]
Yours truly did his best to give some advice to the budding accounting bloggers out there over at Blogging Suits:

Despite the reaction of strangers, the content and purpose of your blog is yours to decide and there are certain techniques that can be utilized that will keep your readers engaged and coming back (no matter how “boring” a subject might seem):

• Blog regularly – For any blog to be successful, regular content is paramount. I’m not suggesting that you dedicate your entire day to posting but you should commit to posting to at least twice a week. Long periods without posting will turn readers off and they’ll assume that you’re not serious about keeping them informed.

Don’t get excited, no one is expecting you to keep the schedule we do here at GC. Besides, we have taskmasters walking around that shock us every 20 minutes to keep us going.

Quote of the Day | 01.26.10

“The problem with dumping him at this stage is that it won’t really get to the heart of the matter, which is that he’s just one of a cast of characters who need to be ousted. The problem is the ensemble. I think it’s a bit like you’re not liking the cast of Seinfeld, and just getting rid of Elaine.”

~ Gary Weiss on Ben Bernanke, et al.

Cardinals’ Rolle Billed by IRS for $2.2 Million

rolle.jpgFootball is a tough sport. Not the physical demands mind you, it appears to be more of a challenge to stay out of trouble.

Today’s ne’er-do-well is Antrel Rolle of the Arizona Cardinals. The IRS is claiming that the all-pro safety understated his taxable income by 50% in 2005 and 2006 and they sent him a bill for $2.2 million in order to get him back in the Service’s good graces.
Rolle, who does not dispute the claims, does complain that the Service, “violated the Taxpayer Bill of Rights, denied him due process and failed to treat him in a ‘fair, professional and courteous manner.'” Perhaps he was unaware that the IRS is not really known for its good etiquette.


Congeniality aside, it’d be one thing if Rolle had made some mistakes using TurboTax or something (you don’t have to tell Doug Shulman that this shit is complicated) but he seems to have been just ramming onto his Schedule C without prejudice.
Forbes:

Drawing particular IRS attention was Rolle’s report of a Schedule C “sole proprietorship” involving “management and consulting” that he said he operated both years. Over that period he listed $557,000 in revenue and $1.9 million in expenses. The IRS disallowed all but $71,000 of the expenses, which included $254,000 for “advertising” and $372,000 classified as “rent or lease–vehicles.” Rolle said his business was located at an address in Chandler, Ariz., a Phoenix suburb. But “correspondence mailed to that address was returned indicating ‘no such number,’ and electronic research turned up the same result,” the IRS agent wrote.

So you claim over $1 mil in expenses, the IRS takes a look and says that only $71k is actually legit? Hopefully he fired his CPA.
IRS Hits Cardinals’ Antrel Rolle With $2.2 Million Bill [Forbes via TaxProf]